UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 26, 2001
Commission File Number 1-10275
BRINKER INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 75-1914582
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6820 LBJ FREEWAY, DALLAS, TEXAS 75240
(Address of principal executive offices)
(Zip Code)
(972) 980-9917
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
Number of shares of common stock of registrant outstanding at
September 26, 2001: 98,212,258
BRINKER INTERNATIONAL, INC.
INDEX
Part I - Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets -
September 26, 2001 (Unaudited) and June 27, 2001 3
Consolidated Statements of Income
(Unaudited) - Thirteen-week periods ended
September 26, 2001 and September 27, 2000 4
Consolidated Statements of Cash Flows
(Unaudited) - Thirteen-week periods ended
September 26, 2001 and September 27, 2000 5
Notes to Consolidated
Financial Statements (Unaudited) 6 - 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10 - 14
Item 3. Quantitative and Qualitative Disclosures
About Market Risk 14
Part II - Other Information 17
Item 6. Exhibits and Reports on Form 8-K
Signatures
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
BRINKER INTERNATIONAL, INC.
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
September 26, June 27,
2001 2001
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 13,921 $ 13,312
Accounts receivable 29,031 31,438
Inventories 26,130 27,351
Prepaid expenses 58,014 55,809
Deferred income taxes 6,452 7,295
Other - 2,000
Total current assets 133,548 137,205
Property and Equipment, at Cost:
Land 204,612 201,013
Buildings and leasehold improvements 931,900 898,133
Furniture and equipment 502,658 478,847
Construction-in-progress 58,458 70,051
1,697,628 1,648,044
Less accumulated depreciation and
amortization (589,452) (563,320)
Net property and equipment 1,108,176 1,084,724
Other Assets:
Goodwill, net 141,080 138,127
Other 91,472 82,245
Total other assets 232,522 220,372
Total assets $1,474,276 $1,442,301
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current installments of long-term debt $ 17,635 $ 17,635
Accounts payable 95,548 89,436
Accrued liabilities 124,966 134,420
Total current liabilities 238,149 241,491
Long-term debt, less current installments 264,806 236,060
Deferred income taxes 14,503 12,502
Other liabilities 53,118 51,961
Shareholders' Equity:
Common stock - 250,000,000 authorized shares;
$0.10 par value; 117,500,054 shares issued
and 98,212,258 shares outstanding at
September 26, 2001, and 117,501,080 shares
issued and 99,509,455 shares outstanding
at June 27, 2001 11,750 11,750
Additional paid-in capital 315,363 314,867
Retained earnings 841,622 801,988
1,168,735 1,128,605
Less:
Treasury stock, at cost (19,287,796 shares at
September 26, 2001 and 17,991,625 shares at
June 27, 2001 (261,366) (225,334)
Accumulated other comprehensive loss (551) (895)
Unearned compensation (3,118) (2,089)
Total shareholders' equity 903,700 900,287
Total liabilities and shareholders' equity $1,474,276 $1,442,301
See accompanying notes to consolidated financial statements.
BRINKER INTERNATIONAL, INC.
Consolidated Statements of Income
(In thousands, except per share amounts)
(Unaudited)
Thirteen-Week Periods Ended
September 26, September 27,
2001 2000
Revenues $ 690,547 $ 589,283
Operating Costs and Expenses:
Cost of sales 185,824 156,407
Restaurant expenses 385,612 326,129
Depreciation and amortization 28,186 23,430
General and administrative 27,559 27,211
Total operating costs and expenses 627,181 533,177
Operating income 63,366 56,106
Interest expense 3,784 1,396
Other, net (1,113) 399
Income before provision for
income taxes 60,695 54,311
Provision for income taxes 21,061 19,117
Net income $ 39,634 $ 35,194
Basic net income per share $ 0.40 $ 0.36
Diluted net income per share $ 0.39 $ 0.35
Basic weighted average
shares outstanding 98,963 98,753
Diluted weighted average
shares outstanding 101,572 101,570
See accompanying notes to consolidated financial statements.
BRINKER INTERNATIONAL, INC.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Thirteen-Week Periods Ended
September 26, September 27,
2001 2000
Cash Flows from Operating Activities:
Net income $ 39,634 $ 35,194
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 28,186 23,430
Amortization of unearned compensation 348 413
Deferred income taxes 2,844 2,579
Changes in assets and liabilities, excluding
effects of acquisitions:
Receivables 4,149 (3,156)
Inventories 1,263 (262)
Prepaid expenses (519) 2,275
Other assets 5,467 96
Accounts payable 6,400 9,671
Accrued liabilities (8,551) (5,921)
Other liabilities 1,157 2,153
Net cash provided by operating activities 80,378 66,472
Cash Flows from Investing Activities:
Payments for property and equipment (49,162) (42,288)
Payment for purchase of restaurants (6,580) -
Investment in equity method investee (12,250) -
Net advances to affiliates (675) -
Net cash used in investing activities (68,667) (42,288)
Cash Flows from Financing Activities:
Net borrowings (payments) on credit facilities 26,788 (4,199)
Proceeds from issuances of treasury stock 1,849 5,377
Purchases of treasury stock (39,739) (25,391)
Net cash used in financing activities (11,102) (24,213)
Net change in cash and cash equivalents 609 (29)
Cash and cash equivalents at beginning of year 13,312 12,343
Cash and cash equivalents at end of year $ 13,921 $ 12,314
See accompanying notes to consolidated financial statements.
BRINKER INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
(Unaudited)
1. Basis of Presentation
The consolidated financial statements of Brinker International,
Inc. and its wholly-owned subsidiaries (collectively, the
"Company") as of September 26, 2001 and June 27, 2001 and for the
thirteen-week periods ended September 26, 2001 and September 27,
2000, respectively, have been prepared by the Company pursuant to
the rules and regulations of the Securities and Exchange
Commission ("SEC"). The Company owns, operates, or franchises
various restaurant concepts under the names of Chili's Grill & Bar
("Chili's"), Romano's Macaroni Grill ("Macaroni Grill"), On The
Border Mexican Grill & Cantina ("On The Border"), Cozymel's
Coastal Mexican Grill ("Cozymel's"), Maggiano's Little Italy
("Maggiano's"), Corner Bakery Cafe ("Corner Bakery"), and Big
Bowl. In addition, the Company is involved in the ownership and
has been involved in the development of the Eatzi's Market and
Bakery ("Eatzi's") concept. On July 12, 2001, the Company
acquired an approximately 40% interest in the legal entities
owning and developing Rockfish Seafood Grill ("Rockfish").
The information furnished herein reflects all adjustments
(consisting only of normal recurring accruals and adjustments)
which are, in the opinion of management, necessary to fairly state
the operating results for the respective periods. However, these
operating results are not necessarily indicative of the results
expected for the full fiscal year. Certain information and
footnote disclosures normally included in annual financial
statements prepared in accordance with generally accepted
accounting principles have been omitted pursuant to SEC rules and
regulations. The notes to the consolidated financial statements
should be read in conjunction with the notes to the consolidated
financial statements contained in the June 27, 2001 Form 10-K.
Company management believes that the disclosures are sufficient
for interim financial reporting purposes.
Certain prior year amounts in the accompanying consolidated
financial statements have been reclassified to conform with fiscal
2002 classifications. These reclassifications have no effect on
the Company's net income or financial position as previously
reported.
2. Business Combinations
Effective June 28, 2001, the Company acquired from its franchise
partner, Hal Smith Restaurant Group, three On The Border
restaurants for approximately $6.6 million. The acquisition was
accounted for as a purchase. Goodwill of approximately $2.9
million was recorded in connection with the acquisition. The
operations of the restaurants are included in the Company's
consolidated results of operations from the date of the
acquisition. The results of operations on a pro forma basis are
not presented separately as the results do not differ
significantly from historical amounts reported herein.
3. Investment in Unconsolidated Entities
Effective July 12, 2001, the Company formed a partnership with
Rockfish, a privately held Dallas-based restaurant company with
nine locations currently in operation. The Company made a $12.3
million capital contribution to Rockfish in exchange for an
approximately 40% ownership interest in the legal entities owning
and developing the restaurant concept.
4. Goodwill and Other Intangibles
The Company elected early adoption of Statement of Financial
Accounting Standards ("SFAS") No. 142, "Goodwill and Other
Intangible Assets." SFAS No. 142 eliminates the amortization for
goodwill and other intangible assets with indefinite lives.
Intangible assets with lives restricted by contractual, legal, or
other means will continue to be amortized over their useful lives.
Goodwill and other intangible assets not subject to amortization
are tested for impairment annually or more frequently if events or
changes in circumstances indicate that the asset might be
impaired. SFAS No. 142 requires a two-step process for testing
impairment. First, the fair value of each reporting unit is
compared to its carrying value to determine whether an indication
of impairment exists. If an impairment is indicated, then the
fair value of the reporting unit's goodwill is determined by
allocating the unit's fair value to its assets and liabilities
(including any unrecognized intangible assets) as if the reporting
unit had been acquired in a business combination. The amount of
impairment for goodwill and other intangible assets is measured as
the excess of its carrying value over its fair value. No such
impairment losses were recorded upon the initial adoption of SFAS
142.
Intangible assets subject to amortization under SFAS No. 142
consist primarily of intellectual property rights. Amortization
expense is calculated using the straight-line method over their
estimated useful lives of 15 to 25 years. Intangible assets not
subject to amortization consist primarily of reacquired
development rights.
The gross carrying amount of intellectual property rights subject
to amortization totaled $6.4 million at September 26, 2001 and
June 27, 2001. Accumulated amortization related to these
intangible assets totaled approximately $1.0 million and $960,000
at September 26, 2001 and June 27, 2001, respectively. The
carrying amount of reacquired development rights not subject to
amortization totaled $4.4 million at September 26, 2001 and June
27, 2001.
The changes in the carrying amount of goodwill for the quarter
ended September 26, 2001 are as follows (in thousands):
Balance, June 27, 2001 $ 138,127
Goodwill acquired during the period 2,953
Balance, September 26, 2001 $ 141,080
The pro forma effects of the adoption of SFAS No. 142 on net
income is as follows (in thousands, net of taxes):
Thirteen-Week Periods Ended
Sept. 26, Sept. 27,
2001 2000
Net income, as reported $ 39,634 $ 35,194
Intangible amortization - 457
Net income, pro forma $ 39,634 $ 35,651
The adoption of SFAS No. 142 did not have a material effect on
basic and diluted earnings per share as of September 27, 2000.
5. Shareholders' Equity
In August 2001, the Board of Directors authorized an increase in
the stock repurchase plan of an additional $100.0 million,
bringing the Company's total share repurchase program to $310.0
million. Pursuant to the Company's stock repurchase plan, the
Company repurchased approximately 1,574,000 shares of its common
stock for $39.7 million during the first quarter of fiscal 2002,
resulting in a cumulative repurchase total of approximately 12.6
million shares of its common stock for $231.2 million. The
Company's stock repurchase plan is used by the Company to offset
the dilutive effect of stock option exercises and to increase
shareholder value. The repurchased common stock is reflected as a
reduction of shareholders' equity.
