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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 15, 1997
REGISTRATION NO. 33-____
=========================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
THE INTERPUBLIC GROUP OF COMPANIES, INC.
(Exact name of registrant as specified in its charter)
---------------
Delaware 13-1024020
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1271 Avenue of the Americas
New York, New York 10020
212-399-8000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
NICHOLAS J. CAMERA, VICE PRESIDENT,
GENERAL COUNSEL & SECRETARY
THE INTERPUBLIC GROUP OF COMPANIES, INC.
1271 Avenue of the Americas
New York, New York 10020
212-399-8000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
---------------
The Commission is requested to mail signed copies of all
orders, notices and communications to:
Theodore H. Paraskevas, Esq. Barry M. Fox, Esq.
The Interpublic Group of Companies, Inc. Cleary, Gottlieb, Steen &
1271 Avenue of the Americas Hamilton
New York, New York 10020 One Liberty Plaza
212-399-8000 New York, New York 10006
212-225-2000
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE
PUBLIC: As soon as practicable after this Registration Statement
becomes effective.
If the only securities being registered on this Form are
being offered pursuant to dividend or interest reinvestment
plans, please check the following box. |_|
If any of the securities being registered on this Form are
to be offered on a delayed or continuous basis pursuant to Rule
415 under the Securities Act of 1933, other than securities
offered only in connection with dividend or interest reinvestment
plans, check the following box. |X|
If this Form is filed to register additional securities for
an offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant
to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the
same offering. |_|
If delivery of the prospectus is expected to be made pursuant
to Rule 434, please check the following box. |_|
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------
Proposed Proposed
maximum maximum
Title of offering aggregate Amount of
securities Amount to be price per offering price registration
to be registered registered share (1) (1) fee
- --------------------------------------------------------------------------
1.80%
Convertible
Subordinated $250,000,000 86% $215,000,000 $63,425
Notes due 2004
- --------------------------------------------------------------------------
Common Stock
upon par value 3,346,500 N/A N/A N/A(3)
$.10 per share shares(2)
- --------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee.
(2) Pursuant to Rule 457(i) under the Securities Act of 1933 there is no
filing fee with respect to the shares of Common Stock
issuable upon conversion of the Notes because no additional
consideration will be received in connection with the
exercise of the conversion privilege.
(3) Plus such additional indeterminate number of shares as may become
issuable upon conversion of the Notes being registered
hereunder by means of adjustment of the conversion price.
---------------
The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its Effective
Date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
=========================================================================
Information contained herein is subject to completion or
amendment. A Registration Statement relating to these securities
has been filed with the Securities and Exchange Commission. These
securities may not be sold nor may offers to buy be accepted
prior to the time the Registration Statement becomes effective.
This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of
these securities in any State in which such offer, solicitation,
or sale would be unlawful prior to registration or qualification
under the securities laws of any such State.
Subject to Completion, Dated December 15, 1997
PROSPECTUS
THE INTERPUBLIC GROUP OF
COMPANIES, INC.
$250,000,000 Principal Amount of
1.80% Convertible Subordinated Notes Due 2004
(Interest payable March 16 and September 16)
and
Shares of Common Stock Issuable Upon Conversion Thereof
---------
This Prospectus relates to (i) $250,000,000 aggregate
principal amount at maturity of 1.80% Convertible Subordinated
Notes due 2004 (the "Notes") of the Interpublic Group of
Companies, Inc., a Delaware corporation (the "Company"), and (ii)
the shares of common stock, par value $.10 per share (the "Common
Stock"), of the Company issuable upon conversion of the Notes
(the "Shares"). The Notes and the Common Stock that offered for
resale hereby are to be offered for the account of the holders
thereof (the "Selling Securityholders"). The Notes were initially
acquired from the Company by Morgan Stanley & Co. Incorporated,
Goldman, Sachs & Co. and SBC Warburg Dillon Read Inc. (the
"Initial Purchasers") in September 1997 in connection with a
private offering. See "Description of the Notes."
The Notes are convertible into Common Stock of the Company
at any time after 90 days following the original issuance thereof
and prior to maturity, unless previously redeemed, at a
Conversion Rate of 13.386 shares per $1,000 principal amount at
maturity (initially representing a conversion price of
approximately $59.769), subject to adjustment in certain events.
The Company's Common Stock is listed on the New York Stock
Exchange under the symbol "IPG." On December 10, 1997, the last
sale price of the Common Stock as reported on the New York Stock
Exchange Composite Tape was $46 1/4 per share.
The Notes are not redeemable by the Company prior to
September 20, 2000. Thereafter, the Notes will be redeemable on
at least 30 days' notice at the option of the Company, in whole
or in part at any time, at a redemption price for each Note equal
to the Issue Price (as defined herein) plus accrued Original
Issue Discount (as defined herein), together with accrued
interest, in each case to the redemption date. The Notes may also
be redeemed at the option of the holder if there is a Fundamental
Change (as defined herein) at a redemption price for each Note
equal to the Issue Price plus accrued Original
1
Issue Discount, together with accrued interest, in each case to
the redemption date, subject to adjustment in certain
circumstances.
The Notes are general, unsecured obligations of the
Company, subordinated in right of payment to all Senior Debt (as
defined herein) of Company, and are subordinated by operation of
law to all liabilities (including trade payables) of the
Company's subsidiaries. The Indenture pursuant to which the Notes
are issued does not restrict the incurrence of Senior Debt or
other indebtedness by the Company or its subsidiaries. At
September 30, 1997, the Company had an aggregate of approximately
$260.1 million of Senior Debt. See "Description of the Notes."
The Company will not receive any of the proceeds from sales
of Notes or the Shares by the Selling Securityholders. The Notes
and the Shares may be offered in negotiated transactions or
otherwise at market prices prevailing at the time of sale or at
negotiated prices. See "Plan of Distribution." The Selling
Securityholders may be deemed to be "underwriters" as defined in
the Securities Act of 1933, as amended (the "Securities Act"). If
any broker-dealers are used by the Selling Securityholders, any
commissions paid to broker-dealers and, if broker-dealers
purchase any Notes or Shares as principals, any profits received
by such broker-dealers on the resale of the Notes or Shares may
be deemed to be underwriting discounts or commissions under the
Securities Act. In addition, any profits realized by the Selling
Securityholders may be deemed to be underwriting commissions.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, ANY OF THE SECURITIES OFFERED
HEREBY BY ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL
FOR SUCH PERSON TO MAKE SUCH AN OFFERING OR SOLICITATION.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
December 15, 1997
2
TABLE OF CONTENTS
Page
----
Available Information ......................................... 3
Incorporation of Certain Documents by Reference ............... 4
Prospectus Summary ............................................ 5
The Company ................................................... 8
Use of Proceeds ............................................... 8
Common Stock Price Range and Dividends ........................ 9
Ratio of Earnings to Fixed Charges ............................ 9
Description of the Notes ...................................... 10
Description of Capital Stock and Rights ....................... 23
Certain Federal Income Tax Considerations ..................... 24
Selling Securityholders ....................................... 29
Plan of Distribution .......................................... 29
Legal Matters ................................................. 31
Experts ....................................................... 31
-----------
Interpublic is a trademark of the Company. All other
trademarks or trade names referred to herein are the property of
their respective owners.
-----------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Exchange Act and, in accordance therewith, files reports,
proxy statements and other information with the Commission. Such
reports, proxy statements and other information can be inspected
and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the following regional offices of
the Commission: Seven World Trade Center, Suite 1300, New York,
New York 10048 and Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511. Copies of such
materials can be obtained by mail from the Public Reference
Section of the Commission, at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. The Commission
maintains a World Wide Web site on the Internet at
http://www.sec.gov that contains reports, proxy statements and
other information regarding registrants that file electronically
with the Commission.
3
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Securities
and Exchange Commission (the "Commission") and are incorporated
herein by reference:
(a) the Company's Annual Report on Form 10-K for the year
ended December 31, 1996, as amended by the Company's
Amendment Number One on Form 10-K/A for the year ended
December 31, 1996;
(b) the Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1997, June 30, 1997 and
September 30, 1997;
(c) the Company's Current Reports on Form 8-K dated
January 10, 1997, March 10, 1997, April 7, 1997, June
17, 1997, September 9, 1997, September 10, 1997 and
September 30, 1997; and
(d) the Company's Proxy Statement for the 1997 annual
meeting of stockholders.
All documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act") after the date of this Prospectus
and prior to termination of the offering to which this Prospectus
relates shall be deemed to be incorporated by reference and to be
a part of this Prospectus from the respective dates of filing of
those documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in
any other subsequently filed document which also is or is deemed
to be incorporated by reference herein modifies or supersedes
such statement. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a
part of this Prospectus.
The Company hereby undertakes to provide without charge to
each person to whom a copy of this Prospectus has been delivered,
on the written or oral request of such person, a copy of any or
all of the documents referred to above which have been
incorporated in this Prospectus by reference, other than exhibits
to such documents. Written or telephone requests for such copies
should be directed to Thomas J. Volpe, Senior Vice
President-Financial Operations, The Interpublic Group of
Companies, Inc., 1271 Avenue of the Americas, New York, New York
10020; telephone number (212) 399-8000.
4
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the
more detailed information and financial statements, including the
notes thereto, included or incorporated by reference in this
Prospectus.
THE COMPANY
The Interpublic Group of Companies, Inc. ("Interpublic" or
the "Company") was incorporated in Delaware in September 1930
under the name of McCann-Erickson Incorporated as the successor
to the advertising agency businesses founded in 1902 by A.W.
Erickson and in 1911 by Harrison K. McCann. It has operated under
the Interpublic name since January 1961.
The advertising agency business is the primary business of
the Company. This business is conducted throughout the world
through three advertising agency systems, McCann-Erickson
Worldwide, Ammirati Puris Lintas and The Lowe Group. Interpublic
also carries on a media buying business through its ownership of
Western International Media and its affiliates, as well as a
separate direct and promotional marketing business through its
ownership of DraftWorldwide, Inc. The Company also offers
advertising agency services through association arrangements with
local agencies in various parts of the world. Other activities
conducted by the Company within the area of "marketing
communications" include public relations, graphic design, market
research, sales promotion, interactive services, sports and event
marketing, consulting and other related services.
The principal functions of an advertising agency are to
plan and create advertising programs for its clients and to place
advertising in various media such as television, cinema, radio,
magazines, newspapers, direct mail, outdoor and interactive
electronic media. The planning function involves analysis of the
market for the particular product or service, evaluation of
alternative methods of distribution and choice of the appropriate
media to reach the desired market most efficiently. The
advertising agency develops a communications strategy and then
creates an advertising program, within the limits imposed by the
client's advertising budget, and places orders for space or time
with the media that have been selected.
THE OFFERING
Securities Offered .....$250,000,000 principal amount at maturity of
1.80% Convertible Subordinated Notes due 2004
(the "Notes") and Common Stock issuable upon
conversion thereof. See "Description of the
Notes."
Issue ..................Price The Notes were originally sold to
the Initial Purchasers at an issue price
of 80.007% of the principal amount at
maturity (the "Issue Price").
Interest ...............1.80% per annum on the principal amount
at maturity, payable semiannually in
arrears in cash on March 16 and September
16 of each year, commencing March 16,
1998.
5
Yield to Maturity of
Notes ..................5-1/4% per annum (computed on a
semi-annual bond equivalent basis giving
effect both to accrual of Original Issue
Discount and to accrual of interest)
calculated from September 16, 1997.
Conversion .............Each Note is convertible, at the option of the
holder, at any time (after 90 days) following the
latest date of original issuance thereof through
maturity, unless previously redeemed or otherwise
purchased by the Company, into Common Stock at the
Conversion Rate of 13.386 shares per $1,000
principal amount at maturity of the Notes. The
Conversion Rate will not be adjusted for accrued
Original Issue Discount or interest, but will be
subject to adjustment upon the occurrence of
certain events affecting the Common Stock. Upon
conversion, the holder will not receive any cash
payment representing accrued Original Issue
Discount or interest; such accrued Original Issue
Discount and interest will be deemed paid by the
Common Stock received on conversion. See
"Description of the Notes--Conversion of Notes."
Subordination ..........The Notes are subordinated to all existing and
future Senior Debt (as defined herein). The Notes
are also effectively subordinated to all
indebtedness and liabilities of subsidiaries of the
Company. At September 30, 1997, the Company had
approximately $260.1 million of outstanding Senior
Debt. The Indenture does not prohibit or limit the
incurrence of additional Senior Debt.
Original Issue
Discount ...............Each Note was offered at an
original issue discount for federal
income tax purposes equal to the excess
of the principal amount at maturity of
the Note over the amount of its issue
price. Prospective purchasers of Notes
should be aware that accrued original
issue discount will be includable
periodically in a holder's gross income
for federal income tax purposes prior to
conversion, redemption, other disposition
or maturity of such holder's Notes,
whether or not such Notes are ultimately
converted, redeemed, sold (to the Company
or otherwise) or paid at maturity. See
"Certain Federal Income Tax
Considerations."
Sinking Fund ...........None.
Redemption by Company ..The Notes are not redeemable
by the Company prior to September 20,
2000. Subject to the foregoing, the Notes
are redeemable on at least 30 days'
notice at the option of the Company, in
whole or in part, at any time, at the
redemption prices set forth in
"Description of the Notes," in each case
together with accrued and unpaid
interest.
Fundamental Change .....Upon the occurrence of any Fundamental Change in
6
the Company occurring prior to the maturity of
the Notes, each holder shall have the right,
at such holder's option, to require the
Company to purchase all or any part
(provided that the principal amount at
maturity is $1,000 or an integral
multiple thereof) of such holder's Notes
at the redemption prices set forth in
"Description of Notes," subject to
adjustment in certain events, together
with accrued and unpaid interest thereon
to the date of purchase. See "Description
of the Notes--Redemption at Option of the
Holder."
Use of Proceeds ........The Company will not receive
any proceeds from the sale by the Selling
Securityholders of the Notes or the
Common Stock registered hereby.
Registration Rights ....The Company has agreed to use reasonable
efforts to keep effective a shelf registration
statement of which this Prospectus forms a part
covering the resale of the Notes and the
underlying Common Stock until the earlier of
(i) the sale of all securities covered by the
registration statement, and (ii) the expiration
of the holding period applicable under Rule
144(k) under the Securities Act, or any
successor provision.
7
THE COMPANY
The Interpublic Group of Companies, Inc. was
incorporated in Delaware in September 1930 under the name of
McCann-Erickson Incorporated as the successor to the advertising
agency businesses founded in 1902 by A.W. Erickson and in 1911 by
Harrison K. McCann. It has operated under the Interpublic name
since January 1961.
The advertising agency business is the primary business of
the Company. This business is conducted throughout the world
through three advertising agency systems, McCann-Erickson
Worldwide, Ammirati Puris Lintas and The Lowe Group. Interpublic
also carries on a media buying business through its ownership of
Western International Media and its affiliates, as well as a
separate direct and promotional marketing business through its
ownership of DraftWorldwide, Inc. The Company also offers
advertising agency services through association arrangements with
local agencies in various parts of the world. Other activities
conducted by the Company within the area of "marketing
communications" include public relations, graphic design, market
research, sales promotion, interactive services, sports and event
marketing, consulting and other related services.
The principal functions of an advertising agency are to
plan and create advertising programs for its clients and to place
advertising in various media such as television, cinema, radio,
magazines, newspapers, direct mail, outdoor and interactive
electronic media. The planning function involves analysis of the
market for the particular product or service, evaluation of
alternative methods of distribution and choice of the appropriate
media to reach the desired market most efficiently. The
advertising agency develops a communications strategy and then
creates an advertising program, within the limits imposed by the
client's advertising budget, and places orders for space or time
with the media that have been selected.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale by
the Selling Securityholders of the Notes or the Shares. See
"Selling Securityholders."
8
COMMON STOCK PRICE RANGE AND DIVIDENDS
The Company's Common Stock is listed on the New York Stock
Exchange under the symbol "IPG." The table below shows the range
of reported last sale prices on the New York Stock Exchange
Composite Tape for the Company's Common Stock for the periods
indicated and the dividends paid per share on the Common Stock
for such periods. Sales prices and per share amounts have been
adjusted to reflect a three-for-two stock split paid in the form
of a stock dividend on July 15, 1997. On July 17, 1997, the
Company declared a dividend of $.13 per share payable on
September 15.
Cash
Dividends
Common Declared Per
Stock Price Share
----------- ------------
High Low
---- ---
Year ended December 31, 1995
First Quarter ................. $24 11/12 $21 7/12 $.093
Second Quarter ................ 26 23 1/2 .103
Third Quarter ................. 26 2/3 24 .103
Fourth Quarter ................ 28 11/12 24 11/12 .103
Year ended December 31, 1996
First Quarter ................. 31 1/2 26 2/3 .103
Second Quarter ................ 33 1/6 30 5/12 .113
Third Quarter ................. 32 1/3 27 5/6 .113
Fourth Quarter ................ 33 1/3 29 7/12 .113
Year ended December 31, 1997
First Quarter ................. 36 7/12 32 1/4 .113
Second Quarter ................ 41 5/12 35 1/12 .130
Third Quarter ................. 50 5/16 40 7/8 .130
Fourth Quarter (through December
10) .......................... 52 9/16 45 3/8 .130
The Company is not aware of any restrictions on its present
or future ability to pay dividends. However, in connection with
certain borrowing facilities entered into by the Company and its
subsidiaries, the Company is subject to certain restrictions on
the ratio of cash flow to consolidated borrowings and the ratio
of consolidated borrowings to net worth. Any future dividend
payments will be made at the discretion of the Board of
Directors.
RATIO OF EARNINGS TO FIXED CHARGES
Nine Months
Year Ended December 31, Ended September 30,
1992 1993 1994 1995 1996 1996 1997
Ratio of
earnings to
fixed charges 3.8 4.5 3.6 3.9 4.9 4.3 4.3
9
DESCRIPTION OF THE NOTES
The Notes were issued under an indenture, dated as of
September 16, 1997 (the "Indenture"), between the Company and The
Bank of New York, as trustee (the "Trustee"). A copy of the
Indenture and the Registration Rights Agreement, dated as of
September 16, 1997 between the Company and Morgan Stanley & Co.
Incorporated, Goldman, Sachs & Co., and SBC Warburg Dillon Read
(the "Registration Rights Agreement"), are available from the
Trustee upon request by a registered holder of the Notes. The
following summaries of certain provisions of the Notes and the
Indenture do not purport to be complete and are subject to, and
are qualified in their entirety by reference to, all the
provisions of the Notes and the Indenture, including the
definitions therein of certain terms which are not otherwise
defined in this Prospectus. Wherever particular provisions or
defined terms of the Indenture (or of the form of Note which is a
part thereof) are referred to, such provisions or defined terms
are incorporated herein by reference.
General
The Notes represent unsecured general obligations of the
Company subordinate in right of payment to certain other
obligations of the Company as described under "Subordination of
Notes" and convertible into Common Stock as described under
"Conversion of Notes." The Notes are limited to $250,000,000
aggregate principal amount at maturity, were issued only in
denominations of $1,000 or any multiple thereof and will mature
on September 16, 2004, unless earlier redeemed at the option of
the Company or at the option of the holder upon a Fundamental
Change (as defined below) or converted prior thereto.
The Indenture does not contain any financial covenants or
restrictions on the payment of dividends, the incurrence of
Senior Debt (as defined below under "Subordination of Notes") or
the issuance or repurchase of securities of the Company. The
Indenture contains no covenants or other provisions to afford
protection to holders of the Notes in the event of a highly
leveraged transaction or a change in control of the Company
except to the extent described under "Redemption at Option of the
Holder."
The Notes bear interest at the annual rate set forth on the
cover page hereof from September 16, 1997, payable semi-annually
on March 16 and September 16, commencing on March 16, 1998, to
holders of record at the close of business on the preceding March
2 and September 2, respectively, except (i) that the interest
payment upon redemption (unless the date of redemption is an
interest payment date) will be payable to the person to whom
principal is payable and (ii) as set forth in the next succeeding
sentence. In the case of any Note (or portion thereof) which is
converted into Common Stock of the Company during the period from
(but excluding) a record date to (but excluding) the next
succeeding interest payment date either (i) if such Note (or
portion thereof) has been called for redemption on a redemption
date which occurs during such period, or is to be redeemed in
connection with a Fundamental Change on a Fundamental Change
Repurchase Date (as defined below) which occurs during such
period, the Company shall not be required to pay interest on such
interest payment date in respect of any such Note (or portion
thereof) or (ii) if otherwise, any Note (or portion thereof)
submitted for conversion
10
during such period shall be accompanied by funds equal to the
interest payable on such succeeding interest payment date on the
aggregate principal amount so converted (see "Conversion of
Notes" below). Interest may, at the Company's option, be paid
either (i) by check mailed to the address of the person entitled
thereto as it appears in the Note register or (ii) by transfer to
an account maintained by such person located in the United
States; provided, however, that payments to The Depository Trust
Company, New York, New York ("DTC") will be made by wire transfer
of immediately available funds to the account of DTC or its
nominee. Interest will be computed on the basis of a 360-day year
composed of twelve 30-day months.
The Notes are offered at a substantial discount from their
principal amount at maturity. See "Certain Federal Income Tax
Considerations." The calculation of the accrual of "Original
Issue Discount" (the difference between the Issue Price and the
principal amount at maturity of a Note) in the period during
which a Note remains outstanding will be on a semi-annual bond
equivalent basis using a year composed of twelve 30-day months;
such accrual will commence on the first date of issuance of any
of the Notes. Maturity, conversion or redemption of a Note will
cause Original Issue Discount and interest, if any, to cease to
accrue on such Note under the terms and subject to the conditions
of the Indenture. The Company may not reissue a Note that has
matured or been converted, redeemed or otherwise canceled (except
for registration of transfer, exchange or replacement thereof).
Form, Denomination and Registration
The Notes are issued in fully registered form, without
coupons, in denomination of $1,000 principal amount and multiples
thereof.
Global Note, Book-Entry Form. Notes are issuable in fully
registered form without coupons, in denominations of $1,000
principal amount and multiples thereof. Notes sold by the Selling
Securityholders pursuant to the Registration Statement of which
this Prospectus forms a part will be represented by a global Note
(the "Global Note"), except as set forth below under
"Certificated Notes." The Global Note will be deposited with, or
on behalf of, The Depository Trust Company, New York, New York
("DTC") and registered in the name of Cede & Co. ("Cede") as
DTC's nominee. Beneficial interests in the Global Note will be
exchangeable for definitive Certificated Notes only in accordance
with the terms of the Indenture.
Purchasers of the Notes offered hereby may hold their
interests in the Global Note directly through DTC or indirectly
through organizations that are participants in DTC (the
"Participants"). Transfers between Participants will be effected
in the ordinary way in accordance with DTC rules and will be
settled in clearing house funds.
Persons who are not Participants may beneficially own
interests in the Global Note held by DTC only through
Participants, or certain banks, brokers, dealers, trust companies
and other parties that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly
("Indirect Participants"). So long as Cede, as the nominee of
DTC, is the registered owner of the Global Note, Cede for all
purposes will be considered
11
the sole holder of the Global Note. Except as provided below,
owners of beneficial interests in the Global Note will not be
entitled to have certificates registered in their names, will not
receive or be entitled to receive physical delivery of
certificates in definitive form, and will not be considered the
holders thereof.
Payment of interest on and the redemption price of the
Global Note will be made to Cede, the nominee for DTC, as the
registered owner of the Global Note by wire transfer of
immediately available funds on each interest payment date or the
redemption or repurchase date, as the case may be. Neither the
Company, the Trustee nor any paying agent will have any
responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership
interests in the Global Note or for maintaining, supervising or
reviewing any records relating to such beneficial ownership
interests.
The Company has been informed by DTC that, with respect to
any payment of interest on, or the redemption price of, the
Global Note, DTC's practice is to credit Participants' accounts
on the payment date therefor with payments in amounts
proportionate to their respective beneficial interests in the
principal amount represented by the Global Note as shown on the
records of DTC, unless DTC has reason to believe that it will not
receive payment on such payment date. Payments by Participants to
owners of beneficial interests in the principal amount
represented by the Global Note held through such Participants
will be the responsibility of such Participants, as is now the
case with securities held for the accounts of customers
registered in "street name."
Because DTC can only act on behalf of Participants, who in
turn act on behalf of Indirect Participants and certain banks,
the ability of a person having a beneficial interest in the
principal amount represented by the Global Note to pledge such
interest to persons or entities that do not participate in the
DTC system, or otherwise take actions in respect of such
interest, may be affected by the lack of a physical certificate
evidencing such interest.
Neither the Company nor the Trustee (or any registrar,
paying agent or conversion agent under the Indenture) will have
any responsibility for the performance by DTC or its Participants
or Indirect Participants of their respective obligations under
the rules and procedures governing their operations. DTC has
advised the Company that it will take any action permitted to be
taken by a holder of Notes (including, without limitation, the
presentation of Notes for exchange as described below) only at
the direction of one or more Participants to whose account with
DTC interests in the Global Note are credited, and only in
respect of the principal amount of the Notes represented by the
Global Note as to which such Participant or Participants has or
have given such direction.
DTC has advised the Company as follows: DTC is a limited
purpose trust company organized under the laws of the State of
New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the Uniform Commercial Code
and a "clearing agency" registered pursuant to the provisions of
Section 17A of the Exchange Act. DTC was created to hold
securities for its Participants and to facilitate the clearance
and settlement
12
of securities transactions between Participants through
electronic book-entry changes to the accounts of its
Participants, thereby eliminating the need for physical movement
of certificates. Participants include securities brokers and
dealers, banks, trust companies and clearing corporations and may
include certain other organizations such as the Initial
Purchasers. Certain of such Participants (or their
representatives), together with other entities, own DTC. Indirect
access to the DTC system is available to others such as banks,
brokers, dealers and trust companies that clear through, or
maintain a custodial relationship with, a Participant, either
directly or indirectly.
Although DTC has agreed to the foregoing procedures in
order to facilitate transfers of interests in the Global Note
among Participants, it is under no obligation to perform or
continue to perform such procedures, and such procedures may be
discontinued at any time. If DTC is at any time unwilling or
unable to continue as depositary and a successor depositary is
not appointed by the Company within 90 days, the Company will
cause Notes to be issued in definitive form in exchange for the
Global Note.
Certificated Notes. Holders of Notes registered hereunder may
take physical delivery of the Notes in definitive registered
form. In addition, Holders may request that certificated Notes be
issued in exchange for Notes represented by the Global Notes.
Furthermore, certificated Notes may be issued in exchange for
Notes represented by the Global Note, if no successor depositary
is appointed by the Company as set forth above under "Global
Note, Book-Entry Form."
Conversion of Notes
A holder may convert a Note into Common Stock of the
Company at any time after 90 days following the latest date of
original issuance of the Notes through the close of business on
the final maturity date of the Notes; provided that if a Note is
called for redemption, the holder may convert such Note only
until the close of business on the day prior to the Redemption
Date. A Note in respect of which a holder is exercising its
option to require redemption upon a Fundamental Change may be
converted only if such holder withdraws its election to exercise
its option in accordance with the terms of the Indenture. A
holder may convert such holder's Notes in part so long as such
part is $1,000 principal amount at maturity or an integral
multiple thereof. If Notes not called for redemption are
converted after a record date for the payment of interest and
prior to the next succeeding interest payment date, such Notes
must be accompanied by funds equal to the interest payable on
such succeeding interest payment date on the principal amount at
maturity so converted provided that no such payment will be
required if the Company exercises its rights to redeem the Notes.
The initial Conversion Rate is 13.386 shares of Common
Stock per $1,000 principal amount at maturity of Notes, subject
to adjustment upon the occurrence of certain events. A holder who
would otherwise be entitled to a fractional share of Common Stock
shall receive cash equal to the then current market value of such
fractional share. On conversion of a Note, a holder will not
receive any cash payment representing accrued Original Issue
Discount or accrued interest thereon. The Company's delivery to
the holder of the fixed
13
number of shares of Common Stock into which the Note is
convertible (together with the cash payment in lieu of any
fractional share of Common Stock) will be deemed to satisfy the
Company's obligation to pay the principal amount of the Note
including the accrued Original Issue Discount attributable to the
period from the first date of issuance of any of the Notes to the
date of surrender for conversion and accrued interest thereon.
Thus, the accrued Original Issue Discount and accrued interest
are deemed to be paid in full rather than canceled, extinguished
or forfeited. The Conversion Rate will not be adjusted at any
time during the term of the Notes for such accrued Original Issue
Discount or accrued interest.
To convert a Note into shares of Common Stock, the holder
of a Note must (i) complete and manually sign the conversion
notice on the back of the Note (or complete and manually sign a
facsimile thereof) and deliver such notice to the Conversion
Agent, (ii) surrender the Note to the Conversion Agent, (iii) if
required, furnish appropriate endorsements and transfer
documents, (iv) if required, pay all transfer or similar taxes,
and (v) if required, pay funds equal to interest payable on the
next interest payment date. Pursuant to the Indenture, the date
on which all of the foregoing requirements have been satisfied is
the date of surrender for conversion.
The initial Conversion Rate is subject to adjustment under
formulae as set forth in the Indenture in certain events,
including:
(i) the issuance of Common Stock of the Company as a
dividend or distribution on the Common Stock;
(ii) certain subdivisions and combinations of the
Common Stock;
(iii) the issuance to all holders of Common Stock of
certain rights or warrants to purchase Common Stock;
(iv) the distribution to all holders of Common Stock
of capital stock (other than Common Stock), of evidences of
indebtedness of the Company or of assets (including
securities, but excluding those rights, warrants, dividends
and distributions referred to in clause (iii) above or paid
in cash);
(v) distributions consisting of cash, excluding any
quarterly cash dividend on the Common Stock to the extent
that the aggregate cash dividend per share of Common Stock
in any quarter does not exceed the greater of (x) the
amount per share of Common Stock of the next preceding
quarterly cash dividend on the Common Stock to the extent
that such preceding quarterly dividend did not require an
adjustment of the Conversion Rate pursuant to this clause
(v) (as adjusted to reflect subdivisions or combinations of
the Common Stock), and (y) 3.75 percent of the average of
the last reported sales price of the Common Stock during
the ten trading days immediately prior to the date of
declaration of such dividend, and excluding any dividend or
distribution in connection with the liquidation,
dissolution or winding up of the Company. If an adjustment
is required to be made as set forth in this clause (v) as a
result of a distribution that is a quarterly dividend,
14
such adjustment would be based upon the amount by which
such distribution exceeds the amount of the quarterly cash
dividend permitted to be excluded pursuant to this clause
(v). If an adjustment is required to be made as set forth
in this clause (v) as a result of a distribution that is
not a quarterly dividend, such adjustment would be based
upon the full amount of the distribution;
(vi) payment in respect of a tender offer or exchange
offer by the Company or any subsidiary of the Company for
the Common Stock to the extent that the cash and value of
any other consideration included in such payment per share
of Common Stock exceeds the Current Market Price (as
defined in the Indenture) per share of Common Stock on the
trading day next succeeding the last date on which tenders
or exchanges may be made pursuant to such tender or
exchange offer; and
(vii) payment in respect of a tender offer or exchange
offer by a person other than the Company or any subsidiary
of the Company in which, as of the closing date of the
offer, the Board of Directors is not recommending rejection
of the offer. The adjustment referred to in this clause
(vii) will only be made if the tender offer or exchange
offer is for an amount which increases the offeror's
ownership of Common Stock to more than 25% of the total
shares of Common Stock outstanding, and if the cash and
value of any other consideration included in such payment
per share of Common Stock exceeds the Current Market Price
per share of Common Stock on the business day next
succeeding the last date on which tenders or exchanges may
be made pursuant to such tender or exchange offer. The
adjustment referred to in this clause (vii) will generally
not be made, however, if, as of the closing of the offer,
the offering documents with respect to such offer disclose
a plan or an intention to cause the Company to engage in a
consolidation or merger of the Company or a sale of all or
substantially all of the Company's assets.
In the event that the Rights (as defined below) are
separated from the Common Stock in accordance with the provisions
of the Company's Preferred Shares Rights Plan such that the
holders of Notes would thereafter not be entitled to receive any
such Rights in respect to the Common Stock issuable upon
conversion of such Notes, the Conversion Rate will be adjusted as
provided in clause (iv) of the preceding paragraph (subject to
readjustment in the event of the expiration, termination or
redemption of the Rights). In lieu of any such adjustment, the
Company may amend the Preferred Shares Rights Plan to provide
that upon conversion of the Notes the holders will receive, in
addition to the Common Stock issuable upon such conversion, the
Rights which would have attached to such shares of Common Stock
if the Rights had not become separated from the Common Stock
pursuant to the provisions of the Preferred Shares Rights Plan.
See "Description of Capital Stock and Rights--Rights."
In the case of (i) any reclassification of the Common
Stock, or (ii) a consolidation, merger or combination involving
the Company or a sale or conveyance to another person of the
property and assets of the Company as an entirety or
substantially as an entirety, in each case as a result of which
holders of Common Stock shall be entitled to receive stock, other
securities, other property or assets (including cash) with
respect to or in exchange for
15
such Common Stock, the holders of the Notes then outstanding will
generally be entitled thereafter to convert such Notes into the
kind and amount of shares of stock, other securities or other
property or assets which they would have owned or been entitled
to receive upon such reclassification, change, consolidation,
merger, combination, sale or conveyance had such Notes been
converted into Common Stock immediately prior to such
reclassification, change, consolidation, merger, combination,
sale or conveyance assuming that a holder of Notes would not have
exercised any rights of election as to the stock, other
securities or other property or assets receivable in connection
therewith. See "Redemption at Option of the Holder."
In the event of a taxable distribution to holders of
Common Stock or in certain other circumstances requiring
Conversion Rate adjustments, the holders of Notes may, in certain
circumstances, be deemed to have received a distribution subject
to United States income tax as a dividend; in certain other
circumstances, the absence of such an adjustment may result in a
taxable dividend to the holders of Common Stock. See "Certain
Federal Income Tax Considerations."
The Company from time to time may, to the extent permitted
by law, increase the Conversion Rate by any amount for any period
of at least 20 days, in which case the Company shall give at
least 15 days' notice of such increase if the Company's Board of
Directors has made a determination that such increase would be in
the best interests of the Company, which determination shall be
conclusive. The Company may, at its option, make such increases
in the Conversion Rate, in addition to those set forth above, as
the Board of Directors deems advisable to avoid or diminish any
income tax to holders of Common Stock resulting from any dividend
or distribution of stock (or rights to acquire stock) or from any
event treated as such for income tax purposes. See "Certain
Federal Income Tax Considerations."
No adjustment in the Conversion Rate will be required
unless such adjustment would require a change of at least one
percent in the Conversion Rate then in effect; provided that any
adjustment that would otherwise be required to be made shall be
carried forward and taken into account in any subsequent
adjustment. Except as stated above, the Conversion Rate will not
be adjusted for the issuance of Common Stock or any securities
convertible into or exchangeable for Common Stock or carrying the
right to purchase any of the foregoing.
Optional Redemption by the Company
No sinking fund is provided for the Notes. Prior to
September 20, 2000 (three business days after the interest
payment date immediately prior thereto), the Notes will not be
redeemable at the option of the Company. At any time on or after
such date, the Company may redeem the Notes for cash as a whole
at any time, or from time to time in part at the applicable
Redemption Price together with accrued interest to, but
excluding, the date fixed for redemptions; provided that any
semi-annual payment of interest becoming due on the date fixed
for redemption shall be payable to the holders of such Notes
registered on the relevant record date. Not less than 30 days'
nor more than 60 days' notice of redemption shall be given by
mail to holders of Notes. The
16
Notes will be redeemable in integral multiples of $1,000
principal amount at maturity.
The table below shows Redemption Prices of a Note per
$1,000 principal amount at maturity, at September 20, 2000, at
each September 16 thereafter prior to maturity and at maturity on
September 16, 2004, which prices reflect the accrued Original
Issue Discount calculated to each such date. The Redemption Price
of a Note redeemed between such dates would include an additional
amount reflecting the additional Original Issue Discount accrued
since the next preceding date in the table to the actual
Redemption Date.
(1) (2) (3)
Note Issue Accrued Original Redemption
Redemption Date Price Issue Discount Price
- --------------- ----- --------------
(1) + (2)
---------
September 20, 2000 ..... $800.070 $77.215 $877.285
September 16, 2001 ..... 800.070 105.312 905.382
September 16, 2002 ..... 800.070 135.232 935.302
September 16, 2003 ..... 800.070 166.743 966.813
September 16, 2004 ..... 800.070 199.930 1,000.000
If less than all of the outstanding Notes are to be
redeemed, the Trustee shall select the Notes to be redeemed in
principal amounts of $1,000 or multiples thereof by lot, pro rata
or by another method the Trustee considers fair and appropriate.
If a portion of a holder's Notes is selected for partial
redemption and such holder converts a portion of such Notes, such
converted portion shall be deemed to be of the portion selected
for redemption.
Redemption at Option of the Holder
If a Fundamental Change (as defined below) occurs at any
time prior to September 16, 2004, each holder shall have the
right, at the holder's option, to require the Company to redeem
any or all of such holder's Notes on the date (the "Fundamental
Change Repurchase Date") that is 45 days after the date of the
Company's notice of such Fundamental Change. The Notes will be
redeemable in multiples of $1,000 principal amount at maturity at
their accreted value on the Fundamental Change Repurchase Date.
The Company shall redeem such Notes at a price (the
"Fundamental Change Repurchase Price") equal to the accreted
value of the Note to, but excluding, the Fundamental Change
Repurchase Date. The Fundamental Change Repurchase Price is equal
to (i) $800.070 if the Fundamental Change Repurchase Date is
September 16, 1997, (ii) $824.388 if the Fundamental Change
Repurchase Date is September 16, 1998, (iii) $850.000 if the
Fundamental Change Repurchase Date is September 16, 1999, (iv)
$876.974 if the Fundamental Change Repurchase Date is September
16, 2000 and (v) thereafter at the redemption price set forth
under "Optional Redemption by the Company" which would be
applicable to a redemption at the option of the Company on the
Fundamental Change Repurchase Date; provided, however, that if
the Fundamental Change Repurchase Date is between such dates,
17
the Fundamental Change Repurchase Price would include an
additional amount reflecting the additional Original Issue
Discount accrued since the preceding September 16.
Notwithstanding the foregoing, if the Applicable Price (as
defined) is less than the Reference Market Price (as defined),
the Company shall redeem such Notes at a price equal to the
foregoing redemption price multiplied by the fraction obtained by
dividing the Applicable Price by the Reference Market Price. In
each case, the Company shall also pay accrued interest on the
redeemed Notes to, but excluding, the Fundamental Change
Repurchase Date; provided that, if such Fundamental Change
Repurchase Date is an interest payment date, then the interest
payable on such date shall be paid to the holder of record of the
Notes on the relevant record date.
The Company is required to mail to all holders of record of
the Notes a notice of the occurrence of a Fundamental Change and
of the redemption right arising as a result thereof on or before
the tenth day after the occurrence of such Fundamental Change.
The Company is also required to deliver to the Trustee a copy of
such notice. To exercise the redemption right, a holder of Notes
must deliver, on or before the 30th day after the date of the
Company's notice of a Fundamental Change (the "Fundamental Change
Expiration Time"), written notice of the holder's exercise of
such right, together with the Notes to be so redeemed, duly
endorsed for transfer, to the Company (or an agent designated by
the Company for such purpose). Payment for Notes surrendered for
redemption (and not withdrawn) prior to the Fundamental Change
Expiration Time will be made promptly following the Fundamental
Change Repurchase Date.
The term "Fundamental Change" means the occurrence of any
transaction or event in connection with which all or
substantially all Common Stock shall be exchanged for, converted
into, acquired for or constitute the right to receive
consideration (whether by means of an exchange offer,
liquidation, tender offer, consolidation, merger, combination,
reclassification, recapitalization or otherwise) which is not all
or substantially all common stock of a company listed (or, upon
consummation or immediately following such transaction or event,
which will be listed) on a United States national securities
exchange or approved for quotation on the Nasdaq National Market
or any similar United States system of automated dissemination of
quotations of securities prices.
The term "Applicable Price" means (i) in the event of a
Fundamental Change in which the holders of Common Stock receive
only cash, the amount of cash received by the holder of one share
of Common Stock and (ii) in the event of any other Fundamental
Change, the average of the last reported sale price for the
Common Stock during the ten trading days prior to the record date
for the determination of the holders of Common Stock entitled to
receive cash, securities, property or other assets in connection
with such Fundamental Change, or, if there is not such record
date, the date upon which the holders of the Common Stock shall
have the right to receive such cash, securities, property or
other assets in connection with the Fundamental Change.
The term "Reference Market Price" shall initially mean
$31.875 (which is equal to 66 2/3% of the last sale price of the
Common Stock prior to the original issuance of the Notes) and, in
the event of any adjustment to the Conversion Rate described
above pursuant to the provisions of the Indenture, the Reference
Market Price shall also be adjusted so that the Reference Market
18
Price after giving effect to any such adjustment shall equal the
Reference Market Price multiplied by a fraction, the numerator of
which is the Conversion Rate prior to such adjustment and the
denominator of which is the Conversion Rate after such
adjustment.