6. Supplemental Cash Flow Information
Cash paid for interest and income taxes is as follows (in
thousands):
Sept. 26, Sept. 27,
2001 2000
Interest, net of amounts capitalized $ 2,880 $ 662
Income taxes, net of refunds 1,860 6,853
Non-cash investing and financing activities are as follows (in
thousands):
Sept. 26, Sept. 27,
2001 2000
Restricted common stock issued, net of
forfeitures $ 2,354 $ 1,028
Change in fair value of interest rate swaps
and debt 1,958 -
Change in fair value of forward rate
agreements (344) -
During the first quarter of fiscal 2002, the Company purchased
certain assets and assumed certain liabilities in connection with
the acquisition of restaurants. The fair values of the acquired
assets and liabilities recorded at the date of acquisition are as
follows (in thousands):
Property, plant and equipment acquired $ 3,858
Goodwill 2,953
Liabilities assumed (231)
Net cash paid $ 6,580
7. Subsequent Events
In October 2001, the Company issued $431.7 million of zero coupon
convertible senior debentures ("Debentures"), maturing on October
10, 2021, and received proceeds totaling approximately $250.0
million prior to debt issuance costs. The Debentures require no
interest payments and were issued at a discount representing a
yield to maturity of 2.75% per annum. Each $1,000 face amount
bond is convertible into 18.08 shares of the Company's common
stock contingent upon certain market price conditions and other
circumstances. In addition, the Debentures are redeemable at the
Company's option on October 10, 2004, and the holders of the bonds
may require the Company to repurchase the Debentures on October
10, 2003, 2005, 2011 or 2016, and in certain other circumstances.
The Company intends to use the net proceeds of the offering for
repayment or retirement of existing indebtedness, future
acquisitions, purchases of outstanding common stock under the
Company's stock repurchase plan and for general corporate
purposes.
During October 2001, the Company repurchased approximately 1.6
million shares of common stock under its stock repurchase plan for
approximately $37.4 million.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following table sets forth selected operating data as a
percentage of total revenues for the periods indicated. All
information is derived from the accompanying consolidated
statements of income.
Thirteen-Week Periods Ended
Sept. 26, Sept. 27,
2001 2000
Revenues 100.0 % 100.0 %
Operating Costs and Expenses:
Cost of sales 26.9 % 26.5 %
Restaurant expenses 55.8 % 55.3 %
Depreciation and amortization 4.1 % 4.0 %
General and administrative 4.0 % 4.6 %
Total operating costs and expenses 90.8 % 90.4 %
Operating income 9.2 % 9.6 %
Interest expense 0.5 % 0.2 %
Other, net (0.1)% 0.1 %
Income before provision for income taxes 8.8 % 9.3 %
Provision for income taxes 3.1 % 3.3 %
Net income 5.7 % 6.0 %
The following table details the number of restaurant openings
during the first quarter and total restaurants open at the end of
the first quarter.
Total Open at End of
First Quarter Openings First Quarter
Fiscal Fiscal Fiscal Fiscal
2002 2001 2002 2001
Chili's:
Company-owned 9 7 551 473
Franchised 6 8 213 226
Total 15 15 764 699
Macaroni Grill:
Company-owned 3 4 162 149
Franchised - - 6 4
Total 3 4 168 153
On The Border:
Company-owned 2 1 104 83
Franchised - 1 20 28
Total 2 2 124 111
Corner Bakery:
Company-owned 4 1 66 57
Franchised - - 2 1
Total 4 1 68 58
Cozymel's - - 14 13
Maggiano's 1 1 15 13
Big Bowl - - 9 6
Eatzi's - - 4 4
Wildfire - - - 3
Rockfish - - 8 -
Grand Total 25 23 1,174 1,060
REVENUES
Revenues for the first quarter of fiscal 2002 increased to $690.5
million, 17.2% over the $589.3 million generated for the same
quarter of fiscal 2001. The increase is primarily attributable to
a net increase of 133 company-owned restaurants since September 27,
2000 and an increase in comparable store sales for the first
quarter of fiscal 2002 compared to the same quarter of fiscal 2001.
The Company increased its capacity (as measured in sales weeks) for
the first quarter of fiscal 2002 by 16.6% compared to the
respective prior year period. Comparable store sales increased 0.5%
for the first quarter compared to the same quarter of fiscal 2001.
Menu prices in the aggregate increased 2.2% in fiscal 2002 as
compared to fiscal 2001.
COSTS AND EXPENSES (as a Percent of Revenues)
Cost of sales increased for the first quarter of fiscal 2002 as
compared to the same quarter of fiscal 2001 due to product mix
changes to menu items with higher percentage food costs and
unfavorable commodity price variances for beef, seafood and dairy
and cheese, which were partially offset by menu price increases and
favorable commodity price variances for beverages and other items.
Restaurant expenses increased for the first quarter of fiscal 2002
compared to the same quarter of fiscal 2001. Utility costs and
preopening costs were higher than in the prior year, but were
partially offset by increased sales leverage, improvements in labor
productivity, and menu price increases year-over-year.
Depreciation and amortization increased for the first quarter of
fiscal 2002 as compared to the first quarter of fiscal 2001.
Depreciation and amortization increases resulted from increases in
depreciation and amortization related to new unit construction,
ongoing remodel costs and restaurants acquired during fiscal 2001.
These increases were partially offset by increased sales leverage,
a declining depreciable asset base for older units, utilization of
equipment leasing facilities, and the elimination of goodwill
amortization in accordance with SFAS 142.
General and administrative expenses decreased for the first quarter
of fiscal 2002 compared to the same quarter of fiscal 2001 as a
result of the Company's continued focus on controlling corporate
expenditures relative to increasing revenues and increased sales
leverage resulting from acquisitions.
Interest expense increased for the first quarter of fiscal 2002
compared with the same quarter of fiscal 2001 as a result of
increased average borrowings on the Company's credit facilities
primarily related to restaurants acquired and the continued
repurchase of the Company's common stock. These increases were
partially offset by a decrease in interest expense on senior notes
due to the scheduled repayment made in April 2001, decreases in the
average interest rates on the credit facilities, and an increase in
interest capitalization.
Other, net decreased for the first quarter of fiscal 2002 as
compared to the same quarter of fiscal 2001 due to reduced equity
losses related to the Company's share in equity method investees
and a gain on the sale of property.
INCOME TAXES
The Company's effective income tax rate decreased to 34.7% from
35.2% for the first quarter of fiscal 2002. The decrease is
primarily due to the elimination of goodwill amortization in
accordance with SFAS 142.
NET INCOME AND NET INCOME PER SHARE
Net income and diluted net income per share for the first quarter
of fiscal 2002 increased 12.6% and 11.4%, respectively, compared to
the respective periods of fiscal 2001. The increase in both net
income and diluted net income per share was primarily due to
increasing revenues driven by increases in comparable store sales,
sales weeks, and menu prices and decreases in general and
administrative expenses, partially offset by increases in cost of
sales and restaurant expenses as a percent of revenues.
LIQUIDITY AND CAPITAL RESOURCES
The working capital deficit increased from $104.3 million at June
27, 2001 to $104.6 million at September 26, 2001. Net cash
provided by operating activities increased to $80.4 million for the
first quarter of fiscal 2002 from $66.5 million during the same
quarter in fiscal 2001 due to increased profitability, partially
offset by the timing of operational receipts and payments.
Long-term debt outstanding at September 26, 2001 consisted of $61.9
million of unsecured senior notes ($57.1 million principal plus
$4.8 million representing the effect of changes in interest rates
on the fair value of the debt), $45.1 million in assumed debt
related to the acquisition of restaurants from a former franchise
partner ($40.1 million principal plus $5.0 million representing a
debt premium), $174.1 million of borrowings on credit facilities,
and obligations under capital leases. The Company has credit
facilities totaling $345.0 million. At September 26, 2001, the
Company had $170.9 million in available funds from these
facilities.
In October 2001, the Company issued $431.7 million of zero coupon
convertible debentures and received proceeds totaling approximately
$250.0 million. The Company intends to use the proceeds for
repayment or retirement of existing indebtedness, future
acquisitions, purchases of outstanding common stock under the
Company's stock repurchase plan and for general corporate purposes.
On July 12, 2001, the Company made a $12.3 million capital
contribution to Rockfish in exchange for an approximately 40%
ownership interest in the legal entities owning and developing
Rockfish. The Company financed this acquisition through existing
credit facilities and cash provided by operations.
As of September 26, 2001, $16.2 million of the Company's $25.0
million equipment leasing facility and $43.5 million of the
Company's $75.0 million real estate leasing facility had been
utilized. The unused portion of the real estate leasing facility
will be used to lease real estate through fiscal year 2003.
Capital expenditures consist of purchases of land for future
restaurant sites, new restaurants under construction, purchases of
new and replacement restaurant furniture and equipment, and ongoing
remodeling programs. Capital expenditures, net of amounts funded
under the respective equipment and real estate leasing facilities,
were $49.2 million for the first quarter of fiscal 2002 compared to
$42.3 million for the same quarter of fiscal 2001. The increase is
due primarily to an increase in the number of new store openings.
The Company estimates that its capital expenditures, net of amounts
expected to be funded under leasing facilities, during the second
quarter of fiscal 2002 will approximate $59.0 million. These
capital expenditures will be funded entirely from operations and
existing credit facilities.
In August 2001, the Board of Directors authorized an increase in
the stock repurchase plan of an additional $100.0 million, bringing
the Company's total share repurchase program to $310.0 million.
Pursuant to the Company's stock repurchase plan, approximately
1,574,000 shares of its common stock were repurchased for $39.7
million during the first quarter of fiscal 2002. As of September
26, 2001, approximately 12.6 million shares had been repurchased
for $231.2 million under the stock repurchase plan. During October
2001, the Company repurchased an additional 1.6 million shares of
common stock under the repurchase plan for approximately $37.4
million. The repurchased common stock was or will be used by the
Company to increase shareholder value, offset the dilutive effect
of stock option exercises, satisfy obligations under its savings
plans, and for other corporate purposes. The repurchased common
stock is reflected as a reduction of shareholders' equity. The
Company financed the repurchase program through a combination of
cash provided by operations, drawdowns on its available credit
facilities and the issuance of the Debentures.
The Company is not aware of any other event or trend which would
potentially affect its liquidity. In the event such a trend
develops, the Company believes that there are sufficient funds
available under its lines of credit and from its strong internal
cash generating capabilities to adequately manage the expansion of
business.
RECENT ACCOUNTING PRONOUNCEMENTS
In August 2001, the Financial Accounting Standards Board issued
SFAS No. 144 "Accounting for the Impairment or Disposal of Long-
Lived Assets". This statement supersedes SFAS No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed Of" and the accounting and reporting provisions of
Accounting Principles Board Opinion No. 30 "Reporting the Results
of Operations-Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions". SFAS No. 144 retains the fundamental
provisions of SFAS No. 121 but eliminates the requirement to
allocate goodwill to long-lived assets to be tested for
impairment. This statement also requires discontinued operations
to be carried at the lower of cost or fair value less costs to
sell and broadens the presentation of discontinued operations to
include a component of an entity rather than a segment of a
business. SFAS No. 144 is effective for fiscal years beginning
after December 15, 2001, and interim periods within those fiscal
years, with early application encouraged. The Company does not
expect the adoption of this statement to have a material impact on
its results of operations or financial position.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes in the quantitative and
qualitative market risks of the Company since the prior reporting
period.
FORWARD-LOOKING STATEMENTS
The Company wishes to caution readers that the following important
factors, among others, could cause the actual results of the
Company to differ materially from those indicated by forward-
looking statements made in this report and from time to time in
news releases, reports, proxy statements, registration statements
and other written communications, as well as oral forward-looking
statements made from time to time by representatives of the
Company. Such forward-looking statements involve risks and
uncertainties that may cause the Company's or the restaurant
industry's actual results, level of activity, performance or
achievements to be materially different from any future results,
levels of activity, performance or achievements expressed or
implied by these forward-looking statements. Factors that might
cause actual events or results to differ materially from those
indicated by these forward-looking statements may include matters
such as future economic performance, restaurant openings, operating
margins, the availability of acceptable real estate locations for
new restaurants, the sufficiency of the Company's cash balances and
cash generated from operating and financing activities for the
Company's future liquidity and capital resource needs, and other
matters, and are generally accompanied by words such as "believes,"
"anticipates," "estimates," "predicts," "expects" and similar
expressions that convey the uncertainty of future events or
outcomes. An expanded discussion of some of these risk factors
follows.
Competition may adversely affect the Company's operations and
financial results.
The restaurant business is highly competitive with respect to
price, service, restaurant location and food quality, and is often
affected by changes in consumer tastes, economic conditions,
population and traffic patterns. The Company competes within each
market with locally-owned restaurants as well as national and
regional restaurant chains, some of which operate more restaurants
and have greater financial resources and longer operating histories
than the Company. There is active competition for management
personnel and for attractive commercial real estate sites suitable
for restaurants. In addition, factors such as inflation, increased
food, labor and benefits costs, and difficulty in attracting hourly
employees may adversely affect the restaurant industry in general
and the Company's restaurants in particular.
The Company's sales volumes generally decrease in winter months.
The Company's sales volumes fluctuate seasonally, and are generally
higher in the summer months and lower in the winter months, which
may cause seasonal fluctuations in the Company's operating results.
Changes in governmental regulation may adversely affect the
Company's ability to open new restaurants and the Company's
existing and future operations.
Each of the Company's restaurants is subject to licensing and
regulation by alcoholic beverage control, health, sanitation,
safety and fire agencies in the state and/or municipality in which
the restaurant is located. The Company has not encountered any
difficulties or failures in obtaining the required licenses or
approvals that could delay or prevent the opening of a new
restaurant and although the Company does not, at this time,
anticipate any occurring in the future, there can be no assurance
that the Company will not experience material difficulties or
failures that could delay the opening of restaurants in the future.
The Company is subject to federal and state environmental
regulations, and although these have not had a material negative
effect on the Company's operations, there can be no assurance that
there will not be a material negative effect in the future. More
stringent and varied requirements of local and state governmental
bodies with respect to zoning, land use and environmental factors
could delay or prevent development of new restaurants in particular
locations. The Company is subject to the Fair Labor Standards Act,
which governs such matters as minimum wages, overtime and other
working conditions, along with the Americans With Disabilities Act
and various family leave mandates. Although the Company expects
increases in payroll expenses as a result of federal and state
mandated increases in the minimum wage, and although such increases
are not expected to be material, there can be no assurance that
there will not be material increases in the future. However, the
Company's vendors may be affected by higher minimum wage standards,
which may result in increases in the price of goods and services
supplied to the Company.
Inflation may increase the Company's operating expenses.
The Company has not experienced a significant overall impact from
inflation. As operating expenses increase, the Company, to the
extent permitted by competition, recovers increased costs by
increasing menu prices, by reviewing, then implementing,
alternative products or processes, or by implementing other cost-
reduction procedures. There can be no assurance, however, that the
Company will be able to continue to recover increases in operating
expenses due to inflation in this manner.
Increased energy costs may adversely affect the Company's
profitability.
The Company's success depends in part on its ability to absorb
increases in utility costs. Various regions of the United States
in which the Company operates multiple restaurants, particularly
California, experienced significant increases in utility prices.
If these increases continue, there will be an adverse effect on the
Company's profitability.
If the Company is unable to meet its growth plan, the Company's
profitability in the future may be adversely affected.
The Company's ability to meet its growth plan is dependent upon,
among other things, its ability to identify available, suitable and
economically viable locations for new restaurants, obtain all
required governmental permits (including zoning approvals and
liquor licenses) on a timely basis, hire all necessary contractors
and subcontractors, and meet construction schedules. The costs
related to restaurant and concept development include purchases and
leases of land, buildings and equipment and facility and equipment
maintenance, repair and replacement. The labor and materials costs
involved vary geographically and are subject to general price
increases. As a result, future capital expenditure costs of
restaurant development may increase, reducing profitability. There
can be no assurance that the Company will be able to expand its
capacity in accordance with its growth objectives or that the new
restaurants and concepts opened or acquired will be profitable.
Other risk factors may adversely affect the Company's financial
performance.
Other risk factors that could cause the Company's actual results to
differ materially from those indicated in the forward-looking
statements include, without limitation, changes in economic
conditions, consumer perceptions of food safety, changes in
consumer tastes, governmental monetary policies, changes in
demographic trends, availability of employees, and weather and
other acts of God.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on FORM 8-K
(a) Exhibits
4. Instruments Defining the Rights of Security Holders, Including
Debentures.
Indenture, dated as of October 10, 2001, between the Company
and SunTrust Bank, as Trustee.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
BRINKER INTERNATIONAL, INC.
Date: November 13, 2001 By:_________________________________
Ronald A. McDougall, Chairman and
Chief Executive Officer
Date: November 13, 2001 By:_________________________________
Charles M. Sonsteby,
Executive Vice President and Chief
Financial Officer
(Principal Financial and Accounting
Officer)
BRINKER INTERNATIONAL, INC.
Zero Coupon Convertible Senior Debentures Due 2021
__________________________________________________
INDENTURE
Dated as of October 10, 2001
___________________________________________________
SunTrust Bank
TRUSTEE
___________________________________________________
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions 1
Section 1.02. Other Definitions 5
Section 1.03. Incorporation By Reference Of Trust
Indenture Act 6
Section 1.04. Rules Of Construction 7
Section 1.05. Acts Of Holders 7
ARTICLE 2
THE SECURITIES
Section 2.01. Form And Dating 8
Section 2.02. Execution And Authentication 9
Section 2.03. Registrar, Paying Agent, Conversion
Agent And Calculation Agent 10
Section 2.04. Paying Agent To Hold Money And
Securities In Trust 10
Section 2.05. Securityholder Lists 11
Section 2.06. Transfer And Exchange 11
Section 2.07. Replacement Securities 13
Section 2.08. Outstanding Securities; Determinations
Of Holders' Action 13
Section 2.09. Temporary Securities 14
Section 2.10. Cancellation 15
Section 2.11. Persons Deemed Owners 15
Section 2.12. Global Securities 15
Section 2.13. CUSIP Numbers 20
Section 2.14. Ranking 21
ARTICLE 3
REDEMPTION AND PURCHASES
Section 3.01. Company's Right To Redeem; Notices to
Trustee 21
Section 3.02. Selection Of Securities To Be Redeemed 22
Section 3.03. Notice Of Redemption 23
Section 3.04. Effect Of Notice Of Redemption 24
Section 3.05. Deposit Of Redemption Price 24
Section 3.06. Securities Redeemed In Part 24
Section 3.07. Purchase Of Securities By The Company At
Option Of The Holder 24
Section 3.08. Purchase Of Securities At Option Of The
Holder Upon Change Of Control 26
Section 3.09. Company's Right To Elect Manner Of
Payment Of Purchase Price And Change Of
Control Purchase Price For Payment 31
Section 3.10. Effect Of Purchase Notice Or Change Of
Control Purchase Notice 36
Section 3.11. Deposit Of Purchase Price Or Change
Of Control Price 38
Section 3.12. Securities Purchased In Part 38
Section 3.13. Covenant To Comply With Securities Laws
Upon Purchase Of Securities 39
Section 3.14. Repayment To The Company 39
ARTICLE 4
COVENANTS
Section 4.01. Payment Of Securities 39
Section 4.02. SEC And Other Reports 40
Section 4.03. Compliance Certificate 40
Section 4.04. Further Instruments And Acts 40
Section 4.05. Maintenance Of Office Or Agency 40
Section 4.06. Delivery Of Certain Information 41
Section 4.07. Liquidated Damages Notice 41
ARTICLE 5
SUCCESSOR CORPORATION
Section 5.01. When Company May Merge Or Transfer
Assets 42
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events Of Default 43
Section 6.02. Acceleration 45
Section 6.03. Other Remedies 46
Section 6.04. Waiver Of Past Defaults 46
Section 6.05. Control By Majority 46
Section 6.06. Limitation On Suits 47
Section 6.07. Rights Of Holders To Receive Payment 47
Section 6.08. Collection Suit By Trustee 47
Section 6.09. Trustee May File Proofs Of Claim 48
Section 6.10. Priorities 48
Section 6.11. Undertaking For Costs 49
Section 6.12. Waiver Of Stay, Extension Or Usury Laws 49
ARTICLE 7
TRUSTEE
Section 7.01. Duties Of Trustee 50
Section 7.02. Rights Of Trustee 51
Section 7.03. Individual Rights Of Trustee 52
Section 7.04. Trustee's Disclaimer 52
Section 7.05. Notice Of Defaults 53
Section 7.06. Reports By Trustee To Holders 53
Section 7.07. Compensation And Indemnity 53
Section 7.08. Replacement Of Trustee 54
Section 7.09. Successor Trustee By Merger 55
Section 7.10. Eligibility; Disqualification 55
Section 7.11. Preferential Collection of Claims
Against Company 55
ARTICLE 8
DISCHARGE OF INDENTURE
Section 8.01. Discharge Of Liability On Securities 55
Section 8.02. Repayment To The Company 56
ARTICLE 9
AMENDMENTS
Section 9.01. Without Consent Of Holders 56
Section 9.02. With Consent Of Holders 57
Section 9.03. Compliance With Trust Indenture Act 59
Section 9.04. Revocation And Effect Of Consents,
Waivers And Actions 59
Section 9.05. Notation On Or Exchange Of Securities 59
Section 9.06. Trustee To Sign Supplemental Indentures 59
Section 9.07. Effect Of Supplemental Indentures 59
ARTICLE 10
CONVERSIONS
Section 10.01. Conversion Privilege 59
Section 10.02. Conversion Procedure; Conversion Price;
Fractional Shares 61
Section 10.03. Adjustment Of Conversion Rate 63
Section 10.04. Effect of Reclassification,
Consolidation, Merger or Sale 73
Section 10.05. Taxes on Shares Issued 74
Section 10.06. Reservation of Shares, Shares to Be
Fully Paid; Compliance with Governmental
Requirements; Listing of Common Stock 74
Section 10.07. Responsibility of Trustee 75
Section 10.08. Notice To Holders Prior To Certain
Actions 76
Section 10.09. Rights Issued In Respect of Common Stock
Issued Upon Conversion 77
Section 10.10. Unconditional Right Of Holders To
Convert 77
ARTICLE 11
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls 77
Section 11.02. Notices 77
Section 11.03. Communication By Holders With Other
Holders 78
Section 11.04. Certificate And Opinion As To Conditions
Precedent 78
Section 11.05. Statements Required In Certificate Or
Opinion 78
Section 11.06. Separability Clause 79
Section 11.07. Rules By Trustee, Paying Agent,
Conversion Agent and Registrar 79
Section 11.08. Legal Holidays 79
Section 11.09. GOVERNING LAW 79
Section 11.10. No Recourse Against Others 79
Section 11.11. Successors 79
Section 11.12. Multiple Originals 80
EXHIBIT A Form of Global Security
EXHIBIT B Form of Certificated Security
EXHIBIT C Transfer Certificate
INDENTURE dated as of October 10, 2001
between BRINKER INTERNATIONAL, INC., a
Delaware corporation ("Company"), and
SUNTRUST BANK, a Georgia banking
corporation ("Trustee").