The Company will comply with the provisions of Rule 13e-4
and any other tender offer rules under the Exchange Act which may
then be applicable in connection with the redemption rights of
Note holders in the event of a Fundamental Change. The redemption
rights of the holders of Notes could discourage a potential
acquiror of the Company. The Fundamental Change redemption
feature, however, is not the result of management's knowledge of
any specific effort to obtain control of the Company by means of
a merger, tender offer, solicitation, or otherwise, or part of a
plan by management to adopt a series of anti-takeover provisions.
The Company, would, in the future, enter into certain
transactions, including certain recapitalizations of the Company,
that would not constitute a Fundamental Change, but that would
increase the amount of indebtedness, including Senior Debt,
outstanding at such time. Further, payment of the Fundamental
Change Repurchase Price on the Notes may be subordinated to the
prior payment of Senior Debt as described under "Subordination of
Notes" below. There are no restrictions in the Indenture on the
creation of additional Senior Debt or other indebtedness. Under
certain circumstances, the incurrence of additional indebtedness
could have an adverse effect on the Company's ability to service
its indebtedness, including the Notes. If a Fundamental Change
were to occur, there can be no assurance that the Company would
have sufficient funds to pay the Fundamental Change Repurchase
Price for all Notes tendered by the holders thereof. A default by
the Company on its obligations to pay the Fundamental Change
Repurchase Price could result in acceleration of the payment of
other indebtedness of the Company at the time outstanding
pursuant to cross-default provisions.
Subordination of Notes
The payment of the principal of and premium, if any, and
interest on the Notes will, to the extent set forth in the
Indenture, be subordinated in right of payment to the prior
payment in full of all Senior Debt. Upon any payment or
distribution of assets to creditors upon any liquidation,
dissolution, winding up, reorganization, assignment for the
benefit of creditors, marshalling of assets or any bankruptcy,
insolvency or similar proceedings of the Company, the holders of
all Senior Debt will first be entitled to receive payment in full
of all amounts due or to become due thereon before the holders of
the Notes will be entitled to receive any payment in respect of
the principal of or premium, if any, or interest on the Notes. In
the event of the acceleration of the maturity of any Notes, the
holders of all Senior Debt will first be entitled to receive
payment in full of all amounts due or to become due thereon
before the holders of the Notes will be entitled to receive any
payment in respect of the principal of or premium, if any, or
interest on the Notes. No payments on account of principal,
premium, if any, or interest in respect of the Notes may be made
if there shall have occurred and be continuing a default in any
payment with respect to Senior Debt, or an event of default with
respect to any Senior Debt permitting the holders thereof to
accelerate the maturity thereof.
19
By reason of such subordination, in the event of
insolvency, creditors of the Company who are not holders of
Senior Debt or of the Notes may recover less, ratably, than
holders of Senior Debt and may recover more, ratably, than
holders of the Notes. The Notes are also subordinated by
operation of law to all liabilities (including trade payables) of
the Company's subsidiaries.
"Senior Debt" is defined to mean the principal of and
premium, if any, and interest on the following, whether
outstanding at the date of execution of the Indenture or
thereafter incurred or created: (a) indebtedness of the Company
for money borrowed, or evidenced by a note or similar instrument
or written agreement given in connection with the acquisition of
any businesses, properties or assets, including securities, (b)
indebtedness of the Company to banks or financial institution
evidenced by notes or other written obligations, (c) indebtedness
of the Company evidenced by notes, debentures, bonds or other
securities issued under the provisions of an indenture or similar
instrument, (d) indebtedness of others of the kinds described in
the preceding clauses (a), (b) and (c) that the Company has
assumed, guaranteed or otherwise assured the payment thereof,
directly or indirectly, and (e) deferrals, renewals, extensions
and refundings of, or bonds, debentures, notes or other evidences
of indebtedness issued in exchange for, the indebtedness
described in the preceding classes (a) through (d) whether or not
there is any notice to or consent of the holders of Notes; except
(i) indebtedness and advances among the Company and its direct
and indirect Subsidiaries, (ii) any particular indebtedness,
deferral, renewal, extension or refunding, if it is expressly
stated in the governing terms, or in the assumption or guarantee,
thereof that the indebtedness involved is not Senior Debt and
(iii) the Company's 3 3/4% Convertible Subordinated Debentures
due 2002.
At September 30, 1997, Senior Debt aggregated approximately
$260.1 million, excluding accrued interest. The Company expects
from time to time to incur additional indebtedness constituting
Senior Debt. The Indenture does not prohibit or limit the
incurrence of additional Senior Debt.
Events of Default; Notice and Waiver
The Indenture provides that if any Event of Default shall
have occurred and be continuing the Trustee or the holders of not
less than 25 percent in principal amount at maturity of the Notes
then outstanding may declare due and payable immediately the sum
of the Issue Price plus accrued Original Issue Discount from the
date of issue of the Notes to the date of declaration and accrued
interest, but if the Company shall cure all defaults (except the
nonpayment of Issue Price and accrued Original Issue Discount
which shall have become due by acceleration) and certain other
conditions are met, such declaration may be annulled and past
defaults may be waived by the holders of a majority in principal
amount at maturity of the Notes then outstanding. In the case of
certain events of bankruptcy or insolvency, the Issue Price of
the Notes plus the Original Issue Discount accrued thereon to the
occurrence of such event shall automatically become and be
immediately due and payable. See "--Subordination of Notes"
above. Under certain circumstances, the holders of a majority in
aggregate principal amount at maturity of the outstanding Notes
may rescind any such acceleration with respect to the Notes and
its consequences.
20
Interest shall accrue and be payable on demand upon a default in
the payment of the Issue Price, accrued Original Issue Discount,
or any Redemption Price, Purchase Price or Fundamental Change
redemption price to the extent that payment of such interest
shall be legally enforceable.
Under the Indenture, Events of Default are defined as: (i)
default in payment of the principal amount at maturity, Issue
Price, accrued Original Issue Discount, Redemption Price or
Fundamental Change Redemption Price with respect to any Note when
such becomes due and payable (whether or not payment is
prohibited by the provisions of the Indenture); (ii) default for
30 days in payment of any installment of interest on the Notes;
(iii) failure by the Company to comply with any of its other
agreements in the Notes or the Indenture upon the receipt by the
Company of notice of such default by the Trustee or by holders of
not less than 25 percent in aggregate principal amount at
maturity of the Notes then outstanding and the Company's failure
to cure such default within 45 days after receipt by the Company
of such notice; or (iv) certain events of bankruptcy or
insolvency. The Indenture provides that the Trustee may withhold
notice to the holders of Notes of any default (except in payment
of the principal amount at maturity, or interest on, the Notes)
if the Trustee considers it in the interest of the holders of the
Notes to do so.
Modification
The Indenture contains provisions permitting the Company
and the Trustee, with the consent of the holders of not less than
a majority in principal amount at maturity of the Notes at the
time outstanding, to modify the Indenture or any supplemental
indenture or the rights of the holders of the Notes, except that
no such modification shall (i) extend the fixed maturity of any
Note, reduce the rate or extend the time or payment of interest
thereon, change the rate of accrual or extend the time of payment
in connection with Original Issue Discount, reduce the principal
amount at maturity thereof, reduce any amount payable upon
redemption thereof, change the obligation of the Company to make
redemption of any Note upon the happening of any Fundamental
Change, impair or affect the right of a holder to institute suit
for the payment thereof, change the currency in which the Notes
are payable, impair the right to convert the Notes into Common
Stock subject to the terms set forth in the Indenture or modify
the provisions of the Indenture with respect to the subordination
of the Notes in a manner adverse to the holders of the Notes in
any material respect, without the consent of the holder of each
Note so affected, or (ii) reduce the aforesaid percentage of
Notes, without the consent of the holders of all the Notes then
outstanding.
Registration Rights of the Noteholders
The Company has filed with the Commission a shelf
registration statement, of which this Prospectus forms a part,
covering resales by holders of the Notes and the Common Stock
issuable upon conversion of the Notes within 90 days after the
latest date of original issuance of the Notes. The Company will
use its reasonable efforts to cause the registration statement to
become effective as promptly as is practicable and to keep the
registration statement effective until the earlier of (i) the
sale pursuant to the shelf registration statement of all the
securities registered thereunder and (ii) the expiration of the
21
holding period applicable to such securities under Rule 144(k)
under the Securities Act, or any successor provision. The Company
will be permitted to suspend the use of this Prospectus for a
period not to exceed 30 days in any three-month period, or not to
exceed an aggregate of 90 days in any 12-month period under
certain circumstances relating to pending corporate developments,
public filings with the Commission and similar events. The
Company has agreed to pay predetermined liquidated damages to
those holders of Notes and those holders of Common Stock issued
upon conversion of the Notes who have requested to sell pursuant
to the registration statement if the registration statement is
not timely filed or if the Prospectus is unavailable for periods
in excess of those permitted above. The Company has further
agreed, if such failure to file or unavailability continues for
an additional 30 day period, to pay predetermined liquidated
damages to all holders of Notes and all holders of Common Stock
issued upon conversion of the Notes, whether or not such holder
has requested to sell pursuant to the shelf registration
statement. Such predetermined liquidated damages shall be
determined, in respect of any Note, at a rate equal to .5% of the
accreted amount thereof and, in respect of any shares of Common
Stock, at a rate equal to .5% of the then applicable conversion
price, which equals the accreted amount of the Notes divided by
the Conversion Rate. A holder who sells Notes and Common Stock
issued upon conversion of the Notes pursuant to the shelf
registration statement generally will be required to be named as
a selling securityholder in the Prospectus, deliver a Prospectus
to purchasers and be bound by those provisions of the
Registration Rights Agreement that are applicable to such holder
(including certain indemnification provisions). The Company will
pay all expenses of the registration statement, provide to each
registered holder copies of the Prospectus, notify each
registered holder when the shelf registration statement has
become effective and take certain other actions as are required
to permit, subject to the foregoing, unrestricted resales of the
Notes and the Common Stock issued upon conversion of the Notes.
Certain holders of the Company's Common Stock have certain
rights with respect to the registration under the Securities Act,
for resale to the public, of less than two percent of the shares
of the Company's Common Stock (the "Registrable Shares"). The
Company's agreements with such holders provide that in the event
the Company proposes to register its securities under the
Securities Act, such stockholders may be entitled to have the
Registrable Shares registered, subject to certain conditions and
limitations. The Company will be obligated to pay all expenses
associated with the exercise of such registration rights other
than underwriting discounts or commissions incurred in connection
with such registration and the legal fees of the holders of the
Registrable Shares. The Company intends to file a registration
statement with respect to the Registrable Shares subsequent to
the filing of the registration statement of which this Prospectus
forms a part.
Limitations of Claims in Bankruptcy
If a bankruptcy proceeding is commenced in respect of the
Company, the claim of the holder of a Note is, under Title 11 of
the United States Code, limited to the Issue Price of the Note
plus that portion of the Original Issue Discount and interest
that has accrued from the date of issue to the commencement of
the proceeding. In addition, the holders of the Notes will be
22
subordinated in right of payment to Senior Debt and effectively
subordinated to the indebtedness and other obligations of the
Company's subsidiaries. See "Subordination of Notes" above.
Taxation of Notes
See "Certain Federal Income Tax Considerations" for a
discussion of certain Federal tax aspects which will apply to
holders of Notes.
Information Concerning the Trustee
The Bank of New York, as the Trustee under the Indenture,
has been appointed by the Company as paying agent, conversion
agent, registrar and custodian with regard to the Notes. The
Indenture provides that, except during the continuance of an
Event of Default, the Trustee thereunder will exercise such
rights and powers vested in it under the Indenture and use the
same degree of care and skill in its exercise as a prudent person
would exercise under the circumstances in the conduct of such
person's own affairs.
The Indenture and provisions of the Trust Indenture Act of
1939, as amended ("TIA"), incorporated by reference therein
contain limitations on the rights of the Trustee thereunder,
should it become a creditor of the Company, to obtain payment of
certain claims in certain cases or to realize on certain property
received by it in respect of any such claims, as security or
otherwise. The Trustee is permitted to engage in other
transactions; provided, however, that if it acquires any
conflicting interest (within the meaning of the TIA) it must
eliminate such conflicting interest or resign.
DESCRIPTION OF CAPITAL STOCK AND RIGHTS
The total number of shares of all classes of capital stock
which the Company has the authority to issue is 245,000,000
shares, consisting of 225,000,0000 shares of Common Stock, par
value $.10 per share, and 20,000,000 shares of Preferred Stock,
without par value. No shares of Preferred Stock have been issued.
The number of shares of Common Stock which were issued as of September
30, 1997 was 138,923,546 (of which 12,714,304 were Treasury
Stock), as restated to reflect a three-for-two stock split paid
in the form of a stock dividend on July 15, 1997. To the best of
the Company's knowledge based on publicly available information
as of November 31, 1997, no person was the beneficial owner of more
than 5% of Common Stock other than The Capital Group Companies,
Inc. and its subsidiaries, which owned 7.8% of the Common Stock
as of March 24, 1997. The following description of Common Stock
is qualified in its entirety by reference to the Restated
Certificate of Incorporation, as amended, and By-Laws of the
Company as amended, copies of which will be available for
inspection at the office of the Trustee in New York during the
term of the Notes.
The holders of Common Stock are entitled to receive such
dividends as the Board of Directors of the Company from time to
time may declare out of funds legally available therefor. See
"Common Stock Price Range and Dividend Payments." Each holder of
Common Stock is entitled to one vote for each share held on all
matters voted upon by the stockholders of the Company, including
23
the election of directors. The Common Stock does not have
cumulative voting rights. Election of directors is decided by the
holders of a plurality of the shares entitled to vote and present
in person or by proxy at a meeting for the election of directors.
In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company, holders of Common Stock
are entitled to share equally and ratably in the balance of
assets, if any, remaining after payment of all debts and
liabilities.
The Common Stock has no conversion or preemptive rights or
redemption or sinking fund provisions. The issued and outstanding
shares of Common Stock are fully paid and non-assessable.
The transfer agent and registrar for the Common Stock is
First Chicago Trust Company of New York.
Rights
In 1989, the Company adopted a Preferred Share Rights Plan
designed to deter coercive takeover tactics. Pursuant to this
plan, holders of shares of Common Stock are entitled (such
entitlement, the "Rights") to purchase 1/100th of a share of
Preferred Stock at an exercise price of $100 per such 1/100th of
a share if a person or group acquires, or commences a tender
offer for, 15% or more of the Company's outstanding Common Stock.
Rights holders (other than the 15% stockholder) will also be
entitled to buy, for the $100 exercise price, shares of Common
Stock with a market value of $200 in the event a person or group
actually acquires 15% or more of the Common Stock. Rights may be
redeemed at $.01 per Right under certain circumstances. The
Rights will not be represented by separate certificates, and thus
will not be separable from the Common Stock, until after the
Rights become exercisable. The Conversion Rate will be adjusted
if and when the Rights become exercisable and separable from the
Common Stock, and shares of Common Stock issued after the Rights
become exercisable and separable (including those issued upon
conversion of the Notes) will not be entitled to such Rights. See
"Description of the Notes--Conversion of the Notes." The Rights
expire by their terms on July 18, 1999 unless earlier redeemed by
the Company.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of certain United States federal
income tax consequences of the purchase, ownership and
disposition of the Notes and the Common Stock into which Notes
may be converted, but does not purport to be a complete analysis
of all the potential tax considerations relating thereto. This
summary is based on laws, regulations, rulings and decisions now
in effect, all of which are subject to change. This summary deals
only with holders that will hold Notes and Common Stock as
capital assets and does not address tax considerations applicable
to investors that may be subject to special tax rules such as
banks, insurance companies, tax-exempt organizations, dealers in
securities or currencies, persons that will hold Notes or Common
Stock as part of an integrated investment (including a
"straddle") comprised of Notes or shares of Common Stock and one
or more other positions, persons that
24
have a "functional currency" other than the U.S. dollar or
holders of Notes that did not acquire the Notes in the initial
distribution thereof at their original issue price. Investors
considering the purchase of Notes should consult their own tax
advisors with respect to the application of the federal income
tax laws to their particular situations as well as any tax
consequences arising under the laws of any state, local or
foreign taxing jurisdiction.
As used herein, the term "United States Holder" means the
beneficial owner of a Note or Common Stock that is, for United
States federal income tax purposes, (i) a citizen or resident of
the United States, (ii) a domestic corporation or (iii) otherwise
subject to United States federal income taxation on a net income
basis.
Interest and Original Issue Discount
Payments of interest on the Notes will constitute
"qualified stated interest" (as defined below) and will generally
be taxable to a United States Holder as ordinary interest income
at the time such interest is received or accrued, in accordance
with such holder's method of accounting for federal income tax
purposes.
United States Holders of Notes generally will also be
subject to the special tax accounting rules for original issue
discount obligations provided by the Internal Revenue Code of
1986, as amended (the "Code"). Accordingly, as described in more
detail below, United States Holders of the Notes will be required
to include original issue discount in gross income as ordinary
income as it accrues, in advance of the receipt of cash
attributable to that income.
In general, a debt obligation that is issued for an amount
less than its stated redemption price at maturity will be
considered to have been issued with original issue discount for
U.S. federal income tax purposes. Under the applicable
regulations, the stated redemption price at maturity will equal
100 percent of the principal amount.
Each United States Holder of a Note, whether such holder
uses the cash or the accrual method of tax accounting, will be
required to include in gross income the sum of the "daily
portions" of original issue discount on that Note for all days
during the taxable year that the United States Holder owns the
Note. The daily portions of original issue discount on a Note are
determined by allocating to each day in any accrual period (each
successive period that ends on an interest payment date) a
ratable portion of the original issue discount allocable to that
accrual period. The amount of original issue discount allocable
to each accrual period is determined by (i) multiplying the
"adjusted issue price" (as defined below) at the beginning of the
accrual period by the annual yield to maturity of the Note and
(ii) subtracting from that product the amount of qualified stated
interest payable at the end of the period. The "adjusted issue
price" of a Note at the beginning of any accrual period will be
the sum of its issue price (generally, the first price at which a
substantial amount of Notes are sold, disregarding sales to bond
houses, brokers, or similar persons or organizations acting in
the capacity of underwriters, placement agents or wholesalers)
and the amount of original issue discount allocable to all prior
accrual periods, reduced by the amount of all payments
25
previously made on the Notes that were not qualified stated
interest payments. The term "qualified stated interest" generally
means stated interest that is unconditionally payable in cash or
property (other than debt instruments of the Company) at least
annually during the entire term of the Notes at a single fixed
rate of interest. As a result of this "constant yield" method of
including original issue discount in income, the amounts
includible in income by a United States Holder in respect of a
Note are lesser in the early years and greater in the later years
than the amounts that would be includible on a straight-line
basis.
Sale, Exchange or Retirement of the Notes
Upon the sale, exchange or retirement (including a
redemption by the Company) of a Note, a United States Holder
generally will recognize capital gain or loss equal to the
difference between the amount realized on the sale, exchange or
retirement (except to the extent such amount is attributable to
accrued interest income, which will be treated as such) and such
holder's adjusted tax basis in the Note. A holder's adjusted tax
basis in a Note will generally be equal to the amount paid for
the Note by such holder increased by any original issue discount
included in income by the holder, and reduced by any payments
received, other than payments of qualified stated interest. Such
capital gain or loss will be long-term capital gain or loss if
the United States Holder's holding period in the Note is more
than one year at the time of disposition. The distinction between
capital gain or loss and ordinary income or loss is important for
purposes of the limitations on a United States Holder's ability
to offset capital losses against ordinary income and because
United States Holders that are individuals may be entitled to a
preferential rate on long-term capital gains. The Taxpayer Relief
Act of 1997 further reduces tax rates on capital gains recognized
by individuals in respect of assets held for more than 18 months.
United States Holders are advised to consult with their own tax
advisers regarding the application of the Taxpayer Relief Act of
1997 to their particular circumstances.
Conversion of the Notes
A United States Holder generally will not recognize any
income, gain, or loss upon conversion of a Note into Common Stock
except with respect to cash received in lieu of a fractional
share of Common Stock. Such holder's basis in the Common Stock
received on conversion of a Note will be the same as such
holder's tax basis in the Note at the time of conversion (reduced
by any basis allocable to a fractional share interest as
described below), and the holding period for the Common Stock
received on conversion will include the holding period of the
Note converted, except that the holding period of the Common
Stock allocable to accrued original issue discount may commence
with the conversion.
Cash received in lieu of a fractional share of Common Stock
upon conversion will be treated as a payment in exchange for the
fractional share interest in the Common Stock. Accordingly, the
receipt of cash in lieu of a fractional share of Common Stock
will generally result in capital gain or loss (measured by the
difference between the cash received for the fractional share and
the United States Holder's basis in the fractional share).
26
Constructive Dividends
If at any time (a) the Company makes a distribution to its
shareholders or purchases Common Stock in a tender offer and such
distribution or purchase would be taxable to such stockholders as
a dividend for United States federal income tax purposes (e.g.,
distributions of evidences of indebtedness or assets of the
Company, but generally not stock dividends or rights to subscribe
for Common Stock) and, pursuant to the antidilution provisions of
the Indenture, the Conversion Rate of the Notes is increased, or
(b) the Conversion Rate of the Notes is increased at the
discretion of the Company, such increase may be deemed to be the
payment of a taxable dividend to holders or beneficial owners of
Notes (pursuant to Section 305 of the Code). Holders of Notes
therefore could have taxable income as a result of an event in
which they receive no cash or property. Similarly, a failure to
adjust the Conversion Rate to reflect a stock dividend or other
event increasing the proportionate interest of the holders of
outstanding Common Stock could, in some circumstances, give rise
to deemed dividend income to United States Holders of such Common
Stock.
Dividends on Common Stock
Dividends paid on Common Stock generally will be includible
in the income of a United States Holder as ordinary income to the
extent of the Company's current or accumulated earnings and
profits. Subject to certain limitations, a corporate taxpayer
holding Common Stock that receives dividends thereon generally
will be eligible for a dividends-received deduction equal to 70%
of the dividends received.
Sale, Exchange or Redemption of Common Stock
Upon the sale, exchange or redemption of Common Stock, a
United States Holder generally will recognize capital gain or
loss equal to the difference between the amount realized on the
sale, exchange or redemption and the holder's adjusted basis in
the Common Stock. Such capital gain or loss will be long-term
capital gain or loss if the holder's holding period in the Common
Stock was more than one year at the time of the sale, exchange or
redemption. The distinction between capital gain or loss and
ordinary income or loss is important for purposes of the
limitations on a United States Holder's ability to offset capital
losses against ordinary income and because United States Holders
that are individuals may be entitled to a preferential rate on
long-term capital gains. The Taxpayer Relief Act of 1997 further
reduces tax rates on capital gains recognized by individuals in
respect of assets held for more than 18 months. United States
Holders are advised to consult with their own tax advisers
regarding the application of the Taxpayer Relief Act of 1997 to
their particular circumstances.
Information Reporting and Backup Withholding Tax
In general, information reporting requirements will apply
to payments of principal, premium, if any, and interest on a
Note, payments of dividends on Common Stock, and payment of the
proceeds of the sale of a Note or Common Stock to certain
non-corporate United States Holders, and a 31% backup withholding
27
tax may apply to such payments if the United States Holder (i)
fails to furnish or certify its correct taxpayer identification
number to the payor in the manner required, (ii) is notified by
the Internal Revenue Service (the "IRS") that it has failed to
report payments of interest and dividends properly, or (iii)
under certain circumstances, fails to certify that it has not
been notified by the IRS that it is subject to backup withholding
for failure to report interest and dividend payments. Any amounts
withheld under the backup withholding rules from a payment to a
United States Holder will be allowed as a credit against such
holder's United States federal income tax liability and may
entitle the United States Holder to a refund.
Non-United States Holders
Subject to the discussion of backup withholding below,
payments of interest (including original issue discount) on the
Notes to, or on behalf of, any beneficial owner of a Note that
is, with respect to the United States, a nonresident alien or a
foreign corporation and that is not subject to United States
federal income tax as a result of any direct or indirect
connection to the United States other than its ownership of a
Note or Common Stock (a "Non-United States Holder") will not be
subject to U.S. federal income or withholding taxes, provided
that the Non-United States Holders provides an appropriate
statement (generally on IRS Form W-8), signed under penalties of
perjury, identifying the Non-United States Holder and stating
that the holder is not a U.S. person and provided that the holder
is not a "10% shareholder" or "related controlled foreign
corporation" with respect to the Company. If these conditions are
not met, a 30% withholding tax will apply to interest income from
the Notes, unless an income tax treaty reduces or eliminates such
tax. A 30% withholding tax will apply to dividends paid (or
deemed paid, as described under "Constructive Dividends") on
shares of Common Stock held by a Non-United States Holder, unless
an income tax treaty reduces or eliminates such tax.
Any capital gain realized on the sale, exchange, redemption
or other disposition of a Note or shares of Common Stock
(including the receipt of cash in lieu of fractional shares upon
conversion of a Note into shares of Common Stock) by a Non-United
States Holder will not be subject to United States federal income
or withholding taxes unless, in the case of an individual, such
holder is present in the United States for 183 days or more in
the taxable year of the sale, exchange, redemption, or other
disposition and certain other conditions are met.
Except as described above with respect to the receipt of
cash in lieu of fractional shares by certain Non-United States
Holders upon conversion of Notes, no United States federal income
or withholding taxes will be imposed upon the conversion of Notes
into shares of Common Stock.
If interest with respect to the Notes, dividends on Common
Stock or capital gain on the sale, exchange or other disposition
of the Notes or Common Stock is "effectively connected" with the
conduct of a trade or business by a nonresident alien or foreign
corporation in the United States, such income will be subject to
United States federal income tax at the same rate that applies
for United States Holders and may also be subject to a United
States "branch
28
profits tax" at a 30% rate (or such lower rate as may be
specified by an applicable income tax treaty).
Payments made on Notes or shares of Common Stock and
proceeds from the sale of a Note or shares of Common Stock
received by a Non-United States Holder will not be subject to a
backup withholding tax of 31% or to information reporting
requirements unless, in general, the holder fails to comply with
certain reporting procedures or otherwise fails to establish an
exemption from such tax reporting requirements under applicable
provisions of the Code.
On April 15, 1996, the Internal Revenue Service released
proposed revisions (the "Proposed Regulations") to the
regulations interpreting the withholding tax, information
reporting and backup withholding tax rules described above. In
general, the Proposed Regulations would require certain
Non-United States Holders to provide additional information in
order to establish an exemption from or reduce the rate of
withholding tax or backup withholding tax. The Proposed
Regulations are proposed generally to be effective for payments
made after December 31, 1997. It is not possible to predict
whether, or in what form, the Proposed Regulations ultimately
will be adopted.
SELLING SECURITYHOLDERS
The Notes offered hereby were originally issued by the
Company and sold by the Initial Purchasers in transactions exempt
from the registration requirements of the Securities Act to
"qualified institutional buyers" (as defined in Rule 144A under
the Securities Act) or other institutional "accredited investors"
(as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act). The Selling Securityholders (which term includes
their transferees, pledgees, donees or their successors) may from
time to time offer and sell pursuant to this Prospectus any or
all of the Notes and Common Stock issued upon conversion of the
Notes.
Prior to any use of this Prospectus in connection with an
offering of the Notes and/or the Common Stock issuable upon
conversion of the Notes, this Prospectus will be supplemented to
set forth the name and number of shares beneficially owned by the
Selling Securityholder intending to sell such Notes and/or Common
Stock and the number of Notes and/or shares of Common Stock to be
offered. The Prospectus Supplement will also disclose whether any
Selling Securityholder selling in connection with such Prospectus
Supplement has held any position or office with, been employed by
or otherwise has had a material relationship with, the Company or
any of its affiliates during the three years prior to the date of
the Prospectus Supplement.
PLAN OF DISTRIBUTION
The Company will not receive any of the proceeds of the
sale of the Notes and Common Stock offered hereby. The Notes and
Common Stock may be sold from time to time to purchasers directly
by the Selling Securityholders. Alternatively, the Selling
Securityholders may from time to time offer the Notes in the form
of discounts, concessions or commissions from the Selling
Securityholders and/or the purchasers of the Notes and Common
Stock for whom
29
they may act as agent. The Selling Securityholders and any such
brokers, dealers or agents who participate in the distribution of
the Notes and Common Stock may be deemed to be "underwriters,"
and any profits on the sale of the Notes and Common Stock by them
and any discounts, commissions or concessions received by any
such brokers, dealers or agents might be deemed to be
underwriting discounts and commissions under the Securities Act.
To the extent the Selling Securityholders may be deemed to be
underwriters, the Selling Securityholders may be subject to
certain statutory liabilities, including, but not limited to,
Sections 11, 12 and 17 of the Securities Act and Rule 10b-5 under
the Exchange Act.
The Notes and Common Stock offered hereby may be sold from
time to time in one or more transactions at fixed prices, at
prevailing market prices at the time of sale, at varying prices
determined at the time of sale or at negotiated prices. The Notes
and Common Stock may be sold by one or more of the following
methods, without limitation: (a) a block trade in which the
broker or dealer so engaged will attempt to sell the Notes and
Common Stock issuable upon conversion thereof as agent but may
position and resell a portion of the block as principal to
facilitate the transaction; (b) purchases by a broker or dealer
as principal and resale by such broker or dealer for its account
pursuant to this Prospectus; (c) ordinary brokerage transactions
and transactions in which the broker solicits purchasers; (d) an
exchange distribution in accordance with the rules of such
exchange; (e) face-to-face transactions between sellers and
purchasers without a broker-dealer; (f) through the writing of
options; and (g) other. At any time a particular offer of the
Notes and Common Stock is made, a revised Prospectus or
Prospectus Supplement, if required, will be distributed which
will set forth the aggregate amount and type of Securities being
offered and the terms of the offering, including the name or
names of any underwriters, dealers or agents, any discounts,
commissions, concessions and other items constituting
compensation from the Selling Securityholders and any discounts,
commissions or concessions allowed or reallowed or paid to
dealers. Such Prospectus Supplement and, if necessary, a
post-effective amendment to the Registration Statement of which
this Prospectus is apart, will be filed with the Commission to
reflect the disclosure of additional information with respect to
the distribution of the Notes and Common Stock. In addition, the
Notes and Common Stock covered by this Prospectus may be sold in
private transactions or under Rule 144 rather than pursuant to
this Prospectus.
To the best knowledge of the Company, there are currently
no plans, arrangements or understandings between any Selling
Securityholders and any broker, dealer, agent or underwriter
regarding the sale of the Securities by the Selling
Securityholders. There is no assurance that any Selling
Securityholder will sell any or all of the Securities offered by
it hereunder or that any such Selling Securityholder will not
transfer, devise or gift such Securities by other means not
described herein.
The Selling Securityholders and any other person
participating in such distribution will be subject to applicable
provisions of the Exchange Act and the rules and regulations
thereunder, including, without limitation, Regulation M which may
limit the timing of purchases and sales of any of the Notes and
Common Stock by the Selling Securityholders and any other such
person. Furthermore, Regulation M of the Exchange Act may
restrict the ability of any
30
person engaged in the distribution of the Notes and Common Stock
to engage in market-making activities with respect to the
particular Notes and Common Stock being distributed for a period
of up to five business days prior to the commencement of such
distribution. All of the foregoing may affect the marketability
of the Notes and Common Stock and the ability of any person or
entity to engage in market-making activities with respect to the
Notes and Common Stock.
Pursuant to the Registration Rights Agreement entered into
in connection with the offer and sale of the Notes by the
Company, each of the Company and the Selling Securityholders will
be indemnified by the other against certain liabilities,
including certain liabilities under the Securities Act, or will
be entitled to contribution in connection therewith.
The Company has agreed to pay substantially all of the
expenses incidental to the registration, offering and sale of the
Securities to the public other than commissions, fees and
discounts of underwriters, brokers, dealers and agents.
LEGAL MATTERS
The validity of the Notes and the underlying Common Stock
offered hereby will be passed upon for the Company by Nicholas J.
Camera, General Counsel of the Company.
EXPERTS
The consolidated financial statements of the Company and its
subsidiaries incorporated in this Prospectus by reference to the
Company's Annual Report on Form 10-K for the year ended December
31, 1996, as amended by the Company's Amendment Number One on
Form 10-K/A for the year ended December 31, 1996, have been so
incorporated in reliance on the report of Price Waterhouse LLP,
independent accountants, given on the authority of said firm as
experts in accounting and auditing.
31
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses payable by the registrant in
connection with the distribution of the securities being
registered are as follows:
Registration fees............................... $63,425
Legal fees and expenses......................... 30,000
Fee of accountants, Price Waterhouse LLP ....... 9,700
Miscellaneous................................... 0
Total........................................... $103,125
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of Title 8 of the Delaware Code gives a
corporation power to indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in
the right of the corporation) by reason of the fact that he is or
was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by
him in connection with such action, suit or proceeding if he
acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The same
Section also gives a corporation power to indemnify any person
who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the
right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee, or
agent of another corporation, partnership, joint venture, trust
or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit if he acted in good
faith and in a manner he reasonable believed to be in or not
opposed to the best interests of the corporation and except that
no indemnification shall be made in respect of any claim, issue
or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was
brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to
indemnify for such expenses
II-1
which the Court of Chancery or such other court shall deem
proper. Also, the Section states that, to the extent that a
director, officer, employee or agent of a corporation has been
successful on the merits or otherwise in defense or any such
action, suit or proceeding, or in defense of any claim, issue or
matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by
him in connection therewith.
The Company's bylaws contain specific authority for
indemnification by the Company of current and former directors,
officers, employees or agents of the Company on terms that have
been derived from Section 145 of Title 8 of the Delaware Code.
The Company maintains policies of insurance under which the
Company and its directors and officers are insured subject to
specified exclusions and deductible and maximum amounts against
loss arising from any claim which may be made against the Company
or any director or officer of the Company by reason of any breach
of duty, neglect, error, misstatement, omission or act done or
alleged to have been done while acting in their respective
capabilities.
ITEM 16. EXHIBITS.
Exhibit Number Description
-------------- -----------
4.1 Indenture dated as of September 16, 1997 between
the Company and The Bank of New York, as trustee.
4.2 Form of Note (included in Exhibit 4.1).
4.3 Registration Rights Agreement dated as of
September 16, 1997 between the Company and
Morgan Stanley & Co. Incorporated, Goldman,
Sachs & Co., and SBC Warburg Dillon Read Inc.
5 Opinion of Nicholas J. Camera, Esq.
12 Statement of Ratio of Earnings to Fixed Charges.
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Nicholas J. Camera, Esq. (included in
Exhibit 5).
24 Power of Attorney (included in Part II of this
Registration Statement).
25 Statement re Eligibility of Trustee on Form T-1.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
II-2
(1) To file, during any period in which offers or sales are being
made of the securities registered hereby, a post-effective
amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in this registration statement. Notwithstanding
the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high end
of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent
no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation
of Registration Fee" table in this registration
statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
this registration statement or any material change to
such information in this registration statement;
provided, however, that the undertakings set forth in paragraphs
(i) and (ii) above do not apply if the information required to be
included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
II-3
(c) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the foregoing provisions or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of
the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
(d) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
Prospectus filed as part of this Registration Statement in
reliance upon Rule 430A and contained in a form of Prospectus
filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of
this Registration Statement as of the time it was effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that
contains a form of Prospectus shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be initial bona fide offering thereof.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-3 and has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of New York, State of New York, on the 15th day of
December, 1997.
THE INTERPUBLIC GROUP OF COMPANIES,
INC.
(Registrant)
By: /s/ Nicholas J. Camera
----------------------
Nicholas J. Camera
Vice President, General Counsel and
Secretary
II-5
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Philip H. Geier,
Jr., Eugene P. Beard and Nicholas J. Camera, and each of them,
his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all
amendments to this Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection
therewith with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full
power and authority to do and to perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully and to all intents and purposes as he might or
would do in person, hereby ratifying and confirming all that said
attorney-in-fact and agents or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
the Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ Philip H. Geier, Jr. Chairman of the Board and December 9,
- ------------------------ President (Principal Executive 1997
Officer)
/s/ Eugene P. Beard Vice Chairman - Finance and December 9,
- ------------------------ Operations (Principal Financial 1997
Officer and Director)
/s/ Joseph M. Studley Vice President and Controller December 9,
- ------------------------ (Principal Accounting Officer) 1997
/s/ Frank J. Borelli Director December 9,
- ------------------------ 1997
/s/ Reginald K. Brack Director December 9,
- ------------------------ 1997
/s/ Jill M. Considine Director December 9,
- ------------------------ 1997
/s/ John J. Dooner, Jr. Director December 9,
- ------------------------ 1997
/s/ Frank B. Lowe Director December 9,
- ------------------------ 1997
/s/ Leif H. Olsen Director December 9,
- ------------------------ 1997
/s/ Martin F. Puris Director December 9,
- ------------------------ 1997
II-6
/s/ Allen Questrom Director December 9,
- ------------------------ 1997
/s/ J. Phillip Samper Director December 9,
- ------------------------ 1997
II-7
EXHIBIT INDEX
Exhibit Number Description
-------------- -----------
4.1 Indenture dated as of September 16, 1997 between
the Company and The Bank of New York, as trustee.
4.2 Form of Note (included in Exhibit 4.1).
4.3 Registration Rights Agreement dated as of
September 16, 1997 between the Company and
Morgan Stanley & Co. Incorporated, Goldman,
Sachs & Co., and SBC Warburg Dillon Read Inc.
5 Opinion of Nicholas J. Camera, Esq.
12 Statement of Ratio of Earnings to Fixed Charges.
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Nicholas J. Camera, Esq. (included in
Exhibit Number 5).
24 Power of Attorney (included in Part II of this
Registration Statement).
25 Statement re Eligibility of Trustee on Form T-1.
Exhibit 4.1
THE INTERPUBLIC GROUP OF COMPANIES, INC.
and
THE BANK OF NEW YORK
Trustee
-----------
INDENTURE
Dated as of September 16, 1997
-----------
1.80% Convertible Subordinated Notes
due 2004
=================================================================
TABLE OF CONTENTS*
-------------
PAGE
----
PARTIES..................................................1
RECITALS.................................................1
Purpose of Indenture...............................1
Form of Face of Note...............................1
Form of Trustee's Certificate of Authentication....5
Form of Reverse of Note............................6
Form of Conversion Notice.........................12
Form of Assignment................................14
Form of Option to Elect Redemption
Upon a Fundamental Change ........................16
Compliance with Legal Requirements................18
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions.............................18
Affiliate........................................18
Applicable Price.................................18
Board of Directors...............................19
Common Stock.....................................19
Company..........................................19
Conversion Rate..................................19
Depositary.......................................19
Event of Default.................................20
Fundamental Change...............................20
Fundamental Change Repurchase Date
...........................................20
Indenture........................................20
Issue Price......................................20
Nasdaq National Market...........................20
Note or Notes....................................20
Noteholder.......................................20
Notes Payment....................................20
Officers' Certificate............................21
Opinion of Counsel...............................21
Original Issue Discount..........................21
Outstanding......................................21
- --------
*This table of contents shall not, for any purposes, be deemed to
be a part of the Indenture.