Each party agrees as follows for the
benefit of the other party and for the
equal and ratable benefit of the Holders of
the Company's Zero Coupon Convertible
Senior Debentures Due 2021:
ARTICLE 1
Definitions And Incorporation By Reference
Section 1.01. Definitions.
"144A Global Security" means a
permanent Global Security in the form of
the Security attached hereto as Exhibit A,
and that is deposited with and registered
in the name of the Depositary, representing
Securities sold in reliance on Rule 144A
under the Securities Act.
"Accreted Conversion Price" as of any
day means, per $1,000 principal amount at
maturity of the Securities, the sum of the
Issue Price plus accrued Original Issue
Discount to the date of determination, with
such sum divided by the Conversion Rate.
"Affiliate" of any specified person
means any other person directly or
indirectly controlling or controlled by or
under direct or indirect common control
with such specified person. For the
purposes of this definition, "control" when
used with respect to any specified person
means the power to direct or cause the
direction of the management and policies of
such person, directly or indirectly,
whether through the ownership of voting
securities, by contract or otherwise; and
the terms "controlling" and "controlled"
have meanings correlative to the foregoing.
"Applicable Procedures" means, with
respect to any transfer or transaction
involving a Global Security or beneficial
interest therein, the rules and procedures
of the Depositary for such Security, in
each case to the extent applicable to such
transaction and as in effect from time to
time.
"Board of Directors" means either the board
of
directors of the Company or any duly
authorized committee of such board.
"Board Resolution" means a resolution
of the Board of Directors.
"Business Day" means, with respect to
any Security, a day that in the City of New
York, is not a day on which banking
institutions are authorized by law or
regulation to close.
"Calculation Agent" shall mean
initially SunTrust Bank and its successors
and assigns.
"Capital Stock" for any corporation
means any and all shares, interests, rights
to purchase, warrants, options,
participations or other equivalents of or
interests in (however designated) stock
issued by that corporation.
"Certificated Securities" means
Securities that are in the form of the
Securities attached hereto as Exhibit B.
"Common Stock" shall mean the Common
Stock, $0.10 par value per share, of the
Company existing on the date of this
Indenture or any other shares of Capital
Stock of the Company into which such Common
Stock shall be reclassified or changed.
"Company" means the party named as the
"Company" in the first Section of this
Indenture until a successor replaces it
pursuant to the applicable provisions of
this Indenture and, thereafter, shall mean
such successor. The foregoing sentence
shall likewise apply to any subsequent such
successor or successors.
"Company Request" or "Company Order" means
a
written request or order signed in the name
of the Company by any two Officers.
"Conversion Price" as of any date will
equal $1,000 divided by the Conversion Rate
as of such date.
"Conversion Rate" shall have the
meaning set forth in Section 10.02(a)
hereof.
"Corporate Trust Office" means the
principal office of the Trustee at which at
any time its corporate trust business shall
be administered, which office at the date
hereof is located at SunTrust Bank, 25 Park
Place, 24th Floor, Atlanta, Georgia 30303,
or such other address as the Trustee may
designate from time to time by notice to
the Holders and the Company, or the
principal corporate trust office of any
successor Trustee (or such other address as
a successor Trustee may designate from time
to time by notice to the Holders and the
Company).
"Default" means an Event of Default.
"Global Securities" means Securities
that are in the form of the Securities
attached hereto as Exhibit A, and that are
registered in the register of Securities in
the name of a Depositary or a nominee
thereof, and to the extent that such
Securities are required to bear the Legend
required by Section 2.06, such Securities
will be in the form of a 144A Global
Security.
"Holder" or "Securityholder" means a
person in whose name a Security is
registered on the Registrar's books.
"Indenture" means this Indenture, as
amended or supplemented from time to time
in accordance with the terms hereof,
including the provisions of the TIA that
are deemed to be a part hereof.
"Issue Date" of any Security means the
date on which the Security was originally
issued or deemed issued as set forth on the
face of the Security.
"Issue Price" of any Security means,
in connection with the original issuance of
the Security, the initial issue price per
$1,000 principal amount at maturity at
which the security is sold.
"Liquidated Damages" means the
interest that is payable by the Company
under the Registration Rights Agreement
upon a Registration Default (as defined in
such agreement).
"NYSE" means The New York Stock Exchange,
Inc.
"Officer" means the Chairman of the
Board, the Vice Chairman, the Chief
Executive Officer, the President, any
Executive Vice President, any Senior Vice
President, the Treasurer, the Controller,
or the Secretary or any Assistant Treasurer
or Assistant Secretary of the Company.
"Officers' Certificate" means a
written certificate containing the
information specified in
Sections 11.04 and 11.05, signed in the
name of the Company by any two Officers,
and delivered to the Trustee. An Officers'
Certificate given pursuant to Section 4.03
shall be signed by an authorized financial
or accounting Officer of the Company but
need not contain the information specified
in Sections 11.04 and 11.05.
"Opinion of Counsel" means a written
opinion containing the information
specified in Sections 11.04 and 11.05, from
legal counsel who is reasonably acceptable
to the Trustee. The counsel may be an
employee of, or counsel to, the Company or
the Trustee.
"Original Issue Discount" of any Security
means
the difference between the Issue Price and
the principal amount at maturity of the
Security as set forth on the face of the
Security.
"Person" means any individual,
corporation, limited liability company,
partnership, joint venture, association,
joint-stock company, trust, unincorporated
organization, or government or any agency
or political subdivision thereof.
"Principal Amount at Maturity" or
"principal amount at maturity" of a
Security means the principal amount at
maturity as set forth on the face of the
Security.
"Redemption Date" or "redemption date"
shall mean the date specified in a notice
of redemption on which the Securities may
be redeemed in accordance with the terms of
the Securities and this Indenture.
"Redemption Price" or "redemption
price" shall have the meaning set forth in
Section 5 of the Securities.
"Registration Rights Agreement" means
the Resale Registration Rights Agreement,
dated as of the date hereof, among the
Company, Banc of America Securities LLC and
Salomon Smith Barney Inc., as
representatives of several initial
purchasers.
"Responsible Officer" shall mean, when
used with respect to the Trustee, any
officer within the corporate trust
department of the Trustee, including any
vice president, assistant vice president,
assistant secretary, assistant treasurer,
trust officer or any other officer
associated with the corporate trust
department of the Trustee who customarily
performs functions similar to those
performed by the persons who at the time
shall be such officers, respectively, or to
whom any corporate trust matter is referred
because of such person's knowledge of and
familiarity with the particular subject and
who shall have direct responsibility for
the administration of this Indenture.
"Restricted Security" means a Security
required to bear the restrictive legend set
forth in the form of Security set forth in
Exhibits A and B of this Indenture.
"Rule 144A" means Rule 144A under the
Securities
Act (or any successor provision), as it may
be amended from time to time.
"SEC" means the Securities and
Exchange Commission.
"Securities" means any of the
Company's Zero Coupon Convertible Senior
Debentures Due 2021, as amended or
supplemented from time to time, issued
under this Indenture.
"Securityholder" or "Holder" means a
person in whose name a Security is
registered on the Registrar's books.
"Stated Maturity", when used with
respect to any Security, means October 10,
2021.
"Subsidiary" means any person of which
at least a majority of the outstanding
Voting Stock shall at the time directly or
indirectly be owned or controlled by the
Company or by one or more Subsidiaries or
by the Company and one or more
Subsidiaries.
"TIA" means the Trust Indenture Act of
1939 as in effect on the date of this
Indenture, provided, however, that in the
event the TIA is amended after such date,
TIA means, to the extent required by any
such amendment, the TIA as so amended.
"Trading Day" means a day during which
trading in securities generally occurs on
the NYSE or, if the Common Stock is not
listed on the NYSE, on the principal other
national or regional securities exchange on
which the Common Stock then is listed or,
if the Common Stock is not listed on a
national or regional securities exchange,
on the National Association of Securities
Dealers Automated Quotation System or, if
the Common Stock is not quoted on the
National Association of Securities Dealers
Automated Quotation System, on the
principal other market on which the Common
Stock is then traded.
"Trustee" means the party named as the
"Trustee" in the first paragraph of this
Indenture until a successor replaces it
pursuant to the applicable provisions of
this Indenture and, thereafter, shall mean
such successor. The foregoing sentence
shall likewise apply to any subsequent such
successor or successors.
"Voting Stock" of a person means
Capital Stock of such person of the class
or classes pursuant to which the holders
thereof have the general voting power under
ordinary circumstances to elect at least a
majority of the board of directors,
managers or trustees of such person
(irrespective of whether or not at the time
Capital Stock of any other class or classes
shall have or might have voting power by
reason of the happening of any
contingency).
Section 1.02. Other Definitions.
Term Section: Defined
in:
"Accepted Purchased Shares"
10.03(g)
"Adjustment Event"
10.03(l) "Agent Members" 2.12(e)
"Applicable Stock" 3.08(c)
"beneficial owner" 3.08(a)
"cash" 3.09(a)
"Change of Control" 3.08(a)
"Change of Control Purchase Date" 3.08(a)
"Change of Control Purchase
Notice" 3.08(c)
"Change of Control Purchase
Price" 3.08(a)
"Closing Price"
10.03(h) "Company Notice" 3.09(d)
"Company Notice Date" 3.09(b)
"Continuing Director" 3.08(a)
"Conversion Agent" 2.03
"Conversion Period"
10.01(b) "Current Market Price"
10.03(h) "DTC" 2.01(a)
"Depositary" 2.01(a)
"Designated Subsidiary" 6.01
"Determination Date"
10.03(l) "Distributed Assets"
10.03(d) "Event of Default" 6.01
"Ex-Dividend Time"
10.01(b) "Exchange Act" 2.12(e)
"Expiration Time"
10.03(f) "Fair Market Value" or
"fair market 10.03(h) value"
"Institutional Accredited 2.12(a)(i
Investors"
v)
"Legal Holiday"
11.08 "Legend" 2.06(f)
"Market Price" 3.09(c)
"non-electing share"
10.04 "Notice of Default" 6.01
"Offer Expiration Time"
10.03(g) "Paying Agent" 2.03
"Purchase Date" 3.07
"Purchase Notice" 3.07
"Purchase Price" 3.07
"Purchased Shares"
10.03(f) "QIB" 2.01(a)
"Record Date"
10.03(h) "Registrar" 2.03
"Rule 144A Information" 4.06
"Securities Act" 2.06(f)
"Trading Price"
10.01(b) "Trigger Event"
10.03(d)
Section 1.03. Incorporation By
Reference Of Trust Indenture Act. Whenever
this Indenture refers to a provision of the
TIA, the provision is incorporated by
reference in and made a part of this
Indenture. The following TIA terms used in
this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the
Securities.