PAGE
----
Person...........................................22
PORTAL Market....................................22
Predecessor Note.................................22
Principal Office of the Trustee..................22
Proceeding.......................................22
QIB ............................................22
Redemption Price.................................22
Reference Market Price...........................22
Responsible Officer..............................23
Restricted Note..................................23
Rule 144A........................................23
Senior Debt......................................23
Trigger Event....................................23
Trustee..........................................24
U.S. Government Obligations......................24
ARTICLE 2
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES
SECTION 2.01. Designation, Amount and Issue of Notes..24
SECTION 2.02. Form of Notes...........................24
SECTION 2.03. Date and Denomination of Notes;
Payments of Interest ...................24
SECTION 2.04. Execution of Notes......................26
SECTION 2.05. Exchange and Registration of Transfer
of Notes; Restrictions on Transfers;
Depositary .............................28
SECTION 2.06. Mutilated, Destroyed, Lost or
Stolen Notes ...........................37
SECTION 2.07. Temporary Notes.........................38
SECTION 2.08. Cancellation of Notes Paid, Etc.........39
SECTION 2.09. CUSIP Numbers...........................39
ARTICLE 3
REDEMPTION OF NOTES
SECTION 3.01. Redemption Prices.......................40
SECTION 3.02. Notice of Redemption; Selection
of Notes ...............................40
SECTION 3.03. Payment of Notes Called for Redemption..41
SECTION 3.04. No Sinking Fund.........................42
SECTION 3.05. Conversion Arrangement on Call for
Redemption .............................42
ii
PAGE
----
ARTICLE 4
SUBORDINATION
SECTION 4.01. Securities Subordinated to Senior Debt..43
SECTION 4.02. Payment over of Proceeds
upon Dissolution, Etc ..................43
SECTION 4.03. No Payment When Senior Debt in Default..45
SECTION 4.04. Payment Permitted If No Default.........45
SECTION 4.05. Subrogation to Rights of Holders of
Senior Debt.............................46
SECTION 4.06. Provisions Solely to Define
Relative Rights ........................46
SECTION 4.07. Trustee to Effectuate Subordination.....46
SECTION 4.08. No Waiver of Subordination Provisions...46
SECTION 4.09. Notice to Trustee.......................47
SECTION 4.10. Reliance on Judicial Order or
Certificate of Liquidating Agent........48
SECTION 4.11. Trustee Not Fiduciary for Holders of
Senior Debt ............................48
SECTION 4.12. Rights of Trustee as Holder of Senior
Debt; Preservation of Trustee's Rights..49
SECTION 4.13. Article Applicable to Paying Agents.....49
ARTICLE 5
PARTICULAR COVENANTS OF THE COMPANY
SECTION 5.01. Payment of Principal, Premium and
Interest ...............................49
SECTION 5.02. Offices for Notices and Payments, Etc...49
SECTION 5.03. Appointments to Fill Vacancies
in Trustee's Office ....................50
SECTION 5.04. Provision as to Paying Agent............50
SECTION 5.05. Reports by the Company..................51
ARTICLE 6
NOTEHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
SECTION 6.01. Noteholders' Lists......................52
SECTION 6.02. Preservation of Lists...................52
SECTION 6.03. Reports by the Trustee..................52
SECTION 6.04. Statement as to Compliance..............53
SECTION 6.05. Statement by Officers as to Default.....53
SECTION 6.06. Calculation of Original Issue Discount..53
iii
PAGE
----
ARTICLE 7
REMEDIES OF THE TRUSTEE AND NOTEHOLDERS IN THE EVENT OF DEFAULT
SECTION 7.01. Events of Default.......................53
SECTION 7.02. Payment of Notes on Default;
Suit Therefor ..........................56
SECTION 7.03. Application of Monies Collected
by Trustee .............................58
SECTION 7.04. Proceedings by Noteholder...............59
SECTION 7.05. Proceedings by Trustee..................60
SECTION 7.06. Remedies Cumulative and Continuing......60
SECTION 7.07. Direction of Proceedings and Waiver
of Defaults by Majority Noteholders...61
SECTION 7.08. Notice of Defaults......................61
SECTION 7.09. Undertaking to Pay Costs................62
ARTICLE 8
CONCERNING THE TRUSTEE
SECTION 8.01. Duties and Responsibilities of Trustee..62
SECTION 8.02. Reliance on Documents, Opinions, Etc....64
SECTION 8.03. No Responsibility for Recitals, Etc.....66
SECTION 8.04. Trustee, Paying Agents, Conversion Agents
or Registrar May Own Notes..............66
SECTION 8.05. Monies to Be Held in Trust..............66
SECTION 8.06. Compensation and Expenses of Trustee....66
SECTION 8.07. Officers' Certificate as Evidence.......67
SECTION 8.08. Eligibility of Trustee..................67
SECTION 8.09. Resignation or Removal of Trustee.......67
SECTION 8.10. Acceptance by Successor Trustee.........69
SECTION 8.11. Succession by Merger, Etc...............69
ARTICLE 9
CONCERNING THE NOTEHOLDERS
SECTION 9.01. Action by Noteholders...................70
SECTION 9.02. Proof of Execution by Noteholders
................................................70
SECTION 9.03. Who Are Deemed Absolute Owners..........71
SECTION 9.04. Company-Owned Notes Disregarded.........71
SECTION 9.05. Revocation of Consents; Future
Holders Bound ..........................72
iv
PAGE
----
ARTICLE 10
NOTEHOLDERS' MEETINGS
SECTION 10.01. Purposes of Meetings...................72
SECTION 10.02. Call of Meetings by Trustee............73
SECTION 10.03. Call of Meetings by Company or
Noteholders ...........................73
SECTION 10.04. Qualification for Voting...............73
SECTION 10.05. Regulations............................73
SECTION 10.06. Voting.................................74
SECTION 10.07. No Delay of Rights by Meeting..........75
ARTICLE 11
SUPPLEMENTAL INDENTURES
SECTION 11.01. Supplemental Indentures Without Consent
of Noteholders.........................75
SECTION 11.02. Supplemental Indentures with Consent
of Noteholders ........................76
SECTION 11.03. Effect of Supplemental Indentures......77
SECTION 11.04. Notation on Notes......................78
SECTION 11.05. Evidence of Compliance of Supplemental
Indenture to be Furnished to the
Trustee................................78
ARTICLE 12
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 12.01. Company May Consolidate, Etc.,
on Certain Terms ......................78
SECTION 12.02. Successor Corporation to
Be Substituted ........................79
SECTION 12.03. Opinion of Counsel to Be Given
Trustee ...............................80
ARTICLE 13
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 13.01. Discharge of Indenture.................80
SECTION 13.02. Deposited Monies to Be Held in
Trust by Trustee ......................81
SECTION 13.03. Paying Agent to Repay Monies Held......81
SECTION 13.04. Return of Unclaimed Monies.............81
v
PAGE
----
ARTICLE 14
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 14.01. Indenture and Notes Solely Corporate
Obligations ...........................82
ARTICLE 15
CONVERSION OF NOTES
SECTION 15.01. Right to Convert.......................82
SECTION 15.02. Exercise of Conversion Privilege;
Issuance of Common Stock on Conversion;
No Adjustment for Interest or
Dividends .............................83
SECTION 15.03. Cash Payments in Lieu of
Fractional Shares .....................84
SECTION 15.04. Conversion Rate........................85
SECTION 15.05. Adjustment of Conversion Rate..........85
SECTION 15.06. Effect of Reclassification,
Consolidation, Merger or Sale .........93
SECTION 15.07. Taxes on Shares Issued.................93
SECTION 15.08. Reservation of Shares; Shares to Be
Fully Paid; Compliance with Governmental
Requirements; Listing of Common
Stock..................................93
SECTION 15.09. Responsibility of Trustee..............94
SECTION 15.10. Notice to Holders Prior to Certain
Actions ...............................95
ARTICLE 16
REDEMPTION OF NOTES AT OPTION OF HOLDERS
SECTION 16.01. Option to Elect Redemption Upon a
Fundamental Change.....................96
SECTION 16.02. Deposit of Funds for Redemption........97
ARTICLE 17
MISCELLANEOUS PROVISIONS
SECTION 17.01. Provisions Binding on Company's
Successors ............................97
SECTION 17.02. Official Acts by Successor Corporation.97
SECTION 17.03. Conflict with Trust Indenture Act......98
SECTION 17.04. Addresses for Notices, Etc.............98
SECTION 17.05. Governing Law..........................98
SECTION 17.06. Evidence of Compliance with Conditions
Precedent; Certificates to Trustee.....98
SECTION 17.07. Legal Holidays.........................99
vi
PAGE
----
SECTION 17.08. No Security Interest Created...........99
SECTION 17.09. Benefits of Indenture..................99
SECTION 17.10. Table of Contents, Headings, Etc.......99
SECTION 17.11. Execution in Counterparts..............99
Signatures.............................................99
Acknowledgments..........................................
vii
INDENTURE date as of September 16, 1997 between THE
INTERPUBLIC GROUP OF COMPANIES, INC., a Delaware corporation
(hereinafter sometimes called the "Company"), and The Bank of New
York, a New York banking corporation, as trustee hereunder
(hereinafter sometimes called the "Trustee").
W I T N E S S E T H :
WHEREAS, for its lawful corporate purposes, the Company has
duly authorized the issue of its 1.80% Conver ible Subordinated
Notes due 2004 (hereinafter sometimes called the "Notes"), in an
aggregate principal amount at maturity not to exceed $250,000,000
and, to provide the terms and conditions upon which the Notes are
to be authenticated, issued and delivered, the Company has duly
authorized the execution and delivery of this Indenture; and
WHEREAS, the Notes, the certificate of authentication to be
borne by the Notes and a form of conversion notice are to be
substantially in the following forms, respectively:
[FORM OF LEGEND FOR GLOBAL NOTE:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.]
[FORM OF FACE OF NOTE]
FOR UNITED STATES FEDERAL INCOME TAX PURPOSES, THIS
NOTE BEARS ORIGINAL ISSUE DISCOUNT. THE ISSUE PRICE
WITH RESPECT TO EACH $1,000 OF PRINCIPAL AMOUNT AT
MATURITY OF THIS NOTE IS $800.07, THE AMOUNT OF
ORIGINAL ISSUE DISCOUNT WITH RESPECT TO EACH $1,000
OF PRINCIPAL AMOUNT AT MATURITY OF THIS NOTE IS $199.93, THE
ISSUE DATE IS SEPTEMBER 16, 1997 AND THE YIELD TO MATURITY
BASED ON SEMIANNUAL COMPOUNDING IS 5.25%.
THE NOTE EVIDENCED HEREBY HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT
IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT)
("INSTITUTIONAL ACCREDITED INVESTOR"), (2) AGREES THAT IT
WILL NOT, PRIOR TO EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER
RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), RESELL OR OTHERWISE TRANSFER THE NOTE EVIDENCED
HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH
NOTE EXCEPT (A) TO THE INTERPUBLIC GROUP OF COMPANIES, INC.
OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH
TRANSFER, FURNISHED TO THE BANK OF NEW YORK, AS TRUSTEE (OR A
SUCCESSOR TRUSTEE, IF APPLICABLE), A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THE NOTE EVIDENCED HEREBY (THE
FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE), (D)
OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER
THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE) OR (F) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT
(AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH
2
TRANSFER), (3) PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE 1(F) ABOVE), IT WILL FURNISH TO THE BANK
OF NEW YORK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND (4) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THE NOTE EVIDENCED HEREBY IS TRANSFERRED
A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THE NOTE EVIDENCED HEREBY
PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO
SALES OF THE NOTE EVIDENCED HEREBY UNDER RULE 144(K) UNDER
THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER
MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE
HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT
THIS CERTIFICATE TO THE BANK OF NEW YORK, AS TRUSTEE (OR A
SUCCESSOR TRUSTEE, IF APPLICABLE). IF THE PROPOSED TRANSFEREE
IS AN INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER WHO IS
NOT A U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE BANK OF NEW YORK, AS TRUSTEE (OR A SUCCESSOR
TRUSTEE, IF APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS
OR OTHER INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM
THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE
REMOVED UPON THE EARLIER TO OCCUR OF THE TRANSFER OF THE NOTE
EVIDENCED HEREBY PURSUANT TO CLAUSE 1(F) ABOVE OR UPON ANY
TRANSFER OF THE NOTES EVIDENCED HEREBY UNDER RULE 144(K)
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION). AS
USED HEREIN, THE TERMS "UNITED STATES" AND "U.S. PERSON" HAVE
THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.
3
THE INTERPUBLIC GROUP OF COMPANIES, INC.
1.80% CONVERTIBLE SUBORDINATED NOTES DUE 2004
No. $
CUSIP :
THE INTERPUBLIC GROUP OF COMPANIES, INC., a corporation
duly organized and validly existing under the laws of the State
of Delaware (the "Company", which term includes any successor
corporation under the Indenture referred to on the reverse
hereof), for value received hereby promises to pay to
___________, or registered assigns, the principal sum of
$___________ Dollars on September 16, 2004 at the office or
agency of the Company maintained for that purpose in New York,
New York, in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the
payment of public and private debts, and to pay interest,
semi-annually on March 16 and September 16 of each year,
commencing March 16, 1998 on said principal sum at said office or
agency, in like coin or currency, at the rate per annum of 1.80%
from March 16 or September 16, as the case may be, next preceding
the date of this Note to which interest has been paid or duly
provided for, unless the date hereof is a date to which interest
has been paid or duly provided for, in which case from the date
of this Note, or unless no interest has been paid or duly
provided for on the Notes, in which case from September 16, 1997
until payment of said principal sum has been made or duly
provided for. Notwithstanding the foregoing, if the date hereof
is after any March 2 or September 2, as the case may be, and
before the following March 16 or September 16 , this Note shall
bear interest from such March 16 or September 16; provided,
however, that if the Company shall default in the payment of
interest due on such March 16 or September 16, then this Note
shall bear interest from the next preceding March 16 or September
16 to which interest has been paid or duly provided for or, if no
interest has been paid or duly provided for on the Notes, from
September 16, 1997. The interest so payable on any March 16 or
September 16 will be paid to the person in whose name this Note
(or one or more Predecessor Notes) is registered at the close of
business on the record date, which shall be the March 2 or
September 2 (whether or not a business day) next preceding such
March 16 or September 16, provided that any such interest not
punctually paid or duly provided for shall be payable as provided
in the Indenture. Interest may, at the option of the Company, be
paid by check mailed to the registered address of such person.
Reference is made to the further provisions of this Note
set forth on the reverse hereof, including, without limitation,
provisions subordinating the
4
payment of principal amount at maturity, Issue Price, accrued
Original Issue Discount, Redemption Price, Fundamental Change
Redemption Price and interest, if any, in respect of the Notes to
the prior payment in full of all Senior Debt as defined in the
Indenture and provisions giving the holder of this Note the right
to convert this Note into Common Stock of the Company on the
terms and subject to the limitations referred to on the reverse
hereof and as more fully specified in the Indenture. Such further
provisions shall for all purposes have the same effect as though
fully set forth at this place.
This Note shall be deemed to be a contract made under the
laws of the State of New York, and for all purposes shall be
construed in accordance with and governed by the laws of said
State.
This Note shall not be valid or become obligatory for any
purpose until the certificate of authentication hereon shall have
been manually signed by the Trustee under the Indenture.
IN WITNESS WHEREOF, the Company has caused this instrument
to be duly executed under its corporate seal.
THE INTERPUBLIC GROUP OF
COMPANIES, INC.
Dated: By:
-----------------------------
Title:
[Seal]
Attest:
- ---------------------
Secretary
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes described in the within-mentioned
Indenture.
THE BANK OF NEW YORK,
as Trustee
Dated: By:
-----------------------------
Authorized Signatory
5
[FORM OF REVERSE OF NOTE]
THE INTERPUBLIC GROUP OF COMPANIES, INC.
1.80% Convertible Subordinated Notes
due 2004
This Note is one of a duly authorized issue of Notes of the
Company, designated as its 1.80% Convertible Subordinated Notes
due 2004 (herein called the "Notes"), limited to the aggregate
principal amount at maturity of $___________ all issued under and
pursuant to an Indenture dated as of September 16, 1997 (herein
called the "Indenture"), between the Company and The Bank of New
York (herein called the "Trustee"), to which Indenture and all
indentures supplemental thereto reference is hereby made for a
description of the rights, limitations of rights, obligations,
duties and immunities thereunder of the Trustee, the Company and
the holders of the Notes.
In case an Event of Default, as defined in the Indenture,
shall have occurred and be continuing, the principal of and
accrued interest on all Notes may be declared, and upon such
declaration shall become, due and payable, in the manner, with
the effect and subject to the conditions provided in the
Indenture.
The Indenture contains provisions permitting the Company
and the Trustee, with the consent of the holders of not less than
a majority in aggregate principal amount at maturity of the Notes
at the time outstanding, evidenced as in the Indenture provided,
to execute supplemental indentures adding any provisions to or
changing in any manner or eliminating any of the provisions of
the Indenture or of any supplemental indenture or modifying in
any manner the rights of the holders of the Notes; provided,
however, that no such supplemental indenture shall (i) extend the
fixed maturity of any Note, reduce the rate or extend the time of
payment of interest thereon, change the rate of accrual or extend
the time of payment in connection with Original Issue Discount,
reduce the principal amount at maturity thereof, reduce any
amount payable on redemption thereof, change the obligation of
the Company to make redemption of any Note upon the happening of
any Fundamental Change as referred to below, impair or affect the
right of any Noteholder to institute suit for the payment
thereof, change the currency in which the Notes and other amounts
in respect thereof are payable, modify the provisions of the
Indenture with respect to the subordination of the Notes in a
manner adverse to the Noteholders, or impair the right to convert
the Notes into Common Stock subject to the terms set forth in the
Indenture, including Section 15.06, without the consent of the holder
of each Note so affected or (ii) reduce the aforesaid percentage
of Notes, the holders of which are required to consent to any
6
such supplemental indenture, without the consent of the holders
of all Notes then outstanding. It is also provided in the
Indenture that, prior to any declaration accelerating the
maturity of the Notes, the holders of a majority in aggregate
principal amount at maturity of the Notes at the time outstanding
may on behalf of the holders of all of the Notes waive any past
default or Event of Default under the Indenture and its
consequences except a default in the payment of principal amount
at maturity, Issue Price, accrued Original Issue Discount,
Redemption Price, Fundamental Change Redemption Price or
interest, if any, in respect of any of the Notes or a failure by
the Company to convert any Notes into Common Stock of the
Company. Any such consent or waiver by the holder of this Note
(unless revoked as provided in the Indenture) shall be conclusive
and binding upon such holder and upon all future holders and
owners of this Note and any Notes which may be issued in exchange
or substitution herefor, irrespective of whether or not any
notation thereof is made upon this Note or such other Notes.
The indebtedness evidenced by the Notes is, to the extent
and in the manner provided in the Indenture, expressly
subordinate and subject in right of payment to the prior payment
in full of all Senior Debt of the Company as defined in the
Indenture, whether outstanding at the date of the Indenture or
thereafter incurred, and this Note is issued subject to the
provisions of the Indenture with respect to such subordination.
Each holder of this Note, by accepting the same, agrees to and
shall be bound by such provisions and authorizes the Trustee on
his behalf to take such action as may be necessary or appropriate
to effectuate the subordination so provided and appoints the
Trustee his attorney in fact for such purpose.
No reference herein to the Indenture and no provision of
this Note or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional,
to pay the principal amount at maturity, Issue Price, accrued
Original Issue Discount, Redemption Price, Fundamental Change
Redemption Price and interest, if any, in respect of this Note at
the place, at the respective times, at the rate and in the coin
or currency herein prescribed.
Interest on the Notes shall be computed on the basis of a
360-day year of twelve 30-day months. Accrual of Original Issue
Discount shall be calculated on the basis of a 360-day year of
twelve 30-day months, compounded semi-annually.
The Notes are issuable in registered form without coupons
in denominations of $1,000 principal amount at maturity and any
multiple thereof. At the office or agency of the Company referred
to on the face hereof, and in the manner and subject to the
limitations provided in the Indenture, but without payment of any
service charge, Notes may be exchanged for a like aggregate
principal amount at maturity of Notes of other authorized
denominations.
7
The Company may not redeem the Notes prior to September 20,
2000. On or after that date, the Company may, at its option,
redeem the Notes as a whole, or from time to time in part, on any
date prior to maturity, upon mailing a notice of such redemption
not less than thirty nor more than sixty days before the date
fixed for redemption to the holders of Notes at their last
registered addresses, all as provided in the Indenture, at the
following optional Redemption Prices per $1,000 principal amount
at maturity (which prices reflect accrued Original Issue Discount
calculated to each such date), together in each case with accrued
interest to the date fixed for redemption. The Redemption Price
of a Note redeemed between such dates would include an additional
amount reflecting the additional Original Issue Discount accrued
since the next preceding date in the table to the actual
Redemption Date.
- ---------------------------------------------------------
(1) (2) (3)
- ---------------------------------------------------------
Accrued Redemption
Note Original Issue Price
Redemption Date Issue Price Discount (1) + (2)
--------- ---------- ---------
- ---------------------------------------------------------
September 20, 2002 $800.070 $77.215 $877.285
- ---------------------------------------------------------
September 16, 2001 800.070 105.312 905.382
- ---------------------------------------------------------
September 16, 2002 800.070 135.232 935.302
- ---------------------------------------------------------
September 16, 2003 800.070 166.743 966.813
- ---------------------------------------------------------
September 16, 2004 800.070 199.930 1,000.000
- ---------------------------------------------------------
Notwithstanding the foregoing, if the date fixed for redemption
is a March 16 or September 16, then the interest payable on such
date shall be paid to the holder of record on the next preceding
March 2 or September 2.
The Notes are not subject to redemption through the
operation of any sinking fund.
If a Fundamental Change (as defined in the Indenture)
occurs at any time prior to September 16, 2004, each holder of
Notes shall have the right, at such holder's option, to require
the Company to redeem all or any part of such holder's Notes on
the date (the "Fundamental Change Repurchase Date") (or if such
date is not a business day, the next succeeding business day) that
is 45 days after the date of the Company's notice of such
Fundamental Change. Such redemption shall be made at a price (the
"Fundamental Change Repurchase Price") equal to the Issue Price
plus accrued Original Issue Discount to the Fundamental Change
Repurchase Date; provided that, with respect to a Fundamental
Change, if
8
the Applicable Price (as defined in the Indenture) is less than
the Reference Market Price (as defined in the Indenture), the
Company shall redeem such Notes at a price equal to the foregoing
redemption price multiplied by the fraction obtained by dividing
the Applicable Price by the Reference Market Price. In each case,
the Company shall also pay accrued interest, if any, on such
Notes to, but excluding, the Fundamental Change Redemption Date;
provided that if such Fundamental Change Repurchase Date is a
March 16 or September 16, then the interest payable on such date
shall be paid to the holder of record of the Note on the next
preceding March 2 or September 2. The Company shall mail to all
holders of record of the Notes a notice of the occurrence of a
Fundamental Change and of the redemption right arising as a
result thereof on or before the tenth day after the occurrence of
such Fundamental Change. For a Note to be so repaid at the option
of the holder, the Company must receive at the office or agency
of the Company maintained for that purpose in New York, New York
such Note with the form entitled "Option to Elect Redemption Upon
a Fundamental Change" on the reverse thereof duly completed,
together with such Notes duly endorsed for transfer, on or before
the 30th day after the date of such notice (or if such 30th day
is not a business day, the immediately preceding business day).
All questions as to the validity, eligibility (including time of
receipt) and acceptance of any Note for redemption shall be
determined by the Company, whose determination shall be final and
binding.
Subject to the provisions of the Indenture, the holder
hereof has the right, at his option, at any time after 90 days
following the latest date of original issuance of the Notes
through the close of business on September 16, 2004, or, as to
all or any portion hereof called for redemption, prior to the
close of business on the business day immediately preceding the
date fixed for redemption (unless the Company shall default in
payment due upon redemption thereof), to convert the principal
hereof or any portion of such principal which is $1,000 principal
amount at maturity or a multiple thereof, into that number of
fully paid and nonassessable shares of the Company's Common
Stock, as said shares shall be constituted at the date of
conversion, obtained by dividing the principal amount at maturity
of this Note or portion thereof to be converted by $1,000 and
multiplying the result so obtained by 13.386 (the "Conversion
Rate") or such Conversion Rate as adjusted from time to time as
provided in the Indenture, upon surrender of this Note, together
with a conversion notice as provided in the Indenture, to the
Company at the office or agency of the Company maintained for
that purpose in New York, New York, and, unless the shares
issuable on conversion are to be issued in the same name as this
Note, duly endorsed by, or accompanied by instruments of transfer
in form satisfactory to the Company duly executed by, the holder
or by his duly authorized attorney. No adjustments in respect of
accrued Original Issue Discount, interest or dividends will be
made upon any conversion; provided, however, that if this Note
shall be surrendered for conversion during the period
9
from the close of business on any record date for the payment of
interest to the opening of business on the following interest
payment date, this Note (unless it or the portion being converted
shall have been called for redemption on a date in such period)
must be accompanied by an amount, in New York Clearing House
funds, equal to the interest payable on such interest payment
date on the principal amount at maturity being converted. No
fractional shares will be issued upon any conversion, but an
adjustment in cash will be made, as provided in the Indenture, in
respect of any fraction of a share which would otherwise be
issuable upon the surrender of any Note or Notes for conversion.
Any Notes called for redemption, unless surrendered for
conversion on or before the close of business on the business day
immediately preceding the date fixed for redemption, may be
deemed to be purchased from the holder of such Notes at an amount
equal to the applicable Redemption Price, together with accrued
interest to the date fixed for redemption, by one or more
investment bankers or other purchasers who may agree with the
Company to purchase such Notes from the holders thereof and
convert them into Common Stock of the Company and to make payment
for such Notes as aforesaid to the Trustee in trust for such
holders.
Upon due presentment for registration of transfer of this
Note at the office or agency of the Company in New York, New
York, a new Note or Notes of authorized denominations for an
equal aggregate principal amount at maturity will be issued to
the transferee in exchange herefor, subject to the limitations
provided in the Indenture, without charge except for any tax or
other governmental charge imposed in connection therewith.
The Company, the Trustee, any paying agent, any conversion
agent and any Note registrar may deem and treat the registered
holder hereof as the absolute owner of this Note (whether or not
this Note shall be overdue and notwithstanding any notation of
ownership or other writing hereon made by anyone other than the
Company or any Note registrar), for the purpose of receiving
payment hereof, or on account hereof, for the conversion hereof
and for all other purposes, and neither the Company nor the
Trustee nor any other paying agent nor any other conversion agent
nor any Note registrar shall be affected by any notice to the
contrary. All payments made to or upon the order of such
registered holder shall, to the extent of the sum or sums paid,
satisfy and discharge liability for monies payable on this Note.
No recourse for the payment of the principal amount at
maturity, Issue Price, accrued Original Issue Discount,
Redemption Price, Fundamental Change Redemption Price or
interest, if any, in respect of this Note, or for any claim based
hereon or otherwise in respect hereof, and no recourse under or
upon any
10
obligation, covenant or agreement of the Company in the Indenture
or any indenture supplemental thereto or in any Note, or because
of the creation of any indebtedness represented thereby, shall be
had against any incorporator, stockholder, officer or director,
as such, past, present or future, of the Company or of any
successor corporation, either directly or through the Company or
any successor corporation, whether by virtue of any constitution,
statute or rule of law or by the enforcement of any assessment or
penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issue hereof,
expressly waived and released.
11
[FORM OF CONVERSION NOTICE]
CONVERSION NOTICE
To: The Interpublic Group of Companies, Inc.
The undersigned registered holder of this Note hereby
irrevocably exercises the option to convert this Note, or portion
hereof (which is $1,000 principal amount at maturity or a
multiple thereof) below designated, into shares of Common Stock
of The Interpublic Group of Companies, Inc. in accordance with
the terms of the Indenture referred to in this Note, and directs
that the shares issuable and deliverable upon the conversion,
together with any check in payment for fractional shares and any
Notes representing any unconverted principal amount at maturity
hereof, be issued and delivered to the registered holder hereof
unless a different name has been indicated below. If shares or
any portion of this Note not converted are to be issued in the
name of a person other than the undersigned, the undersigned will
pay all transfer taxes payable with respect thereto. Any amount
required to be paid by the undersigned on account of interest
accompanies this Note.
Dated:
-------------------------------
-------------------------------
Signature(s)
12
Fill in for registration of shares
if to be delivered, and Notes
if to be issued other than to
and in the name of the
registered holder:
- ----------------------------------
(Name)
- ----------------------------------
(Street Address)
- ----------------------------------
(City, State and zip code)
Please print name and address
Principal amount at maturity to
be converted (if less than all):
$_____,000
----------------------------------
Social Security or Other
Taxpayer Identification Number
13
[FORM OF ASSIGNMENT]
For value received ___________________________ hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________
(Please insert social security or other taxpayer
identification number of assignee.)
the within Note and hereby irrevocably constitutes and appoints
______________ attorney to transfer the said Note on the books of
the Company, with full power of substitution in the premises.
In connection with any transfer of the within Note occurring
within two years of the original issuance of such Note, the
undersigned confirms that such Note is being transferred:
|_| To The Interpublic Group of Companies, Inc. or a subsidiary
thereof; or
|_| Pursuant to and in compliance with Rule 144A under the Securities
Act of 1933, as amended; or
|_| To an Institutional Accredited Investor pursuant to and in
compliance with the Securities Act of 1933, as amended; or
|_| Pursuant to and in compliance with Regulation S under the
Securities Act of 1933, as amended; or
|_| Pursuant to and in compliance with Rule 144 under the
Securities Act of 1933, as amended.
and unless the box below is checked, the undersigned confirms
that such Note is not being transferred to an "affiliate" of the
Company as defined in Rule 144 under the Securities Act of 1933,
as amended (an "Affiliate"):
14
|_| The transferee is an Affiliate of the Company.
Dated:
---------------------
-------------------------------
Signature(s)
- ------------------------
Signature Guarantee
Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar, which
requirements include membership or participation in the Security
Transfer Agent Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
15
[FORM OF OPTION TO ELECT REDEMPTION
UPON A FUNDAMENTAL CHANGE]
To: The Interpublic Group of Companies, Inc.
The undersigned registered holder of this Note hereby
acknowledges receipt of a notice from The Interpublic Group of
Companies, Inc. (the "Company") as to the occurrence of a
Fundamental Change with respect to the Company and requests and
instructs the Company to redeem this Note, or portion hereof
(which is $1,000 principal amount at maturity or a multiple
thereof) below designated, in accordance with the terms of the
Indenture referred to in this Note, together with accrued
interest to such date, to the registered holder hereof.
Principal amount at maturity
to be converted (if less than all):
$_____,000
Dated:
------------------------
-------------------------------
Signature(s)
-------------------------------
Social Security or Other
Taxpayer Identification Number
NOTICE: The above signatures of the holder(s) hereof must
correspond with the name as written upon the face of the Note in
every particular without alteration or enlargement or any change
whatever.
16
[FORM OF SCHEDULE FOR
ENDORSEMENTS ON GLOBAL SECURITY
TO REFLECT CHANGES IN PRINCIPAL AMOUNT]
Schedule A
Change to Principal Amount of Global Security
Changes to Principal
Principal Amount of
Securities by which this
Global Security Is To Be
Reduced or Increased, and Remaining Principal
Reason for Rediction or Amount of this Notion
Date Increase Global Security Made by
- ---- ----------------------- --------------- -------
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
17
AND WHEREAS, all acts and things necessary to make the
Notes, when executed by the Company and authenticated and made
available for delivery by the Trustee, as in this Indenture
provided, the valid, binding and legal obligations of the
Company, and to constitute these presents a valid agreement
according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Notes
have in all respects been duly authorized;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon
which the Notes are, and are to be, authenticated, issued and
delivered, and in consideration of the premises and of the
purchase and acceptance of the Notes by the holders thereof, the
Company covenants and agrees with the Trustee for the equal and
proportionate benefit of the respective holders from time to time
of the Notes (except as otherwise provided below), as follows:
ARTICLE
DEFINITIONS
SECTION 1.01. Definitions. The terms defined in this Section
(except as herein otherwise expressly provided or unless the
context otherwise requires) for all purposes of this Indenture and
of any indenture supplemental hereto shall have the respective
meanings specified in this Section . The words "herein", "hereof"
and "hereunder" and words of similar import refer to this
Indenture as a whole and not to any particular Article, Section
or other Subdivision. The terms defined in this Article include
the plural as well as the singular.
Affiliate: The term "Affiliate" with respect to 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 Price: The term "Applicable Price" shall mean
(i) in the event of a Fundamental Change in which the holders of
the Common Stock receive only cash, the amount of cash received
by the holder of one share of Common Stock and (ii) in the event
of any other Fundamental Change, the
18
average of the last reported sale price for the Common
Stock (determined as set forth in subsection (f) of Section 15.05)
during the ten Trading Days (as defined in subsection (f) of
Section 15.05) prior to the record date for the determination of the
holders of Common Stock entitled to receive cash, securities,
property or other assets in connection with such Fundamental
Change, or, if there is no such record date, the date upon which
the holders of Common Stock shall have the right to receive such
cash, securities, property or other assets in connection with the
Fundamental Change.
Board of Directors: The term "Board of Directors" shall
mean the Board of Directors of the Company or a committee of such
Board duly authorized to act for it hereunder.
Common Stock: The term "Common Stock" shall mean any stock
of any class of the Company which has no preference in respect of
dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company
and which is not subject to redemption by the Company. Subject to
the provisions of Section 15.06, however, shares issuable on
conversion of Notes shall include only shares of Common Stock,
$.10 par value per share (which is the class designated as Common
Stock of the Company at the date of this Indenture), or shares of
any class or classes resulting from any reclassification or
reclassifications thereof and which have no preference in respect
of dividends or of amounts payable in the event of any voluntary
or involuntary liquidation, dissolution or winding up of the
Company and which are not subject to redemption by the Company;
provided that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable
shall be substantially in the proportion to which the total
number of shares of such class resulting from all such
reclassifications bears to the total number of shares of all such
classes resulting from all such reclassifications.
Company: The term "Company" shall mean The Interpublic
Group of Companies, Inc., a Delaware corporation, and subject to
the provisions of Article 12 shall include its successors and
assigns.
Conversion Rate: The term "Conversion Rate" shall have
the meaning specified in Section 15.04.
Depositary: The term "Depositary" means, with respect
to the Notes issuable or issued in whole or in part in global
form, the person specified in Section 2.05 as the Depositary with
respect to the Notes, until a successor shall have been appointed
and become such pursuant to the applicable provisions of this
Indenture, and thereafter, "Depositary" shall mean or include
such successor.
19
Event of Default: The term "Event of Default" shall mean
any event specified in Section 7.01, continued for the period of
time, if any, and after the giving of the notice, if any, therein
designated.
Fundamental Change: The term "Fundamental Change" means the
occurrence of any transaction or event in connection with which
all or substantially all the Common Stock shall be exchanged for,
converted into, acquired for or constitute the right to receive
consideration (whether by means of an exchange offer,
liquidation, tender offer, consolidation, merger, combination,
reclassification of a company, recapitalization or otherwise)
which is not all or substantially all common stock of a company
listed (or, upon consummation of or immediately following such
transaction or event, which will be listed) on a United States
national securities exchange or approved for quotation on the
Nasdaq National Market or any similar United States system of
automated dissemination of quotations of securities prices.
Fundamental Change Repurchase Date: The term "Fundamental
Change Repurchase Date" has the meaning ascribed to it in Section 16.01(a).
Indenture: The term "Indenture" shall mean this
instrument as originally executed or, if amended or supplemented
as herein provided, as so amended or supplemented.
Issue Price: The term "Issue Price" shall mean, in connection
with the original issuance of such Note (including any
Predecessor Note), the initial issue price at which the Note is
sold as set forth on the face of the Note.
Nasdaq National Market: The term "Nasdaq National Market"
shall mean the electronic inter-dealer quotation system operated
by NASDAQ, Inc., a subsidiary of the National Association of
Securities Dealers, Inc.
Note or Notes: The terms "Note" or "Notes" shall mean any
Note or Notes, as the case may be, authenticated and delivered
under this Indenture.
Noteholder: The terms "Noteholder" or "holder of Notes", or
other similar terms, shall mean any person in whose name at the
time a particular Note is registered on the books of the Company
kept for that purpose in accordance with the terms hereof.
Notes Payment: The term "Notes Payment" shall have the meaning
specified in Section 4.02.
20
Officers' Certificate: The term "Officers' Certificate",
when used with respect to the Company, shall mean a certificate
signed both (a) by its Chairman of the Board of Directors, or any
Vice-Chairman of the Board of Directors, or its President or any
Vice President (whether or not designated by a number or numbers
or a word or words added before or after the title "Vice
President") and (b) by its Treasurer, or Controller, or Secretary
or any Assistant Secretary.
Opinion of Counsel: The term "Opinion of Counsel" shall
mean an opinion in writing signed by legal counsel, who may be an
employee of or counsel to the Company or other counsel acceptable
to the Trustee.
Original Issue Discount: The term "Original ssue Discount"
of any Note means the difference between the Issue Price and the
principal amount at maturity of the Note as set forth on the face
of the Note. For purposes of this Indenture and the Notes,
accrual of Original Issue Discount shall be calculated on the
basis of a 360-day year of twelve 30-day months, compounded
semi-annually.
Outstanding: The term "outstanding", when used with
reference to Notes, shall, subject to the provisions of Section 9.04,
mean, as of any particular time, all Notes authenticated and made
available for delivery by the Trustee under this Indenture,
except
(a) Notes theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(b) Notes, or portions thereof, for the payment or
redemption of which monies in the necessary amount shall have
been deposited in trust with the Trustee or with any paying agent
(other than the Company) or shall have been set aside and
segregated in trust by the Company (if the Company shall act as
its own paying agent), provided that if such Notes are to be
redeemed prior to the maturity thereof, notice of such redemption
shall have been given as in Article 3 provided, or provision
satisfactory to the Trustee shall have been made for giving such
notice;
(c) Notes paid or Notes in lieu of or in substitution for
which other Notes shall have been authenticated and made
available for delivery pursuant to the terms of Section 2.06 unless
proof satisfactory to the Trustee is presented that any such
Notes are held by bona fide holders in due course; and
(d) Notes converted into Common Stock pursuant to Article 15
hereof and Notes not deemed outstanding pursuant to Section 3.02.
21
Person: The term "Person" shall mean a corporation, an
association, a partnership, an organization, an individual, a
government or a political subdivision thereof or a governmental
agency, and shall include any successor (by merger or otherwise)
of such entity.
PORTAL Market: The term "PORTAL" Market shall mean the
Private Offerings, Resales and Trading through Automated Linkages
Market operated by the National Association of Securities Dealers
Inc. or any successor thereto.
Predecessor Note: The term "Predecessor Note" of any
particular Note shall mean every previous Note evidencing all or
a portion of the same debt as that evidenced by such particular
Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 2.06 in lieu of a lost,
destroyed or stolen Note shall be deemed to evidence the same
debt as the lost, destroyed or stolen Note.
Principal Office of the Trustee: The term "principal office
of the Trustee", or other similar term, shall mean the principal
office of the Trustee at which at any particular time its
corporate trust business shall be administered, which office is,
at the date as of which this Indenture is dated, located at The
Bank of New York, 101 Barclay Street, 21 West, New York, NY
10286; Attn: Corporate Trust Trustee Administration.
Proceeding: The term "Proceeding" shall have the meaning
specified in Section 4.02.
QIB: The term "QIB" shall mean a "qualified institutional
buyer as defined in Rule 144A.
Redemption Price: The term "Redemption Price" means the
applicable Redemption Price as set forth in the notice, including
any applicable additional Original Issue Discount referred to
therein.
Reference Market Price: The term "Reference Market Price"
shall initially mean $31.875 and in the event of any adjustment
to the Conversion Rate pursuant to subsection (a), (b) or (c) of
Section 15.05, the Reference Market Price shall also be adjusted so
that the Reference Market Price after giving effect to any such
adjustment shall equal the Reference Market Price immediately
prior to such adjustment multiplied by a fraction, the numerator
of which is the Conversion Rate immediately prior to such
adjustment and the denominator of which is the Conversion Rate
after such adjustment.
22
Responsible Officer: The term "Responsible Officer", when
used with respect to the Trustee, shall mean any officer assigned
by the Trustee to administer its corporate trust matters.
Restricted Note: The term "Restricted Note" means any Note
that bears or is required to bear the legend set forth in Section 2.05(d).
Rule 144A: The term "Rule 144A" shall mean Rule 144A as
promulgated under the Securities Act.
Senior Debt: The term "Senior Debt" shall mean the
principal of and premium, if any and interest on the following,
whether outstanding at the date of execution of this Indenture or
thereafter incurred or created:
(a) indebtedness of the Company for money borrowed, or
evidenced by a note or similar instrument or written agreement
given in connection with the acquisition of any businesses,
properties or assets, including securities,
(b) indebtedness of the Company to banks or financial
institutions evidenced by notes or other written obligations,
(c) indebtedness of the Company evidenced by notes,
debentures, bonds or other securities issued under the provisions
of an indenture or similar instrument,
(d) indebtedness of others of the kinds described in the
preceding clauses (a), (b) and (c) that the Company has assumed,
guaranteed or otherwise assured the payment thereof, directly or
indirectly, and
(e) deferrals, renewals, extensions and refundings of, or
bonds, debentures, notes or other evidences of indebtedness
issued in exchange for, the indebtedness described in the
preceding clauses (a) through (d) whether or not there is any
notice to or consent of the holders of Notes; except, in each of
clauses (a) through (e), (i) indebtedness and advances among the
Company and its direct and indirect Subsidiaries, (ii) any
particular indebtedness, deferral, renewal, extension or
refunding, if it is expressly stated in the governing terms, or
in the assumption or guarantee, thereof that the indebtedness
involved is not Senior Debt and (iii) the Company's 3 3/4%
Convertible Subordinated Debentures due 2002.
Trigger Event: The term "Trigger Event" is defined in
Section 15.05(h).
23
Trustee: The term "Trustee" shall mean The Bank of New York
and, subject to the provisions of Article 8 hereof, shall also
include its successors and assigns as Trustee hereunder.
U.S. Government Obligations: The term "U.S. Government
Obligations" shall mean direct obligations (or certificates
representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality
thereof) for the payment of which the full faith and credit of
the United States of America is pledged and which are not
callable at the issuer's option.
ARTICLE 2
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES
SECTION 2.01. Designation, Amount and Issue of Notes.
The Notes shall be designated as "1.80% Convertible Subordinated
Notes due 2004". Notes not to exceed the aggregate principal
amount at maturity of $250,000,000 (except pursuant to Sections
2.05, 2.06, 3.03, 15.02 and 16.01) upon the execution of this
Indenture, or from time to time thereafter, may be executed by
the Company and delivered to the Trustee for authentication, and
the Trustee shall thereupon authenticate and make available for
delivery said Notes to or upon the written order of the Company,
signed both (a) by its Chairman of the Board of Directors, or any
Vice-Chairman of the Board of Directors, or its President or any
Vice President (whether or not designated by a number or numbers
or a word or words added before or after the title "Vice
President") and (b) by its Treasurer, or Controller, or Secretary
or any Assistant Secretary without any further action by the
Company hereunder.
SECTION 2.02. Form of Notes. The Notes and the
Trustee's certificate of authentication to be borne by the Notes
shall be substantially in the form as in this Indenture above
recited. Any of the Notes may have imprinted thereon such legends
or endorsements as the officers executing the same may approve
(execution thereof to be conclusive evidence of such approval)
and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with
any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Notes may be listed
or any trading system in which the Notes may be admitted, or to
conform to usage.