"indenture security holder" means a
Securityholder.
"indenture to be qualified" means this
Indenture.
"indenture trustee" or "institutional
trustee"
means the Trustee.
"obligor" on the indenture securities
means the
Company.
All other TIA terms used in this Indenture
that
are defined by the TIA, defined by TIA
reference to another statute or defined by
SEC rule have the meanings assigned to
them by such definitions.
Section 1.04. Rules Of Construction.
Unless the context otherwise requires:
(1) a term has the meaning
assigned to it;
(2) an accounting term not otherwise
defined has the meaning assigned to it in
accordance with generally
accepted accounting principles as in effect from
time
to time;
(3) "or" is not exclusive;
(4) "including" means including, without
limitation; and
(5) words in the singular include the
plural, and words in the plural include the
singular.
Section 1.05. Acts Of Holders. (a) Any
request,
demand, authorization, direction, notice,
consent,
waiver or other action provided by this
Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more
instruments of substantially similar tenor
signed by such Holders in person or by an agent
duly appointed in writing; and, except as
herein otherwise expressly provided, such
action shall become effective when such
instrument or instruments are delivered to the
Trustee and, where it is hereby expressly
required, to the Company, as described in
Section 11.02. Such instrument or instruments
(and the action embodied therein and evidenced
thereby) are herein sometimes referred to as
the "Act" of Holders signing such instrument or
instruments. Proof of execution of any such
instrument or of a writing appointing any such
agent shall be sufficient for any purpose of
this Indenture and conclusive in favor of the
Trustee and the Company, if made in the manner
provided in this Section.
(b) The fact and date of the execution
by any person of any such instrument or writing
may be proved by the affidavit of a witness of
such execution or by a certificate of a notary
public or other officer
authorized by law to take acknowledgments
of deeds, certifying that the individual
signing such instrument or writing
acknowledged to such officer the execution
thereof. Where such execution is by a
signer acting in a capacity other than such
signer's individual capacity, such
certificate or affidavit shall also
constitute sufficient proof of such
signer's authority. The fact and date of
the execution of any such instrument or
writing, or the authority of the person
executing the same, may also be proved in
any other manner which the Trustee deems
sufficient.
(c) The principal amount at maturity and
serial number of any Security and the
ownership of Securities shall be proved by
the register for the Securities.
(d) Any request, demand, authorization,
direction, notice, consent, waiver or other
Act of the Holder of
any Security shall bind every future Holder
of the same Security and the Holder of
every Security issued upon the registration
of transfer thereof or in exchange therefor
or in lieu thereof in respect of anything
done, omitted or suffered to be done by the
Trustee or the Company in reliance thereon,
whether or not notation of such action is
made upon such Security.
(e) If the Company shall solicit from the
Holders any request, demand, authorization,
direction, notice, consent, waiver or other
Act, the Company may, at its option, by or
pursuant to a Board Resolution, fix in
advance a record date for the determination
of Holders entitled to give such request,
demand, authorization, direction, notice,
consent, waiver or other Act, but the
Company shall have no obligation to do so.
If such a record date is fixed, such
request, demand, authorization, direction,
notice, consent, waiver or other Act may be
given before or after such record date, but
only the Holders of record at the close of
business on such record date shall be
deemed to be Holders for the purposes of
determining whether Holders of the
requisite proportion of outstanding
Securities have authorized or agreed or
consented to such request, demand,
authorization, direction, notice, consent,
waiver or other Act, and for that purpose
the outstanding Securities shall be
computed as of such record date; provided
that no such authorization, agreement or
consent by the Holders on such record date
shall be deemed effective unless it shall
become effective pursuant to the provisions
of this Indenture not later than six months
after the record date.
ARTICLE 2
The Securities
Section 2.01. Form And Dating. The
Securities and the Trustee's certificate of
authentication shall be substantially in
the form of Exhibits A and B, which are a
part of this Indenture. The Securities may
have notations, legends or endorsements
required by law, stock exchange rule or
usage (provided that any such notation,
legend or endorsement required by usage is
in a form acceptable to the Company). The
Company shall provide any such notations,
legends or endorsements to the Trustee in
writing. Each Security shall be dated the
date of its authentication.
(a) 144A Global Securities.
Securities offered and sold within the
United States to qualified
institutional buyers as defined in Rule
144A ("QIBs") in reliance on Rule 144A
shall be issued, initially in the form of
a 144A Global Security, which shall be
deposited with the Trustee at its
Corporate Trust Office, as custodian for
the Depositary (as defined below) and
registered in the name of The Depository
Trust Company ("DTC") or the nominee
thereof (DTC, or any successor thereto,
and any such nominee being hereinafter
referred to as the "Depositary"), duly
executed by the Company and authenticated
by the Trustee as hereinafter provided.
The aggregate principal amount at maturity
of the 144A Global Securities may from
time to time be increased or decreased by
adjustments made on the records of the
Trustee and the Depositary as hereinafter
provided.
(b) Global Securities in General.
Each Global Security shall represent such
of the outstanding Securities as shall be
specified therein and each shall provide
that it shall represent the aggregate
amount of outstanding Securities from time
to time endorsed thereon and that the
aggregate amount of outstanding Securities
represented thereby may from time to time
be reduced or increased, as appropriate, to
reflect exchanges, redemptions, repurchases
and conversions.
Any adjustment of the aggregate
principal amount at maturity of a Global
Security to reflect the amount of any
increase or decrease in the amount of
outstanding Securities represented thereby
shall be made by the Trustee in accordance
with instructions given by the Holder
thereof as required by Section 2.12 hereof
and shall be made on the records of the
Trustee and the Depositary.
(c) Book-Entry Provisions. This Section
2.01(c) shall apply only to Global Securities
deposited with or on
behalf of the Depositary.
The Company shall execute and the Trustee shall,
in accordance with this Section 2.01(c),
authenticate
and deliver initially one or more Global
Securities that (a) shall be registered in the
name of the Depositary, (b) shall be delivered by
the Trustee to the Depositary or pursuant to the
Depositary's instructions and (c) shall be
substantially in the form of Exhibit A attached
hereto.
(d) Certificated Securities. Securities
not issued as interests in the Global Securities
will be issued in certificated form substantially
in the form of Exhibit
B attached hereto.
Section 2.02. Execution And
Authentication. The Securities shall be
executed on behalf of the Company by any
Officer. The signature of the Officer on
the Securities may be manual or facsimile.
Securities bearing the manual or
facsimile signatures of individuals who
were at the time of the execution of the
Securities Officers shall bind the Company,
notwithstanding that such individuals or
any of them have ceased to hold such
offices prior to the authentication and
delivery of such Securities or did not hold
such offices at the date of authentication
of such Securities.
No Security shall be entitled to any
benefit under this Indenture or be valid or
obligatory for any purpose unless there
appears on such Security a certificate of
authentication substantially in the form
provided for herein duly executed by the
Trustee by manual signature of an
authorized signatory, and such certificate
upon any Security shall be conclusive
evidence, and the only evidence, that such
Security has been duly authenticated and
delivered hereunder.
The Trustee shall authenticate and
deliver the Securities for original issue
in an aggregate principal amount at
maturity of up to $431,690,000 upon one or
more Company Orders without any further
action by the Company (other than as
contemplated in Section 11.04
and Section 11.05 hereof). The aggregate
principal amount at maturity of the
Securities due at the Stated Maturity
thereof outstanding at any time may not
exceed the amount set forth in the
foregoing sentence.
The Securities shall be issued only in
registered form without coupons and only in
denominations of $1,000 of principal amount
at maturity and any integral multiple of
$1,000.
Section 2.03. Registrar, Paying
Agent, Conversion Agent And Calculation
Agent. The Company shall maintain an office
or agency where Securities may be presented
for registration of transfer or for
exchange ("Registrar"), an office or agency
where Securities may be presented for
purchase or payment ("Paying Agent") and an
office or agency where Securities may be
presented for conversion ("Conversion
Agent"). The Registrar shall keep a
register of the Securities and of their
transfer and exchange. The Company may
have one or more co-registrars, one or more
additional paying agents and one or more
additional conversion agents. The term
Paying Agent includes any additional paying
agent, including any named pursuant to
Section 4.05. The term Conversion Agent
includes any additional conversion agent,
including any named pursuant to Section
4.05.
The Company shall enter into an
appropriate agency agreement with any
Registrar, Paying Agent, Conversion Agent,
Calculation Agent or co-registrar (in each
case, if such Registrar, agent or co-
registrar is a Person other than the
Trustee). The agreement shall implement
the provisions of this Indenture that
relate to such agent. The Company shall
notify the Trustee of the name and address
of any such agent. If the Company fails to
maintain a Registrar, Paying Agent or
Conversion Agent, the Trustee shall act as
such and shall be entitled to appropriate
compensation therefor pursuant to Section
7.07. The Company or any Subsidiary or an
Affiliate of either of them may act as
Paying Agent, Registrar, Conversion Agent
or coregistrar.
The Company initially appoints the Trustee
as
Registrar, Conversion Agent, Calculation
Agent and Paying Agent in connection with
the Securities.
Section 2.04. Paying Agent To Hold
Money And Securities In Trust. Except as
otherwise provided herein, on or prior to
each due date of payments in respect of any
Security, the Company shall deposit with
the Paying Agent a sum of money (in
immediately available funds if deposited on
the due date) or shares of Common Stock
sufficient to make such payments when so
becoming due. The Company shall require
each Paying Agent (other than the Trustee)
to agree in writing that the Paying Agent
shall hold in trust for the benefit of
Securityholders or the Trustee all money
and shares of Common Stock held by the
Paying Agent for the making of payments in
respect of the Securities and shall notify
the Trustee of any default by the Company
in making any such payment. At any time
during the continuance of any such default,
the Paying Agent shall, upon the written
request of the Trustee, forthwith pay to
the Trustee all money and shares of Common
Stock so held in
trust. If the Company, a Subsidiary or an
Affiliate of either of them acts as Paying
Agent, it shall segregate the money and
shares of Common Stock held by it as Paying
Agent and hold it as a separate trust fund.
The Company at any time may require a
Paying Agent to pay all money and shares of
Common Stock held by it to the Trustee and
to account for any funds and Common Stock
disbursed by it. Upon doing so, the Paying
Agent shall have no further liability for
the money or shares of Common Stock.