SECTION 2.03. Date and Denomination of Notes; Payments of
Interest. The Notes shall be issuable in registered form without
coupons in denominations
24
of $1,000 principal amount at maturity and any multiple thereof.
Every Note shall be dated the date of its authentication, shall
bear interest from the applicable date and shall be payable on
the dates specified on the face of the form of Note recited
above.
The person in whose name any Note (or its Predecessor Note) is
registered at the close of business on any record date with
respect to any interest payment date shall be entitled to receive
the interest payable on such interest payment date
notwithstanding the cancellation of such Note upon any transfer
or exchange subsequent to the record date and prior to such
interest payment date. As provided in Section 15.02, and subject to
the exception contained therein, interest shall not be payable to
such person in the case of any Note or Notes, or portion thereof,
which have been called for redemption and which are converted on
a date subsequent to such record date and prior to such interest
payment date. Interest may, at the option of the Company, be paid
by check mailed to the address of such person on the registry
kept for such purposes; provided that with respect to any holder
of Notes with an aggregate principal amount at maturity equal to
or in excess of $10 million, at the request of such holder in
writing the Company shall pay interest on such holder's Notes by
wire transfer in immediately available funds. The term "record
date" with respect to any interest payment date shall mean the
March 2 or September 2 preceding said March 16 or September 16.
Interest on the Notes shall be computed on the basis of a 360-day
year of twelve 30-day months. Accrual of Original Issue Discount
shall be calculated on the basis of a 360-day year of twelve
30-day months, compounded semi-annually.
Any interest on any Note which is payable, but is not
punctually paid or duly provided for, on any said March 16 or
September 16 (herein called "Defaulted Interest") shall
forthwith cease to be payable to the Noteholder on the relevant
record date by virtue of his having been such Noteholder; and
such Defaulted Interest shall be paid by the Company, at its
election in each case, as provided in clause (1) below:
(1) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the Notes (or
their respective Predecessor Notes) are registered at the close
of business on a special record date for the payment of such
Defaulted Interest, which date shall be fixed in the following
manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Note and
the date of the proposed payment (which shall be not less than 25
days after the receipt by the Trustee of such notice, unless the
Trustee shall consent to an earlier date), and at the same time
the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of
such Defaulted Interest or shall
25
make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this clause provided.
Thereupon the Trustee shall fix a special record date for the
payment of such Defaulted Interest which shall be not more than
15 days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payment. The Trustee
shall promptly notify the Company of such special record date
and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the
special record date therefor to be mailed, first-class postage
prepaid to each Noteholder at his address as it appears in the
Note register, 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 so mailed, such
Defaulted Interest shall be paid to the Persons in whose names
the Notes (or their respective Predecessor Notes) are registered
at the close of business on such special record date
and shall no longer be payable.
SECTION 2.04. Execution of Notes. The Notes shall be signed in the
name and on behalf of the Company by the facsimile signature of
its President or its Chief Executive Officer and attested by the
facsimile signature of its Secretary or its Chief Financial
Officer (which may be printed, engraved or otherwise reproduced
thereon, by facsimile or otherwise). Only such Notes as shall
bear thereon a certificate of authentication substantially in the
form hereinbefore recited, manually executed by the Trustee,
shall be entitled to the benefits of this Indenture or be valid
or obligatory for any purpose. Such certificate by the Trustee
upon any Note executed by the Company shall be conclusive
evidence that the Note so authenticated has been duly
authenticated and made available for delivery hereunder and that
the holder is entitled to the benefits of this Indenture.
In case any officer of the Company who shall have signed any of
the Notes shall cease to be such officer before the Notes so
signed shall have been authenticated and made available for
delivery by the Trustee, or disposed of by the Company, such
Notes nevertheless may be authenticated and made available for
delivery or disposed of as though the person who signed such
Notes had not ceased to be such officer of the Company; and any
Note may be signed on behalf of the Company by such persons as,
at the actual date of the execution of such Note, shall be the
proper officers of the Company, although at the date of the
execution of this Indenture any such person was not such an
officer.
26
In authenticating such Notes, and accepting the
additional responsibilities under this Indenture in relation to
such Notes, the Trustee shall be entitled to receive, and, shall
be fully protected in relying upon:
(a) A copy of the resolution or resolutions of the Board of
Directors in or pursuant to which the terms and form of the Notes
were established, certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect as of the date of
such certificate, and if the terms and form of such Notes are
established by an Officers' Certificate pursuant to general
authorization of the Board of Directors, such Officers'
Certificate;
(b) an executed supplemental indenture, if any;
(c) an Officers' Certificate delivered in accordance with Section
17.06; and
(d) an Opinion of Counsel which shall state:
(1) that the form of such Note has been established by
a supplemental indenture or by or pursuant to a resolution of the
Board of Directors in accordance with Sections 2.01 and 2.02 and
in conformity with the provisions of this Indenture;
(2) that the terms of such Notes have been
established in accordance with Section 2.01 and in
conformity with the other provisions of this Indenture; and
(3) that such Notes, when authenticated and delivered
by the Trustee and issued by the Company in the manner and
subject to any conditions specified in such Opinion of Counsel,
will constitute valid and legally binding obligations of the
Company, enforceable in accordance with their terms, subject to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting the enforcement of
creditors' rights and to general equity principles;
The Trustee shall have the right to decline to authenticate
and deliver any Notes under this Section if the Trustee, being
advised by counsel, determines that such action may not lawfully
be taken or if the Trustee in good faith by its board
27
of directors or trustees, executive committee, or a
trust committee of directors or trustees or vice presidents shall
determine that such action would expose the Trustee to personal
liability to existing Holders.
SECTION 2.05. Exchange and Registration of Transfer of Notes;
Restrictions on Transfers; Depositary. The Company shall keep at
its principal office, or shall cause to be kept, at one of the
offices or agencies maintained pursuant to Section 5.02, a register
(the "Register") in which, subject to such reasonable regulations
as it may prescribe, Notes shall be registered and the transfer
of Notes shall be registered as in this Article provided. Such
Register shall be in written form or in any other form capable of
being converted into written form within a reasonable time. At
all reasonable times such Register shall be open for inspection
by the Trustee. Upon due presentment for registration of transfer
of any Note at any office or agency maintained by the Company
pursuant to Section 5.02, the Company shall execute and register and
the Trustee shall authenticate and make available for delivery in
the name of the transferee or transferees a new Note or Notes for
an equal aggregate principal amount at maturity.
Upon surrender for registration of transfer of any Note to the
Trustee and satisfaction of the requirements for such transfer
set forth in this Section 2.05, the Company shall execute, and the
Trustee shall authenticate and make available for delivery, in
the name of the designated transferee or transferees, one or more
new Notes of any authorized denominations and of a like aggregate
principal amount at maturity and bearing such restrictive legends
as may be required by this Indenture.
Notes may be exchanged for a like aggregate principal amount
at maturity of Notes of other authorized denominations. Notes to
be exchanged shall be surrendered at any office or agency to
be maintained by the Company pursuant to Section 5.02 and the Company
shall execute and register and the Trustee shall authenticate and
make available for delivery in exchange therefor the Note or
Notes which the Noteholder making the exchange shall be entitled
to receive, bearing registration numbers not contemporaneously
outstanding.
All Notes presented for registration of transfer or for
exchange, redemption, conversion or payment shall (if so required
by the Company or the Trustee) be duly endorsed by, or be
accompanied by a written instrument or instruments of transfer in
form satisfactory to the Company and the Trustee duly executed
by, the holder or his attorney duly authorized in writing.
No service charge shall be charged to the Noteholder for any
exchange or registration of transfer of Notes, but the Company
may require payment of a sum
28
sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith.
Neither the Company nor the Trustee shall be required to
exchange or register a transfer of (a) any Notes for a period of
15 days next preceding any selection of Notes to be redeemed or
(b) any Notes or portions thereof selected or called for
redemption or (c) any Notes or portion thereof surrendered for
conversion or (d) any Notes or portion thereof surrendered for
redemption pursuant to Article 16.
All Notes issued upon any transfer or exchange of Notes
shall be valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture as
the Notes surrendered upon such exchange or transfer.
(b) So long as the Notes are eligible for book-entry
settlement with the Depositary (as defined below), or unless
otherwise required by law, all Notes to be traded on the PORTAL
Market may be represented by a Note in global form registered in
the name of the Depositary or the nominee of the Depositary. The
transfer and exchange of beneficial interests in such Note in
global form shall be effected through the Depositary, in
accordance with this Indenture (including the restrictions on
transfer set forth herein) and the procedures of the Depositary
therefor.
At any time at the request of the beneficial holder of an
interest in a Note in global form, such beneficial holder shall
be entitled to obtain a definitive Note upon written request to
the Trustee in accordance with the procedures of the Depositary
for the issuance thereof. Upon receipt of any such request, the
Trustee will cause, in accordance with the standing instructions
and procedures of the Depositary, the aggregate principal amount
at maturity of the Note in global form to be reduced and,
following such reduction, the Company will execute and the
Trustee will authenticate and make available for delivery to such
beneficial holder (or its nominee) a Note or Notes in the
appropriate aggregate principal amount at maturity of the name of
such beneficial holder (or its nominee) and bearing such
restrictive legends as may be required by this Indenture.
Any transfer of a beneficial interest in a Note in global form
which cannot be effected through book-entry settlement must be
effected by the delivery to the transferee (or its nominee) of a
definitive Note or Notes registered in the name of the transferee
(or its nominee) on the books maintained by the Trustee. With
respect to any such transfer, the Trustee will cause, in
accordance with the standing instructions and procedures of the
Depositary, the aggregate principal amount at maturity of the
Note in global form to be reduced and, following such
29
reduction, the Company will execute and the Trustee
will authenticate and make available for delivery to the
transferee (or such transferee's nominee, as the case may be), a
Note or Notes in the appropriate aggregate principal amount at
maturity in the name of such transferee (or its nominee) and
bearing such restrictive legends as may be required by this
Indenture.
(c) So long as the Notes are eligible for book-entry
settlement, or unless otherwise required by law, upon any
transfer of a definitive Note to a QIB in accordance with Rule
144A, unless otherwise requested by the transferor, and upon
receipt of the definitive Note or Notes being so transferred,
together with a certification from the transferor that the
transferee is a QIB (or other evidence satisfactory to the
Trustee), the Trustee shall make an endorsement on the Note in
global form to reflect an increase in the aggregate principal
amount at maturity of the Notes represented by the Note in global
form, the Trustee shall cancel such definitive Note or Notes in
accordance with the standing instructions and procedures of the
Depositary, the aggregate principal amount at maturity of Notes
represented by the Note in global form to be increased
accordingly; provided that no definitive Note, or portion
thereof, in respect of which the Company or an Affiliate of the
Company held any beneficial interest shall be included in such
Note in global form until such definitive Note is freely tradable
in accordance with Rule 144(k); provided further that the Trustee
shall issue Notes in definitive form upon any transfer of a
beneficial interest in the Note in global form to the Company
or any Affiliate of the Company.
Any Note in global form may be endorsed with or have
incorporated in the text thereof such legends or recitals or
changes not inconsistent with the provisions of this
Indenture as may be required by the Depositary or by the National
Association of Securities Dealers, Inc. in order for the Notes to
be tradeable on the PORTAL Market or as may be required for the
Notes to be tradeable on any other market developed for trading
of securities pursuant to Rule 144A or required to comply with
any applicable law or any regulation thereunder or with the rules
and regulations of any securities exchange upon which the Notes
may be listed or traded or to conform with any usage with respect
thereto, or to indicate any special limitations or restrictions
to which any particular Notes are subject.
(d) Every Restricted Note shall be subject to the
restrictions on transfer provided in the legend required to be
borne by each Restricted Note pursuant to this Section 2.05, unless
such restrictions on transfer shall be waived by the written
consent of the Company, and the holder of each Restricted Note,
by such Noteholder's acceptance thereof, agrees to be bound by
such restrictions on transfer. As used in this Section 2.05(a) and in
Section 2.05(e), the terms
30
"transfer" encompasses any sale, pledge, transfer or other
disposition of any Restricted Note.
Until the expiration of the holding period applicable to
sales thereof under Rule 144(k) under the Securities Act (or any
successor provision), any certificate evidencing such Note (and
all securities issued in exchange or substitution therefor, other
than Common Stock, if any, issued upon conversion thereof that
shall bear the legend set forth in Section 2.05(e), if applicable)
shall bear a legend in substantially the following form, unless
otherwise agreed by the Company (with written notice thereof to
the Trustee):
THE NOTE EVIDENCED HEREBY HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO,
OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT
AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A)
IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT)
("INSTITUTIONAL ACCREDITED INVESTOR"), (2) AGREES THAT
IT WILL NOT, PRIOR TO EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY
UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION), RESELL OR OTHERWISE TRANSFER THE
NOTE EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON
CONVERSION OF SUCH NOTE EXCEPT (A) TO THE INTERPUBLIC
GROUP OF COMPANIES, INC. OR ANY SUBSIDIARY THEREOF, (B)
INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL
BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,
FURNISHED TO THE BANK OF NEW YORK, AS TRUSTEE (OR A
SUCCESSOR TRUSTEE, IF APPLICABLE), A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THE NOTE
EVIDENCED HEREBY (THE
31
FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH
TRUSTEE), (D) OUTSIDE THE UNITED STATES IN COMPLIANCE
WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO
THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT
TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES
TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER), (3)
PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER PURSUANT
TO CLAUSE 1(F) ABOVE), IT WILL FURNISH TO THE BANK OF
NEW YORK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR
OTHER INFORMATION AS IT MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (4)
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE
NOTE EVIDENCED HEREBY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THE NOTE EVIDENCED
HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE NOTE EVIDENCED HEREBY UNDER
RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX
SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER
OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE
BANK OF NEW YORK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE,
IF APPLICABLE). IF THE PROPOSED TRANSFEREE IS AN
INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER WHO IS
NOT A U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE BANK OF NEW YORK, AS TRUSTEE
(OR A SUCCESSOR TRUSTEE, IF APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS
IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER
IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION
32
REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE
REMOVED UPON THE EARLIER TO OCCUR OF THE TRANSFER OF
THE NOTE EVIDENCED HEREBY PURSUANT TO CLAUSE 1(F) ABOVE
OR UPON ANY TRANSFER OF THE NOTES EVIDENCED HEREBY
UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION). AS USED HEREIN, THE TERMS "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO
THEM BY REGULATION S UNDER THE SECURITIES ACT.
Any Note (or security issued in exchange or
substitution therefor) as to which such restrictions on transfer
shall have expired in accordance with their terms, may upon
surrender of such Note for exchange to the Note registrar in
accordance with the provisions of this Section 2.05, be exchanged for
a new Note or Notes, of like tenor and aggregate principal amount
at maturity, which shall not bear the restrictive legend required
by this Section 2.05(d).
Notwithstanding any other provisions of this Indenture (other
than the provisions set forth in this Section 2.05(d), a Note in global
form may not be the transferred as a whole except by the
Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee to a
successor Depositary or a nominee of such successor Depositary.
The Depositary shall be a clearing agency registered
under the Exchange Act. The Company initially appoints The
Depository Trust Company to act as Depositary with respect to the
Notes in global form. Initially, the global Note shall be issued
to the Depositary, registered in the name of Cede & Co., as the
nominee of the Depositary, and deposited with the custodian for
Cede & Co.
If at any time the Depositary for the Note in global
form notifies the Company that it is unwilling or unable to
continue as Depositary for such Note, the Company may appoint a
successor Depositary with respect to such Note. If a successor
Depositary for the Note is not appointed by the Company within 90
days after the Company receives such notice, the Company will
execute, and the Trustee, upon receipt of an Officers'
Certificate for authentication and delivery of Notes, will
authenticate and make available for delivery Notes in definitive
form, in an aggregate principal amount at maturity equal to the
principal amount at maturity of the Note in global form, in
exchange for the such Note in the global form.
If a definitive Note is issued in exchange for any portion of a
Note in global form after the close of business at the office or
agency where such
33
exchange occurs on any record date and before the opening of
business at such office or agency on the next succeeding interest
payment date, interest will not be payable on such interest
payment date in respect of such Note, but will be payable on such
interest payment date only to the person to whom interest in
respect of such portion of such Note in global form is payable in
accordance with the provisions of this Indenture.
Definitive Notes issued in exchange for all or a part of a
Note in global form pursuant to this Section 2.05 shall be registered
in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. Upon
execution and authentication, the Trustee shall make available
for delivery such definitive Notes to the person in whose names
such definitive Notes are so registered.
At such time as all interests in a Note in global form have
been redeemed, converted, repurchased or canceled, such Note in
global form shall be canceled by the Trustee in accordance with
standing procedures and instructions of the Depositary. At any
time prior to such cancellation, if any interest in a global Note
is exchanged for definitive Notes, redeemed, converted, canceled,
or transferred to a transferee who receives definitive Notes
therefor or any definitive Note is exchanged or transferred for
part of a Note in global form, the principal amount at maturity
of such Note in global form shall, in accordance with the
standing procedures and instructions of the Depositary be reduced
or increased, as the case may be, and an endorsement shall be
made on such Note in global form by the Trustee to reflect such
reduction or increase.
(e) Until the expiration of the holding period applicable to
sales thereof under Rule 144(k) under the Securities Act (or any
successor provision), any stock certificate representing Common
Stock issued upon conversion of such Note shall bear a legend in
substantially the following form, unless otherwise agreed by the
Company (with written notice thereof to the Trustee):
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN AND WILL
NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,
U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A
34
UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT)
("INSTITUTIONAL ACCREDITED INVESTOR"), (2) AGREES THAT
IT WILL NOT, PRIOR TO EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY
UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION), RESELL OR OTHERWISE TRANSFER THE
COMMON STOCK EVIDENCED HEREBY EXCEPT (A) TO THE
INTERPUBLIC GROUP OF COMPANIES, INC. OR ANY SUBSIDIARY
THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER
THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH
TRANSFER, FURNISHED TO THE BANK OF NEW YORK, AS TRUSTEE
(OR A SUCCESSOR TRUSTEE, IF APPLICABLE), A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF
THE COMMON STOCK EVIDENCED HEREBY (THE FORM OF WHICH
LETTER CAN BE OBTAINED FROM SUCH TRUSTEE), (D) OUTSIDE
THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES
ACT (IF AVAILABLE) OR (F) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT
THE TIME OF SUCH TRANSFER), (3) PRIOR TO SUCH TRANSFER
(OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(F) ABOVE),
IT WILL FURNISH TO THE BANK OF NEW YORK, AS TRUSTEE (OR
A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS
IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER
IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND (4) AGREES THAT
IT WILL DELIVER TO EACH PERSON TO WHOM THE COMMON STOCK
EVIDENCED HEREBY IS
35
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE
COMMON STOCK EVIDENCED HEREBY PRIOR TO THE EXPIRATION
OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE COMMON
STOCK EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE
SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER
MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE
HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND
SUBMIT THIS CERTIFICATE TO THE BANK OF NEW YORK, AS
TRUSTEE (OR A SUCCESSOR TRUSTEE, IF APPLICABLE). IF THE
PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED
INVESTOR OR A PURCHASER WHO IS NOT A U.S. PERSON, THE
HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE
BANK OF NEW YORK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE,
IF APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR
OTHER INFORMATION AS IT MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS
LEGEND WILL BE REMOVED UPON THE EARLIER TO OCCUR OF THE
TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY PURSUANT
TO CLAUSE 1(F) ABOVE OR UPON ANY TRANSFER OF THE COMMON
STOCK EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE
SECURITIES ACT (OR ANY SUCCESSOR PROVISION). AS USED
HEREIN, THE TERMS "UNITED STATES" AND "U.S. PERSON"
HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER
THE SECURITIES ACT.
(f) Any certificate evidencing a Note that has been
transferred to an Affiliate of the Company prior to the
expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor
provision), as evidenced by a notation on the Assignment Form for
such transfer or in the representation letter delivered in
respect thereof, shall, until two years after the last date on
which the Company or any Affiliate of the Company was an owner of
such Note, bear a legend in substantially the following form,
unless otherwise agreed by the Company (with written notice
thereof to the Trustee);
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THE NOTE EVIDENCED HEREBY HAS NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET
FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER AGREES (1) THAT IT
WILL NOT RESELL OR OTHERWISE TRANSFER THE NOTE
EVIDENCED HEREBY OR THE COMMON STOCK
ISSUABLE UPON CONVERSION OF SUCH NOTE EXCEPT
(A) TO THE INTERPUBLIC GROUP OF COMPANIES, INC.
OR ANY SUBSIDIARY THEREOF, (B) IN A TRANSACTION
REGISTERED UNDER THE SECURITIES ACT OR (C)
PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) AND (2) THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THE NOTE EVIDENCED HEREBY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. IF THE PROPOSED TRANSFER
IS PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT,
THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE BANK OF NEW YORK, AS TRUSTEE,
SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS THE COMPANY MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING
MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN,
THE TERMS "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT.
Any stock certificate representing Common Stock issued upon
conversion of such Note shall also bear a legend in substantially
the form indicated above, unless otherwise agreed by the Company
(with written notice thereof to the Trustee).
SECTION 2.06. Mutilated, Destroyed, Lost or Stolen Notes. In
case any temporary or definitive Note shall become mutilated or
be apparently destroyed, lost or stolen, the Company in its
discretion may execute, and upon its re uest the Trustee shall
authenticate and make available for delivery, a new Note, bearing
a
37
number not contemporaneously outstanding, in exchange and
substitution for the mutilated Note, or in lieu of and in
substitution for the Note so apparently destroyed, lost or
stolen. In every case the applicant for a substituted Note shall
furnish to the Company and to the Trustee such security or
indemnity as may be required by them to save each of them
harmless, and, in every case of destruction, loss or theft, the
applicant shall also furnish to the Company and to the Trustee
evidence to their satisfaction of the destruction, loss or theft
of such Note and of the ownership thereof.
The Trustee may authenticate any such substituted Note and
make available for delivery the same upon the receipt of such
security or indemnity as the Trustee and the Company may require.
Upon the issuance of any substituted Note, the Company may
require the payment of a sum sufficient to cover any tax or other
governmental harge that may be imposed in relation thereto and
any other expenses connected therewith. In case any Note which
has matured or is about to mature or has been called for
redemption or is about to be converted into Common Stock shall
become mutilated or be destroyed, lost or stolen, the Company
may, instead of issuing a substitute Note, pay or authorize the
payment of or convert or authorize the conversion of the same
(without surrender thereof except in the case of a mutilated
Note) if the applicant for such payment or conversion shall
furnish to the Company and to the Trustee such security or
indemnity as may be required by them to save each of them
harmless and, in case of destruction, loss or theft, evidence
satisfactory to the Company and the Trustee of the destruction,
loss or theft of such Note and of the ownership thereof.
Every substituted Note issued pursuant to the provisions of
this Section 2.06 by virtue of the fact that any Note is destroyed,
lost or stolen shall constitute an additional contractual
obligation of the Company, whether or not the apparently
destroyed, lost or stolen Note shall be found at any time, and
shall be entitled to all the benefits of (but shall be subject to
all the limitations set forth in) this Indenture equally and
proportionately with any and all other Notes duly issued
hereunder. To the extent permitted by law, all Notes shall be
held and owned upon the express condition that the foregoing
provisions are exclusive with respect to the replacement or
payment or conversion of mutilated, destroyed, lost or stolen
Notes and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted
to the contrary with respect to the replacement or payment or
conversion of negotiable instruments or other securities without
their surrender.
SECTION 2.07. Temporary Notes. Pending the preparation of
definitive Notes, the Company may execute and the Trustee shall
authenticate and make available for delivery temporary Notes
(printed or lithographed). Temporary Notes shall be issuable in
any authorized denomination, and substantially in the
38
form of the definitive Notes but with such omissions,
insertions and variations as may be appropriate for temporary
Notes, all as may be determined by the Company. Every such
temporary Note shall be executed by the Company and authenticated
by the Trustee upon the same conditions and in substantially the
same manner, and with the same effect, as the definitive Notes.
Without unreasonable delay the Company will execute and deliver
to the Trustee definitive Notes and thereupon any or all
temporary Notes may be surrendered in exchange therefor, at each
office or agency maintained by the Company pursuant to Section
5.02 and the Trustee shall authenticate and make available for
delivery in exchange for such temporary Notes an equal aggregate
principal amount at maturity of definitive Notes. Such exchange
shall be made by the Company at its own expense and without any
charge therefor. Until so exchanged, the temporary Notes shall in
all respects be entitled to the same benefits under this
Indenture as definitive Notes authenticated and made available
for delivery hereunder.
SECTION 2.08. Cancellation of Notes Paid, Etc. All Notes
surrendered for the purpose of payment, redemption, conversion,
exchange or registration of transfer, shall, if surrendered to
the Company or any paying agent or any Note registrar or any
conversion agent, be surrendered to the Trustee and promptly
canceled by it, or, if surrendered to the Trustee, shall be
promptly canceled by it, and no Notes shall be issued in lieu
thereof except as expressly permitted by any of the provisions of
this Indenture. The Trustee shall dispose of all canceled Notes
in accordance with applicable law and its customary practice in
effect from time to time. If the Company shall acquire any of the
Notes, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Notes unless
and until the same are delivered to the Trustee for cancellation.
SECTION 2.09. CUSIP Numbers. The Company in issuing the
Notes 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 Notes or as
contained in any notice of a redemption and that reliance may be
placed only on the other identification numbers printed on the
Notes, 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 OF NOTES
SECTION 3.01. Redemption Prices. The Company may not redeem
the Notes prior to September 20, 2000. On or after that date, the
Company may, at its option, redeem all or from time to time any
part of the Notes on any date prior to maturity, upon notice as
set forth in Section 3.02, and at the optional Redemption Prices set
forth in the form of Note herein above recited, together with
interest, if any, to the date fixed for redemption.
SECTION 3.02. Notice of Redemption; Selection of Notes. In
case the Company shall desire to exercise the right to redeem all
or, as the case may be, any part of the Notes pursuant to Section 3.01
for redemption and, it or, at its request, the Trustee in the
name of and at the expense of the Company, shall mail or cause to
be mailed a notice of such redemption at least 30 and not more
than 60 days prior to the date fixed for redemption to the
holders of Notes so to be redeemed as a whole or in part at their
last addresses as the same appear on the registry books of the
Company. Such mailing shall be by first class mail. The notice if
mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the holder
receives such notice. In any case, failure to give such notice by
mail or any defect in the notice to the holder of any Note
designated for redemption as a whole or in part shall not affect
the validity of the proceedings for the redemption of any other
Note.
Each such notice of redemption shall identify the Notes to
be redeemed (including CUSIP numbers) and shall specify the
principal amount at maturity of each Note to be redeemed, the
date fixed for redemption, the Redemption Price at which Notes
are to be redeemed, the place or places of payment, that payment
will be made upon presentation and surrender of such Notes, that
interest and Original Issue Discount accrued to the date fixed
for redemption will be paid as specified in said notice, and that
on and after said date interest and Original Issue Discount
thereon or on the portions thereof to be redeemed will cease to
accrue. Such notice shall also state the current Conversion Rate
and the date on which the right to convert such Notes or portions
thereof into Common Stock will expire. In case any Note is to be
redeemed in part only, the notice of redemption shall state the
portion of the principal amount at maturity thereof to be
redeemed and shall state that on and after the date fixed for
redemption, upon surrender of such Note, a new Note or Notes in
principal amount at maturity equal to the unredeemed portion
thereof will be issued.
On or before the redemption date specified in the notice of
redemption given as provided in this Section, the Company will
deposit with the Trustee or
40
with one or more paying agents (or, if the Company is acting as
its own paying agent, set aside, segregate and hold in trust as
provided in Section 5.04) an amount of money sufficient to redeem on
the redemption date all the Notes so called for redemption (other
than those theretofore surrendered for conversion into Common
Stock) at the appropriate Redemption Price, together with accrued
interest to the date fixed for redemption. If any Note called for
redemption is converted pursuant hereto, any money deposited with
the Trustee or any paying agent or so segregated and held in
trust for the redemption of such Note shall be paid to the
Company upon its request, or, if then held by the Company shall
be discharged from such trust. If fewer than all the Notes are to
be redeemed, the Company will give the Trustee written notice not
less than 45 days prior to the redemption date as to the
aggregate principal amount at maturity of Notes to be redeemed.
If fewer than all the Notes are to be redeemed, the Company
shall select, with written notice to the Trustee in such manner
as the Company shall deem equitable and fair, the Notes or
portions thereof (in multiples of $1,000 principal amount at
maturity) to be redeemed. If any Note selected for partial
redemption is converted in part after such selection, the
converted portion of such Note shall be deemed (so far as may be)
to be the portion to be selected for redemption. The Notes (or
portions thereof) so selected shall be deemed duly selected for
redemption for all purposes hereof, notwithstanding that any such
Note is converted as a whole or in part before the mailing of the
notice of redemption.
Upon any redemption of less than all Notes, the Company and
the Trustee may treat as outstanding any Notes surrendered for
conversion during the period of 15 days next preceding the
mailing of a notice of redemption and need not treat as
outstanding any Note authenticated and made available for
delivery during such period in exchange for the unconverted
portion of any Note converted in part during such period.
SECTION 3.03. Payment of Notes Called for Redemption. If
notice of redemption has been given as above provided, the Notes
or portions of Notes with respect to which such notice has been
given shall, unless theretofore converted into Common Stock
pursuant to the terms hereof, become due and payable on the date
and at the place or places stated in such notice at the
applicable Redemption Price, together with interest accrued to
the date fixed for redemption, and on and after said date (unless
the Company shall default in the payment of such Notes at the
Redemption Price, together with interest accrued to said date)
Original Issue Discount and interest on the Notes or portions of
Notes so called for redemption shall cease to accrue and such
Notes shall cease after the date fixed for redemption to be
convertible into Common Stock and, except as provided in Sections
8.05 and 13.04, to be entitled to any benefit or security under this
41
Indenture, and the holders thereof shall have no right in respect
of such Notes except the right to receive the Redemption Price
thereof and unpaid interest to the date fixed for redemption. On
presentation and surrender of such Notes at a place of payment in
said notice specified, the said Notes or the specified portions
thereof shall be paid and redeemed by the Company at the
applicable Redemption Price, together with interest accrued
thereon to the date fixed for redemption; provided that any
semi-annual payment of interest becoming due on the date fixed
for redemption shall be payable to the holders of such Notes
registered as such on the relevant record date subject to the
terms and provisions of Section 2.03 hereof.
Upon presentation of any Note redeemed in part only, the
Company shall execute and the Trustee shall authenticate and make
available for delivery to the holder thereof, at the expense of
the Company, a new Note or Notes, of authorized denominations, in
principal amount at maturity equal to the unredeemed portion of
the Note so presented.
Notwithstanding the foregoing, the Trustee shall not redeem
any Notes or mail any notice of optional redemption during the
continuance of a default in payment of principal amount at
maturity, Issue Price, accrued Original Issue Discount,
Redemption Price, Fundamental Change Redemption Price or
interest, if any, of which the Trustee has actual knowledge of in
respect of the Notes or of any Event of Default. If any Note
called for redemption shall not be so paid upon surrender thereof
for redemption, the Redemption Price and, to the extent legally
permitted, interest, if any, in respect thereof shall, until paid
or duly provided for, bear interest from the date fixed for
redemption at the rate borne by the Note (giving effect to
accrual of Original Issue Discount) and such Note shall remain
convertible into Common Stock until the Redemption Price shall
have been paid or duly provided for.
SECTION 3.04. No Sinking Fund. The Notes shall not be
entitled to the benefit of any sinking fund.
SECTION 3.05. Conversion Arrangement on Call for
Redemption. In connection with any redemption of Notes, the Company
may arrange for the purchase and conversion of any Notes by an
agreement with one or more investment bankers or other purchasers
to purchase such Notes by paying to the Trustee in trust for the
Noteholders, on or before the close of business on the date fixed
for redemption, an amount not less than the applicable Redemption
Price, together with interest accrued to the date fixed for
redemption, of such Notes. Notwithstanding anything to the
contrary contained in this Article 3, the obligation of the
Company to pay the Redemption Price of such Notes, together with
interest accrued to the date fixed for redemption, shall be
deemed to be satisfied and discharged to the extent such amount
is so paid by such purchasers.
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If such an agreement is entered into, a copy of which will be
filed with the Trustee 5 days prior to the date fixed for
redemption, any Notes not duly surrendered for conversion by the
holders thereof may, at the option of the Company, be deemed, to
the fullest extent permitted by law, acquired by such purchasers
from such holders and (notwithstanding anything to the contrary
contained in Article 15) surrendered by such purchasers for
conversion, all as of immediately prior to the close of business
on the date fixed for redemption, subject to payment of the above
amount as aforesaid. At the direction of the Company, the Trustee
shall hold and dispose of any such amount paid to it in the same
manner as it would monies deposited with it by the Company for
the redemption of Notes. Without the Trustee's prior written
consent, no arrangement between the Company and such purchasers
for the purchase and conversion of any Notes shall increase or
otherwise affect any of the powers, duties, responsibilities or
obligations of the Trustee as set forth in this Indenture, and
the Company agrees to indemnify the Trustee from, and hold it
harmless against, any loss, liability or expense arising out of
or in connection with any such arrangement for the purchase and
conversion of any Notes between the Company and such purchasers
to which the Trustee has not consented in writing, including the
costs and expenses incurred by the Trustee in the defense of any
claim or liability arising out of or in connection with the
exercise or performance of any of its powers, duties,
responsibilities or obligations under this Indenture.
ARTICLE 4
SUBORDINATION
SECTION 4.01. Securities Subordinated to Senior Debt. The
Company covenants and agrees, and each holder of a Note, by his
acceptance thereof, likewise covenants and agrees, that, to the
extent and in the manner hereinafter set forth in this Article
(subject to the provisions of Article 13), the payment of the
principal of and premium, if any, and interest on each and all of
the Notes are hereby expressly made subordinate and subject in
right of payment to the prior payment in full of all Senior Debt.
SECTION 4.02. Payment over of Proceeds upon
Dissolution, Etc. In the event of (a) any insolvency or
bankruptcy case or proceeding, or any receivership, liquidation,
reorganization or other similar case or proceeding in connection
therewith, relative to the Company or to its creditors, such as,
or to its assets, or (b) any liquidation, dissolution or other
winding up of the Company, whether voluntary or involuntary and
whether or not involving insolvency or bankruptcy, or (c) any
assignment for the benefit of creditors or any other marshalling
of assets and liabilities of the Company, then and in any such
event specified in (a), (b) or (c) above (each such event, if
any, herein sometimes referred to as a
43
"Proceeding") the holders of Senior Debt shall be entitled to
receive payment in full of all amounts due or to become due on or
in respect of all Senior Debt, or provision shall be made for
such payment in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Senior Debt, before the holders of
the Notes are entitled to receive any payment or distribution of
any kind or character, whether in cash, property or securities,
on account of principal of or premium, if any, or interest on the
Notes or on account of any purchase or other acquisition of Notes
by the Company, or any Subsidiary of the Company (all such
payments, distributions, purchases and acquisitions herein
referred to, individually and collectively, as a "Notes
Payment"), and to that end the holders of all Senior Debt shall
be entitled to receive, for application to the payment thereof,
any Notes Payment which may be payable or deliverable in respect
of the Notes in any such Proceeding.
In the event that, notwithstanding the foregoing provisions
of this Section, the Trustee or the holder of any Note shall have
received any Notes Payment before all Senior Debt is paid in full
or payment thereof provided for in cash or cash equivalents or
otherwise in a manner satisfactory to the holders of Senior Debt,
and if such fact shall, at or prior to the time of such Notes
Payment, have been made known to the Trustee or, as the case may be,
such holder, then and in such event such Notes Payment shall be
paid over or delivered forthwith to the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee, agent or
other Person making payment or distribution of assets of the
Company for application to the payment of all Senior Debt
remaining unpaid, to the extent necessary to pay all Senior Debt
in full, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Debt.
For purposes of this Article only, the words "any payment
or distribution of any kind or character, whether in cash,
property or securities" shall not be deemed to include a payment
or distribution of stock or securities of the Company provided
for by a plan of reorganization or readjustment authorized by an
order or decree of a court of competent jurisdiction in a
reorganization proceeding under any applicable bankruptcy law or
of any other corporation provided for by such plan of
reorganization or readjustment which stock or securities are
subordinated in right of payment to all then outstanding Senior
Debt to substantially the same extent as the Notes are so
subordinated as provided in this Article. The consolidation of
the Company with, or the merger of the Company into, another
Person or the liquidation or dissolution of the Company following
the conveyance, transfer, sale or lease of all or substantially
all of its properties and assets to another Person upon the terms
and conditions set forth in Article 12 shall not be deemed a
Proceeding for the purposes of this Section if the Person formed
by such consolidation or into which the Company is merged or the
Person which acquires by conveyance, transfer, sale or lease such
properties and assets, as the
44
case may be, shall, as a part of such consolidation, merger,
conveyance, transfer, sale or lease comply with the conditions
set forth in Article 12.
SECTION 4.03 No Payment When Senior Debt in Default. In the
event that any Notes are declared due and payable before their
maturity, then and in such event the holders of the Senior Debt
outstanding at the time such Notes so become due and payable
shall be entitled to receive payment in full of all amounts due
or to become due on or in respect of all Senior Debt, or
provision shall be made for such payment in cash or cash
equivalents or otherwise in a manner satisfactory to the holders
of such Senior Debt, before the holders of the Notes are entitled
to receive any Notes Payment.
In the event and during the continuation of any default in
the payment of principal or of premium, if any, or interest on
any Senior Debt beyond any applicable grace period with respect
thereto, or in the event that any event of default with respect
to any Senior Debt shall have occurred and be continuing
permitting the holders of such Senior Debt (or a trustee, or other
representative on behalf of the holders thereof) to declare such
Senior Debt due and payable prior to the date on which it would
otherwise have become due and payable, unless and until such
event of default shall have been cured or waived or shall have
ceased to exist and such acceleration shall have been rescinded
or annulled, or in the event any judicial proceeding shall be
pending with respect to any such default in payment or event of
default, then no Notes Payment shall be made.
In the event that, notwithstanding the foregoing, the
Company shall make any Notes Payment to the Trustee or any holder
prohibited by the foregoing provisions of this Section, and if
such fact shall, at or prior to the time of such Notes Payment,
have been made known to the Trustee or, as the case may be, such
holder, then and in such event such Notes Payment shall be paid
over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any Notes
Payment with respect to which Section 4.02 would be applicable.
SECTION 4.04. Payment Permitted If No Default. Nothing
contained in this Article or elsewhere in this Indenture or in
any of the Notes shall prevent (a) the Company, at any time except
during the pendency of any Proceeding referred to in Section 4.02
or under the conditions described in Section 4.03, from making
Notes Payments, or (b) the application by the Trustee of any money
deposited with it hereunder to Notes Payments or the retention of
such Notes Payment by the holders, if at the time of such
application by the Trustee, it did not have actual knowledge that
such Notes Payment would have been prohibited by the provisions
of this Article.
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SECTION 4.05. Subrogation to Rights of Holders of Senior
Debt. Subject to the payment in full of all amounts due or to
become due on or in respect of Senior Debt, or the provision for
such payment in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Senior Debt, the holders of the
Notes shall be subrogated to the rights of the holders of such
Senior Debt to receive payments and distributions of cash,
property and securities applicable to the Senior Debt until the
principal of and premium, if any, and interest on the Notes shall
be paid in full. For purposes of such subrogation, no payments or
distributions to the holders of the Senior Debt of any cash,
property or securities to which the holders of the Notes or the
Trustee would be entitled except for the provisions of this
Article, and no payments over pursuant to the provisions of this
Article to the holders of Senior Debt by holders of the Notes or
the Trustee, shall, as among the Company, its creditor other than
holders of Senior Debt and the holders of the Notes, be deemed to
be a payment or distribution by the Company to or on account of
the Senior Debt.
SECTION 4.06. Provisions Solely to Define Relative Rights.
The provisions of this Article are and are intended solely for
the purpose of defining the relative rights of the holders on the
one hand and the holders of Senior Debt on the other hand.
Nothing contained in this Article or elsewhere in this Indenture
or in the Notes is intended to or shall (a) impair, as among the
Company, its creditors other than holders of Senior Debt and the
holders of the Notes, the obligation of the Company, which is
absolute and unconditional (and which, subject to the rights
under this Article of the holders of Senior Debt, is intended to
rank equally with all other general obligations of the Company),
to pay to the holders of the Notes the principal of and premium,
if any, and interest on the Notes as and when the same shall
become due and payable in accordance with their terms; or (b) affect
the relative rights against the Company of the holders of the
Notes and creditors of the Company other than the holders of
Senior Debt; or (c) prevent the Trustee or the holder of any Note
from exercising all remedies otherwise permitted by applicable
law upon default under this Indenture, subject to the rights, if
any, under this Article of the holders of Senior Debt to receive
cash, property and securities otherwise payable or deliverable to
the Trustee or such holder.
SECTION 4.07. Trustee to Effectuate Subordination. Each
holder of a Note by his acceptance thereof authorizes and directs
the Trustee on his behalf to take such action as may be necessary
or appropriate to effectuate the subordination provided in this
Article and appoints the Trustee his attorney-in-fact for any and
all such purposes.
SECTION 4.08. No Waiver of Subordination Provisions. No
right of any present or future holder of any Senior Debt to
enforce subordination as herein
46
provided shall at any time in any way be prejudiced or impaired by
any act or failure to act on the part of the Company or by any
act or failure to act, in good faith, by any such holder, or by
any noncompliance by the Company with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof
any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Debt may, at any time and from
time to time, without the consent of or notice to the Trustee or
the holders of the Notes, without incurring responsibility to the
holders of the Notes and without impairing or releasing the
subordination provided in this Article or the obligations
hereunder of the holders of the Notes to the holders of Senior
Debt, do any one or more of the following: (i) change the manner,
place or terms of payment or extend the time of payment of, or
renew or alter, Senior Debt, or otherwise amend or supplement in
any manner Senior Debt or any instrument evidencing the same or
any agreement under which Senior Debt is outstanding; (ii) sell,
exchange, release or otherwise deal with any property pledged,
mortgaged or otherwise securing Senior Debt; (iii) release any Person
liable in any manner for the collection of Senior Debt; and
(iv) exercise or refrain from exercising any rights against the
Company and any other Person.
SECTION 4.09. Notice to Trustee. The Company shall give
prompt written notice to the Trustee of any fact known to the
Company which would prohibit the making of any payment to or by
the Trustee in respect of the Notes. Notwithstanding the
provisions of this Article or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts which would prohibit the making of any
payment to or by the Trustee in respect of the Notes, unless and
until a Responsible Office of the Trustee shall have received
written notice thereof from the Company or a holder of Senior
Debt or from any trustee therefor or representative thereof; and,
prior to the receipt of any such written notice, the Trustee,
subject to the provisions of Section 8.01, shall be entitled in
all respects to assume that no such facts exist; provided,
however, that if the Trustee shall not have received the notice
provided for in this Section at least three Business Days prior
to the date upon which by the terms hereof any money may become
payable for any purpose (including, without limitation, the
payment of the principal of and premium, if any, or interest on
any Note), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority
to receive such money and to apply the same to the purpose for
which such money was received and shall not be affected by any
notice to the contrary which may be received by it within three
Business Days prior to such date.
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Subject to the provisions of Section 8.01, the Trustee
shall be entitled to rely on the delivery to it of a written
notice by a Person representing himself to be a holder of Senior
Debt (or a trustee therefor or representative thereof) to
establish that such notice has been given by a holder of Senior
Debt (or a trustee therefor or representative thereof). In the
event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a
holder of Senior Debt to participate in any payment or
distribution pursuant to this Article, the Trustee may request
such Person to furnish evidence to the reasonable satisfaction of
the Trustee as to the amount of Senior Debt held by such Person,
the extent to which such Person is entitled to participate in
such payment or distribution and any other facts pertinent to the
rights of such Person under this Article, and if such evidence is
not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the rights of such Person to
receive such payment.
SECTION 4.10. Reliance on Judicial Order or Certificate of
Liquidating Agent. Upon any payment or distribution of assets of
the Company referred to in this Article, the Trustee, subject to
the provisions of Section 8.01, and the holders of the Notes
shall be entitled to rely upon any order or decree entered by any
court of competent jurisdiction in which such Proceeding is
pending, or a certificate of the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee for the benefit of
creditors, agent or other Person making such payment or
distribution, delivered to the Trustee or to the holders of
Notes, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the
Senior Debt and other indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to
this Article.
SECTION 4.11. Trustee Not Fiduciary for Holders of Senior
Debt. The Trustee shall not be deemed to owe any fiduciary duty
to the holders of Senior Debt and shall not be liable to any such
holders if it shall in good faith mistakenly pay over or
distribute to holders of Notes or to the Company or to any other
Person cash, property or securities to which any holders of
Senior Debt shall be entitled by virtue of this Article or
otherwise. The Trustee shall not be charged with knowledge of the
existence of Senior Debt or of any facts that would prohibit any
payment hereunder unless a Responsible Officer of the Trustee
shall have received notice to that effect at the address of the
Trustee set forth in Section 17.04. With respect to the holders
of Senior Debt, the Trustee undertakes to perform or to observe
only such of its covenants or obligations as are specifically set
forth in this Article and no implied covenants or obligations
with respect to holders of Senior Debt shall be read into this
Indenture against the Trustee.
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SECTION 4.12. Rights of Trustee as Holder of Senior Debt;
Preservation of Trustee's Rights. The Trustee in its individual
capacity shall be entitled to all the rights set forth in this
Article with respect to any Senior Debt which may at any time be
held by it, to the same extent as any other holder of Senior
Debt, and nothing in this Indenture shall deprive the Trustee of
any of its rights as such holder.
Nothing in this Article shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 8.06.
SECTION 4.13 Article Applicable to Paying Agents. In case at
any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article shall in such case (unless the
context otherwise requires) be construed as extending to and
including such Paying Agent within its meaning as fully for all
intents and purposes as if such Paying Agent were named in this
Article in addition to or in place of the Trustee; provided,
however, that Sections 4.09 and 4.12 shall not apply to the
Company or any Affiliate of the Company if it or such Affiliate
acts as Paying Agent.
ARTICLE 5
PARTICULAR COVENANTS OF THE COMPANY
SECTION 5.01 Payment of Principal, Premium and Interest. The
Company covenants and agrees that it will duly and punctually pay
or cause to be paid the principal amount at maturity, Issue
Price, accrued Original Issue Discount, Redemption Price,
Fundamental Change Redemption Price and interest, if any, in
respect of each of the Notes at the places, at the respective
times and in the manner provided herein and in the Notes. Each
installment of interest on the Notes may be paid by mailing
checks for the interest payable to or upon the written order of
the holders of Notes entitled thereto as they shall appear on the
registry books of the Company; provided that with respect to any
holder of Notes with an aggregate principal amount at maturity
equal to or in excess of $10 million, at the request of such
holder in writing the Company shall pay interest on such holder's
Notes by wire transfer in immediately available funds.
SECTION 5.02. Offices for Notices and Payments, Etc. So long
as any of the Notes remain outstanding, the Company will maintain
in the Borough of Manhattan, The City of New York, an office or
agency where the Notes may be presented for payment, and an
office or agency where the Notes may be presented
49
for registration of transfer and for exchange and conversion as
provided for in this Indenture and an office or agency where
notices and demands to or upon the Company in respect of the
Notes or of this Indenture may be served. The Company will give
to the Trustee written notice of the location of each such office
or agency and of any change of location thereof. If the Company
shall fail to maintain any such office or agency or shall fail to
give such notice of the location or of any change in the location
thereof, presentations and demands may be made and notices may be
served at the principal office of the Trustee and the Company
hereby appoints the Trustee at the principal office of the
Trustee as its agent to receive all such presentations, demands
and notices.
SECTION 5.03. Appointments to Fill Vacancies in Trustee's
Office. The Company, whenever necessary to avoid or fill a
vacancy in the office of Trustee, will appoint, in the manner
provided in Section 8.09, a Trustee, so that there shall at all times
be a Trustee hereunder.
SECTION 5.04. Provision as to Paying Agent. (a) If the Company
shall appoint a paying agent other than the Trustee, it will
cause such paying agent to execute and deliver to the Trustee an
instrument in which such agent shall agree with the Trustee,
subject to the provisions of this Section 5.04:
(1) that it will hold all sums held by it as such agent for
the payment of the principal amount at maturity, Issue Price,
accrued Original Issue Discount, Redemption Price, Fundamental
Change Redemption Price or interest, if any, in respect of the
Notes (whether such sums have been paid to it by the Company or
by any other obligor on the Notes) in
trust for the benefit of the holders of the Notes;
(2) that it will give the Trustee notice of any failure by
the Company (or by any other obligor on the Notes) to make any
payment of the principal amount at maturity, Issue Price, accrued
Original Issue Discount, Redemption Price, Fundamental Change
Redemption Price or interest, if any, in respect of the Notes
when the same shall be due and payable; and
(3) that at any time during the continuance of an Event of
Default, upon request of the Trustee, it will forthwith pay to
the Trustee all sums so held in trust.
The Company shall, on or before each due date of the
principal amount at maturity, Issue Price, accrued Original Issue
Discount, Redemption Price, Fundamental Change Redemption Price
or interest, if any, in respect of the Notes, deposit with the
paying agent a sum sufficient to pay such amounts so becoming
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due, and (unless such paying agent is the Trustee) the Company
will promptly notify the Trustee of any failure to take such
action.
(b) If the Company shall act as its own paying agent, it
will, on or before each due date of the principal amount at
maturity, Issue Price, accrued Original Issue Discount,
Redemption Price, Fundamental Change Redemption Price or
interest, if any, in respect of the Notes, set aside, segregate
and hold in trust for the benefit of the holders of the Notes a
sum sufficient to pay such amounts so becoming due and will
notify the Trustee in writing of any failure to take such action
and of any failure by the Company (or by any other obligor under
the Notes) to make any payment of the principal amount at
maturity, Issue Price, accrued Original Issue Discount,
Redemption Price, Fundamental Change Redemption Price or
interest, if any, in respect of the Notes when the same shall
become due and payable.
(c) Anything in this Section 5.04 to the contrary
notwithstanding, the Company may, at any time, for the purpose of
obtaining a satisfaction and discharge of this Indenture, or for
any other reason, pay or cause to be paid to the Trustee all sums
held in trust by the Company or any paying agent hereunder as
required by this Section 5.04, such sums to be held by the Trustee
upon the trusts herein contained and upon such payment by the
Company or any paying agent to the Trustee, the Company or such
paying agent shall be released from all further liability with
respect to such money.
(d) Anything in this Section 5.04 to the contrary
notwithstanding, the agreement to hold sums in trust as provided
in this Section 5.04 is subject to Sections 13.03 and 13.04.
SECTION 5.05. Reports by the Company. The Company shall file
with the Trustee and the Commission, and transmit to Holders,
such information, documents and other reports, and such summaries
thereof, as may be required pursuant to the Trust Indenture Act
at the times and in the manner provided pursuant to such Act;
provided that any such information, documents or reports required
to be filed with the Commission pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934 shall be filed with the
Trustee within 15 days after the same is so required to be filed
with the Commission. Delivery of such reports, information and
documents to the Trustee is for informational purposes only and
the Trustee's receipt of such 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).
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ARTICLE 6
NOTEHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
SECTION 6.01. Noteholders' Lists. The Company covenants and
agrees that it will furnish or cause to be furnished to the
Trustee, semiannually, not more than 15 days after each March 2
and September 2 in each year beginning with March 2, 1998, and at
such other times as the Trustee may request in writing, within
thirty days after receipt by the Company of any such request, a
list in such form as the Trustee may reasonably require of the
names and addresses of the holders of Notes as of a date not more
than fifteen days prior to the time such information is
furnished, except that no such list need be furnished so long as
the Trustee is acting as Note registrar.
SECTION 6.02. Preservation of Lists. The Trustee shall
preserve, in as current a form as is reasonably practicable, all
information as to the names and addresses of the holders of Notes
contained in the most recent list furnished to it as provided in
Section 6.01 or maintained by the Trustee in its capacity as Note
registrar, if so acting. The Trustee may destroy any list
furnished to it as provided in Section 6.01 upon receipt of a new list
so furnished.
If the Trustee shall be required by law to disclose any
information contained in any list of Noteholders maintained by
it, then each and every holder of the Notes, by receiving and
holding the same, agrees with the Company and the Trustee that
neither the Company nor the Trustee nor any paying agent nor the
Note registrar shall be held accountable by reason of the
disclosure of any such information, regardless of the source from
which such information was derived.
SECTION 6.03. Reports by the Trustee. (a) On July 15, 1998, and on
or before July 15 in every year thereafter, so long as any Notes
are outstanding hereunder, the Trustee shall transmit to the
Noteholders and the Company, as hereinafter in this Section 6.03
provided, a brief report dated as of the preceding March 2 with
respect to:
(1) its eligibility under Section 8.08, or in lieu thereof, if
to the best of its knowledge it has continued to be eligible
under such Section, a written statement to such effect; and
(2) any action taken by the Trustee in the performance of
its duties under this Indenture which it has not previously
reported and which in its opinion materially affects the Notes,
except action in respect of a default, notice of which has been
or is to be withheld by it in accordance with the provisions of
Section 7.08.
52
(b) Reports pursuant to this Section shall 6.03 be transmitted
by mail to all holders of Notes as the names and addresses of such
holders appear upon the registry books of the Company at the
expense of the Company.
SECTION 6.04. Statement as to Compliance. The Company will
deliver to the Trustee annually, commencing July 15, 1998, a
certificate, from its principal executive officer, principal
financial officer or principal accounting officer, stating
whether or not to the best knowledge of the signer thereof the
Company is in compliance (without regard to periods of grace or
notice requirements) with all conditions and covenants under this
Indenture, and if the Company shall not be in compliance,
specifying such non-compliance, and the nature and status thereof
of which such signer may have knowledge.
SECTION 6.05. Statement by Officers as to Default. The
Company shall deliver to the Trustee, as soon as possible and in
any event within five days after the Company becomes aware of the
occurrence of any Event of Default or an event which, with notice
or the lapse of time or both, would constitute an Event of
Default, an Officers' Certificate setting forth the details of
such Event of Default or default and the action which the Company
proposes to take with respect thereto.
SECTION 6.06. Calculation of Original Issue Discount. The
Company Shall file with the Trustee promptly at the end of each
calendar year (i) a written notice specifying the amount of
original issue discount (including daily rates and accrual
periods) accrued on Outstanding Notes as of the end of such year
and (ii) such other specific information relating to such
original issue discount as may then be relevant under the
Internal Revenue Code of 1986, as amended from time to time.
ARTICLE 7
REMEDIES OF THE TRUSTEE AND NOTEHOLDERS IN THE EVENT OF DEFAULT
SECTION 7.01. Events of Default. In case one or more of the
following Events of Default (whatever the reason for such Event
of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree
or order of any court or any order, rule or regulation of any
administrative or governmental body) shall have occurred and be
continuing:
53
(a) default in the payment of any installment of interest
upon any of the Notes as and when the same shall become due and
payable, and continuance of such default for a period of thirty
days; or
(b) default in the payment of the principal amount at
maturity, Issue Price, accrued Original Issue Discount,
Redemption Price, or Fundamental Change Redemption Price in
respect of any of the Notes as and when the same shall become due
and payable either at maturity, in connection with any redemption
pursuant to Article 16 or in connection with any redemption, by
declaration or otherwise; or
(c) failure on the part of the Company duly to observe or
perform any of the covenants or agreements on the part of the
Company in the Notes or in this Indenture (other than a covenant
or agreement a default in whose performance or whose breach is
elsewhere in this Section specifically dealt with) which failure
continues for a period of forty-five days after the date on which
written notice of such failure, requiring the Company to remedy
the same, shall have been given to the Company by the Trustee, or
to the Company and the Trustee by the holders of at least
twenty-five percent in aggregate principal amount at maturity of
the Notes at the time outstanding; or
(d) the Company shall have commenced a voluntary case
or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator,
custodian, or other similar official of it or any substantial
part of its property, or shall have consented to any such relief
or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced
against it, or shall make a general assignment for the benefit of
creditors, or shall admit in writing of its inability to pay its
debt generally; or
(e) the entry by a court having jurisdiction in the premises
of (1) a decree or order for relief in respect of the Company in
an involuntary case or proceeding under the Bankruptcy Code or
any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (2) a decree 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
54
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 60 consecutive days;
then and in each and every such case, unless the principal of all
of the Notes shall have already become due and payable, either
the Trustee or the holders of not less than twenty-five percent
in aggregate principal amount at maturity of the Notes then
outstanding hereunder, by notice in writing to the Company (and
to the Trustee if given by Noteholders), may declare due and
immediately payable the sum of the Issue Price plus accrued
Original Issue Discount from the date of issue of the Notes to
the date of declaration and the interest accrued thereon, and
upon any such declaration the same shall become and shall be
immediately due and payable, anything in this Indenture or in the
Notes contained to the contrary notwithstanding. This provision,
however, is subject to the condition that if, at any time after
the Notes shall have been so declared due and payable, and before
any judgment or decree for the payment of the monies due shall
have been obtained or entered as hereinafter provided, the
Company shall pay or shall deposit with the Trustee a sum
sufficient to pay all matured installments of interest upon all
the Notes and principal amount at maturity, Issue Price, accrued
Original Issue Discount, Redemption Price, and Fundamental Change
Redemption Price in respect of any and all Notes which shall have
become due otherwise than by acceleration (with interest on
overdue installments of interest (to the extent that payment of
such interest is enforceable under applicable law) and on such
principal amount at maturity, Issue Price, accrued Original Issue
Discount, Redemption Price and Fundamental Change Redemption
Price at the rate borne by the Notes (giving effect to accrual of
Original Issue Discount), to the date of such payment or deposit)
and amounts due to the Trustee pursuant to Section 8.06, and if any
and all defaults under this Indenture, other than the nonpayment
of principal amount at maturity, Issue Price, accrued Original
Issue Discount, Redemption Price, Fundamental Change Redemption
Price and interest, if any, in respect of the Notes which shall
have become due by acceleration, shall have been cured or waived
pursuant to Section 7.07 -- then and in every such case the holders of
a majority in aggregate principal amount at maturity of the Notes
then outstanding, by written notice to the Company and to the
Trustee, may waive all defaults and rescind and annul such
declaration and its consequences; but no such waiver or
rescission and annulment shall extend to or shall affect any
subsequent default, or shall impair any right consequent thereon.
The Trustee shall not be charged with knowledge and shall not be
deemed to have notice of any default or Event of Default, except
an Event of Default under Section 7.01(a) or 7.01(b)in cases where
the Trustee is acting as paying agent, unless written notice thereof
stating that such notice is a "Notice of Default" shall have been given
to a Responsible Officer by the Company or a Noteholder or any
agent of a
55
Noteholder; and, in the absence of such written notice, the
Trustee may conclusively assume that there is no default or Event
of Default.
In case the Trustee shall have proceeded to enforce any
right under this Indenture and such proceedings shall have been
discontinued or abandoned because of such rescission or annulment
or for any other reason or shall have been determined adversely
to the Trustee, then and in every such case the Company, the
holders of Notes, and the Trustee shall be restored respectively
to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the holders of Notes, and the
Trustee shall continue as though no such proceeding had been
taken.
SECTION 7.02. Payment of Notes on Default; Suit Therefor.
The Company covenants that (a) in case default shall be made in
the payment of any installment of interest upon ny of the Notes
as and when the same shall become due and payable, and such
default shall have continued for a period of thirty days, or (b)
in case default shall be made in the payment of the principal
amount at maturity, Issue Price, accrued Original Issue Discount,
Redemption Price, or Fundamental Change Redemption Price in
respect of any of the Notes as and when the same shall have
become due and payable, whether at maturity of the Notes, in
connection with any redemption of a Note pursuant to Article 16, or
in connection with any redemption, by declaration or otherwise --
then, upon demand of the Trustee, the Company will pay to the
Trustee, for the benefit of the holders of the Notes, the whole
amount that then shall have become due and payable on all such
Notes for principal amount at maturity, Issue Price, accrued
Original Issue Discount, Redemption Price, Fundamental Change
Redemption Price, or interest, or both, as the case may be, with
interest upon the overdue principal amount at maturity, Issue
Price, accrued Original Issue Discount, Redemption Price and
Fundamental Change Redemption Price and (to the extent that
payment of such interest is enforceable under applicable law)
upon the overdue installments of interest at the rate borne by
the Notes (giving effect to the accrual of Original Issue
Discount); and, in addition thereto, such further amount as shall
be sufficient to cover the costs and expenses of collection,
including a reasonable compensation to the Trustee, its agents,
attorneys and counsel, and any expenses or liabilities incurred
by the Trustee hereunder other than through its negligence or bad
faith. Until such demand by the Trustee, the Company may pay
principal amount at maturity, Issue Price, accrued Original Issue
Discount, Redemption Price, Fundamental Change Redemption Price
and interest, if any, in respect of the Notes to the registered
holders, whether or not the Notes are overdue.
In case the Company shall fail forthwith to pay such
amounts upon such demand, the Trustee, in its own name and as
trustee of an express trust, shall be
56
entitled and empowered to institute any actions or proceedings at
law or in equity for the collection of the sums so due and unpaid
at the Company's expense, and may prosecute any such action or
proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor
on the Notes and collect in the manner provided by law out of the
property of the Company or any other obligor on the Notes
wherever situated the monies adjudged or decreed to be payable.
In case there shall be pending proceedings for the
bankruptcy or for the reorganization of the Company or any other
obligor on the Notes under Title 11 of the United States Code, or
any other applicable law, or in case a receiver, assignee or
trustee in bankruptcy or reorganization, liquidator, sequestrator
or similar official shall have been appointed for or taken
possession of the Company, the property of the Company or such
other obligor, or in the case of any other similar judicial
proceedings relative to the Company or other obligor upon the
Notes, or to the creditors or property of the Company or such
other obligor, the Trustee, irrespective of whether the principal
of the Notes 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 pursuant to the provisions of
this Section 7.02, shall be entitled and empowered, by intervention
in such proceedings or otherwise, to file and prove a claim or
claims for the whole amount of principal amount at maturity,
Issue Price, accrued Original Issue Discount, Redemption Price,
Fundamental Change Redemption Price and interest, if any, owing
and unpaid in respect of the Notes, and, in case of any judicial
proceedings, to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the
claims of the Trustee and of the Noteholders allowed in such
judicial proceedings relative to the Company or any other obligor
on the Notes, its or their creditors, or its or their property,
and to collect and receive any monies or other property payable
or deliverable on any such claims, and to distribute the same
after the deduction of any amounts due the Trustee under Section
8.06; and any receiver, assignee or trustee in bankruptcy or
reorganization liquidator, custodian or similar official is
hereby authorized by each of the Noteholders to make such
payments to the Trustee, and, if the Trustee shall consent to the
making of such payments directly to the Noteholders, to pay to
the Trustee any amount due it for compensation, expenses,
advances and disbursements including counsel fees and expenses
incurred by it up to the date of such distribution. To the extent
that such payment of reasonable compensation, expenses, advances
and disbursements out of the estate in any such proceedings shall
be denied for any reason, payment of the same shall be secured by
a lien on, and shall be paid out of, any and all distributions,
dividends, monies, securities and other property which the
holders of the Notes may be entitled to receive in such
proceedings, whether in liquidation or under any plan of
reorganization or arrangement or otherwise.
57
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or adopt on behalf of any
Noteholder any plan of reorganization or arrangement, affecting
the Notes or the rights of any Noteholder, or to authorize the
Trustee to vote in respect of the claim of any Noteholder in any
such proceeding.
All rights of action and of asserting claims under this
Indenture, or under any of the Notes, may be enforced by the
Trustee without the possession of any of the Notes, or the
production thereof on any trial or other proceeding relative
thereto, and any such suit or proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment shall, after provision for
the payment of the compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the
ratable benefit of the holders of the Notes.
In any proceedings brought by the Trustee (and in any
proceedings involving the interpretation of any provision of this
Indenture to which the Trustee shall be a party) the Trustee
shall be held to represent all the holders of the Notes, and it
shall not be necessary to make any holders of the Notes parties
to any such proceedings.
SECTION 7.03. Application of Monies Collected by Trustee. Any
monies collected by the Trustee pursuant to this Articles 7 shall be
applied in the order following, at the date or dates fixed by the
Trustee for the distribution of such monies, upon presentation of
the several Notes, and stamping thereon the payment, if only
partially paid, and upon surrender thereof if fully paid:
First: To the payment of costs and expenses of
collection and reasonable compensation to the Trustee, its
agents, attorneys and counsel, and of all other expenses
and liabilities incurred, and all advances made, by the
Trustee except as a result of its negligence or bad faith;
Second: Subject to the provisions of Article 4, in case
the principal of the outstanding Notes shall not hav become due
and be unpaid, to the payment of interest on the Notes in default
in the order of the maturity of the installments of such
interest, with interest (to the extent that such interest has
been collected by the Trustee) upon the overdue installments of
interest at the rate borne by the Notes (giving effect to the
accrual of Original Issue Discount), such payments to be made
ratably to the persons entitled thereto;
Third: Subject to the provisions of Article 4, in
case the principal amount at maturity, Issue Price, accrued
Original Issue Discount,
58
Redemption Price or Fundamental Change Redemption Price
in respect of the outstanding Notes shall have become
due, by declaration or otherwise, and be unpaid to the
payment of the whole amount then owing and unpaid upon
the Notes for principal amount at maturity, Issue
Price, accrued Original Issue Discount, Redemption
Price, Fundamental Change Redemption Price and
interest, if any, with interest on the overdue
principal amount at maturity, Issue Price, accrued
Original Issue Discount, Redemption Price and
Fundamental Change Redemption Price, and (to the extent
that such interest has been collected by the Trustee)
upon overdue installments of interest at the rate borne
by the Notes (giving effect to the accrual of Original
Issue Discount); and in case such monies shall be
insufficient to pay in full the whole amounts so due
and unpaid upon the Notes, then to the principal amount
at maturity, Issue Price, accrued Original Issue
Discount, Redemption Price, Fundamental Change
Redemption Price and interest, if any, without
preference or priority of principal amount at maturity,
Issue Price, accrued Original Issue Discount,
Redemption Price or Fundamental Change Redemption Price
over interest, or of interest over principal amount at
maturity, Issue Price, accrued Original Issue Discount,
Redemption Price or Fundamental Change Redemption Price
or of any installment of interest over any other
installment of interest, or of any Note over any other
Note, ratably to the aggregate of such principal amount
at maturity, Issue Price, accrued Original Issue
Discount, Redemption Price, Fundamental Change
Redemption Price and accrued and unpaid interest;
Fourth: Subject to the provisions of Article 4, to the
payment of the remainder, if any, to the Company or any other
person lawfully entitled thereto.
SECTION 7.04. Proceedings by Noteholder. No holder of any Note
shall have any right by virtue of or by availing of any provision
of this Indenture to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Indenture,
or for the appointment of a receiver, trustee, liquidator,
custodian or other similar official, or for any other remedy
hereunder, unless such holder previously shall have given to the
Trustee written notice of default and of the continuance thereof,
as hereinbefore provided, and unless also the holders of not less
than twenty-five percent in aggregate principal amount at
maturity of the Notes then outstanding shall have made written
request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have
offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee for sixty days after
its receipt of such notice, request and offer of indemnity, shall
have neglected or refused to institute any such action, suit or
59
proceeding and no direction inconsistent with such written
request shall have been given to the Trustee pursuant to Section
7.07; it being understood and intended, and being expressly
covenanted by the taker and holder of every Note with every other
taker and holder and the Trustee, that no one or more holders of
Notes shall have any right in any manner whatever by virtue of or
by availing of any provision of this Indenture to affect, disturb
or prejudice the rights of any other holder of Notes, or to
obtain or seek to obtain priority over or preference to any other
such holder, or to enforce any right under this Indenture, except
in the manner herein provided and for the equal, ratable and
common benefit of all holders of Notes (except as otherwise
provided herein). For the protection and enforcement of this
Section 7.05, each and every Noteholder and the Trustee shall be
entitled to such relief as can be given either at law or in
equity.
Notwithstanding any other provisions of this Indenture and
any provision of any Note, however, the right of any holder of
any Note to receive payment of the principal amount at maturity,
Issue Price, accrued Original Issue Discount, Redemption Price,
Fundamental Change Redemption Price such Note, on or after the
respective due dates expressed in such Note, or to institute suit
for the enforcement of any such payment on or after such
respective dates against the Company shall not be impaired or
affected without the consent of such holder.
Anything in this Indenture or the Notes to the contrary
notwithstanding, the holder of any Note, without the consent of
either the Trustee or the holder of any other Note, in his own
behalf and for his own benefit may enforce, and may institute and
maintain any proceeding suitable to enforce, his rights of
conversion as provided herein.
SECTION 7.05. Proceedings by Trustee. In case of an Event of
Default hereunder the Trustee may in its discretion proceed to
protect and enforce the rights vested in it by this Indenture by
such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either
by suit in equity or by action at law or by proceeding in
bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid
of the exercise of any power granted in this Indenture, or to
enforce any other legal or equitable right vested in the Trustee
by this Indenture or by law.
SECTION 7.06. Remedies Cumulative and Continuing.
Except as provided in Section 2.06, all powers and remedies given
by this Article 7 to the Trustee or to the Noteholders shall, to
the extent permitted by law, be deemed cumulative and not
exclusive of any thereof or of any other powers and remedies
available to the Trustee or the holders of the Notes, by judicial
proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained
60
in this Indenture, and no delay or omission of the Trustee or of
any holder of any of the Notes to exercise any right or power
accruing upon any default occurring and continuing as aforesaid
shall impair any such right or power, or shall be construed to be
a waiver of any such default or an acquiescence therein; and,
subject to the provisions of Section 7.04, every power and remedy
given by this Article 7 or by law to the Trustee or to the
Noteholders may be exercised from time to time, and as often as
shall be deemed expedient, by the Trustee or by the Noteholders.
SECTION 7.07. Direction of Proceedings and Waiver of
Defaults by Majority Noteholders. The holders of a majority in
aggregate principal amount at maturity of the Notes at the time
outstanding determined in accordance with Section 9.04 shall have the
right to direct the time, method, and place of conducting any
proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee; provided, however,
that (subject to the provisions of Section 8.01) the Trustee shall
have the right to decline to follow any such direction if the
Trustee shall be advised by counsel that the action or proceeding
so directed may not lawfully be taken or if the Trustee in good
faith by its board of directors or executive committee, or a
trust committee of directors and/or Responsible Officers shall
determine that the action or proceedings so directed could
involve the Trustee in personal liability. Prior to any
declaration accelerating the maturity of the Notes, the holders
of a majority in aggregate principal amount at maturity of the
Notes at the time outstanding may on behalf of the holders of all
of the Notes waive any past default or Event of Default hereunder
and its consequences except (i) a default in the payment of
principal amount at maturity, Issue Price, accrued Original Issue
Discount, Redemption Price, Fundamental Change Redemption Price
and interest, if any, in respect of the Notes, (ii) a failure by
the Company to convert any Notes into Common Stock or (iii) a
default in respect of a covenant or provision hereof which under
Article 11 cannot be modified or amended without the consent of
the holders of all Notes then outstanding. Upon any such waiver
the Company, the Trustee and the holders of the Notes shall be
restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent
or other default or Event of Default or impair any right
consequent thereon. Whenever any default or Event of Default
hereunder shall have been waived as permitted by this Section 7.07,
said default or Event of Default shall for all purposes of the
Notes and this Indenture be deemed to have been cured and to be
not continuing; but no such waiver shall extend to any subsequent
or other default or Event of Default or impair any right
consequent thereon.
SECTION 7.08. Notice of Defaults. The Trustee shall, within
ninety days after the occurrence of a default, mail to all
Noteholders, as the names and addresses of such holders appear
upon the registry books of the Company, notice
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of all defaults known to the Trustee, unless such defaults shall
have been cured or waived before the giving of such notice (the
term "defaults" for the purpose of this Section 7.08 being hereby
defined to be the events specified in clauses (a), (b), (c), (d)
and (e) of Section 7.01, not including periods of grace, if any, or
the giving of any notice, or both provided for therein); and
provided that, except in the case of default in the payment of
the principal amount at maturity, Issue Price, accrued Original
Issue Discount, Redemption Price, Fundamental Change Redemption
Price and interest, if any, in respect of any of the Notes, the
Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee, or a
trust committee of directors and/or Responsible Officers of the
Trustee in good faith determine that the withholding of such
notice is in the interests of the Noteholders.
SECTION 7.09. Undertaking to Pay Costs. All parties to this
Indenture agree, and each holder of any Note by his acceptance
thereof shall be deemed to have agreed, that any court may in its
discretion require, 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, the
filing by any party litigant in such suit of an undertaking to
pay the costs of such suit and that such court may in its
discretion assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in such
suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; provided, that
the provisions of this Section 7.09 shall not apply to any suit
instituted by the Trustee, to any suit instituted by any
Noteholder, or group of Noteholders, holding in the aggregate
more than ten percent in principal amount at maturity of the
Notes outstanding, or to any suit instituted by any Noteholder
for the enforcement of the payment of the principal amount at
maturity, Issue Price, accrued Original Issue Discount,
Redemption Price, Fundamental Change Redemption Price and
interest, if any, in respect of any Note on or after the due date
expressed in such Note or to any suit for the enforcement of the
right to convert any Note in accordance with the provisions of
Article 15.
ARTICLE 8
CONCERNING THE TRUSTEE
SECTION 8.01. Duties and Responsibilities of Trustee. The
Trustee, prior to the occurrence of an Event of Default and after
the curing of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture and no implied covenant
or obligations shall be read into this Indenture against the
Trustee. In case an
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Event of Default has occurred (which has not been cured or
waived) the Trustee shall exercise such of the rights and powers
vested in it by this Indenture, and use the same degree of care
and skill in their exercise, as a prudent person would exercise
or use under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action,
its own negligent failure to act or its own willful misconduct,
except that
(a) prior to the occurrence of an Event of Default and
after the curing or waiving of all Events of Default which
may have occurred:
(1) the duties and obligations of the Trustee
shall be determined solely by the express provisions
of this Indenture, and the Trustee shall not be liable
except for the performance of such duties and
obligations as are specifically set forth in this
Indenture and no implied covenants or obligations
shall be read into this Indenture against the Trustee;
and
(2) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or
opinions furnished to the Trustee and conforming to
the requirements of this Indenture; but, in the case
of any such certificates or opinions which by any
provisions hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a
duty to examine the same to determine (but need not
confirm or investigate the accuracy of mathematical
calculations or facts stated therein) whether or not
they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer or
Officers of the Trustee, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(c) the Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith
in accordance with the direction of the holders of not less
than a majority in principal amount at maturity of the
Notes at the time outstanding determined as provided in
Section 9.04 relating to the time, method and place of
conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon
the Trustee, under this Indenture; and
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(d) whether or not therein provided, every provision
of this Indenture relating to the conduct or affecting the
liability of, or affording protection to, the Trustee shall
be subject to the provisions of this Section.
None of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if
there is reasonable ground for believing that the redemption of
such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
SECTION 8.02. Reliance on Documents, Opinions, Etc. Except
as otherwise provided in Section 8.01,
(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, consent, order, bond, debenture,
coupon 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) any request, direction, order or demand of the
Company mentioned herein shall be sufficiently evidenced by
an Officers' Certificate (unless other evidence in respect
thereof be herein specifically prescribed); and any
resolution of the Board of Directors may be evidenced to
the Trustee by a copy thereof certified by the Secretary or
an Assistant Secretary of the Company;
(c) the Trustee may consult with counsel of its
selection and any advice or Opinion of Counsel shall be
full and complete authorization and protection in respect
of any action taken or omitted by it hereunder in good
faith and in accordance with such advice or Opinion of
Counsel;
(d) 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
Noteholders pursuant to the provisions of this Indenture,
unless such Noteholders shall have offered to the Trustee
reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or
thereby;
(e) the Trustee shall not be liable for any action
taken or omitted by it in good faith and believed by it to
be authorized or within the discretion or rights or powers
conferred upon it by this Indenture;
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(f) prior to the occurrence of an Event of Default
hereunder and after the curing or waiving of all Events of
Default, the Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond,
debenture, coupon or other paper or document unless
requested in writing to do so by the holders of not less
than a majority in principal amount at maturity of the
Notes then outstanding; provided, however, that if the
payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it
in the making of such investigation is, in the opinion of
the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the
Trustee may require reasonable indemnity against such
expense or liability as a condition to so proceeding; the
reasonable expenses of every such examination shall be paid
by the Company or, if paid by the Trustee or any
predecessor Trustee, shall be repaid by the Company upon
demand; and
(g) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys and the
Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed
by it with due care hereunder.
(h) 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;
(i) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other
paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney
at the sole cost of the Company and shall incur no
liability or additional liability of any kind by reason of
such inquiry or investigation.
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SECTION 8.03. No Responsibility for Recitals, Etc. The
recitals contained herein and in the Notes (except in the
Trustee's certificate of authentication) shall be taken as the
statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes
no representations as to the validity or sufficiency of this
Indenture or of the Notes. The Trustee shall not be accountable
for the use or application by the Company of any Notes or the
proceeds of any Notes authenticated and made available for
delivery by the Trustee in conformity with the provisions of this
Indenture.
SECTION 8.04. Trustee, Paying Agents, Conversion Agents or
Registrar May Own Notes. The Trustee, any paying agent, any
conversion agent or Note registrar, in its individual or any
other capacity, may become the owner or pledgee of Notes with the
same rights it would have if it were not Trustee, paying agent,
conversion agent or Note registrar.
SECTION 8.05. Monies to Be Held in Trust. Subject to the
provisions of Section 13.04, all monies received by the Trustee
shall, until used or applied as herein provided, be held in trust
for the purposes for which they were received. Money held by the
Trustee in trust hereunder need not be segregated from other
funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it
hereunder except to the extent otherwise agreed in writing by the
Company and the Trustee.
SECTION 8.06. Compensation and Expenses of Trustee. The
Company covenants and agrees to pay to the Trustee from time to
time such compensation as the Company and the Trustee shall from
time to time agree in writing for all services rendered by it
hereunder in any capacity (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an
express trust), and the Company will pay or reimburse the Trustee
upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any
of the provisions of this Indenture (including the reasonable
compensation and the expenses and disbursements of its counsel
and of all persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence
or bad faith. The Company also covenants to indemnify the Trustee
and any predecessor trustee to the Trustee for, and to hold it
harmless against, any and all loss, liability, damage, claims or
expense including taxes incurred without negligence or bad faith
on the part of the Trustee and arising out of or in connection
with the acceptance or administration of this trust, including
the costs and expenses of defending itself against any claim of
liability in connection with the exercise or performance of any
of its permits and duties hereunder. The obligations of the
Company under this Section 8.06 to compensate or indemnify the Trustee
and to pay or reimburse the Trustee for expenses, disbursements
and advances shall be secured by a lien prior to that of
66
the Notes upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the benefit of
the holders of particular Notes. The obligation of the Company
under this Section shall survive the satisfaction and discharge
of this Indenture.
SECTION 8.07. Officers' Certificate as Evidence. Except as
otherwise provided in Section 8.01, whenever in the
administration of the provisions of this Indenture the Trustee
shall deem it necessary or desirable that a matter be proved or
established prior to taking or omitting any action hereunder,
such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad
faith on the part of the Trustee, be deemed to be conclusively
proved and established by an Officers' Certificate delivered to
the Trustee, and such Certificate, in the absence of negligence
or bad faith on the part of the Trustee, shall be full warrant to
the Trustee for any action taken or omitted by it under the
provisions of this Indenture upon the faith thereof.
SECTION 8.08. Eligibility of Trustee. The Trustee hereunder
shall at all times be a corporation organized and doing business
under the laws of the United States or any State or Territory
thereof or of the District of Columbia authorized under such laws
to exercise corporate trust powers, having a combined capital and
surplus of at least five million dollars, subject to supervision
or examination by Federal, State, Territorial or District of
Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section 8.08, 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. In case at any time the Trustee shall
cease to be eligible in accordance with the provisions of this
Section 8.08, the Trustee shall resign immediately in the manner and
with the effect specified in Section 8.09.
SECTION 8.09. Resignation or Removal of Trustee. (a) The
Trustee may at any time resign by giving written notice of such
resignation to the Company and by mailing notice thereof to the
holders of Notes at their addresses as they shall appear on the
registry books of the Company. Upon receiving such notice of
resignation, the Company shall promptly appoint a successor
trustee by written instrument, in duplicate, executed by order of
the Board of Directors, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor
trustee. If no successor trustee shall have been so appointed and
have accepted appointment within 30 days after the mailing of
such notice of resignation to the Noteholders, the resigning
Trustee may petition, at the expense of the Company, any court of
competent jurisdiction for the appointment of a successor
trustee, or any Noteholder who has been a bona fide holder of a
Note or
67
Notes for at least six months may, subject to the provisions of
Section 7.09, on behalf of himself and all others similarly situated,
petition any such court for the appointment of a successor
trustee. Such court may thereupon, after such notice, if any, as
it may deem proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall
occur:
(1) the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.08 and shall
fail to resign after written request therefor by the
Company or by any such Noteholder, or
(2) the Trustee shall become incapable of acting,
or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be
appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs
for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case the Company may remove the Trustee and
appoint a successor trustee by written instrument, in duplicate,
executed by order of the Board of Directors, one copy of which
instrument shall be delivered to the Trustee so removed and one
copy to the successor trustee, or, subject to he provisions of
Section 7.09, any Noteholder who has been a bona fide holder of a
Note or Notes for at least six months may, on behalf of himself
and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the
appointment of a successor trustee. Such court may thereupon,
after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee. If an
instrument of acceptance by a successor Trustee shall not have
been delivered to the Trustee within 30 days after the giving of
such notice of removal, the Trustee being removed may petition,
at the expense of the Company, any court of competent
jurisdiction for the appointment of a successor Trustee with
respect to the Notes of such series.
(c) The holders of a majority in aggregate principal amount
at maturity of the Notes at the time outstanding may at any time
remove the Trustee and nominate a successor trustee which shall
be deemed appointed as successor trustee unless within ten days
after notice to the Company of such nomination the Company
objects thereto, in which case the Trustee so removed or any
Noteholder, upon the terms and conditions and otherwise as in
subsection (a) of this Section 8.09 provided, may petition any court
of competent jurisdiction for an appointment of a successor
trustee. If an instrument of acceptance by a successor Trustee
shall not have been delivered to the Trustee within 30 days after
the giving of such notice of removal, the Trustee being removed
may petition, at the
68
expense of the Company, any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Notes
of such series.