Section 2.05. Securityholder Lists. The
Trustee
shall preserve the most recent list
available to it of the names and addresses
of Securityholders. If the Trustee is not
the Registrar, the Company shall cause to
be furnished to the Trustee at least
semiannually on April 10 and October 10 a
listing of Securityholders dated within 15
days of the date on which the list is
furnished and at such other times as the
Trustee may request in writing a list in
such form and as of such date as the
Trustee may reasonably require of the names
and addresses of Securityholders.
Section 2.06. Transfer And Exchange. (a)
Subject
to Section 2.12 hereof, upon surrender for
registration of transfer of any Security,
together with a written instrument of
transfer satisfactory to the Registrar duly
executed by the Securityholder or such
Securityholder's attorney duly authorized
in writing, at the office or agency of the
Company designated as Registrar or co-
registrar pursuant to Section 2.03, the
Company shall execute, and the Trustee
shall authenticate and deliver, in the name
of the designated transferee or
transferees, one or more new Securities of
any authorized denomination or
denominations, of a like aggregate
principal amount. The Company shall not
charge a service charge for any
registration of transfer or exchange, but
the Company may require payment of a sum
sufficient to pay all taxes, assessments or
other governmental charges that may be
imposed in connection with the transfer or
exchange of the Securities from the
Securityholder requesting such transfer or
exchange.
At the option of the Holder, Securities may
be
exchanged for other Securities of any
authorized denomination or denominations,
of a like aggregate principal amount at
maturity upon surrender of the Securities
to be exchanged, together with a written
instrument of transfer satisfactory to the
Registrar duly executed by the
Securityholder or such Securityholder's
attorney duly authorized in writing, at
such office or agency. Whenever any
Securities are so surrendered for exchange,
the Company shall execute, and the Trustee
shall authenticate and deliver, the
Securities which the Holder making the
exchange is entitled to receive.
The Company shall not be required to
make, and the Registrar need not register,
transfers or exchanges of Securities
selected for redemption (except, in the
case of Securities to be redeemed in part,
the portion thereof not to be redeemed) or
any Securities in respect of which a
Purchase Notice or Change of Control
Purchase Notice has been given and not
withdrawn by the Holder thereof in
accordance with the terms of this
Indenture (except, in the case of Securities
to be purchased in part, the portion thereof
not to be purchased) or any Securities for a
period of 15 days before the mailing of a
notice of redemption of Securities to be
redeemed.
(b) Notwithstanding any provision to
the contrary herein, so long as a Global
Security remains
outstanding and is held by or on behalf of the
Depositary, transfers of a Global Security, in
whole or in part, shall be made only in
accordance with Section 2.12 and this Section
2.06(b). Transfers of a Global Security shall
be limited to transfers of such Global
Security in whole or in part, to the
Depositary, to nominees of the Depositary or
to a successor of the Depositary or such
successor's nominee.
(c) Successive registrations and
registrations of transfers and exchanges as
aforesaid may be made from
time to time as desired, and each such
registration shall be noted on the register
for the Securities. (d) Any Registrar
appointed pursuant to Section 2.03
hereof shall provide to the Trustee such
information as the Trustee may reasonably
require in connection with the delivery by
such Registrar of Securities upon transfer
or exchange of Securities.
(e) No Registrar shall be required
to make registrations of transfer or
exchange of Securities during any periods
designated in the text of the Securities or
in this Indenture as periods during which
such registration of transfers and
exchanges need not be made.
(f) If Securities are issued upon
the transfer, exchange or replacement of
Securities subject to restrictions on
transfer and bearing the legends set forth
on the forms of Security attached hereto as
Exhibits A and B setting forth such
restrictions (collectively, the "Legend"),
or if a request is made
to remove the Legend on a Security, the
Securities so issued shall bear the Legend,
or the Legend shall not be removed, as the
case may be, unless there is delivered to
the Company and the Registrar such
satisfactory evidence, which shall include
an opinion of counsel, as may be reasonably
required by the Company and the Registrar
and the Trustee (if not the same Person as
the Trustee), that neither the Legend nor
the restrictions on transfer set forth
therein are required to ensure that
transfers thereof comply with the
provisions of Rule 144A or Rule 144 under
the Securities Act of 1933, as amended
("Securities Act") or that such Securities
are not "restricted" within the meaning of
Rule 144 under the Securities Act. Upon
(i) provision of such satisfactory
evidence, or (ii) notification by the
Company to the Trustee and Registrar of the
sale of such Security pursuant to a
registration statement that is effective at
the time of such sale, the Trustee, at the
written direction of the Company, shall
authenticate and deliver a Security that
does not bear the Legend. If the Legend is
removed from the face of a Security and the
Security is subsequently held by the
Company or an Affiliate of the Company, the
Legend shall be reinstated.
Section 2.07. Replacement Securities.
If (a) any
mutilated Security is surrendered to the
Trustee, or (b) the Company and the Trustee
receive evidence to their satisfaction of
the destruction, loss or theft of any
Security, and there is delivered to the
Company and the Trustee such security or
indemnity as may be required by them to
save each of them harmless, then, in the
absence of notice to the Company or the
Trustee that such Security has been
acquired by a bona fide purchaser, the
Company shall execute and upon its written
request the Trustee shall authenticate and
deliver, in exchange for any such mutilated
Security or in lieu of any such destroyed,
lost or stolen Security, a new Security of
like tenor and principal amount, bearing a
certificate number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost
or
stolen Security has become or is about to
become due and payable, or is about to be
purchased by the Company pursuant to
Article 3 hereof, the Company in its
discretion may, instead of issuing a new
Security, pay or purchase such Security, as
the case may be.
Upon the issuance of any new
Securities under this Section 2.07, the
Company may require the payment of a sum
sufficient to cover any tax or other
governmental charge that may be imposed in
relation thereto and any other expenses
(including the fees and expenses of the
Trustee) connected therewith.
Every new Security issued pursuant to
this Section 2.07 in lieu of any mutilated,
destroyed, lost or stolen Security shall
constitute an original additional
contractual obligation of the Company,
whether or not the destroyed, lost or
stolen Security shall be at any time
enforceable by anyone, and shall be
entitled to all benefits of this Indenture
equally and proportionately with any and
all other Securities duly issued hereunder.
The provisions of this Section 2.07
are exclusive and shall preclude (to the
extent lawful) all other rights and
remedies with respect to the replacement or
payment of mutilated, destroyed, lost or
stolen Securities.
Section 2.08. Outstanding Securities;
Determinations Of Holders' Action.
Securities outstanding at any time are all
the Securities authenticated by the Trustee
except for those cancelled by it, those
paid pursuant to Section 2.07, those
delivered to it for cancellation and those
described in this Section 2.08 as not
outstanding. A Security does not cease to
be outstanding because the Company or an
Affiliate thereof holds the Security;
provided, however, that in determining
whether the Holders of the requisite
principal amount at maturity of Securities
have given or concurred in any request,
demand, authorization, direction, notice,
consent, waiver, or other Act hereunder,
Securities owned by the Company or any
other obligor upon the Securities or any
Affiliate of the Company or such other
obligor shall be disregarded and deemed not
to be outstanding, except that, in
determining whether the Trustee shall be
protected in relying upon any such request,
demand, authorization, direction, notice,
consent, waiver or
other Act, only Securities which a
Responsible Officer of the Trustee actually
knows to be so owned shall be so
disregarded. Subject to the foregoing,
only Securities outstanding at the time of
such determination shall be considered in
any such determination (including, without
limitation, determinations pursuant to
Articles 6 and 9).
If a Security is replaced pursuant to
Section
2.07, it ceases to be outstanding unless
the Trustee receives proof satisfactory to
it that the replaced Security is held by a
bona fide purchaser.
If the Paying Agent holds, in
accordance with this Indenture, on a
Redemption Date, or on the Business Day
following a Purchase Date or a Change of
Control Purchase Date, or on Stated
Maturity, money or securities, if permitted
hereunder, sufficient to pay Securities
payable on that date, then immediately
after such Redemption Date, Purchase Date,
Change of Control Purchase Date or Stated
Maturity, as the case may be, such
Securities shall cease to be outstanding
and Original Issue Discount and Liquidated
Damages, if any, on such Securities shall
cease to accrue; provided, that if such
Securities are to be redeemed, notice of
such redemption has been duly given
pursuant to this Indenture or provision
therefor satisfactory to the Trustee has
been made.
If a Security is converted in
accordance with Article 10, then from and
after the time of conversion on the date of
conversion, such Security shall cease to be
outstanding and Original Issue Discount and
Liquidated Damages, if any, shall cease to
accrue on such Security.
Section 2.09. Temporary Securities.
Pending the preparation of definitive
Securities, the Company may execute, and
upon Company Order the Trustee shall
authenticate and deliver, temporary
Securities which are printed, lithographed,
typewritten, mimeographed or otherwise
produced, in any authorized denomination,
substantially of the tenor of the
definitive Securities in lieu of which they
are issued and with such appropriate
insertions, omissions, substitutions and
other variations as the officers executing
such Securities may determine, as
conclusively evidenced by their execution
of such Securities.
If temporary Securities are issued,
the Company will cause definitive
Securities to be prepared without
unreasonable delay. After the preparation
of definitive Securities, the temporary
Securities shall be exchangeable for
definitive Securities upon surrender of the
temporary Securities at the office or
agency of the Company designated for such
purpose pursuant to Section 2.03, without
charge to the Holder. Upon surrender for
cancellation of any one or more temporary
Securities the Company shall execute and
the Trustee shall authenticate and deliver
in exchange therefor a like principal
amount at maturity of definitive Securities
of authorized denominations. Until so
exchanged the temporary Securities shall in
all respects be entitled to the same
benefits under this Indenture as definitive
Securities.
Section 2.10. Cancellation. All
Securities surrendered for payment,
purchase by the Company pursuant to Article
3, conversion, redemption or registration
of transfer or exchange shall, if
surrendered to any person other than the
Trustee, be delivered to the Trustee and
shall be promptly cancelled by it. The
Company may at any time deliver to the
Trustee for cancellation any Securities
previously authenticated and delivered
hereunder which the Company may have
acquired in any manner whatsoever, and all
Securities so delivered shall be promptly
cancelled by the Trustee. The Company may
not issue new Securities to replace
Securities it has paid or delivered to the
Trustee for cancellation or that any Holder
has converted pursuant to Article 10. No
Securities shall be authenticated in lieu
of or in exchange for any Securities
cancelled as provided in this Section,
except as expressly permitted by this
Indenture. All cancelled Securities held
by the Trustee shall be disposed of by the
Trustee in accordance with the Trustee's
customary procedure.
Section 2.11. Persons Deemed Owners.
Prior to due presentment of a Security for
registration of transfer, the Company, the
Trustee and any agent of the Company or the
Trustee may treat the person in whose name
such Security is registered as the owner of
such Security for the purpose of receiving
payment of the principal amount at maturity
of the Security or any portion thereof,
including the Issue Price and accrued
Original Issue Discount, or the payment of
any Redemption Price, Purchase Price or
Change of Control Purchase Price in respect
thereof, and Liquidated Damages thereon,
for the purpose of conversion and for all
other purposes whatsoever, whether or not
such Security be overdue, and neither the
Company, the Trustee nor any agent of the
Company or the Trustee shall be affected by
notice to the contrary.
Section 2.12. Global Securities. (a)
Notwithstanding any other provisions of
this Indenture or the Securities, (A)
transfers of a Global Security, in whole or
in part, shall be made only in accordance
with Section 2.06 and Section 2.12(a)(i)
below, (B) transfers of a beneficial
interest in a Global Security for a
Certificated Security shall comply with
Section 2.06, Section 2.12(a)(ii) below and
Section 2.12(e)(1) below, and (C) transfers
of a Certificated Security shall comply
with Section 2.06 and Sections 2.12(a)(iii)
and 2.12(a)(iv) below.
(i) Transfer of Global Security. A
Global Security may not be transferred, in
whole or in part, to any
person other than the Depositary or a nominee or
any
successor thereof, and no such transfer to
any such other person may be registered;
provided that this clause 2.12(a)(i) shall
not prohibit any transfer of a Security
that is issued in exchange for a Global
Security but is not itself a Global
Security. No transfer of a Security to any
person shall be effective under this
Indenture or the Securities unless and
until such Security has been registered in
the name of such person. Nothing in this
Section 2.12(a)(i) shall prohibit or render
ineffective any transfer of a beneficial
interest in a Global Security effected in
accordance with the other provisions of
this Section 2.12(a).
(ii) Restrictions on Transfer of
a Beneficial Interest in a Global Security for a
Certificated Security. A beneficial interest in
a Global Security may not be
exchanged for a Certificated Security except upon
satisfaction of the requirements set forth below
and in Section 2.12(e)(1) below. Upon receipt by
the Trustee of a transfer of a beneficial interest
in a Global Security in accordance with Applicable
Procedures for a Certificated Security in the form
satisfactory to the Trustee, together with:
(A) so long as the Securities
are Restricted Securities, certification
in the form set forth in Exhibit C;
(B) written instructions to the Trustee to
make, or direct the Registrar to make, an
adjustment on its
books and records with respect to such Global
Security to reflect a decrease in the aggregate
principal amount at maturity of the Securities
represented by the Global Security, such
instructions to contain information regarding the
Depositary account to be credited with such
decrease; and
(C) if the Company so requests, an
opinion of counsel or other evidence reasonably
satisfactory to it as to
the compliance with the restrictions set
forth in the Legend,
then the Trustee shall cause, or direct the
Registrar to cause, in accordance with the
standing instructions and procedures
existing between the Depositary and the
Registrar, the aggregate principal amount
at maturity of the Securities represented
by the Global Security to be decreased by
the aggregate principal amount at maturity
of the Certificated Security to be issued,
shall issue such Certificated Security and
shall debit or cause to be debited to the
account of the person specified in such
instructions a beneficial interest in the
Global Security equal to the principal
amount at maturity of the Certificated
Security so issued.
(iii) Transfer and Exchange of
Certificated Securities. When Certificated
Securities are presented to the Registrar
with a request:
(y) to register the transfer of such
Certificated Securities; or
(z) to exchange such Certificated
Securities
for an equal principal amount at maturity of
Certificated Securities of other authorized
denominations,
the Registrar shall register the transfer
or make the exchange as requested if its
reasonable requirements for such
transaction are met; provided, however,
that the Certificated Securities
surrendered for transfer or exchange:
(1) shall be duly endorsed or
accompanied by a written instrument of
transfer in form reasonably satisfactory
to the Company and the Registrar, duly
executed by the Holder thereof or his
attorney duly authorized in writing; and
(2) so long as such Securities are
Restricted Securities, such Securities are
being transferred or exchanged pursuant to
an effective registration statement under
the Securities Act or pursuant to clause
(A), (B) or (C) below, and are accompanied
by the following additional information
and documents, as applicable:
(A)if such Certificated
Securities are being delivered
to the Registrar by a Holder
for registration in the name
of such Holder, without
transfer, a certification from
such Holder to that effect; or
(B)if such Certificated
Securities are being
transferred to the Company, a
certification to that effect;
or
(C)if such Certificated
Securities are being
transferred pursuant to an
exemption from registration,
(i) a certification to that
effect (in the form set forth
in Exhibit C, if applicable)
and (ii) if the Company so
requests, an opinion of
counsel or other evidence
reasonably satisfactory to it
as to the compliance with the
restrictions set forth in the
Legend.
(iv) Restrictions on Transfer of a
Certificated Security for a Beneficial
Interest in a Global Security. A
Certificated Security may not be exchanged
for a beneficial interest in a Global
Security except upon satisfaction of the
requirements set forth below.
Upon receipt by the Trustee of a
Certificated
Security, duly endorsed or accompanied by
appropriate instruments of transfer, in
form satisfactory to the Trustee, together
with:
(I) so long as the Securities are
Restricted Securities, certification,
in the form set forth in Exhibit C,
that such Certificated Security is
being transferred to a QIB in
accordance with Rule 144A, or to an
institutional accredited investor
within the meaning of Rule 501(a)(1),
(2), (3) or (7) of Regulation D of the
Securities Act; and
(II) written instructions directing
the Trustee to make, or to direct the
Registrar to make, an adjustment on
its books and records with respect to
such Global Security to reflect an
increase in the aggregate principal
amount at maturity of the Securities
represented by the Global Security,
such instructions to contain
information regarding the Depositary
account to be credited with such
increase, then the Trustee shall
cancel such Certificated Security and
cause, or direct the Registrar to
cause, in accordance with the standing
instructions and procedures existing
between the Depositary and the
Registrar, the aggregate principal
amount at maturity of Securities
represented by the Global Security to
be increased by the aggregate
principal amount at maturity of the
Certificated Security to be
exchanged, and shall credit or cause
to be credited to the account of the
person specified in such instructions
a beneficial interest in the Global
Security equal to the principal amount
at maturity of the Certificated
Security so cancelled. If no Global
Securities are then outstanding, the
Company shall issue and the Trustee
shall authenticate, upon written order
of the Company in the form of an
Officers' Certificate, a new Global
Security in the appropriate principal
amount at maturity.
(b) Subject to the succeeding
Section 2.12(c), every Security shall be
subject to the restrictions on
transfer provided in the Legend including
the delivery of an opinion of counsel, if
so provided. Whenever any Restricted
Security is presented or surrendered for
registration of transfer or for exchange
for a Security registered in a name other
than that of the Holder, such Security must
be accompanied by a certificate in
substantially the form set forth in Exhibit
C, dated the date of such surrender and
signed by the Holder of such Security, as
to compliance with such restrictions on
transfer. The Registrar shall not be
required to accept for such registration of
transfer or exchange any Security not so
accompanied by a properly completed
certificate.
(c) The restrictions imposed by the Legend
upon the transferability of any Security
shall cease and terminate when such
Security has been sold pursuant to an
effective registration statement under the
Securities Act or transferred in compliance
with Rule 144 under the Securities Act (or
any successor provision thereto) or, if
earlier, upon the expiration of the holding
period applicable to sales thereof under
Rule 144(k) under the Securities Act (or
any successor provision). Any Security as
to which such restrictions on transfer
shall have expired in accordance with their
terms or shall have terminated may, upon a
surrender of such Security for exchange to
the Registrar in accordance with the
provisions of this Section 2.12
(accompanied, in the event that such
restrictions on transfer have terminated by
reason of a transfer in compliance with
Rule 144 or any successor provision, by an
opinion of counsel having substantial
experience in practice under the Securities
Act and otherwise reasonably acceptable to
the Company, addressed to the Company and
in form acceptable to the Company, to the
effect that the transfer of such Security
has been made in compliance with Rule 144
or such successor provision), be exchanged
for a new Security, of like tenor and
aggregate principal amount at maturity,
which shall not bear the restrictive
Legend. The Company shall inform the
Trustee of the effective date of any
registration statement registering the
Securities under the Securities Act. The
Trustee shall not be liable for any action
taken or omitted to be taken by it in good
faith in accordance with the aforementioned
opinion of counsel or registration
statement.
(d) As used in the preceding two
paragraphs of this Section 2.12, the term
"transfer" encompasses any sale, pledge,
transfer, loan, hypothecation, or other
disposition of any Security.
(e) The provisions of clauses (1), (2),
(3) and (4) below shall apply only to
Global Securities:
(1) Notwithstanding any other provisions of this
Indenture or the Securities, a Global
Security shall not be exchanged in whole or
in part for a Security registered in the
name of any person other than the
Depositary or one or more nominees thereof,
provided that a Global Security may be
exchanged for Securities registered in the
names of any person designated by the
Depositary in the event that (i) the
Depositary has notified the Company that it
is unwilling or unable to continue as
Depositary for such Global Security or such
Depositary has ceased to be a "clearing
agency" registered under the Securities
Exchange Act of 1934, as amended (the
"Exchange Act"), and a successor Depositary
is not appointed by the Company within 90
days or (ii) an Event of Default has
occurred and is continuing with respect to
the Securities. Any Global Security
exchanged pursuant to clause (i) above
shall be so exchanged in whole and not in
part, and any Global Security exchanged
pursuant to clause (ii) above may be
exchanged in whole or from time to time in
part as directed by the Depositary. Any
Security issued in exchange for a Global
Security or any portion thereof shall be a
Global Security; provided that any such
Security so issued that is registered in
the name of a person other than the
Depositary or a nominee thereof shall not
be a Global Security.
(2) Securities issued in exchange for a Global
Security or any portion thereof shall be
issued in definitive, fully registered
form, shall have an aggregate principal
amount at maturity equal to that of such
Global Security or portion thereof to be so
exchanged, shall be registered in such
names and be in such authorized
denominations as the Depositary shall
designate and shall bear the applicable
legends provided for herein. Any Global
Security to be exchanged in whole shall be
surrendered by the Depositary to the
Trustee, as Registrar. With regard to any
Global Security to be exchanged in part,
either such Global Security shall be so
surrendered for exchange or, if the Trustee
is acting as custodian for the Depositary
or its nominee with respect to such Global
Security, the principal amount at maturity
thereof shall be reduced, by an amount
equal to the portion thereof to be so
exchanged, by means of an appropriate
adjustment made on the records of the
Trustee. Upon any such surrender or
adjustment, the Trustee shall authenticate
and deliver the Security issuable on such
exchange to or upon the order of the
Depositary or an authorized representative
thereof.
(3) Subject to the provisions of clause
(5) below, the registered Holder may grant
proxies and otherwise authorize any person,
including Agent Members (as defined below)
and persons that may hold interests through
Agent Members, to take any action which a
holder is entitled to take under this
Indenture or the Securities.
(4) In the event of the occurrence of any
of the events specified in clause (1)
above, the Company will promptly make
available to the Trustee a reasonable
supply of Certificated Securities in
definitive, fully registered form.