(d) Any resignation or removal of the Trustee and
appointment of a successor trustee to any of the provisions of
this Section 8.09 shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 8.10.
SECTION 8.10. Acceptance by Successor Trustee. Any successor
trustee appointed as provided in Section 8.09 shall execute,
acknowledge and deliver to the Company and to its predecessor
trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any
further act, deed or conveyance, shall become vested with all the
rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named as trustee
herein; but, nevertheless, on the written request of the Company
or of the successor trustee, the trustee ceasing to act shall,
upon payment of any amounts then due it pursuant to the
provisions of Section 8.06, execute and deliver an instrument
transferring to such successor trustee all the rights and powers
of the trustee so ceasing to act. Upon request of any such
successor trustee, the Company shall execute any and all
instruments in writing for more fully and certainly vesting in
and confirming to such successor trustee all such rights and
powers. Any trustee ceasing to act shall, nevertheless, retain a
lien upon all property or funds held or collected by such trustee
to secure any amounts then due it pursuant to the provisions of
Section 8.06.
No successor trustee shall accept appointment as provided
in this Section 8.10 unless at the time of such acceptance such
successor trustee shall be eligible under the provisions of
Section 8.08.
Upon acceptance of appointment by a successor trustee as
provided in this Section 8.10, the Company and the former trustee
shall mail notice of the succession of such trustee hereunder to
the holders of Notes at their addresses as they shall appear on
the registry books of the Company. If the Company fails to mail
such notice within ten days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Company.
SECTION 8.11. Succession by Merger, Etc. Any corporation
into which the Trustee may be merged or converted or with which
it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be
a party, or any corporation succeeding to all or substantially
all of the trust business of the Trustee, shall be the successor
to the Trustee
69
hereunder, provided such corporation shall be eligible under the
provisions of Section 8.08 without the execution or filing of any
paper or any further act on the part of any of the parties
hereto.
In case at the time such successor to the Trustee shall
succeed to the trusts created by this Indenture any of the Notes
shall have been authenticated but not delivered, any such
successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and make available for
delivery such Notes so authenticated; and in case at that time
any of the Notes shall not have been authenticated, any successor
to the Trustee appointed by such successor trustee may
authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor trustee; and in all
such cases such certificates shall have the full force which it
is anywhere in the Notes or in this Indenture provided that the
certificate of the Trustee shall have; provided, however, that
the right to adopt the certificate of authentication of any
predecessor Trustee or authenticate Notes in the name of any
predecessor Trustee shall apply only to its successor or
successors by merger, conversion or consolidation.
ARTICLE 9
CONCERNING THE NOTEHOLDERS
SECTION 9.01. Action by Noteholders. Whenever in this
Indenture it is provided that the holders of a specified
percentage in aggregate principal amount at maturity of the Notes
may take any action (including the making of any demand or
request, the giving of any notice, consent or waiver or the
taking of any other action), the fact that at the time of taking
any such action the holders of such specified percentage have
joined therein may be evidenced (a) by any instrument or any
number of instruments of similar tenor executed by Noteholders in
person or by agent or proxy appointed in writing, or (b) by the
record of the holders of Notes voting in favor thereof at any
meeting of Noteholders duly called and held in accordance with
the provisions of Article 10, or (c) by a combination of such
instrument or instruments and any such record of such a meeting
of Noteholders. Whenever the Company or the Trustee solicits the
taking of any action by the holders of the Notes, the Company or
the Trustee may fix in advance of such solicitation, a date as
the record date for determining holders entitled to take such
action. The record date shall be not more than 15 days prior to
the date of commencement of solicitation of such action.
SECTION 9.02. Proof of Execution by Noteholders. Subject to
the provisions of Sections 8.01, 8.02 and 10.05, proof of the
execution of any
70
instrument by a Noteholder or his agent or proxy shall be
sufficient if made in accordance with such reasonable rules and
regulations as may be prescribed by the Trustee or in such manner
as shall be satisfactory to the Trustee. The holding of Notes
shall be proved by the registry of such Notes or by a certificate
of the Note registrar.
The record of any Noteholders' meeting shall be proved in
the manner provided in Section 10.06.
SECTION 9.03. Who Are Deemed Absolute Owners. The Company,
the Trustee, any paying agent, any conversion agent and any Note
registrar may deem the person in whose name such Note shall be
registered upon the books of the Company to be, and may treat him
as, the absolute owner of such Note (whether or not such Note
shall be overdue and notwithstanding any notation of ownership or
other writing thereon) for the purpose of receiving payment of or
on account of the principal amount at maturity, Issue Price,
accrued Original Issue Discount, Redemption Price, Fundamental
Change Redemption Price and interest, if any, in respect of such
Note, for conversion of such Note and for all other purposes; and
neither the Company nor the Trustee nor any paying agent nor any
conversion agent nor any Note registrar shall be affected by any
notice to the contrary. All such payments so made to any holder
for the time being, or upon his order, shall be valid, and, to
the extent of the sum or sums so paid, effectual to satisfy and
discharge the liability for monies payable upon any such Note.
SECTION 9.04. Company-Owned Notes Disregarded. In determining
whether the holders of the requisite aggregate principal amount
at maturity of Notes have concurred in any direction, consent,
waiver or other action under this Indenture, Notes which are
owned by the Company or any other obligor on the Notes or by any
person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company or any
other obligor on the Notes shall be disregarded and deemed not to
be outstanding for the purpose of any such determination;
provided that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, consent,
waiver or other action only Notes which a Responsible Officer
knows are so owned shall be so disregarded. Notes so owned which
have been pledged in good faith may be regarded as outstanding
for the purposes of this Section 9.04 if the pledgee shall establish
to the satisfaction of the Trustee the pledgee's right to vote
such Notes and that the pledgee is not the Company, any other
obligor on the Notes or a person directly or indirectly
controlling or controlled by or under direct or indirect common
control with the Company or any such other obligor. In the case
of a dispute as to such right, any decision by the Trustee taken
upon the advice of counsel shall be full protection to the
Trustee. Upon request of the Trustee, the Company shall furnish
to the Trustee promptly an Officers' Certificate listing and
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identifying all Notes, if any, known by the Company to be owned
or held by or for the account of any of the above described
persons; and, subject to Section 8.01, the Trustee shall be entitled
to accept such Officers' Certificate as conclusive evidence of
the facts therein set forth and of the fact that all Notes not
listed therein are outstanding for the purpose of any such
determinations.
SECTION 9.05. Revocation of Consents; Future Holders Bound.
At any time prior to (but not after) the evidencing to the
Trustee, as provided in Section 9.01, of the taking of any action by
the holders of the percentage in aggregate principal amount at
maturity of the Notes specified in this Indenture in connection
with such action, any holder of a Note which is shown by the
evidence to be included in the Notes the holders of which have
consented to such action may, by filing written notice with the
Trustee at its Principal Office and upon proof of holding as
provided in Section 9.02, revoke such action so far as concerns such
Note. Except as aforesaid any such action taken by the holder of
any Note shall be conclusive and binding upon such holder and
upon all future holders and owners of such Note and of any Notes
issued in exchange or substitution therefor, irrespective of
whether any notation in regard thereto is made upon such Note or
any Note issued in exchange or substitution therefor.
ARTICLE 10
NOTEHOLDERS' MEETINGS
SECTION 10.01. Purposes of Meetings. A meeting of
Noteholders may be called at any time and from time to time
pursuant to the provisions of this Article 10 for any of the
following purposes:
(1) to give any notice to the Company or to the Trustee or
to give any directions to the Trustee, or to consent to the
waiving of any default hereunder and its consequences, or to
take any other action authorized to be taken by Noteholders
pursuant to any of the provisions of Article 7;
(2) to remove the Trustee and nominate a successor
trustee pursuant to the provisions of Article 8;
(3) to consent to the execution of an indenture or
indentures supplemental hereto pursuant to the provisions of
Section 11.01(a); or
(4) to take any other action authorized to be taken by
or on behalf of the holders of any specified aggregate
principal amount at
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maturity of the Notes under any other provision of this
Indenture or under applicable law.
SECTION 10.02. Call of Meetings by Trustee. The Trustee
shall, upon receiving a written request pursuant to Section 10.03
and at the expense of the Company in accordance with Section 8.06,
call a meeting of Noteholders to take any action specified in
Section 10.01, to be held at such time and at such place as the
Trustee shall determine. Notice of every meeting of the
Noteholders, setting forth the time and the place of such meeting
and in general terms the action proposed to be taken at such
meeting and the establishment of any record date pursuant to
Section 9.01, shall be mailed to holders of Notes at their addresses
as they shall appear on the registry books of the Company. Such
notice shall also be mailed to the Company. Such notices shall be
mailed not less than twenty nor more than ninety days prior to
the date fixed for the meeting.
Any meeting of Noteholders shall be valid without notice if
the holders of all Notes then outstanding are present in person
or by proxy or if notice is waived before or after the meeting by
the holders of all Notes outstanding, and if the Company and the
Trustee are either present by duly authorized representatives or
have, before or after the meeting, waived notice.
SECTION 10.03. Call of Meetings by Company or Noteholders.
In case at any time the Company, pursuant to a resolution of its
Board of Directors, or the holders of at least ten percent in
aggregate principal amount at maturity of the Notes then
outstanding, shall have requested the Trustee to call a meeting
of Noteholders, by written request setting forth in reasonable
detail the action proposed to be taken at the meeting, and the
Trustee shall not have mailed the notice of such meeting within
twenty days after receipt of such request, then the Company or
such Noteholders may determine the time and the place for such
meeting and may call such meeting to take any action authorized
in Section 10.01, by mailing notice thereof as provided in Section
10.02.
SECTION 10.04. Qualification for Voting. To be entitled to
vote at any meeting of Noteholders a person shall (a) be a holder
of one or more Notes or (b) be a person appointed by an
instrument in writing as proxy by a holder of one or more Notes.
The only persons who shall be entitled to be present or to speak
at any meeting of Noteholders shall be the persons entitled to
vote at such meeting and their counsel and any representatives of
the Trustee and its counsel and any representatives of the
Company and its counsel.
SECTION 10.05. Regulations. Notwithstanding any other
provisions of this Indenture, the Trustee may, but shall not be
obligated to, make such reasonable regulations as it may deem
advisable for any meeting of Noteholders,
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in regard to proof of the holding of Notes and of the appointment
of proxies, and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such
other matters concerning the conduct of the meeting as it shall
think fit.
The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have
been called by the Company or by Noteholders as provided in
Section 10.03, in which case the Company or the Noteholders calling the
meeting, as the case may be, shall in like manner appoint a
temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by vote of the holders
of a majority in principal amount at maturity of the Notes
represented at the meeting and entitled to vote at the meeting.
Subject to the provisions of Section 9.04, at any meeting
each Noteholder or proxy shall be entitled to one vote for each
$1,000 principal amount at maturity of Notes held or represented
by him; provided, however, that no vote shall be cast or counted
at any meeting in respect of any Note challenged as not
outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to
vote other than by virtue of Notes held by him or instruments in
writing as aforesaid duly designating him as the person to vote
on behalf of other Noteholders. Any meeting of Noteholders duly
called pursuant to the provisions of Section 10.02 or 10.03 may
be adjourned from time to time by a majority of those present,
whether or not constituting a quorum, and the meeting may be held
as so adjourned without further notice.
SECTION 10.06. Voting. The vote upon any resolution
submitted to any meeting of Noteholders shall be by written
ballot on which shall be subscribed the signatures of the holders
of Notes or of their representatives by proxy and the principal
amount at maturity of the Notes held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of
votes who shall count all votes cast at the meeting for or
against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in
duplicate of all votes cast at the meeting. A record in duplicate
of the proceedings of each meeting of Noteholders shall be
prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of
votes on any vote by ballot taken thereat and affidavits by one
or more persons having knowledge of the facts setting forth a
copy of the notice of the meeting and showing that said notice
was mailed as provided in Section 10.02. The record shall show
the principal amount at maturity of the Notes voting in favor of
or against any resolution. The record shall be signed and
verified by the affidavits of the permanent chairman and
secretary of the meeting and one of the duplicates
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shall be delivered to the Company and the other to the Trustee to
be preserved by the Trustee, the latter to have attached thereto
the ballots voted at the meeting.
Any record so signed and verified shall be conclusive
evidence of the matters therein stated.
SECTION 10.07. No Delay of Rights by Meeting. Nothing in
this Article 10 contained shall be deemed or construed to authorize
or permit, by reason of any call of a meeting of Noteholders or
any rights expressly or impliedly conferred hereunder to make
such call, any hindrance or delay in the exercise of any right or
rights conferred upon or reserved to the Trustee or to the
Noteholders under any of the provisions of this Indenture or of
the Notes.
ARTICLE 11
SUPPLEMENTAL INDENTURES
SECTION 11.01. Supplemental Indentures Without Consent of
Noteholders. The Company, when authorized by the resolutions of
the Board of Directors, and the Trustee may from time to time and
at any time enter into an indenture or indentures supplemental
hereto for one or more of the following purposes:
(a) to make provision with respect to the conversion
rights of the holders of Notes pursuant to the requirements
of Section 15.06;
(b) subject to Article 4, to convey, transfer, assign,
mortgage or pledge to the Trustee as security for the Notes,
any property or assets;
(c) to evidence the succession of another corporation
to the Company, or successive successions, and the
assumption by the successor corporation of the covenants,
agreements and obligations of the Company pursuant to
Article 12 hereof;
(d) to add to the covenants of the Company such further
covenants, restrictions or conditions as the Board of
Directors and the Trustee shall consider to be for the
benefit of the holders of Notes, and to make the occurrence,
or the occurrence and continuance, of a default in any such
additional covenants, restrictions or conditions a default
or an Event of Default permitting the enforcement of all or
any of the several remedies provided in this Indenture as
herein set forth; provided, however,
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that in respect of any such additional covenant, restriction
or condition such supplemental indenture may provide for a
particular period of grace after default (which period may
be shorter or longer than that allowed in the case of other
defaults) or may provide for an immediate enforcement upon
such default or may limit the remedies available to the
Trustee upon such default;
(e) to provide for the issuance under this Indenture of
Notes in coupon form (including Notes registrable as to
principal only) and to provide for exchangeability of such
Notes with the Notes issued hereunder in fully registered
form and to make all appropriate changes for such purpose;
(f) to cure any ambiguity or to correct or supplement
any provision contained herein or in any supplemental
indenture which may be defective or inconsistent with any
other provision contained herein or in any supplemental
indenture, or to make such other provisions in regard to
matters or questions arising under this Indenture which
shall not adversely affect the interests of the holders of
the Notes in any material respect;
(g) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to
the Notes; or
(h) to modify, eliminate or add to the provisions of
this Indenture to such extent as shall be necessary to
effect the qualification of this Indenture under the Trust
Indenture Act, or under any similar federal statute
hereafter enacted.
The Trustee is hereby authorized to join with the Company
in the execution of any such upplemental indenture, to make any
further appropriate agreements and stipulations which may be
therein contained and to accept the conveyance, transfer and
assignment of any property thereunder, but the Trustee shall not
be obligated to, but may in its discretion, enter into any such
supplemental indenture which affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of
this Section 11.01 may be executed by the Company and the Trustee
without the consent of the holders of any of the Notes at the
time outstanding, notwithstanding any of the provisions of
Section 11.02.
SECTION 11.02. Supplemental Indentures with Consent of
Noteholders. With the consent (evidenced as provided in Article 9)
of the holders of not less
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than a majority in aggregate principal amount at maturity of the
Notes at the time outstanding, the Company, when authorized by
the resolutions of the Board of Directors, and the Trustee may
from time to time and at any time enter into an indenture or
indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of any supplemental indenture or
of modifying in any manner the rights of the holders of the
Notes; provided, however, that no such supplemental indenture
shall (i) extend the fixed maturity of any Note, or reduce the
rate or extend the time of payment of interest thereon, change
the rate of accrual or extend the time of payment in connection
with Original Issue Discount, or reduce the principal amount at
maturity thereof, or reduce any amount payable on redemption
thereof or change the obligation of the Company to make
redemption of any Note pursuant to Article 16, or impair or affect
the right of any Noteholder to institute suit for the payment
thereof, or make the principal amount at maturity, Issue Price,
accrued Original Issue Discount, Redemption Price, Fundamental
Change Redemption Price or interest, if any, in respect thereof
payable in any coin or currency other than that provided in the
Notes, or modify the provisions of this Indenture with respect to
the subordination of the Notes in a manner adverse to the
Noteholders in any material respect, or impair the right to
convert the Notes into Common Stock subject to the terms set
forth herein, including Section 15.06, without the consent of the
holder of each Note so affected, or (ii) reduce the aforesaid
percentage of Notes, the holders of which are required to consent
to any such supplemental indenture, without the consent of the
holders of all Notes then outstanding.
Upon the request of the Company, accompanied by a copy of
the resolutions of the Board of Directors certified by its
Secretary or Assistant Secretary authorizing the execution of any
such supplemental indenture, and upon the filing with the Trustee
of evidence of the consent of Noteholders as aforesaid, the
Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects
the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such
supplemental indenture.
It shall not be necessary for the consent of the Noteholders
under this Section 11.02 to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if
such consent shall approve the substance thereof.
SECTION 11.03. Effect of Supplemental Indentures. Upon the
execution of any supplemental indenture pursuant to the
provisions of this Article 11, this Indenture shall be and be
deemed to be modified and amended in accordance
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therewith and the respective rights, limitation of rights,
obligations, duties and immunities under this Indenture of the
Trustee, the Company and the holders of Notes shall thereafter be
determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments and all the terms
and conditions of any such supplemental indenture shall be and be
deemed to be part of the terms and conditions of this Indenture
for any and all purposes.
SECTION 11.04. Notation on Notes. Notes authenticated and
delivered after the execution of any supplemental indenture
pursuant to the provisions of this Article 11 may bear a notation in
form approved by the Trustee as to any matter provided for in
such supplemental indenture. If the Company or the Trustee shall
so determine, new Notes so modified as to conform, in the opinion
of the Trustee and the Board of Directors, to any modification of
this Indenture contained in any such supplemental indenture may
be prepared and executed by the Company, authenticated by the
Trustee and made available for delivery in exchange for the Notes
then outstanding, upon surrender of such Notes then outstanding.
SECTION 11.05. Evidence of Compliance of Supplemental
Indenture to be Furnished to the Trustee. The Trustee, subject to
the provisions of Sections 8.01 and 8.02, shall be entitled to
receive and shall be fully protected in relying upon an Officers'
Certificate and an Opinion of Counsel as conclusive evidence that
any supplemental indenture executed pursuant hereto complies with
the requirements of this Indenture.
ARTICLE 12
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 12.01. Company May Consolidate, Etc. on Certain
Terms. Subject to the provisions of Section 12.02, nothing
contained in this Indenture or in any of the Notes shall prevent
any consolidation or merger of the Company with or into any other
corporation or corporations (whether or not affiliated with the
Company), or successive consolidations or mergers in which the
Company or its successor or successors shall be a party or
parties, or shall prevent any sale, conveyance or lease (or
successive sales, conveyances or leases) of all or substantially
all of the property of the Company, to any other corporation
(whether or not affiliated with the Company) authorized to
acquire and operate the same and which shall be organized under
the laws of a State of the United States or the District of
Columbia; provided, however, and the Company hereby covenants and
agrees, that upon any such consolidation, merger, sale,
conveyance
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or lease, the due and punctual payment of the principal amount at
maturity, Issue Price, accrued Original Issue Discount,
Redemption Price, Fundamental Change Redemption Price and
interest, if any, in respect of all of the Notes, according to
their tenor, and the due and punctual performance and observance
of all of the covenants and conditions of this Indenture to be
performed by the Company, shall be expressly assumed, by either
an Officers' Certificate and an Opinion of Counsel or a
supplemental indenture that is, in either case, satisfactory in
form to the Trustee, executed and delivered to the Trustee by the
corporation (if other than the Company) formed by such
consolidation, or into which the Company shall have been merged,
or by the corporation which shall have acquired or leased such
property, and any such supplemental indenture shall provide for
the applicable conversion rights set forth in Section 15.06.
SECTION 12.02. Successor Corporation to Be Substituted. In
case of any such consolidation, merger, sale, conveyance or lease
and upon the assumption by the successor corporation, by
supplemental indenture, executed and delivered to the Trustee and
satisfactory in form to the Trustee, of the due and punctual
payment of the principal amount at maturity, Issue Price, accrued
Original Issue Discount, Redemption Price, Fundamental Change
Redemption Price and interest, if any, in respect of all of the
Notes and the due and punctual performance of all of the
covenants and conditions of this Indenture to be performed by the
Company, such successor corporation shall succeed to and be
substituted for the Company, with the same effect as if it had
been named herein as the party of the first part. Such successor
corporation thereupon may cause to be signed, and may issue
either in its own name or in the name of The Interpublic Group of
Companies, Inc. any or all of the Notes issuable hereunder which
theretofore shall not have been signed by the Company and
delivered to the Trustee; and, upon the order of such successor
corporation instead of the Company and subject to all the terms,
conditions and limitations in this Indenture prescribed, the
Trustee shall authenticate and shall deliver any Notes which
previously shall have been signed and delivered by the officers
of the Company to the Trustee for authentication, and any Notes
which such successor corporation thereafter shall cause to be
signed and delivered to the Trustee for that purpose. All the
Notes so issued shall in all respects have the same legal rank
and benefit under this Indenture as the Notes theretofore or
thereafter issued in accordance with the terms of this Indenture
as though all of such Notes had been issued at the date of the
execution hereof. In the event of any such consolidation, merger,
sale, conveyance or lease, the person named as the "Company" in
the first paragraph of this Indenture or any successor which
shall thereafter have become such in the manner prescribed in
this Article 12 may be dissolved, wound up and liquidated at any
time thereafter and such person shall be released from its
liabilities as obligor and maker of the Notes and from its
obligations under this Indenture.
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In case of any such consolidation, merger, sale, conveyance
or lease, such changes in phraseology and form (but not in
substance) may be made in the Notes thereafter to be issued as may
be appropriate.
SECTION 12.03. Opinion of Counsel to Be Given Trustee. The
Trustee, subject to Sections 8.01 and 8.02, shall receive an
Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance or
lease and any such assumption complies with the provisions of
this Article 12.
ARTICLE 13
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 13.01. Discharge of Indenture. When (a) the Company
shall deliver to the Trustee for cancellation all Notes
theretofore authenticated (other than any Notes which shall have
been destroyed, lost or stolen and in lieu of or in substitution
for which other Notes shall have been authenticated and
delivered) and not theretofore canceled, or (b) all the Notes not
theretofore canceled or delivered to the Trustee for cancellation
shall have become due and payable, or are by their terms to
become due and payable within one year or are to be called for
redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption, and the Company
shall deposit with the Trustee, in trust, cash and U.S.
Government Obligations sufficient to pay at maturity or upon
redemption all of the Notes (other than any Notes which shall
have been mutilated, destroyed, lost or stolen and in lieu of or
in substitution for which other Notes shall have been
authenticated and made available for delivery) not theretofore
canceled or delivered to the Trustee for cancellation, including
principal amount at maturity, Issue Price, accrued Original Issue
Discount, Redemption Price, Fundamental Change Redemption Price
and interest, if any, due or to become due to such date of
maturity or redemption date, as the case may be, and if in either
case the Company shall also pay or cause to be paid all other
sums payable hereunder by the Company, then this Indenture shall
cease to be of further effect (except as to (i) remaining rights
of registration of transfer, substitution and exchange and
conversion of Notes, (ii) rights hereunder of Noteholders to
receive payments of principal amount at maturity, Issue Price,
accrued Original Issue Discount, Redemption Price, Fundamental
Change Redemption Price and interest, if any, in respect of the
Notes and the other rights, duties and obligations of
Noteholders, as beneficiaries hereof with respect to the amounts,
if any, so deposited with the Trustee and (iii) the rights,
obligations and immunities of the Trustee hereunder), and the
Trustee, on demand of the
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Company accompanied by an Officers' Certificate and an Opinion of
Counsel as required by Section 17.06 and at the cost and expense of the
Company, shall execute proper instruments acknowledging
satisfaction of and discharging this Indenture; the Company,
however, hereby agreeing to reimburse the Trustee for any costs
or expenses thereafter reasonably and properly incurred by the
Trustee and to compensate the Trustee for any services thereafter
reasonably and properly rendered by the Trustee in connection
with this Indenture or the Notes.
SECTION 13.02. Deposited Monies to Be Held in Trust by
Trustee. Subject to Section 13.04, all monies deposited with the
Trustee pursuant to Section 13.01 shall be held in trust and
applied by it to the payment, either directly or through any
paying agent (including the Company if acting as its own paying
agent), to the holders of the particular Notes for the payment or
redemption of which such monies have been deposited with the
Trustee, of all sums due and to become due thereon for principal
amount at maturity, Issue Price, accrued Original Issue Discount,
Redemption Price, Fundamental Change Redemption Price and
interest, if any.
SECTION 13.03. Paying Agent to Repay Monies Held. Upon the
satisfaction and discharge of this Indenture, all monies then
held by any paying agent of the Notes (other than the Trustee)
shall, upon written demand of the Company, be repaid to it or
paid to the Trustee, and thereupon such paying agent shall be
released from all further liability with respect to such monies.
SECTION 13.04. Return of Unclaimed Monies. Any monies
deposited with or paid to the Trustee for payment of the
principal amount at maturity, Issue Price, accrued Original Issue
Discount, Redemption Price, Fundamental Change Redemption Price
or interest, if any, in respect of Notes and not applied but
remaining unclaimed by the holders of Notes for two years after
the date upon which such amounts shall have become due and
payable, shall be repaid to the Company by the Trustee on written
demand and all liability of the Trustee shall thereupon cease
with respect to such monies; and the holder of any of the Notes
shall thereafter look only to the Company for any payment which
such holder may be entitled to collect.
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ARTICLE 14
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 14.01. Indenture and Notes Solely Corporate
Obligations. No recourse for the payment of the principal amount
at maturity, Issue Price, accrued Original Issue Discount,
Redemption Price, Fundamental Change Redemption Price and
interest, if any, in respect of any Note, or for any claim based
thereon or otherwise in respect thereof, and no recourse under or
upon any obligation, covenant or agreement of the Company in this
Indenture or in any supplemental indenture, or in any Note, or
because of the creation of any indebtedness represented thereby,
shall be had against any incorporator, stockholder, officer or
director, as such, past, present or future, of the Company or of
any successor corporation, either directly or through the Company
or any successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise; it being expressly
understood that all such liability is hereby expressly waived and
released as a condition of, and as a consideration for, the
execution of this Indenture and the issue of the Notes.
ARTICLE 15
CONVERSION OF NOTES
SECTION 15.01. Right to Convert. Subject to and upon
compliance with the provisions of this Article, the holder of any
Note shall have the right, at his option, at any time after 90
days following the latest date of original issuance and prior to
the close of business on September 16, 2004 (except that, with
respect to any Note or portion of a Note which shall be called
for redemption such right shall terminate, except as provided in
the third paragraph of Section 15.02, at the close of business, New
York City time, on the business day next preceding the date fixed
for redemption of such Note or portion of a Note and such right
shall terminate with respect to any Note or portion thereof
subject to a duly completed and delivered election for redemption
pursuant to Article 16, unless in each case the Company shall
default in payment due upon redemption or redemption thereof) to
convert the principal amount at maturity of any such Note, or any
portion of such principal amount at maturity which is $1,000 or a
multiple thereof, into that number of fully paid and
non-assessable shares of Common Stock (as such shares shall then
be constituted) obtained by dividing the principal amount at
maturity of the Note or portion thereof surrendered for
conversion by $1,000 and multiplying the result so obtained by
the Conversion Rate in effect at such time, by surrender of the
Note so to be converted in whole or in part in the manner
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provided in Section 15.02. A holder of Notes is not entitled to
any rights of a holder of Common Stock until such holder has
converted his Notes.
SECTION 15.02. Exercise of Conversion Privilege; Issuance
of Common Stock on Conversion; No Adjustment for Interest or
Dividends. In order to exercise the conversion privilege, the
holder of any Note to be converted in whole or in part shall
surrender such Note at an office or agency maintained by the
Company pursuant to Section 15.02, accompanied by the funds, if any,
required by the last paragraph of this Section, and shall give
written notice of conversion in the form provided on the Notes
(or such other notice which is acceptable to the Company) to the
Company at such office or agency that the holder elects to
convert such Note or the portion thereof specified in said
notice. Such notice shall also state the name or names (with
address) in which the certificate or certificates for shares of
Common Stock which shall be issuable on such conversion shall be
issued, and shall be accompanied by transfer taxes, if required
pursuant to Section 15.07. Each Note surrendered for conversion
shall, unless the shares issuable on conversion are to be issued
in the same name as the registration of such Note, be duly
endorsed by, or be accompanied by instruments of transfer in form
satisfactory to the Company duly executed by, the holder or his
duly authorized attorney.
As promptly as practicable after the surrender of such Note
and the receipt of such notice and funds, if any, as aforesaid,
the Company shall issue and shall deliver at such office or
agency to such holder, or on his written order, a certificate or
certificates for the number of full shares issuable upon the
conversion of such Note or portion thereof in accordance with the
provisions of this Article and a check or cash in respect of any
fractional interest in respect of a share of Common Stock arising
upon such conversion, as provided in Section 15.03. In case any
Note of a denomination greater than $1,000 principal amount at
maturity shall be surrendered for partial conversion, and subject
to Section 2.03, the Company shall execute and the Trustee shall
authenticate and make available for delivery to or upon the
written order of the holder of the Note so surrendered, without
charge to him, a new Note or Notes in authorized denominations in
an aggregate principal amount at maturity equal to the
unconverted portion of the surrendered Note.
Each conversion shall be deemed to have been effected on the
date on which such Note shall have been surrendered (accompanied
by the funds, if any, required by the last paragraph of this
Section) and such notice shall have been received by the Company,
as aforesaid, and the person in whose name any certificate or
certificates for shares of Common Stock shall be issuable upon
such conversion shall be deemed to have become on said date the
holder of record of the shares represented thereby; provided,
however, that any such surrender on any
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date when the stock transfer books of the Company shall be closed
shall constitute the person in whose name the certificates are to
be issued as the record holder thereof for all purposes on the
next succeeding day on which such stock transfer books are open,
but such conversion shall be at the Conversion Rate in effect on
the date upon which such Note shall have been surrendered.
Except as described in this Section, holders of the Notes
will not be entitled to any payment or adjustment on account of
accrued Original Issue Discount or accrued and unpaid interest
upon conversion of the Notes. The Company's delivery of the fixed
number of shares of Common Stock into which the Notes are
convertible will be deemed to satisfy the Company's obligation to
pay the principal amount at maturity of the Notes and all accrued
interest and Original Issue Discount that has not previously been
(or is not simultaneously being) paid. The Common Stock is
treated as issued first in payment of accrued interest and
Original Issue Discount and then in payment or principal.
Any Note or portion thereof surrendered for conversion
during the period from the close of business on the record date
for any interest payment date to the opening of business on such
interest payment date shall (unless such Note or portion thereof
being converted shall have been called for redemption on a date
in such period) be accompanied by payment, in New York Clearing
House funds of an amount equal to the interest otherwise payable
on such interest payment date on the principal amount at maturity
being converted; provided, however, that no such payment need be
made if there shall exist at the time of conversion a default in
the payment of interest on the Notes. Except as provided above in
this Section, no adjustment shall be made for Original Issue
Discount or interest accrued on any Note converted or for
dividends on any shares issued upon the conversion of such Note
as provided in this Article.
Each share of Common Stock issued upon conversion of Notes
pursuant to Article 15 shall be entitled to receive the
appropriate number of preferred share purchase rights (the
"Rights"), if any, and the certificates representing the Common
Stock issued upon such purchase shall bear such legends, if any,
in each case as provided by and subject to the terms of the
Second Amended and Restated Rights Agreement (the "Rights
Agreement") dated as of August 1, 1989, between the Company and
The First Chicago Trust Company of New York, as Rights Agent, as
in effect at the time of such purchase.
SECTION 15.03. Cash Payments in Lieu of Fractional Shares.
No fractional shares of Common Stock or scrip representing
fractional shares shall be issued upon conversion of Notes. If
more than one Note shall be surrendered for conversion at one time
by the same holder, the number of full shares which shall be
issuable upon conversion shall be computed on the basis of the
aggregate
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principal amount at maturity of the Notes (or specified portions
thereof to the extent permitted hereby) so surrendered. If any
fractional share of stock would be issuable upon the conversion
of any Note or Notes, the Company shall make an adjustment
therefor in cash at the current market value thereof. For these
purposes, the current market value of a share of Common Stock
shall be the last reported sale price on the first day (which is
not a Legal Holiday as defined in Section 17.07) immediately
preceding the day on which the Notes (or specified portions
thereof) are deemed to have been converted and such last reported
sale price shall be determined as provided in subsection (f) of
Section 15.05.
SECTION 15.04. Conversion Rate. The Conversion Rate shall be
as specified in the form of Note herein above set forth, subject
to adjustment as provided in this Article.
SECTION 15.05. Adjustment of Conversion Rate. The Conversion
Rate shall be adjusted from time to time by the Company as follows:
(a) In case the Company shall (i) pay a dividend, or
make a distribution, in shares of its Common Stock, on its
Common Stock, (ii) subdivide its outstanding Common Stock
into a greater number of shares, or (iii) combine its
outstanding Common Stock into a smaller number of shares,
the Conversion Rate in effect immediately prior thereto
shall be adjusted so that the holder of any Note thereafter
surrendered for conversion shall be entitled to receive the
number of shares of Common Stock of the Company which he
would have owned or have been entitled to receive after the
happening of any of the events described above had such Note
been converted immediately prior to the happening of such
event. An adjustment made pursuant to this subsection (a)
shall become effective immediately after the record date in
the case of a dividend and shall become effective
immediately after the effective date in the case of
subdivision or combination.
(b) In case the Company shall issue rights or warrants
to all holders of its Common Stock entitling them (for a
period expiring within 45 days after the record date
mentioned below) to subscribe for or purchase Common Stock
at a price per share less than the Current Market Price per
share of Common Stock (as defined in subsection (f) below)
at the record date for the determination of stockholders
entitled to receive such rights or warrants, the Conversion
Rate in effect immediately prior thereto shall be adjusted
so that the same shall equal the rate determined by
multiplying the Conversion Rate in effect immediately prior
to the date of issuance of such rights or warrants by a
fraction of which the denominator shall be the number of
shares of Common Stock outstanding
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on the date of issuance of such rights or warrants plus the
number of shares which the aggregate offering price of the
total number of shares so offered would purchase at such
Current Market Price, and of which the numerator shall be
the number of shares of Common Stock outstanding on the date
of issuance of such rights or warrants plus the number of
additional shares of Common Stock offered for subscription
or purchase. Such adjustment shall be made successively
whenever any such rights or warrants are issued, and shall
become effective immediately after such record date. In
determining whether any rights or warrants entitle the
holders to subscribe for or purchase shares of Common Stock
at less than such Current Market Price, and in determining
the aggregate offering price of such shares of Common Stock,
there shall be taken into account any consideration received
by the Company for such rights or warrants, the value of
such consideration, if other than cash, to be determined by
the Board of Directors.
(c) In case the Company shall distribute to all holders
of its Common Stock any shares of any class of capital stock
of the Company (other than Common Stock) or evidences of its
indebtedness or assets (excluding cash dividends or other
distributions to the extent paid from retained earnings of
the Company) or rights or warrants to subscribe for or
purchase any of its securities (excluding those referred to
in subsection (b) above), then in each such case the
Conversion Rate shall be adjusted so that the same shall
equal the rate determined by multiplying the Conversion Rate
in effect immediately prior to the date of such distribution
by a fraction of which the denominator shall be the Current
Market Price per share (as defined in subsection (f) below)
of the Common Stock on the record date mentioned below less
the fair market value on such record date (as determined by
the Board of Directors of the Company, whose determination
shall be conclusive, and described in a certificate filed
with the Trustee) of the portion of the capital stock or
assets or evidences of indebtedness so distributed or of
such rights or warrants applicable to one share of Common
Stock, and the numerator shall be the Current Market Price
per share (as defined in subsection (f) below) of the Common
Stock on such record date. Such adjustment shall become
effective immediately after the record date for the
determination of shareholders entitled to receive such
distribution.
(d) In case the Company shall, by dividend or
otherwise, distribute to all holders of its Common Stock
cash (excluding (x) any quarterly cash dividend on the
Common Stock to the extent the aggregate cash dividend per
share of Common Stock in any fiscal quarter does not exceed
the greater of (A) the amount per share of Common Stock of the
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next preceding quarterly cash dividend on the Common Stock
to the extent such preceding quarterly dividend did not
require any adjustment of the Conversion Rate pursuant to
this Section 15.05(d) (as adjusted to reflect subdivisions or
combinations of the Common Stock), and (B) 3.75% of the
average of the last reported sales price of the Common Stock
(determined as provided in Section 15.05(g)) during the ten Trading
Days (as defined in Section 15.05(g)) next preceding the date of
declaration of such dividend and (y) any dividend or
distribution in connection with the liquidation, dissolution
or winding up of the Company, whether voluntary or
involuntary), then, in such case, unless the Company elects
to reserve such cash for distribution to the holders of the
Notes upon the conversion of the Notes so that any such
holder converting Notes will receive upon such conversion,
in addition to the shares of Common Stock to which such
holder is entitled, the amount of cash which such holder
would have received if such holder had, immediately prior to
the record date for such distribution of cash, converted its
Notes into Common Stock, the Conversion Rate shall be
adjusted so that the same shall equal the rate determined by
multiplying the Conversion Rate in effect immediately prior
to the record date by a fraction of which the denominator
shall be the Current Market Price of the Common Stock on the
record date less the amount of cash so distributed (and not
excluded as provided above) applicable to one share of
Common Stock and the numerator shall be such Current Market
Price of the Common Stock, such adjusted to be effective
immediately prior to the opening of business on the day
following the record date; provided, however, that in the
event the portion of the cash so distributed applicable to
one share of Common Stock is equal to or greater than the
Current Market Price of the Common Stock on the record date,
in lieu of the foregoing adjustment, adequate provision
shall be made so that each Noteholder shall have the right
to receive upon conversion the amount of cash such holder
would have received had such holder converted each Note on
the record date. If such dividend or distribution is not so
paid or made, the Conversion Rate shall again be adjusted to
be the Conversion Rate which would then be in effect if such
dividend or distribution had not been declared.
If any adjustment is required to be made as set forth in this
subsection (d) as a result of a distribution that is a quarterly
dividend, such adjustment shall be based upon the amount by which
such distribution exceeds the amount of the quarterly cash
dividend permitted to be excluded pursuant hereto. If an
adjustment is required to be made as set forth in this subsection
(d) above as a result of a distribution that is not a quarterly
dividend, such adjustment shall be based upon the full amount of
the distribution.
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(e) In case a tender or exchange offer made by the Company
or any subsidiary of the Company for all or any portion of the
Common Stock shall expire and such tender or exchange offer shall
involve the payment by the Company or such subsidiary of
consideration per share of Common Stock having a fair market
value (as determined by the Board of Directors or, to the extent
permitted by applicable law, a duly authorized committee thereof,
whose determination shall be conclusive, and described in a
resolution of the Board of Directors or such duly authorized
committee thereof, as the case may be), at the last time (the
"Expiration Time") tenders or exchanges may be made pursuant to
such tender or exchange offer (as it shall have been amended)
that exceeds the Current Market Price of the Common Stock on the
Trading Day next succeeding the Expiration Time, the Conversion
Rate shall be adjusted so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect
immediately prior to the Expiration Time by a fraction of which
the denominator shall be the number of shares of Common Stock
outstanding (including any tendered or exchanged shares) on the
Expiration Time multiplied by the Current Market Price of the
Common Stock on the Trading Day next succeeding the Expiration
Time and the numerator shall be sum of (x) the fair market value
(determined as aforesaid) of the aggregate consideration payable
to stockholders based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of all
shares validly tendered or exchanged and not withdrawn as of the
Expiration Time (the shares deemed so accepted up to any such
maximum, being referred to as the "Purchased Shares") and (y) the
product of the number of shares of Common Stock outstanding (less
any Purchased Shares) on Expiration Time and the Current Market
Price of the Common Stock on the Trading Day next succeeding the
Expiration Time, such reduction to become effective immediately
prior to the opening of business on the day following the
Expiration Time. If the Company is obligated to purchase shares
pursuant to any such tender or exchange offer, but the Company is
permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion
Rate shall again be adjusted to be the Conversion Rate which
would then be effect if such tender or exchange offer had not
been made.
(f) In case of a tender or exchange offer made by a person
other than the Company or any subsidiary for an amount which
increases he offeror's ownership of Common Stock to more than 25%
of the Common Stock outstanding and shall involve the payment by
such person of consideration per share of Common Stock having a
fair market value (as determined by the Board of Directors, whose
determination shall be
88
conclusive, and described in a resolution of the Board of
Directors) at the last time (the "Offer Expiration Time") tenders
or exchanges may be made pursuant to such tender or exchange
offer (as it shall have been amended) that exceeds the Current
Market Price of the Common Stock on the Trading Day next
succeeding the Offer Expiration Time, and in which, as of the
Offer Expiration Time the Board of Directors is not recommending
rejection of the offer, the Conversion Price shall be reduced so
that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the Offer
Expiration Time by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding (including any
tendered or exchanged shares) on the Offer Expiration Time
multiplied by the Current Market Price of the Common Stock on the
Trading Day next succeeding the Offer Expiration Time and the
denominator shall be the sum of (x) the fair market value
(determined as aforesaid) of the aggregate consideration payable
to stockholders based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of all
shares validly tendered or exchanged and not withdrawn as of the
Offer Expiration Time (the shares deemed so accepted, up to any
such maximum, being referred to as the "Accepted Purchased
Shares") and (y) the product of the number of shares of Common
Stock outstanding (less any Accepted Purchased Shares) on the
Offer Explanation Time and the Current Market Price of the Common
Stock on the Trading Day next succeeding the Offer Explanation
Time, such reduction to become effective immediately prior to the
opening of business on the day following the Offer Expiration
Time. In the event that such person is obligated to purchase
shares pursuant to any such tender or exchange offer, but such
person is permanently prevented by applicable law from effecting
any such purchases or all such purchases are rescinded, the
Conversion Price shall again be adjusted to be the Conversion
Price which would then be in effect if such tender or exchange
offer had not been made. Notwithstanding the foregoing, the
adjustment described in this Section 15.05(f) shall not be made
if, as of the Offer Expiration Time, the offering documents with
respect to such offer disclose a plan or intention to cause the
Company to engage in any transaction described in Article 12 .
(g) For the purpose of any computation under subsections
(b), (c), (d), (e) and (f) above, the Current Market Price per
share of Common Stock at any date shall be deemed to be the
average of the last reported sale prices for the the ten
consecutive Trading Days (as defined below) preceding the day
before the record date with respect to any distribution, issuance
or other event requiring such computation. The last reported sale
price for each day shall be (i) the last reported sale price of
Common Stock
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on the National Market of the NASDAQ System, or any similar
system of automated dissemination of quotations of securities
prices then in common use, if so quoted, or (ii) if not quoted as
described in clause (i), the mean between the high bid and low
asked quotations for Common Stock as reported by the National
Quotation Bureau Incorporated if at least two securities dealers
have inserted both bid and asked quotations for such class of
stock on at least 5 of the 10 preceding days, or (iii) if the
Common Stock is listed or admitted for trading on any national
securities exchange, the last sale price, or the closing bid
price if no sale occurred, of such class of stock on the
principal securities exchange on which such class of stock is
listed. If the Common Stock is quoted on a national securities or
central market system, in lieu of a market or quotation system
described above, the last reported sale price shall be determined
in the manner set forth in clause (ii) of the preceding sentence
if bid and asked quotations are reported but actual transactions
are not, and in the manner set forth in clause (iii) of the
preceding sentence if actual transactions are reported. If none
of the conditions set forth above is met, the last reported sale
price of Common Stock on any day or the average of such last
reported sale prices for any period shall be the fair market
value of such class of stock as determined by a member firm of
the New York Stock Exchange, Inc. selected by the Company. As
used herein the term "Trading Days" with respect to Common Stock
means (i) if the Common Stock is quoted on the National Market of
the NASDAQ System or any similar system of automated
dissemination of quotations of securities prices, days on which
trades may be made on such system or (ii) if the Common Stock is
listed or admitted for trading on any national securities
exchange, days on which such national securities exchange is open
for business.
(h) Each share of Common Stock issued upon conversion of
Notes pursuant to this Article 15 shall be entitled to receive
the appropriate number of Rights, if any, and the certificates
representing the Common Stock issued upon such conversion shall
bear such legends, if any, in each case as provided by and
subject to their terms of the Rights Agreement as in effect at
the time of such conversion. If the Rights are separated from the
Common Stock in accordance with the provisions of the Rights
Agreement such that the Holders of Notes would thereafter not be
entitled to receive any such Rights in respect to the Common
Stock issuable upon conversion of such Notes, the Conversion Rate
will be adjusted as provided in Section 15.05(c) on the
separation date; provided that if such Rights expire, terminate
or are redeemed by the Company, the Conversion Rate shall again
be adjusted to be the Conversion Rate which would then be in
effect if such separation had not occurred. In lieu of any such
adjustment, the Company may amend the Rights Agreement to
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provide that upon conversion of the Notes the Holders will
receive, in addition to the Common Stock issuable upon such
conversion, the Rights which would have attached to such shares
of Common Stock if the Rights had not become separated from the
Common Stock pursuant to the provisions of the Rights Agreement.
Rights or warrants distributed by the Company to all
holders of Common Stock entitling the holdres thereof to
subscribe for or purchase shares of the Company's capital stock
(either initially or under certain circumstances), which rights
or warrants, until the occurrence or a specified event or events
("Trigger Event"):
(i) are deemed to be transferred with such shares of
Common Stock,
(ii) are not exercisable, and
(iii) are also issued in respect of future issuances of
Common Stock,
shall not be deemed distributed for purposes of Section
15.05(c) until the occurrence of the earliest Trigger Event. In
addition, in the event of any distribution of rights or warrants,
or any Trigger Event with respect thereto, that shall have
resulted in an adjustment to the Conversion Rate under Section
15.05(c), (1) in the case of any such rights or warrants which
shall all have been redeemed or repurchased without exercise by
any holders thereof, the Conversion Rate shall be readjusted upon
such final redemption or repurchase to give effect to such
distribution or Trigger Event, as the case may be, as though it
were a cash distribution, equal to the per share redemption or
repurchase price received by a holder of Common Stock with
respect to such rights or warrants (assuming such holder had
retained such rights or warrants), made to all holders of Common
Stock as of the date of such redemption or repurchase, and (2) in
the case of any such rights or warrants all of which shall have
expired without exercise by any holder thereof, the Conversion
Rate shall be readjusted as if such issuance had not occurred.
(i) No adjustment in the Conversion Rate shall be required
unless such adjustment would require an increase or decrease of
at least l% in such rate; provided, however, that any adjustments
which by reason of this subsection (h) are not required to be
made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Article 15 shall
be made by the Company and shall be made to the
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nearest cent or to the nearest one hundredth of a share, as the
case may be. Anything in this Section 15.05 to the contrary
notwithstanding, the Company shall be entitled to make such
increases in the Conversion Rate, in addition to those required
by this Section 15.05, as it in its discretion shall determine to be
advisable in order that any stock dividends, subdivision of
shares, distribution of rights to purchase stock or securities,
or a distribution of securities convertible into or exchangeable
for stock hereafter made by the Company to its stockholders shall
not be taxable. To the extent permitted by applicable law, the
Company from time to time may increase the Conversion Rate by any
amount for any period of time if the period is at least 20 days,
the increase is irrevocable during the period and the Board of
Directors shall have made a determination that such increase
would be in the best interests of the Company, which
determination shall be conclusive. Whenever the Conversion Rate
is so increased, the Company shall mail to Noteholders 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.
(j) Whenever the Conversion Rate is adjusted, as herein
provided, the Company shall promptly file with the Trustee and any
conversion agent other than the Trustee an Officers' Certificate
setting forth the Conversion Rate after such adjustment and
setting forth a brief statement of the facts requiring such
adjustment. Promptly after delivery of such certificate, the
Company shall prepare a notice of such adjustment of the
Conversion Rate setting forth the adjusted Conversion Rate and
the date on which such adjustment becomes effective and shall
mail such notice of such adjustment of the Conversion Rate to the
holder of each Note at his last address appearing on the Note
register provided for in Section 2.05 of this Indenture.
(k) In any case in which this Section 15.05 provides that an
adjustment shall become effective immediately after a record date
for an event, the Company may defer until the occurrence of such
event (i) issuing to the holder of any Note converted after such
record date and before the occurrence of such event the
additional shares of Common Stock issuable upon such conversion
by reason of the adjustment required by such event over and above
the Common Stock issuable upon such conversion before giving
effect to such adjustment and (ii) paying to such holder any
amount in cash in lieu of any fraction pursuant to Section 15.03.
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SECTION 15.06. Effect of Reclassification, Consolidation, Merger
or Sale. If any of the following events occur, namely (i) any
reclassification or change of outstanding shares of Common Stock
(other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a
subdivision or combination), (ii) any consolidation, merger or
combination of the Company with another corporation as a result
of which holders of Common Stock shall be entitled to receive
stock, securities or other property or assets (including cash)
with respect to or in exchange for such Common Stock, or (iii)
any sale or conveyance of the properties and assets of the
Company as, or substantially as, an entirety to any other
corporation as a result of which holders of Common Stock shall be
entitled to receive stock, securities or other property or assets
(including cash) with respect to or in exchange for such Common
Stock, then the Company or the successor or purchasing
corporation, as the case may be, shall execute with the Trustee a
supplemental indenture providing that each Note shall be
convertible into the kind and amount of shares of stock and other
securities or property or assets (including cash) receivable upon
such reclassification, change, consolidation, merger,
combination, sale or conveyance by a holder of a number of shares
of Common Stock issuable upon conversion of such Notes
immediately prior to such reclassification, change,
consolidation, merger, combination, sale or conveyance. Such
supplemental indenture shall provide for adjustments which shall
be as nearly equivalent as may be practicable to the adjustments
provided for in this Article.
The Company shall cause notice of the execution of such
supplemental indenture to be mailed to each holder of Notes, at
his address appearing on the Note register provided for in
Section 2.05 of this Indenture.
The above provisions of this Section shall similarly apply
to successive reclassifications, consolidations, mergers,
combinations and sales.
SECTION 15.07. Taxes on Shares Issued. The issue of stock
certificates on conversions of Notes shall be made without charge
to the converting Noteholder for any U.S. tax in respect of the
issue thereof. The Company shall not, however, be required to pay
any tax which may be payable in respect of any transfer involved
in the iss e and delivery of stock in any name other than that of
the holder of any Note converted, and the Company shall not be
required to issue or deliver any such stock certificate unless
and until the person or persons requesting the issue thereof
shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax
has been paid.
SECTION 15.08. Reservation of Shares; Shares to Be Fully Paid;
Compliance with Governmental Requirements; Listing of Common Stock. The
Company shall provide, free from preemptive rights, out of its authorized but
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unissued shares, sufficient shares to provide for the conversion
of the Notes from time to time as such Notes are presented for
conversion.
Before taking any action which would cause an adjustment
increasing the Conversion Rate so that the shares of Common Stock
issuable upon conversion of the Notes would be issued for less
than the par value of such Common Stock, the Company will take
all corporate action which may be necessary in order that the
Company may validly and legally issue fully paid and
nonassessable shares of such Common Stock at such adjusted
Conversion Rate.
The Company covenants that all shares of Common Stock which
may be issued upon conversion of Notes will upon issue be fully
paid and nonassessable by the Company and free from all taxes,
liens and charges with respect to the issue thereof.
The Company covenants that if any shares of Common Stock to
be provided for the purpose of conversion of Notes hereunder
require registration with or approval of any governmental
authority under any Federal or State law before such shares may
be validly issued upon conversion, the Company will in good faith
and as expeditiously as possible endeavor to secure such
registration or approval, as the case may be.
The Company further covenants that if at any time the
Common Stock shall be listed on the New York Stock Exchange or
any other national securities exchange the Company will, if
permitted by the rules of such exchange, list and keep listed so
long as the Common Stock shall be so listed on such exchange, all
Common Stock issuable upon conversion of the Notes.
SECTION 15.09. Responsibility of Trustee. The Trustee and any
other conversion agent shall not at any time be under any duty or
responsibility to any holder of Notes to determine whether any
facts exist which may require any adjustment of the Conversion
Rate or with respect to the nature or extent or calculation of
any such adjustment when made, or with respect to the method
employed, or herein or in any supplemental indenture provided to
be employed, in making the same. The Trustee and any other
conversion agent shall not be accountable with respect to the
validity or value (or the kind or amount) of any shares of Common
Stock, or of any securities or property, which may at any time be
issued or delivered upon the conversion of any Note; and the
Trustee and any other conversion agent make no representations
with respect thereto. Subject to the provisions of Section 8.01,
neither the Trustee nor any conversion agent shall be responsible
for any failure of the Company to issue, transfer or deliver any
shares of Common Stock or stock certificates or other securities
or property or cash upon the surrender of any Note for the
purpose of conversion or to comply
94
with any of the duties, responsibilities or covenants of the
Company contained in this Article. Without limiting the
generality of the foregoing, neither the Trustee nor any
conversion agent shall be under any responsibility to determine
the correctness of any provisions contained in any supplemental
indenture entered into pursuant to Section 15.06 relating either to
the kind or amount of shares of stock or securities or property
(including cash) receivable by Noteholders upon the conversion of
their Notes after any event referred to in such Section or to any
adjustment to be made with respect thereto, but, subject to the
provisions of Section 8.01 may accept as conclusive evidence of the
correctness of any such provisions, and shall be protected in
relying upon, the Officers' Certificate (which the Company shall
be obligated to file with the Trustee prior to the execution of
any such supplemental indenture) with respect thereto.
SECTION 15.10. Notice to Holders Prior to Certain Actions. In case:
(a) the Company shall declare a dividend (or any other
distribution) on its Common Stock (other than in cash out of retained
earnings); or
(b) the Company shall authorize the granting to the holders
of its Common Stock of rights or warrants to subscribe for or
purchase any share of any class or any other rights or warrants;
or
(c) of any reclassification of the Common Stock of the
Company (other than a subdivision or combination of its
outstanding Common Stock, or a change in par value, or from par
value to no par value, or from no par value to par value), or of
any consolidation or merger to which the Company is a party and
for which approval of any shareholders of the Company is
required, or of the sale or transfer of all or substantially all
of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
the Company shall cause to be filed with the Trustee and to be
mailed to each holder of Notes at his address appearing on the
Note register, provided for in Section 2.05 of this Indenture, as
promptly as possible but in any event at least fifteen days prior
to the applicable date hereinafter specified, a notice stating
(x) the date on which a record is to be taken for the purpose of
such dividend, distribution or rights or warrants, or, if a
record is not to be taken, the date as of which the holders of
Common Stock of record to be entitled to such dividend,
distribution or rights are to be determined, or (y) the date on
which such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or
95
winding-up is expected to become effective or occur, and the date
as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their Common Stock for securities
or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation
or winding-up. Failure to give such notice, or any defect
therein, shall not affect the legality or validity of such
dividend, distribution, reclassification, consolidation, merger,
sale, transfer, dissolution, liquidation or winding-up.
ARTICLE 16
REDEMPTION OF NOTES AT OPTION OF HOLDERS
SECTION 16.01. Option to Elect Redemption Upon a Fundamental
Change. If a Fundamental Change shall occur at any time prior to
September 16, 2004, each holder of Notes shall have the right, at
such holder's option, to require the Company to redeem any or all
of such holder's Notes on the date (the "Fundamental Change
Repurchase Date") (or if such date is not a business day, the
next succeeding business day) that is 45 days after the date of
the Company's notice of such Fundamental Change. Any redemption
of such holder's Notes in part shall be in the amount of $1,000
principal amount at maturity at their accreted value or any
multiple thereof. Such redemption shall be made at the applicable
Redemption Price set forth in the form of Note; provided that,
with respect to a Fundamental Change, if the Applicable Price is
less than the Reference Market Price, the Company shall redeem
such Notes at a price equal to the foregoing Redemption Price
multiplied by the fraction obtained by dividing the Applicable
Price by the Reference Market Price. In each case, the Company
shall also pay accrued interest, if any, on such Notes to the
Fundamental Change Redemption Date; provided that if such
Fundamental Change Redemption Date is between a March 2 and the
next succeeding March 16 or between a September 2 and the next
succeeding September 16, then the interest payable on such date
shall be paid to the holder of record of the Note on the next
preceding March 2 or September 2. The Company shall mail to all
holders of record of the Notes a notice of the occurrence of a
Fundamental Change and of the redemption right arising as a
result thereof on or before the 10th day after the occurrence of
such Fundamental Change. The Company shall promptly furnish the
Trustee a copy of such notice.
(b) For a Note to be so redeemed at the option of the
holder, the Company must receive at the office or agency of the
Company maintained for that purpose in New York, New York such
Note with the form entitled "Option to Elect Redemption Upon a
Fundamental Change" on the reverse thereof (a
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"Fundamental Change Redemption Notice") duly completed, together
with such Notes duly endorsed for transfer, on or before the 30th
day after the date of such notice (or if such 30th day is not a
business day, the immediately preceding business day). All
questions as to the validity, eligibility (including time of
receipt), withdrawal and acceptance of any Note for redemption
shall be determined by the Company, whose determination shall be
final and binding.
A Fundamental Change Redemption Notice may be withdrawn by
means of a written notice of withdrawal delivered to the office
of the Trustee at any time prior to the close of business on the
Fundamental Change Redemption Date to which it re ates
specifying:
(1) the certificate number of the Note in respect of which such
notice of withdrawal is being submitted,
(2) the principal amount at maturity of the Note with respect to
which such notice of withdrawal is being submitted, and
(3) the principal amount at maturity, if any, of such Note
which remains subject to the original Fundamental Change
Redemption Notice and which has been or will be delivered for
redemption by the Company.
SECTION 16.02. Deposit of Funds for Redemption. Note is required
to be paid pursuant to Section 16.02, the Company will deposit with
the Trustee or with one or more paying agents (or, if the Company
is acting as its own paying agent, set aside, segregate and hold
in trust as provided in Section 5.04) an amount of money sufficient
to redeem on the applicable Fundamental Change Redemption Date
all the Notes to be repaid on such date at the appropriate
Redemption Price, together with accrued interest to the date
fixed for redemption.
ARTICLE 17
MISCELLANEOUS PROVISIONS
SECTION 17.01. Provisions Binding on Company's Successors. All
the covenants, stipulations, promises and agreements in this
Indenture contained by the Company shall bind its successors and
assigns whether so expressed or not.
SECTION 17.02. Official Acts by Successor Corporation.
Any act or proceeding by any provision of this Indenture
authorized or required to be done or
97
performed by any board, committee or officer of the Company shall
and may be done and performed with like force and effect by the
like board, committee or officer of any corporation that shall at
the time be the lawful sole successor of the Company.
SECTION 17.03. Conflict with Trust Indenture Act. If any
provision hereof limits, qualifies or conflicts with a provision
of the Trust Indenture Act that is required under such Act to be
a part of and govern this Indenture, assuming this Indenture
qualified thereunder, the latter provision shall control.
SECTION 17.04. Addresses for Notices, Etc. Any notice or demand
which by any provision of this Indenture is required or permitted
to be given or served by the Trustee or by the holders of Notes
on the Company may be given or served by being deposited postage
prepaid by registered or certified mail in a post office letter
box addressed (until another address is filed by the Company with
the Trustee) to:
The Interpublic Group of Companies, Inc.
1271 Avenue of the Americas
New York, New York 10020
Attention: Chief Financial Officer
Telephone Number: (212) 399-8000
Any notice, direction, request or demand hereunder to or upon the
Trustee shall be deemed to have been sufficiently given or made,
for all purposes, if given or made in writing at the Principal
Office of the Trustee, which office is, at the date as of which
this Indenture is dated, located at:
The Bank of New York
101 Barclay Street, 21st Floor West
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Telephone Number: (212) 815-5939
Facsimile Number: (212) 815-5915
SECTION 17.05. Governing Law. This Indenture and each Note shall
be deemed to be a contract made under the laws of New York, and
for all purposes shall be construed in accordance with the laws
of New York.
SECTION 17.06. Evidence of Compliance with Conditions Precedent;
Certificates to Trustee. Upon any application or demand by he Company to the
Trustee to take any action under any of the provisions of this Indenture, the
98
Company shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent, if any, provided for in
this Indenture relating to the proposed action have been complied
with and an Opinion of Counsel stating that, in the opinion of
such counsel, all such conditions precedent have been complied
with.
SECTION 17.07. Legal Holidays. In any case where the date of
maturity of interest on or principal of the Notes or the date
fixed for redemption or repayment of any Note will be a legal
holiday or a day on which banking institutions in New York, New
York are authorized by law or executive order to close ("Legal
Holidays"), then payment of such interest on or principal of the
Notes need not be made on such date but may be made on the next
succeeding day not a Legal Holiday with the same force and effect
as if made on the date of maturity or the date fixed for
redemption or repayment and no interest shall accrue for the
period from and after such date.
SECTION 17.08. No Security Interest Created. Nothing in this
Indenture or in the Notes, expressed or implied, shall be
construed to constitute a security interest under the Uniform
Commercial Code or similar legislation, as now or hereafter
enacted and in effect, in any jurisdiction where property of the
Company or its subsidiaries is located.
SECTION 17.09. Benefits of Indenture. Nothing in this Indenture
or in the Notes, express or implied, shall give to any person,
other than the parties hereto, any paying agent, any Note
registrar and their successors hereunder, the holders of Notes
and the holders of Senior Debt, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 17.10. Table of Contents, Headings, Etc. The table of
contents and the titles and headings of the articles and sections
of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
SECTION 17.11. Execution in Counterparts. This Indenture may be
executed in any number of counterparts, each of which shal be an
original, but such counterparts shall together constitute but one
and the same instrument.
99
The Bank of New York hereby accepts the trusts in this
Indenture declared and provided, upon the terms and conditions
herein above set forth.
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly signed, and their respective corporate seals
to be hereunto affixed and attested, all as of the date first
written above.
THE INTERPUBLIC GROUP OF
COMPANIES, INC.
By:
-----------------------------
Name:
Title:
THE BANK OF NEW YORK
By:
-----------------------------
Name:
Title:
100
Exhibit 4.3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made
and entered into as of September 16, 1997 by and among The
Interpublic Group of Companies, Inc., a Delaware corporation (the
"Company"), Morgan Stanley & Co. Incorporated, Goldman, Sachs &
Co. and SBC Warburg Dillon Read Inc. (the "Initial Purchasers")
pursuant to the Purchase Agreement, dated as of September 10,
1997 (the "Purchase Agreement"), between the Company and the
Initial Purchasers. In order to induce the Initial Purchasers to
enter into the Purchase Agreement, the Company has agreed to
provide the registration rights set forth in this Agreement. The
execution of this Agreement is a condition to the closing under
the Purchase Agreement.
The Company agrees with the Initial Purchasers, (i) for its
benefit as Initial Purchasers and (ii) for the benefit of the
holders from time to time of the Convertible Notes (including the
Initial Purchasers) and the holders from time to time of the
Underlying Common Stock issued upon conversion or exchange of the
Convertible Notes (each of the foregoing a "Holder" and together
the "Holders"), as follows:
SECTION 1. Definitions. Capitalized terms used herein
without definition shall have their respective meanings set forth
in the Purchase Agreement. As used in this Agreement, the
following terms shall have the following meanings:
Affiliate: "Affiliate" means, with respect to any specified
person, (i) any other person directly or indirectly controlling
or controlled by, or under direct or direct common control with,
such specified person or (ii) any officer or director of such
other person. For purposes of this definition, the term "control"
(including the terms "controlling," "controlled by" and "under
common control with") of a person means the possession, direct or
indirect, of the power (whether or not exercised) to direct or
cause the direction of the management and policies of a person,
whether through the ownership of voting securities, by contract,
or otherwise.
Business Day: Each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in The
City of New York are authorized or obligated by law or executive
order to close.
Convertible Notes: The 1.80% Convertible Subordinated Notes
due 2004 of he Company being issued and sold pursuant to the
Purchase Agreement and the Indenture.
Common Stock: The shares of common stock, $0.10 par value
per share, of the Company and any other shares of common stock as
may constitute "Common Stock" for purposes of the Indenture,
including the Underlying Common Stock.
Conversion Rate: The initial Conversion Rate is 13.386
shares of Common Stock per $1,000 principal amount at maturity of
Convertible Notes, subject t adjustment upon the occurrence of
certain events pursuant to the terms of the Indenture.
Damages Accrual Period: See Section 2(e) hereof.
Damages Payment Date: Each of the semi-annual interest
payment dates provided in the Indenture.
Deferral Period: See Section 2(d)(iii) hereof.
Effectiveness Period: The period commencing with the date
hereof and ending on the date that all Registrable Securities
have ceased to be Registrable Securities.
Event: See Section 2(e) hereof.
Event Date: See Section 2(e) hereof.
Exchange Act: The Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated
thereunder.
Filing Date: See Section 2(a) hereof.
Holder: See the second paragraph of this Agreement.
Indenture: The Indenture, dated as of September 16, 1997,
between the Company, and The Bank o New York as trustee, pursuant
to which the Convertible Notes are being issued, as amended or
supplemented from time to time in accordance with the terms
hereof.
Initial Purchasers: Morgan Stanley & Co. Incorporated,
Goldman, Sachs & Co. and SBC Warburg Dillon Read Inc.
2
Initial Shelf Registration: See Section 2(a) hereof.
Liquidated Damages Amount: See Section 2(e) hereof.
Losses: See Section 6 hereof.
Managing U derwriters: The investment banking firm or firms
that shall manage or co-manage an Underwritten Offering.
Notice Holder: See Section 2(d)(i) hereof.
Prospectus: The prospectus included in any Registration
Statement (including, without limitation, a prospectus that
discloses information previously omitted from a prospectus filed
as part of an effective registration statement in reliance upon
Rule 430A promulgated under the Securities Act), as amended or
supplement d by any amendment or prospectus supplement, including
post-effective amendments, and all material incorporated by
reference or deemed to be incorporated by reference in such
Prospectus.
Purchase Agreement: See the first paragraph of this
Agreement.
Record Holder: (i) With respect to any Damages Payment Date
relating to any Convertible Note as to which any such Liquidated
Damages Amount has accrued, the registered holder of such
Convertible Note on the record date wi h respect to the interest
payment date under the Indenture on which such Damages Payment
Date shall occur and (ii) with respect to any Damages Payment
Date relating to any Common Stock as to which any such Liquidated
Damages Amount has accrued, the registered holder of such Common
Stock 15 days prior to the next succeeding Damages Payment Date.
Registrable Securities: (A) The Common Stock of the Company
into which the Convertible Notes are convertible or converted,
whether or not such Co vertible Notes have been converted, and at
all times subsequent thereto, and any Common Stock issued with
respect thereto upon any stock dividend, split or similar event
until, in the case of any such Common Stock, (i) it is
effectively registered under the Securities Act and resold in
accordance with the Registration Statement covering it, (ii) it
is saleable by the holder thereof pursuant to Rule 144(k) or
(iii) it is sold to the public pursuant to Rule 144, and, as a
result of the event or circumstance described in any of the
foregoing clauses (i) through (iii), the legends with respect to
transfer restrictions required under the Indenture (other than
any such legends required solely as the consequence of the fact
that such Common Stock (or the Convertible Notes, upon the
conversion of which, such Common Stock was issued or is issuable)
is owned by, or was previously owned
3
by, the Company or an Affiliate of the Company) are removed or
removable in accordance with the terms of the Indenture; (B) the
Convertible Notes, until, in the case of any such Convertible
Note, (i) it is converted into shares of Common Stock in
accordance with the terms of the Indenture, (ii) it is
effectively registered under the Securities Act and resold in
accordance with the Registration Statement covering it, (iii) it
is saleable by the holder thereof pursuant to Rule 144(k) or (iv)
it is sold to the public pursuant to Rule 144, and, as a result
of the event or circumstance described in any of the foregoing
clauses (ii) through (iv), the legends with respect to transfer
restrictions required under the Indenture (other than any such
legends required solely as the consequence of the fact that such
Convertible Note is owned by, or was previously owned by, the
Company or an Affiliate of the Company) are removed or removable
in accordance with the terms of the Indenture.
Registration Expenses: See Section 5 hereof.
Registration Statement: Any registration statement of the
Company which covers any of the Registrable Securities pursuant
to the provisions of this Agreement, including the Prospectus,
amendments and supplements to such registration statement,
including post-effective amendments, all exhibits, and all
material incorporated by reference or deemed to be incorporated
by reference in such registration statement.
Rule 144: Rule 144 under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC.
Rule 144A: Rule 144A under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and
the rules and regulations promulgated by the SEC thereunder.
Selling Period: See Section 2(d)(i) hereof.
Shelf Registration: See Section 2(a) hereof.
Special Counsel: Davis Polk & Wardwell or such other
successor counsel as shall be specified by the holders of a
majority of the Registrable Securities, the
4
fees and expenses of which will be paid by the Company pursuant
to Section 5 hereof.
Subsequent Shelf Registration: See Section 2(b) hereof.
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The Bank of New York, the Trustee under the
Indenture.
Underlying Common Stock: The Common Stock of the Company
into which the Convertible Notes are convertible or into which
the Exchangeable Notes are exchangeable.
Underwritten Registration or Underwritten Offering: A
registration in which securities of the Company are sold to an
underwriter for reoffering to the public.
SECTION 2. Shelf Registration. (a) The Company shall prepare
and file with the SEC, as soon as practicable but in any event
within ninety (90) days after the latest date of original
issuance of the Convertible Notes (the "Filing Date"), a
Registration Statement for an offering to be made on a delayed or
continuous basis pursuant to Rule 415 of the Securities Act (a
"Shelf Registration") registering the resale from time to time by
Holders thereof of all of the Registrable Securities upon and
following conversion or the exchange of the Notes (the "Initial
Shelf Registration"). The Initial Shelf Registration shall be on
Form S-3 or another appropriate form permitting registration of
such Registrable Securities for resale by such Holders in the
manner or manners designated by them (including, without
limitation, one or more Underwritten Offerings). The Company
shall use its reasonable efforts to cause the Initial Shelf
Registration to become effective under the Securities Act as
promptly as is practicable and to keep the Initial Shelf
Registration continuously effective under the Securities Act
until the earlier of the expiration of the Effectiveness Period
or the date a Subsequent Shelf Registration Statement has been
declared effective under the Securities Act.
(b) If the Initial Shelf Registration or any Subsequent
Shelf Registration, as defined below, ceases to be effective for
any reason at any time during the Effectiveness Period (other
than because all Registrable Securities registered thereunder
shall have been sold or shall have ceased to be Registrable
Securities), the Company shall use its best efforts to obtain the
prompt withdrawal of any order suspending the effectiveness
thereof, and in any event shall within thirty (30) days of such
cessation of effectiveness amend the Shelf Registration in a
manner reasonably expected to obtain the withdrawal of the order
suspending the
5
effectiveness thereof, or file an additional Shelf Registration
covering all of the Registrable Securities (a "Subsequent Shelf
Registration"). If a Subsequent Shelf Registration is filed, the
Company shall use its best efforts to cause the Subsequent Shelf
Registration to become effective as promptly as is practicable
after such filing and to keep such Registration Statement
continuously effective until the end of the Effectiveness Period.
(c) The Company shall supplement and amend the Shelf
Registration if required by the rules, regulations or
instructions applicable to the registration form used by the
Company for such Shelf Registration, if required by the
Securities Act, or if reasonably requested by the Initial
Purchasers or by the Trustee on behalf of the Holders of the
Registrable Securities covered by such Registration Statement or
by any Managing Underwriter of such Registrable Securities.
(d) Each Holder of Registrable Securities agrees that if
Holder wishes to sell its Registrable Securities pursuant to a
Shelf Registration and related Prospectus, it will do so only in
accordance with this Section 2(d). Each Holder of Registrable
Securities agrees to give written notice to the Company at least
three (3) Business Days prior to any intended distribution of
Registrable Securities under the Shelf Registration, which notice
shall specify the date on which such Holder intends to begin such
distribution and any information with respect to such Holder and
the intended distribution of Registrable Securities by such
Holder required to amend or supplement the Registration Statement
with respect to such intended distribution of Registrable
Securities by such Holder. As promptly as is practicable after
the date such notice is provided, and in any event within two (2)
Business Days after such date, the Company shall either:
(i) (A) prepare and file with the Commission a post-
effective amendment to the Shelf Registration or a supplement to the
related Prospectus or a supplement or amendment to any document
incorporated therein by reference or file any other required
document so that such Registration Statement will not contain an
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading, and so that, as thereafter
delivered to purchasers of the Registrable Securities being sold
thereunder, such Prospectus will not contain an untrue statement
of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading; (B) provide the Holders of the Registrable Securities who
gave such notice copies of any documents filed pursuant to
Section 2(d)(i)(A); (C) and inform each such Holder that the Company
has complied with its obligations in Section 2(d)(i)(A) (or that,
if the Company has filed a post-effective amendment to the Shelf
Registration which
6
has not yet been declared effective, the Company will notify each
such Holder to that effect, will use its best efforts to secure
the effectiveness of such post-effective amendment and will
immediately notify each such Holder pursuant to Section
2(d)(i)(A) hereof when the amendment has become effective); each
Holder who has given notice of intention to distribute such
Holder's Registrable Securities in accordance with Section 2(d)
hereof (a "Notice Holder") will sell all or any or such
Registrable Securities pursuant to the Shelf Registration and
related Prospectus only during the 45-day period commencing with
the date on which the Company gives notice, pursuant to Section
2(d)(i)(A), that the Registration Statement and Prospectus may be
used for such purpose (such 45-day period is referred to as a
"Selling Period"); the Notice Holders will not sell any
Restricted Securities pursuant to such Registration Statement or
Prospectus after such Selling Period without giving a new notice
of intention to sell pursuant to Section 2(d) hereof and
receiving a further notice from the Company pursuant to Section
2(d)(i)(A) hereof; or
(ii) in the (A) event of the happening of any event of the
kind described in Section 2(e)(i), 2(e)(ii), 2(e)(iii) or
2(iv) hereof or (B) that, in the judgment of the Company, it is
advisable to suspend use of the Prospectus for a discrete
period of time due to pending material corporate
developments or similar material events that have not yet
been publicly disclosed and as to which the Company believes
public disclosure will be prejudicial to the Company, the
Company shall deliver a certificate in writing, signed by
its Chief Executive Officer, Chief Financial Officer or
General Counsel, to the Notice Holders, the Special Counsel
and the Managing Underwriters, if any, to the effect of the
foregoing and, upon receipt of such certificate, each such
Notice Holder's Selling Period will not commence until such
Notice Holder's receipt of copies of the supplemented or
amended Prospectus provided for in Section 2(d)(i)(A)
hereof, or until it is advised in writing by the Company
that the Prospectus may be used, and has received copies of
any additional or supplemental filings that are incorporated
or deemed incorporated by reference in such Prospectus. The
Company will use its best efforts to ensure that the use of
the Prospectus may be resumed, and the Selling Period will
commence, as promptly as is practicable and, in the case of
a pending development or event referred to in Section
2(d)(ii)(B) hereof, as soon as the earlier of (x) public
disclosure of such pending material corporate development or
similar material event or (y) in the judgment of the
Company, public disclosure of such material corporate
development or similar material event would not be
prejudicial to the Company. Notwithstanding the foregoing,
the Company shall not under any circumstances be entitled to
exercise its right under this Section 2(d)(ii) to defer the
commencement of a Selling Period more than one (1) time in
any three (3) month period or
7
three (3) times in any twelve (12) month period, and the
period in which a Selling Period is suspended shall not
exceed thirty (30) days. In no event shall the Company be
permitted to extend the period during which such Selling
Period is deferred from and after the date a Notice Holder
provides notice to the Company in accordance with this
Section 2(d) of its intention to distribute Registrable
Securities (a "Deferral Period") beyond such thirty (30) day
period.
(e) The parties hereto agree that the Holders of Registrable
Securities will suffer damages, and that it would not be feasible
to ascertain the extent of such damages with precision, if (i) the
Initial Shelf Registration has not been filed on or prior to the
Filing Date,(ii) prior to the end of the Effectiveness Period, the
SEC shall have issued a stop order suspending the effectiveness
of the Shelf Registration or proceedings have been initiated with
respect to the Shelf Registration under Section 8(d) or 8(e) of
the Securities Act, (iii) the aggregate number of days in any one
Deferral Period exceeds the periods permitted pursuant to Section
2(d)(ii) hereof or (iv) the number of Deferral Periods exceeds the
number permitted pursuant to Section 2(d)(ii) hereof (each of the
events of a type described in any of the foregoing clauses (i)
through (iv) are individually referred to herein as an "Event",
and the Filing Date in the case of clause (i), the date on which
the effectiveness of the Shelf Registration has been suspended or
proceedings with respect to the Shelf Registration under Section
8(d) or 8(e) of the Securities Act have been commenced in the
case of clause (ii), the date on which the duration of a Deferral
Period exceeds the periods permitted by Section 2(d)(ii) hereof
in the case of clause (iii), and the date of the commencement of
a Deferral Period that causes the limit on the number of Deferral
Periods under Section 2(d)(ii) hereof to be exceeded in the case
of clause (iv), being referred to herein as an "Event Date").
Events shall be deemed to continue until the "Event Termination"
which shall be the following dates with respect to the respective
types of Events: the date the Initial Registration Statement is
filed in the case of an Event of the type described in clause
(i), the date that all stop orders suspending effectiveness of
the Shelf Registration have been removed and the proceedings
initiated with respect to the Shelf Registration under Section
8(d) or (e) of the Securities Act have terminated, as the case
may be, in the case of Events of the types described in clause
(ii), termination of the Deferral Period which caused the periods
permitted by Section 2(d)(ii) to be exceeded in the case of the
commencement of an Event of the type described in clause (iii),
and termination of the Deferral Period the commencement of which
caused the number of Deferral Periods permitted by Section
2(d)(ii) to be exceeded in the case of Events of the type
described in clause (iv).
Accordingly, upon the occurrence of any Event and until
such time as there are no Events which have occurred and are
continuing (a "Damages
8
Accrual Period"), commencing on the Event Date on which such
Damages Accrual Period began, the ompany agrees to pay, as
liquidated damages, and not as a penalty, an additional amount
(the "Liquidated Damages Amount"): (A) (i) to each holder of a
Convertible Notes that is a Notice Holder, accruing at a rate
equal to one-half of one percent per annum (50 basis points) on
an amount equal to the sum of (x) the Issue Price (as defined in
the Indenture) of the Convertible Notes held by such Notice
Holders and (y) the accrued Original Issue Discount (as defined
in the Indenture) on such Convertible Notes and (ii) to each
holder of an Underlying Common Stock that is a Notice Holder,
accruing at a rate equal to one-half of one percent per annum (50
basis points) calculated on an amount equal to the product of (x)
the then accreted value of $1,000 principal amount at maturity of
Convertible Notes divided by the then applicable Conversion Rate,
times (y) the number of shares of Common Stock held by such
holder; and (B) if the Damages Accrual Period continues for in
excess of thirty (30) days from the Event Date, from and after
the end of such thirty (30) day period until such time as there
are no Events which have occurred and are continuing, (i) to each
holder of a Convertible Notes (whether or not a Notice Holder),
accruing at a rate equal to one-half of one percent per annum (50
basis points) on an amount equal to the sum of (x) the Issue
Price of the Convertible Notes held by such holder and (y) the
accrued Original Issue Discount on such Convertible Notes and
(ii) to each holder of Underlying Common Stock (whether or not a
Notice Holder), accruing at a rate equal to one-half of one
percent per annum (50 basis points) calculated on an amount equal
to the product of (x) the then accreted value of $1,000 principal
amount at maturity of Convertible Notes divided by the then
applicable Conversion Rate times (y) the number of shares of
Common Stock held by such holder. Notwithstanding anything else
in this Section 2(e), no Liquidated Damages Amounts shall accrue
under clause (A) for the preceding sentence during any period for
which Liquidated Damages Amounts accrue under clause (B) of the
foregoing sentence or as to any Registrable Securities from and
after the earlier of (x) the date such securities are no longer
Registrable Securities, and (y) expiration of the Effectiveness
Period. The rate of accrual of the Liquidated Damages Amount with
respect to any period shall not exceed the rate provided for in
this paragraph notwithstanding the occurrence of multiple
concurrent Events.
The Company shall pay the liquidated damages due on any
Convertible Notes or Underlying Common Stock by depositing with
the Trustee under the Indenture, in trust for the benefit of the
Notice Holders or the holders of Convertible Notes or Underlying
Common Stock, as the case may be, entitled thereto, at least one
(1) business day prior to the applicable Damages Payment Date,
sums sufficient to pay the liquidated damages accrued or accruing
from and including the last preceding Damages Payment Date to,
but not including, such Damages Payment Date. The Liquidated
Damages Amount shall be paid by the Company to the Record Holders
on each Damages Payment Date by wire transfer
9
of immediately available funds to the accounts specified by them
or by mailing checks to their registered addresses as they appear
in the register, in the case of the Convertible Notes, if no such
accounts have been specified on or before the Damages Payment
Date; provided, however, that any Liquidated Damages Amount
accrued with respect to any Convertible Note or portion thereof
called for redemption on a redemption date, redeemed or
repurchased in connection with a Fundamental Change (as defined
in the Indenture) on a repurchase date, or converted into Common
Stock on a conversion date prior to the Damages Payment Date,
shall, in any such event, be paid instead to the holder who
submitted such Convertible Note or portion thereof for
redemption, repurchase or conversion on the applicable redemption
date, repurchase date or conversion date, as the case may be, on
such date (or promptly following the conversion date, in the case
of conversion of a Convertible Note). The Trustee shall be
entitled, on behalf of the holders of Convertible Notes, holders
of Common Stock and Notice Holders, to seek any available remedy
for the enforcement of this Agreement, including for the payment
of such Liquidated Damages Amount. Notwithstanding the foregoing,
the parties agree that the sole damages payable for a violation
of the terms of this Agreement with respect to which a Liquidated
Damages Amount is expressly provided shall be such Liquidated
Damages Amount. Nothing shall preclude a Notice Holder or Holder
of Registrable Securities from pursuing or obtaining specific
performance or other equitable relief with respect to this
Agreement, in addition to the payment of Liquidated Damages.
All of the Company's obligations set forth in this Section
2(e) which are outstanding with respect to any Registrable
Securities at the ime such security ceases to be a Registrable
Security shall survive until such time as all such obligations
with respect to such security have been satisfied in full
(notwithstanding termination of the Agreement pursuant to Section
9(o)).
The parties hereto agree that the liquidated damages
provided for in this Section 2(e) constitute a reasonable
estimate of the damages that may be incurred by holders of
Registrable Securities (other than the Initial Purchasers) by
reason of the failure of th Shelf Registration to be filed or
declared effective or unavailable (absolutely or as a practical
matter) for effecting resales of Registrable Securities, as the
case may be, in accordance with the provisions hereof.
SECTION 3. Registration Procedures. In connection with the
Company's registration obligations under Section 2 hereof, the
Company shall effect such egistrations to permit the sale of the
Registrable Securities in accordance with the intended method or
methods of disposition thereof, and pursuant thereto the Company
shall as expeditiously as possible:
10
(a) Prepare and file with the SEC a Registration Statement
or Registration Statements on any appropriate form under the
Securities Act available for the sale of the Registrable
Securities by the Holders thereof in accordance with the intended
method or methods of distribution thereof, and use its reasonable
efforts to cause each such Registration Statement to become
effective and remain effective as provided herein; provided, that
before filing any such Registration Statement or Prospectus or
any amendments or supplements thereto (other than documents that
would be incorporated or deemed to be incorporated therein by
reference and that the Company is required by applicable
securities laws or stock exchange requirements to file) the
Company shall furnish to the Initial Purchasers, the Special
Counsel and the Managing Underwriters of such offering, if any,
copies of all such documents proposed to be filed, which
documents will be subject to the review of the Initial
Purchasers, the Special Counsel and such Managing Underwriters,
and the Company shall not file any such Registration Statement or
amendment thereto or any Prospectus or any supplement thereto
(other than such documents which, upon filing, would be
incorporated or deemed to be incorporated by reference therein
and that the Company is required by applicable securities laws or
stock exchange requirements to file) to which the Holders of a
majority of the Registrable Securities covered by such
Registration Statement, the Initial Purchasers or the Special
Counsel shall reasonably object in writing within two (2) full
Business Days.
(b) Prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may
be necessary to keep such Registration Statement continuously
effective for the applicable period specified in Section 2; cause
the related Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed
pursuant to Rule 424 (or any similar provisions then in force)
under the Securities Act; and comply with the provisions of the
Securities Act with respect to the disposition of all securities
covered by such Registration Statement during the applicable
period in accordance with the intended methods of disposition by
the sellers thereof set forth in such Registration Statement as
so amended or such Prospectus as so supplemented.
(c) Notify the selling Holders, the Initial Purchasers, the
Special Counsel and the Managing Underwriters, if any, promptly,
and (if requested by any such person) confirm such notice in
writing, (i) when a Prospectus, any Prospectus supplement, a
Registration Statement or a post-effective amendment to a
Registration Statement has been filed with the SEC, and, with
respect to a Registration Statement or any post-effective
amendment, when the same has become effective, (ii) of any request by
the SEC or any other federal or state governmental authority for
amendments or supplements to a Registration Statement or related
Prospectus or for additional information, (iii) of the issuance
11
by the SEC or any other federal or state governmental authority
of any stop order suspending the effectiveness of a Registration
Statement or the initiation or threatening of any proceedings for
that purpose, (iv) of the receipt by the Company of any notification
with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale
in any jurisdiction or the initiation or threatening of any
proceeding for such purpose, (v) except during any Deferral Period,
of the existence of any fact or happening of any event which
makes any statement of a material fact in such Registration
Statement or related Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue or which
would require the making of any changes in the Registration
Statement or Prospectus in order that, in the case of the
Registration Statement, it will not contain any untrue statement
of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading, (vi) and that in the case of the Prospectus, it will not
contain any untrue statement of a material fact or omit to state
any material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, and of the Company's determination that a
post-effective amendment to a Registration Statement would be
appropriate.
(d) Use its best efforts to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement,
or the lifting of any suspension of the qualification (or
exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest possible
moment.
(e) If reasonably requested by the Initial Purchasers, the
Special Counsel, the Managing Underwriters, if any, or the
Holders of a majority of the Registrable Securities being sold, (i)
promptly incorporate in a Prospectus supplement or post-effective
amendment to a Registration Statement such information as the
Initial Purchasers, the Special Counsel, the Managing
Underwriters, if any, or such Holders, in connection with any
offering of Registrable Securities, agree should be included
therein as required by applicable law, and (ii) make all required
filings of such Prospectus supplement or such post-effective
amendment as promptly as is practicable after the Company has
received notification of the matters to be incorporated in such
Prospectus supplement or post-effective amendment; provided, that
the Company shall not be required to take any actions under this
Section 3(e) that are not, in the reasonable opinion of counsel
for the Company, in compliance with applicable law.
(f) Furnish to each selling Holder, the Special Counsel and
the Initial Purchasers, and each Managing Underwriter, if any,
without charge, at least one conformed copy of the Registration
Statement or Statements and any amendment
12
thereto, including financial statements but excluding schedules,
all documents incorporated or deemed to be incorporated therein
by reference and all exhibits (unless requested in writing by
such holder, counsel, Initial Purchasers or underwriter).
(g) Deliver to each selling Holder, the Special Counsel and
the Initial Purchasers and each Managing Underwriter, if any, in
connection with any offering of Registrable Securities, without
charge, as many copies of the Prospectus or Prospectuses relating
to such Registrable Securities (including each preliminary
prospectus) and any amendment or supplement thereto as such
persons may reasonably request; and the Company hereby consents
to the use of such Prospectus or each amendment or supplement
thereto by each of the selling Holders of Registrable Securities
and the Underwriters, if any, in connection with any offering and
sale of the Registrable Securities covered by such Prospectus or
any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Securities,
to register or qualify or cooperate with the selling Holders, the
Managing Underwriters, if any, and the Special Counsel in
connection with the registration or qualification (or exemption
from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky
laws of such jurisdictions within the United States as any
selling Holder or Managing Underwriter reasonably requests in
writing; keep each such registration or qualification (or
exemption therefrom) effective during the period such
Registration Statement is required to be kept effective and do
any and all other acts or things necessary or advisable to enable
the disposition in such jurisdictions of the Registrable
Securities covered by the applicable Registration Statement;
provided, that the Company will not be required to (i) qualify
generally to do business in any jurisdiction where it is not then
so qualified or (ii) take any action that would subject it to general
service of process in suits or to taxation in any such
jurisdiction where it is not then so subject.
(i) Cause the Registrable Securities covered by the
applicable Registration Statement to be registered with or
approved by such other governmental agencies or authorities
within the United States, except as may be required solely as a
consequence of the nature of such selling Holder, in which case
the Company will cooperate in all reasonable respects with the
filing of such Registration Statement and the granting of such
approvals, as may be necessary to enable the selling Holder or
Holders thereof or the Managing Underwriters, if any, to
consummate the disposition of such Registrable Securities.
(j) During any Selling Peri d (other than during a Deferral
Period), immediately upon the existence of any fact or the
occurrence of any event as a
13
result of which a Registration Statement shall contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, or a Prospectus shall contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading, promptly prepare and file a post-effective
amendment to each Registration Statement or a supplement to the
related Prospectus or any document incorporated therein by
reference or file any other required or permissible document
(such as a Current Report on Form 8-K) that would be incorporated
by reference into the Registration Statement so that the
Registration Statement shall not contain any untrue statement of
a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading, and so that the Prospectus will not contain any
untrue statement of a material fact or omit to state any material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading,
as thereafter delivered to the purchasers of the Registrable
Securities being sold thereunder, and, in the case of a
post-effective amendment to a Registration Statement, use its
best efforts to cause it to become effective as promptly as is
practicable.
(k) Enter into such agreements (including, in the event of
an Underwritten Offering, an underwriting agreement in form,
scope and substance as is customary in Underwritten Offerings)
and take all such other actions in connection therewith
(including, in the event of an underwritten offering, those
reasonably requested by the Managing Underwriters, if any, or the
Holders of a majority of the Registrable Securities being sold)
in order to expedite or facilitate the disposition of such
Registrable Securities and in such connection, whether or not an
underwriting agreement is entered into, and if the registration
is an underwritten registration, (i) make such representations and
warranties, subject to the Company's ability to do so, to the
Holders of such Registrable Securities and the underwriters with
respect to the business of the Company and its subsidiaries, the
Registration Statement, Prospectus and documents incorporated by
reference or deemed incorporated by reference, if any, in each
case, in form, substance and scope as are customarily made by
issuers to underwriters in underwritten offerings and confirm the
same if and when requested; (ii) use its reasonable efforts to obtain
opinions of counsel to the Company and updates thereof (which
counsel and opinions (in form, scope and substance) shall be
reasonably satisfactory to the Managing Underwriters, if any,
Special Counsel and the Holders of a majority of the Registrable
Securities being sold) addressed to each of the underwriters
covering the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be
reasonably requested by such Special Counsel and Managing
Underwriters; (iii) use its reasonable efforts to obtain
14
"cold comfort" letters and updates thereof from the independent
certified public accountants of the Company (and, if necessary,
any other certified public accountants of any subsidiary of the
Company or any business acquired or to be acquired by the Company
for which financial statements and financial data is, or is
required to be, included in the Registration Statement),
addressed to each of the Managing Underwriters, if any, such
letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with
Underwritten Offerings; (iv) and deliver such documents and
certificates as may be reasonably requested by the holders of a
majority of the Registrable Securities being sold, the Special
Counsel and the Managing Underwriters, if any, to evidence the
continued validity of the representations and warranties of the
Company and its subsidiaries made pursuant to clause (i) above
and to evidence compliance with any customary conditions
contained in the underwriting agreement or other agreement
entered into by the Company. The above shall be done at each
closing under such underwriting or similar agreement as and to
the extent required thereunder.
(l) If requested in connection with a disposition of
Registrable Securities pursuant to Registration Statement, make
available for inspection by a representative of the Holders of
Registrable Securities being sold, any Managing Underwriter
participating in any disposition of Registrable Securities, if
any, and any attorney or accountant retained by such selling
Holders or underwriter, financial and other records, pertinent
corporate documents and properties of the Company and its
subsidiaries, and cause the executive officers, directors and
employees of the Company and its subsidiaries to supply all
information reasonably requested by any such representative,
Managing Underwriter, attorney or accountant in connection with
such disposition; subject to reasonable assurances by each such
person that such information will only be used in connection with
matter relating to such Registration Statement.
(m) Comply with all applicable rules and regulations of the
SEC and make generall available to its securityholders earning
statements (which need not be audited) satisfying the provisions
of Section 11(a) of the Securities Act and Rule 158 thereunder
(or any similar rule promulgated under the Securities Act) no
later than 45 days after the end of any 12-month period (or 90
days after the end of any 12-month period if such period is a
fiscal year) (i) commencing at the end of any fiscal quarter in which
Registrable Securities are sold to underwriters in a firm
commitment or best efforts underwritten offering, and (ii) if not sold
to underwriters in such an offering, commencing on the first day
of the first fiscal quarter of the Company commencing after the
effective date of a Registration Statement, which statements
shall cover said 12-month periods.
15
(n) Cooperate with the selling holders of Registrable
Securities to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold and
not bearing any restrictive legends; and enable such Registrable
Securities to be in such denominations and registered in such
names as the holders may request.
(o) Provide a CUSIP number for all Registrable Securities
not later than the effective date of the Registration Statement
and provide the Trustee under the Indenture and the transfer
agent for the Common Stock with printed certificates for the
Registrable Securities which are in a form eligible for deposit
with the Depositary Trust Company.
(p) Cause all Registrable Securities covered by the
Registration Statement to be listed on each securities exchange
or quotation system on which the Company's Common Stock is then
listed no later than the date the Registration Statement is
declared effective and, in connection therewith, to the extent
applicable, to make such filings under the Exchange Act (e.g.,
the filing of a Registration Statement on Form 8-A) and to have
such filings declared effective thereunder.
(q) Cooperate and assist in any filings required to be made
with the National Association of Securities Dealers, Inc.
SECTION 4. Holder's Obligations. Each Holder agrees, by
acquisition of the Convertible Notes and Registrable Securities,
that no Holder of Registrable Securities shall be entitled to
sell any of such Registrable Securities pursuant to a
Registration Statement or to receive a Prospectus relating
thereto, unless such Holder has furnished the Company with the
notice required pursuant to Section 2(d) hereof (including the
information required to accompany such notice) and, promptly
after the Company's request, such other information regarding
such Holder and the distribution of such Registrable Securities
as the Company may from time to time reasonably request. The
Company may exclude from such registration the Registrable
Securities of any Holder who does not furnish such information
provided above for so long as such information is not so
furnished. Each Holder of Registrable Securities as to which any
Registration Statement is being effected agrees promptly to
furnish to the Company all information required to be disclosed
in order to make the information previously furnished to the
Company by such Holder not misleading. Any sale of any
Registrable Securities by any Holder shall constitute a
representation and warranty by such Holder that the information
relating to such Holder and its plan of distribution is as set
forth in the Prospectus delivered by such Holder in connection
with such disposition, that such Prospectus does not as of the
time of such sale contain any untrue statement of a material fact
relating to such Holder or its plan of distribution and
16
that such Prospectus does not as of the time of such sale omit to
state any material fact relating to such Holder or its plan of
distribution necessary to make the statements in such Prospectus,
in light of the circumstances under which they were made, not
misleading.
SECTION 5. Registration Expenses. All fees and expenses
incident to the Company's performance of or compliance with
this Agreement shall be borne by the Company whether or not any
of the Registration Statements become effective. Such fees and
expenses shall include, without limitation, (i) all registration and
filing fees (including, without limitation, fees and expenses (x)
with respect to filings required to be made with the National
Association of Securities Dealers, Inc. and (y) of compliance
with federal securities or Blue Sky laws (including, without
limitation, fees and disbursements of Special Counsel in
connection with Blue Sky qualifications of the Registrable
Securities laws of such jurisdictions as the Managing
Underwriters, if any, or Holders of a majority of the Registrable
Securities being sold may designate), (ii) printing expenses
(including, without limitation, expenses of printing certificates
for Registrable Securities in a form eligible for deposit with
The Depositary Trust Company and of printing prospectuses if the
printing of prospectuses is requested by the Special Counsel or
the holders of a majority of the Registrable Securities included
in any Registration Statement), (iii) reasonable fees and disbursements
of Trustee and its counsel and of the registrar and transfer
agent for the Common Stock, (iv) messenger, telephone and delivery
expenses relating to the performance of the Company's obligations
hereunder, (v) reasonable fees and disbursements of counsel for the
Company and the Special Counsel in connection with the Shelf
Registration (provided that the Company shall not be liable for
the fees and expenses of more than one separate firm for all
parties participating in any transaction hereunder), (vi)
fees and disbursements of all independent certified public
accountants referred to in Section 3(k)(iii) hereof (including
the expenses of any special audit and "cold comfort" letters
required by or incident to such performance) and (vii) Securities Act
liability insurance obtained by the Company in its sole
discretion. In addition, the Company shall pay its internal
expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit, the fees and
expenses incurred in connection with the listing of the
securities to be registered on any securities exchange on which
similar securities issued by the Company are then listed and the
fees and expenses of any person, including special experts,
retained by the Company. Notwithstanding the provisions of this
Section 5, each seller of Registrable Securities shall pay all
registration expenses to the extent the Company is prohibited by
applicable Blue Sky laws from paying for or on behalf of such
seller of Registrable Securities.
17
SECTION 6. Indemnification. (a) Indemnification by the
Company. The Company shall indemnify and hold harmless each
Holder and each person, if any, who controls any Holder (within
the meaning of either Section 15 of the Securities Act or Section
20(a) of the Exchange Act) from and against all losses,
liabilities, claims, damages and expenses (including, without
limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or
claim) (collectively, "Losses"), arising out of or based upon any
untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement or Prospectus or in any
amendment or supplement thereto or in any preliminary prospectus,
or arising out of or based upon any omission or alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except
insofar as such Losses arise out of or based upon the information
relating to any Holder furnished to the Company in writing by
such Holder expressly for use therein; provided, that the Company
shall not be liable to any holder of Registrable Securities (or
any person controlling such Holder) to the extent that any such
Losses arise out of or are based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in
any preliminary prospectus if either (A) (i) such Holder failed to
send or deliver a copy of the Prospectus with or prior to the
delivery of written confirmation of the sale by such Holder to
the person asserting the claim from which such Losses arise and (ii)
the Prospectus would have corrected such untrue statement or
alleged untrue statement or such omission or alleged omission, or
(B) (x) such untrue statement or alleged untrue statement,
omission or alleged omission is corrected in an amendment or
supplement to the Prospectus and (y) having previously been
furnished by or on behalf of the Company with copies of the
Prospectus as so amended or supplemented, such holder thereafter
fails to deliver such Prospectus as so amended or supplemented,
with or prior to the delivery of written confirmation of the sale
of a Registrable Security to the person asserting the claim from
which such Losses arise. The Company shall also indemnify each
underwriter and each person who controls such person (within the
meaning of Section 15 of the Securities Act or Section 20(a) of
the Exchange Act) to the same extent and with the same
limitations as provided above with respect to the indemnification
of the holders of Registrable Securities.
(b) Indemnification by Holder of Registrable Securities.
Each Holder agrees severally and not jointly to indemnify and
hold harmless the Company, its directors, its officers who sign a
Registration Statement, and each person, if any, who controls the
Company (within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act), from and
against all losses arising out of or based upon any untrue
statement of a material fact contained in any Registration
Statement, Prospectus or preliminary prospectus or arising out of
or based upon any omission of a material fact required to be
stated therein or
18
necessary to make the statements therein not misleading, to the
extent, but only to the extent, that such untrue statement or
omission is contained in any information relating to such Holder
so furnished in writing by such Holder to the Company expressly
for use in such Registration Statement or Prospectus. In no event
shall the liability of any selling holder of Registrable
Securities hereunder be greater in amount than the dollar amount
of the proceeds received by such holder upon the sale of the
Registrable Securities giving rise to such indemnification
obligation.
(c) Conduct of Indemnification Proceedings. In case any
proceeding (including any governmental investigation) shall be
instituted involving any person in respect of which indemnity may
be sought pursuant to either of the two preceding paragraphs,
such person (the "indemnified party") shall promptly notify the
person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party, upon
request of the indemnified party, shall retain counsel reasonably
satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any
such proceeding, any indemnified party shall have the right to
retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii) the named parties to
any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests
between them. It is understood that the indemnifying party shall
not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same
jurisdiction, be liable for (a) the fees and expenses of more
than one separate firm (in addition to any local counsel) for all
Holders and all persons, if any, who control any Holder within
the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act, and (b) the fees and expenses of more
than one separate firm (in addition to any local counsel) for the
Company, its directors, its officers who sign a Registration
Statement and each person, if any, who controls the Company
within the meaning of either such Section, and that all such fees
and expenses shall be reimbursed as they are incurred. In the
case of any such separate firm for the Company, and such
directors, officers and control persons of the Company, such firm
shall be designated in writing by the Company. The indemnifying
party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from
and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an
19
indemnifying party to reimburse the indemnified party for fees
and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that
it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered
into more than 30 days after receipt by such indemnifying party
of the aforesaid request and (ii) such indemnifying party shall
not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement. No indemnifying
party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder
by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all
liability on claims that are the subject matter of such
proceeding.
Contribution. To the extent that the indemnification
provided for in this Section 6 is unavailable to an indemnified
party under Section 6(a) or 6(b) hereof in respect of any Losses
or is insufficient to hold such indemnified party harmless, then
each applicable indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable
by such indemnified party as a result of such Losses, (i) in such
proportion as is appropriate to reflect the relative benefits
received by the indemnifying party or parties on the one hand and
the indemnified party or parties on the other hand or
(ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the indemnifying party or
parties on the one hand and of the indemnified party or parties
on the other hand in connection with the statements or omissions
that resulted in such Losses, as well as any other relevant
equitable considerations. Benefits received by the Company shall
be deemed to be equal to the total net proceeds from the initial
placement (before deducting expenses) of the Convertible Notes
pursuant to the Purchase Agreement. Benefits received by any
Holder shall be deemed to be equal to the value of receiving
Underlying Common Stock that is registered under the Securities
Act. The relative fault of the Holders on the one hand and the
Company on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the
Holders or by the Company and the parties' relative intent,
knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Holders' respective
obligations to contribute pursuant to this paragraph are several
in proportion to the respective number of Registrable Securities
they have sold pursuant to a Registration Statement, and not
joint.
20
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 6(d) were
determined by pro rata allocation or by any other method or
allocation that does not take into account the equitable
considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as
a result of the Losses referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding this Section
6(d), an indemnifying party that is a selling Holder of
Registrable Securities shall not be required to contribute any
amount in excess of the amount by which the total price at which
the Registrable Securities sold by such indemnifying party and
distributed to the public were offered to the public exceeds the
amount of any damages which such indemnifying party has otherwise
been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
The indemnity, contribution and expense reimbursement
obligations of the Company hereunder shall be in addition to any
liability the Company may otherwise have hereunder, under the
Purchase Agreement or otherwise. The provisions of this Section 6
shall survive so long as Registrable Securities remain
outstanding, notwithstanding any transfer of the Registrable
Securities by any holder or any termination of this Agreement.
The indemnity and contribution provisions contained in this
Section 6 shall rem ain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Holder or any person
controlling any Holder, or the Company, its officers or directors
or any person controlling the Company and (iii) the sale of any
Registrable Securities by any Holder.
SECTION 7. Information Requirements. (a) The Company shall
file the reports required to be filed by it under the Securities
Act and the Exchange Act, and if at any time the Company is not
required to file such reports, it will, upon the request of any
holder of Registrable Securities, make publicly available, except
during a Deferral Period, other information so long as necessary
to permit sales of Convertible Notes and Underlying Common Stock
pursuant to Rule 144 and Rule 144A under the Securities Act. The
Company further covenants that it will cooperate with any holder
of Registrable Securities and take such further reasonable action
as any holder of Registrable Securities may reasonably request
(including, without limitation, making such reasonable
representations as any
21
such holder may reasonably request), all to the extent required
from time to time to enable such holder to sell Registrable
Securities without registration under the Securities Act within
the limitation of the exemptions provided by Rule 144 and Rule
144A under the Securities Act. Upon the request of any holder of
Registrable Securities, the Company shall deliver to such holder
a written statement as to whether it has complied with such
filing requirements. Notwithstanding the foregoing, nothing in
this Section 7 shall be deemed to require the Company to register
any of its securities under any section of the Exchange Act.
(b) The Company shall file the reports required to be filed
by it under the Exchange Act and shall comply with all other
requirements set forth in the instructions to Form S-3 in order
to allow the Company to be eligible to file registration
statements on Form S-3.
SECTION 8. Submission to Jurisdiction. The Company
irrevocably consents and agrees, for the benefit of the Holders,
that any legal action, suit or proceeding against it with respect
to its obligations, liabilities or any other matter arising out
of or in connection with this Agreement may be brought in the
courts of the State of New York or the courts of the United
States located in The City of New York and hereby irrevocably
consents and submits to the non-exclusive jurisdiction of each
such court in personam, generally and unconditionally, with
respect to any such action, suit or proceeding for itself and in
respect of its properties, assets and revenues.
The Company has irrevocably designated, appointed and
empowered Nicholas J. Camera, Vice President, General Counsel and
Secretary of the Company, as its designee, appointee and agent to
receive, accept and acknowledge for and on its behalf, and its
properties, assets and revenues, service of any and all legal
process, summons, notices and documents which may be served in
any such action, suit or proceeding referred to in the preceding
paragraph of this Section 8 brought in any United States or State
court that may be made on such designee, appointee and agent in
accordance with legal procedures prescribed for such courts. Said
designation and appointment shall be irrevocable until the end of
the Effectiveness Period, provided, however, that if for any
reason such designee, appointee and agent hereunder shall cease
to be available to act as such, the Company agrees to designate a
new designee, appointee and agent in The City of New York on the
terms and for the purposes of this Section 8 satisfactory to the
Initial Purchasers. The Company further hereby irrevocably
consents and agrees to the service of any and all legal process,
summons, notices and documents out of any of the aforesaid courts
in any such action, suit, or proceeding by serving a copy thereof
upon the relevant agent for service of process referred to in
this Section 8 (whether or not the appointment of such agent
22
shall for any reason prove to be ineffective or such agent shall
accept or acknowledge such service) or by mailing copies thereof
by registered or certified air mail, postage prepaid, to the
Company at its address specified in or designated pursuant to
Section 9 of this Agreement. The Company agrees that the failure
of such designee, appointee and agent to give any notice of such
service to it shall not impair or effect in any way the validity
of such service or any judgment rendered in any action or
proceeding based thereon. Nothing herein shall in any way be
deemed to limit the ability of the Notice Holders or the holders
of the Convertible Notes or the Underlying Common Stock, to serve
any such legal process, summons, notices and documents in any
other manner permitted by applicable law or to obtain
jurisdiction over the Company or bring actions, suits or
proceedings against the Company in such other jurisdictions, and
in such manner, as may be permitted by applicable law. The
Company hereby irrevocably and unconditionally waives, to the
fullest extent permitted by law, any objection which it may now,
or until the end of the Effectiveness Period, have to the laying
of venue or any of the aforesaid actions, suits or proceedings
arising out of or in connection with this Agreement brought in
the United States Federal courts located in The City of New York
or the courts of the States of New York and hereby further
irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient
forum.
The provisions of this Section 8 shall survive any
termination of this Agreement, in whole or in part.
SECTION 9. Miscellaneous. (a) Remedies. In the event of a
breach by the Company of its obligations under this Agreement, each
holder of Registrable Securities, in addition to being entitled
to exercise all rights granted by law, including recovery of
damages, will be entitled to specific performance of its rights
under this Agreement, provided, that the sole damages payable for
a violation of the terms of this Agreement for which liquidated
damages are expressly provided pursuant to Section 2(e) hereof
shall be such liquidated damages. The Company agrees that
monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of any of the provisions of
this Agreement and hereby further agrees that, in the event of
any action for specific performance in respect of such breach, it
shall waive the defense that a remedy at law would be adequate.
(b) No Conflicting Agreements. The Company has not, as of
the date hereof, and shall not, on or after the date of this
Agreement, enter into any agreement with respect to its
securities which conflicts with the rights granted to the holders
of Registrable Securities in this Agreement. The Initial
Purchasers acknowledge that the Registration Rights Agreements
between the Company and
23
certain of holders of its Common Stock, as provided to the
Initial Purchasers, do not conflict with the rights granted to
the holders of Registrable Securities in this Agreement. The
Company represents and warrants that the rights granted to the
holders of Registrable Securities hereunder do not in any way
conflict with the rights granted to the holders of the Company's
securities under any other agreements.
(c) Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be
amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, unless
the Company has obtained the written consent of holders of a
majority of the then outstanding Underlying Common Stock
constituting Registrable Securities (with holders of Convertible
Notes deemed to be the holders, for purposes of this Section, of
the number of outstanding shares of Underlying Common Stock into
which such Debentures are convertible or exchangeable).
Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates
exclusively to the rights of holders of Registrable Securities
whose securities are being sold pursuant to a Registration
Statement and that does not directly or indirectly affect the
rights of other holders of Registrable Securities may be given by
holders of at least a majority of the Registrable Securities
being sold by such holders; provided, that the provisions of this
sentence may not be amended, modified, or supplemented except in
accordance with the provisions of the immediately preceding
sentence.
(d) Notices. All notices and other communications provided
for or permitted hereunder shall deemed given (i) when made, if
may by hand delivery, (ii) upon confirmation, if made by
telecopier or (iii) one (1) business day after being deposited
with a reputable next-day courier, postage prepaid, to the
parties as follows (provided that with respect to any notice of
intention to sell given by a Holder to the Company pursuant to
Section 2(d) hereof in accordance with this Section 9(d) which is
given on or after December 24 of any year and on or prior to
January 1 of the next year, such notice shall only be deemed
given upon the earlier of actual receipt of such notice by an
attorney in the Legal Department of the Company or the first
Business Day next succeeding such January 1):
(x) if to a holder of Registrable Securities, at the
most current address given by such holder to the Company in
accordance with the provisions of Section 9(e);
24
(y) if to the Company, to:
The Interpublic Group of Companies, Inc.
1271 Avenue of the Americas
New York, NY 10020
Attention: Nicholas J. Camera, General Counsel
Telecopy No.: (212) 399-8280
with a copy to:
The Interpublic Group of Companies, Inc.
1271 Avenue of the Americas
New York, New York 10020
Attention: Alan M. Forster, Vice President &
Treasurer
Telecopy No.: (212) 319-8130
and
(z) if to the Special Counsel, to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: Bruce K. Dallas
Telecopy No.: (212) 450-4800
or to such other address as such person may have
furnished to the other persons identified in this
Section 9(d) in writing in accordance herewith.
(e) Owner of Registrable Securities. The Company will
maintain, or will cause its registrar and transfer agent to
maintain, a register with respect to the Registrable Securities
in which all transfers of Registrable Securities of which the
Company has received notice will be recorded. The Company may
deem and treat the person in whose name Registrable Securities
are registered in such register of the Company as the owner
thereof for all purposes, including, without limitation, the
giving of notices under this Agreement.
(f) Approval of Holders. Whenever the consent or approval of
holders of a specified percentage of Registrable Securities is
required hereunder, Registrable Securities held by the Company or
its affiliates (as such term is defined in Rule 405 under the
Securities Act) (other than the Initial Purchasers or
25
subsequent holders of Registrable Securities if such subsequent
holders are deemed to be such affiliates solely by reason of
their holdings of such Registrable Securities) shall not be
counted in determining whether such consent or approval was given
by the holders of such required percentage.
(g) Successors and Assigns. Any person who purchases any
Registrable Securities from an Initial Purchasers shall be
deemed, for purposes of this Agreement, to be an assignee of such
Initial Purchasers. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the
parties and shall inure to the benefit of and be binding upon
each holder of any Registrable Securities.
(h) Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to
be original and all of which taken together shall constitute one
and the same agreement.
(i) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise
affect the meaning hereof.
(j) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF
NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
(k) Severability. If any term, provision, covenant or
restriction of this Agreement is held to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or
invalidated thereby, and the parties hereto shall use their best
efforts to find and employ an alternative means to achieve the
same or substantially the same result as that contemplated by
such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions,
covenants and restrictions without including any of such which
may be hereafter declared invalid, void or unenforceable.
(l) Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and is intended
to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject
matter contained herein and the registration rights granted by
the Company with respect to the Convertible Notes and the
Underlying Common
26
Stock of the Company into which Convertible Notes are convertible
or exchangeable sold pursuant to the Purchase Agreement. Except
as provided in the Purchase Agreement, there are no restrictions,
promises, warranties or undertakings, other than those set forth
or referred to herein, with respect to the registration rights
granted by the Company with respect to the Convertible Notes and
the Underlying Common Stock of the Company into which the
Convertible Notes are convertible or exchangeable. This Agreement
supersedes all prior agreements and undertakings among the
parties with respect to such registration rights.
(m) Attorneys' Fees. In any action or proceeding brought to
enforce any provision of this Agreement, or where any provision
hereof is validly asserted as a defense, the prevailing party, as
determined by the court, shall be entitled to recover reasonable
attorneys' fees in addition to any other available remedy.
(n) Further Assurances. Each of the parties hereto
shall use all reasonable efforts to take, or cause to be taken,
all appropri ate action, do or cause to be done all things
reasonably necessary, proper or advisable under applicable law,
and execute and deliver such documents and other papers, as may
be required to carry out the provisions of this Agreement and the
other documents contemplated hereby and consummate and make
effective the transactions contemplated hereby.
(o) Termination. This Agreement and the obligations of the
parties hereunder shall terminate upon the end of the
Effectiveness Period, except for any liabilities or obligations
under Sections 4, 5 or 6 hereof and the obligations to make
payments of and provide for liquidated damages under Section 2(e)
hereof to the extent such damages accrue prior to the end of the
Effectiveness Period, each of which shall remain in effect in
accordance with their terms.
27
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
THE INTERPUBLIC GROUP OF
COMPANIES, INC.
By: /s/ Alan M. Forster
--------------------------
Name: ALAN M. FORSTER
Title: VICE PRESIDENT
& TREASURER
Accepted as of the date first
above written:
MORGAN STANLEY & CO. INCORPORATED
GOLDMAN, SACHS & CO
SBC WARBURG DILLON READ INC.
By: MORGAN STANLEY & CO. INCORPORATED
By: __________________________
Name:
Title:
Exhibit 5
December 15, 1997
The Interpublic Group of Companies, Inc.
1271 Avenue of the Americas
New York, New York 10020
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
In my capacity as General Counsel to The Interpublic Group
of Companies, Inc., a Delaware corporation (the "Company"), I
have been asked to render this opinion in connection with a
Registration Statement on Form S-3 (the "Registration Statement")
being filed by the Company contemporaneously herewith with the
Securities and Exchange Commission under the Securities Act of
1933, as amended, covering an aggregate of (i) $250,000,000
Principal Amount of 1.80% Convertible Subordinated Notes due 2004
(the "Notes") of the Company, and (ii) 3,346,500 shares of common
stock, $.10 par value (the "Common Stock"), of the Company
initially issuable upon conversion of such Notes plus such
indeterminate amount of shares of Common Stock as may become
issuable upon conversion of the Notes as a result of adjustments
to the conversion price (the "Shares"). The Notes and the Shares
registered by the Registration Statement are to be offered for
the respective accounts of the holders thereof.
In that connection, I have examined the Certificate of
Incorporation and the By-Laws, both as amended, of the Company,
the Indenture dated as of September 16, 1997 (the "Indenture")
between the Company and The Bank of New York, as trustee, the
Registration Rights Agreement dated as of September 16, 1997
between the Company and Morgan Stanley & Co. Incorporated,
Goldman Sachs & Co. and SBC Warburg Dillon Read Inc., the
Registration Statement, corporate proceedings relating to the
issuance of the Notes and the Shares, and such other instruments
and documents as I deemed relevant under the circumstances.
In making the aforesaid examinations, I have assumed the
genuineness of all signatures and the conformity to original
documents of all copies furnished to me as original or
photostatic copies. I have also assumed that the corporate
records furnished to me by the Company include all corporate
proceedings taken by the Company to date.
Based upon and subject to the foregoing, I am of the
opinion (i) that the Notes have been duly authorized and are
valid and binding obligations of the Company, enforceable in
accordance with their terms, subject to applicable bankruptcy,
insolvency or similar laws affecting creditors' rights generally
and general principals of equity, and (ii) that the Shares have
been duly authorized and, when issued upon conversion of the
Notes in accordance with the terms of the Indenture, will be
validly issued, fully paid and nonassessable shares of common
stock, $.10 par value, of the Company.
Insofar as the foregoing opinions relate to the validity,
binding effect or enforceability of any agreement or obligation
of the Company, (a) I have assumed that each other party to such
agreement or obligation has satisfied
those legal requirements that are applicable and it to the extent
necessary to make such agreement or obligation enforceable
against it, and (b) such opinions are subject to applicable
bankruptcy, insolvency and similar laws affecting creditors'
rights generally and to general principals of equity.
The foregoing opinions are limited to the federal law of
the United States of America and the law of the State of New
York, and, where necessary, the corporate laws of the State of
Delaware.
I hereby consent to the use of my opinion as herein set
forth as an exhibit to the Registration Statement and to the use
of my name under the caption "Legal Matters" in the Prospectus
forming part of the Registration Statement.
Very truly yours,
/s/ Nicholas J. Camera
Nicholas J. Camera
Vice President, General
Counsel and Secretary
2
EXHIBIT 12
Statement of Ratio of Earnings to Fixed Charges
Nine Months
Ended
Year Ended December 31, September 30,
----------------------- -------------
1992 1993 1994 1995 1996 1996 1997
---- ---- ---- ---- ---- ---- ----
Ratio of
earnings
to fixed
charges ... 3.8 4.5 3.6 3.9 4.9 4.3 4.3
For purpose of computing the ratio of earnings to fixed
charges, earnings are defined as income before provision for
income taxes plus fixed charges. Fixed charges consist of
interest expense, amortization of debt discount and debt issuance
costs and portion of rent expense which is deemed to be
representative of an interest factor.
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in
the Prospectus constituting part of this Registration Statement
on Form S-3 of our report dated February 14, 1997, which appears
on page 48 of the 1996 Annual Report to the Stockholders of The
Interpublic Group of Companies, Inc., which is incorporated by
reference in The Interpublic Group of Companies, Inc.'s Annual Report on
Form 10-K for the year ended December 31, 1996, as amended by the
Company's Amendment Number One on Form 10-K/A for the year ended
December 31, 1996. We also consent to the incorporation by
reference of our report on the Financial Statement Schedules,
which appears on page F-2 of such Annual Report on Form 10-K, as
amended by the Company's Amendment Number One on Form 10-K/A for
the year ended December 31, 1996. We also consent to the
reference to us under the heading "Experts" in such Prospectus.
PRICE WATERHOUSE LLP
New York, New York
December 15, 1997
Exhibit 25
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
________________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
________________________
THE INTERPUBLIC GROUP OF COMPANIES, INC.
(Exact name of obligor as specified in its charter)
Delaware 13-1024020
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1271 Avenue of the Americas
New York, New York 10020
(Address of principal executive offices) (Zip code)
________________________
1.80% Convertible Subordinated Notes due 2004
(Title of the indenture securities)
===============================================================================
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
- -------------------------------------------------------------------------------
Name Address
- -------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany,
N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe
each such affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the
Commission, are incorporated herein by reference as an
exhibit hereto, pursuant to Rule 7a-29 under the Trust
Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of
New York (formerly Irving Trust Company) as now in
effect, which contains the authority to commence
business and a grant of powers to exercise corporate
trust powers. (Exhibit 1 to Amendment No. 1 to Form
T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration
Statement No. 33-21672 and Exhibit 1 to Form T-1 filed
with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
-2-
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its supervising
or examining authority.
-3-
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The
Bank of New York, a corporation organized and existing under the
laws of the State of New York, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in The City of New York, and State
of New York, on the 5th day of November, 1997.
THE BANK OF NEW YORK
By: /s/THOMAS B. ZAKRZEWSKI
-----------------------
Name: THOMAS B. ZAKRZEWSKI
Title: ASSISTANT VICE PRESIDENT
Exhibit 7
- -----------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business
June 30, 1997, published in accordance with a call made by the
Federal Reserve Bank of this District pursuant to the provisions
of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 7,769,502
Interest-bearing balances .......... 1,472,524
Securities:
Held-to-maturity securities ........ 1,080,234
Available-for-sale securities ...... 3,046,199
Federal funds sold and Securities pur-
chased under agreements to resell...... 3,193,800
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................35,352,045
LESS: Allowance for loan and
lease losses ..............625,042
LESS: Allocated transfer risk
reserve........................429
Loans and leases, net of unearned
income, allowance, and reserve 34,726,574
Assets held in trading accounts ...... 1,611,096
Premises and fixed assets (including
capitalized leases) ................ 676,729
Other real estate owned .............. 22,460
Investments in unconsolidated
subsidiaries and associated
companies .......................... 209,959
Customers' liability to this bank on
acceptances outstanding ............ 1,357,731
Intangible assets .................... 720,883
Other assets ......................... 1,627,267
-----------
Total assets ......................... $57,514,958
===========
LIABILITIES
Deposits:
In domestic offices ................ $26,875,596
Noninterest-bearing ......11,213,657
Interest-bearing .........15,661,939
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 16,334,270
Noninterest-bearing .........596,369
Interest-bearing .........15,737,901
Federal funds purchased and Securities
sold under agreements to repurchase. 1,583,157
Demand notes issued to the U.S.
Treasury ........................... 303,000
Trading liabilities .................. 1,308,173
Other borrowed money:
With remaining maturity of one year
or less .......................... 2,383,570
With remaining maturity of more than
one year through three years.......... 0
With remaining maturity of more than
three years ......................... 20,679
Bank's liability on acceptances exe-
cuted and outstanding .............. 1,377,244
Subordinated notes and debentures .... 1,018,940
Other liabilities .................... 1,732,792
-----------
Total liabilities .................... 52,937,421
-----------
EQUITY CAPITAL
Common stock ........................ 1,135,284
Surplus ............................. 731,319
Undivided profits and capital
reserves .......................... 2,721,258
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ 1,948
Cumulative foreign currency transla-
tion adjustments .................. ( 12,272)
------------
Total equity capital ................ 4,577,537
-----------
Total liabilities and equity
capital ........................... $57,514,958
===========
I, Robert E. Keilman, Senior Vice President and Comptroller
of the above-named bank do hereby declare that this Report of
Condition has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System
and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of
this Report of Condition and declare that it has been examined by
us and to the best of our knowledge and belief has been prepared
in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true and correct.
-
Alan R. Griffith |
J. Carter Bacot |
Thomas A. Renyi | Directors
-
- -----------------------------------------------------------------