(5) Neither any members of, or
participants in, the Depositary
(collectively, the "Agent Members") nor any
other persons on whose behalf Agent Members
may act shall have any rights under this
Indenture with respect to any Global
Security registered in the name of the
Depositary or any nominee thereof, or under
any such Global Security, and the
Depositary or such nominee, as the case may
be, may be treated by the Company, the
Trustee and any agent of the Company or the
Trustee as the absolute owner and holder of
such Global Security for all purposes
whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company,
the Trustee or any agent of the Company or
the Trustee from giving effect to any
written certification, proxy or other
authorization furnished by the Depositary
or such nominee, as the case may be, or
impair, as between the Depositary, its
Agent Members and any other person on whose
behalf an Agent Member may act, the
operation of customary practices of such
Persons governing the exercise of the
rights of a holder of any Security.
Section 2.13. CUSIP Numbers. The
Company may issue the Securities with one
or more "CUSIP" numbers (if
then generally in use), and, if so, the
Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to
Holders; provided that any such notice may
state that no representation is made as to
the correctness of such numbers either as
printed on the Securities or as contained
in any notice of a redemption and that
reliance may be placed only on the other
identification numbers printed on the
Securities, and any such redemption shall
not be affected by any defect in or
omission of such numbers. The Company will
promptly notify the Trustee of any change
in the CUSIP numbers.
Section 2.14. Ranking. The
indebtedness of the Company arising under
or in connection with this Indenture and
every outstanding Security issued under
this Indenture from time to time
constitutes and will constitute a senior
unsecured general obligation of the
Company, ranking equally with other
existing and future senior unsecured
Indebtedness of the Company and ranking
senior in right of payment to any future
Indebtedness of the Company that is
expressly made subordinate to the
Securities by the terms of such
Indebtedness. For purposes of this Section
2.14 only, "Indebtedness" means, without
duplication, the principal or face amount
of (i) all obligations for borrowed money,
(ii) all obligations evidenced by
debentures, notes or other similar
instruments, (iii) all obligations in
respect of letters of credit or bankers
acceptances or similar instruments (or
reimbursement obligations with respect
thereto), (iv) all obligations to pay the
deferred purchase price of property or
services, (v) all obligations as lessee
which are capitalized in accordance with
generally accepted accounting principles,
and (vi) all Indebtedness of others
guaranteed by the Company or any of its
Subsidiaries or for which the Company or
any of its Subsidiaries is legally
responsible or liable (whether by agreement
to purchase indebtedness of, or to supply
funds or to invest in, others).
ARTICLE 3
Redemption And Purchases
Section 3.01. Company's Right To
Redeem; Notices To
Trustee. Prior to October 10, 2004, the
Securities
will not be redeemable at the Company's option.
Beginning on October 10, 2004, the Company, at
its option, may redeem the Securities in
accordance with the provisions of Section 5 of
the Securities for cash at any time as a whole,
or from time to time in part, at a redemption
price equal to the Issue Price of those
Securities plus accrued Original Issue Discount
and accrued and unpaid Liquidated Damages, if
any, on those Securities to (but excluding) the
Redemption Date. If the Company elects to redeem
Securities pursuant to Section 5 of the
Securities, it shall notify the Trustee in
writing of the Redemption Date, the principal
amount at maturity of Securities to be redeemed
and the Redemption Price.
The Company shall give the notice to the
Trustee provided for in this Section 3.01
by a Company Order,
at least 40 days before the Redemption Date
(unless a shorter notice shall be satisfactory
to the Trustee).
The table below shows the Redemption Prices for
the Securities, assuming that no Liquidated
Damages have accrued, at October 10, 2004, at
each following October 10 prior to Stated
Maturity, and at Stated Maturity. The prices
reflect accrued Original Issue Discount
calculated through each such date. The
Redemption Price of a Security redeemed between
the dates indicated in the table would include
an additional amount reflecting the additional
Original Issue Discount accrued since the next
preceding date in the table. Securities called
for redemption may be surrendered for conversion
from the date of notice of the redemption until
the close of business on the redemption date.
(1) (2)
(3)
Issue Price Accrued
Redemption
Original
Price
Issue (1)
+ (2)
Discount
Redemption
Date:
October 10:
2004 $ 579.12 $ 49.45 $ 628.57
2005 $ 579.12 $ 66.85 $ 645.97
2006 $ 579.12 $ 84.74 $ 663.86
2007 $ 579.12 $ 103.12 $ 682.24
2008 $ 579.12 $ 122.01 $ 701.13
2009 $ 579.12 $ 141.42 $ 720.54
2010 $ 579.12 $ 161.37 $ 740.49
2011 $ 579.12 $ 181.88 $ 761.00
2012 $ 579.12 $ 202.95 $ 782.07
2013 $ 579.12 $ 224.60 $ 803.72
2014 $ 579.12 $ 246.86 $ 825.98
2015 $ 579.12 $ 269.73 $ 848.85
2016 $ 579.12 $ 293.23 $ 872.35
2017 $ 579.12 $ 317.39 $ 896.51
2018 $ 579.12 $ 342.21 $ 921.33
2019 $ 579.12 $ 367.72 $ 946.84
2020 $ 579.12 $ 393.94 $ 973.06
At Stated $ 579.12 $ 420.88 $
1,000.00
Maturity
Section 3.02. Selection Of Securities To
Be Redeemed. If less than all the Securities
are to be redeemed, unless the procedures of the
Depositary provide otherwise, the Trustee shall
select the Securities to be redeemed by lot, on
a pro rata basis or by another method the
Trustee considers fair and appropriate (so long
as such method is not prohibited by the rules of
any stock exchange on which the Securities are
then listed). The Trustee shall make the
selection within five Business Days after it
receives the notice provided for in Section 3.01
from outstanding Securities not previously
called for redemption. The Trustee may select
for redemption portions of the principal amount
at maturity of Securities that have
denominations larger than $1,000.
Securities and portions of Securities that
the Trustee selects shall be in principal
amounts at maturity of $1,000 or an integral
multiple of $1,000. Provisions of this Indenture
that apply to Securities called for redemption
also apply to portions of Securities called for
redemption. The Trustee shall notify the
Company promptly of the Securities or portions
of the Securities to be redeemed.
Securities and portions of Securities that
are to be redeemed are convertible by the Holder
until the close of business on the second
Business Day prior to the Redemption Date. If
any Security selected for partial redemption is
converted in part before termination of the
conversion right with respect to the portion of
the Security so selected, the converted portion
of such Security shall be deemed (so far as may
be) to be the portion selected for redemption.
Securities which have been converted during a
selection of Securities to be redeemed may be
treated by the Trustee as outstanding for the
purpose of such selection.
Section 3.03. Notice Of Redemption. At
least 30 days but not more than 60 days before a
Redemption Date, the Company shall mail a notice
of redemption by first-class mail, postage
prepaid, to each Holder of Securities to be
redeemed.
The notice shall identify the Securities to be
redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the Conversion Rate;
(4) the name and address of the Paying
Agent and Conversion Agent;
(5) that Securities called for redemption
may be converted at any time before the close of
business on the second Business Day prior to the
Redemption Date;
(6) that Holders who want to convert their
Securities
must satisfy the requirements set forth in
Section 8 of
the Securities;
(7) that Securities called for redemption must
be
surrendered to the Paying Agent to collect the
Redemption Price;
(8) if fewer than all of the outstanding
Securities are to be redeemed, the certificate
numbers, if any,
and principal amounts at maturity of the
particular Securities to be redeemed;
(9) that, unless the Company
defaults in making payment of such
Redemption Price, Original Issue Discount
and Liquidated Damages, if any, on
Securities called for redemption will cease
to accrue on and after the Redemption Date;
and
(10) the CUSIP number(s) of the Securities.
At the Company's request, the Trustee
shall give the notice of redemption in the
Company's name and at the Company's
expense, provided that the Company makes
such request at least seven Business Days
prior to the date by which such notice of
redemption must be given to Holders in
accordance with this Section 3.03.
Section 3.04. Effect Of Notice Of
Redemption. Once notice of redemption is
given, Securities called for redemption
become due and payable on the Redemption
Date and at the Redemption Price stated in
the notice except for Securities which are
converted in accordance with the terms of
this Indenture. Upon surrender to the
Paying Agent, such Securities shall be paid
at the Redemption Price stated in the
notice.
Section 3.05. Deposit Of Redemption
Price. Prior to 10:00 a.m. (New York City
time), on the Redemption Date, the Company
shall deposit with the Paying Agent (or if
the Company or a Subsidiary or an Affiliate
of either of them is the Paying Agent,
shall segregate and hold in trust) money
sufficient to pay the Redemption Price of
all Securities to be redeemed on that date
other than Securities or portions of
Securities called for redemption which on
or prior thereto have been delivered by the
Company to the Trustee for cancellation or
have been converted. The Paying Agent
shall as promptly as practicable return to
the Company any money not required for that
purpose because of conversion of Securities
pursuant to Article 10. If such money is
then held by the Company in trust and is
not required for such purpose it shall be
discharged from such trust.
Section 3.06. Securities Redeemed In
Part. Upon surrender of a Security that is
redeemed in part, the Company shall execute
and the Trustee shall authenticate and
deliver to the Holder a new Security in an
authorized denomination equal in principal
amount to the unredeemed portion of the
Security surrendered.
Section 3.07. Purchase Of Securities
By The Company At Option Of The Holder.
General. Securities shall be purchased by
the Company pursuant to Section 6 of the
Securities at the option of the Holder on
October 10, 2003, October 10, 2005, October
10, 2011 and October
10, 2016 (each, a "Purchase Date"), at a
purchase price equal to the Issue Price of
those Securities plus accrued Original
Issue Discount and accrued and unpaid
Liquidated Damages, if any, on those
Securities, to (but excluding) such
Purchase Date (the "Purchase Price"),
subject to the provisions of Section 3.09.
Purchases of Securities hereunder shall be
made, at the option of the Holder thereof,
upon:
(1) delivery to the Paying Agent by the
Holder of a written notice of purchase
(a "Purchase Notice") during the period
beginning at any time from the
opening of business on the date that is
20 Business Days prior to the relevant
Purchase Date until the close of
business on the third Business Day prior
to such Purchase Date stating:
(A) the certificate number of the
Security
which the Holder will deliver to
be purchased or the appropriate
Depositary procedures if
Certificated Securities have not
been issued,
(B) the portion of the principal
amount at maturity of the Security
which the Holder will deliver to
be purchased, which portion must
be in principal amounts at
maturity of $1,000 or an integral
multiple of $1,000,
(C) that such Security shall be
purchased by the Company as of the
Purchase Date pursuant to the
terms and conditions specified in
Section 6 of the Securities and in
this Indenture, and
(D) in the event the Company
elects, pursuant to Section
3.09(c), to pay the Purchase
Price, in whole or in part, in
shares of Common Stock but such
portion of the Purchase Price
shall ultimately be paid to such
Holder entirely in cash because
any of the conditions to payment
of the Purchase Price in shares of
Common Stock is not satisfied
prior to the close of business on
the relevant Purchase Date, as set
forth in Section 3.09, whether
such Holder elects (i) to withdraw
such Purchase Notice as to some or
all of the Securities to which
such Purchase Notice relates
(stating the principal amount at
maturity and certificate numbers,
if any, of the Securities as to
which such withdrawal shall
relate), or (ii) to receive cash
in respect of the entire Purchase
Price for all Securities (or
portions thereof) to which such
Purchase Notice relates; and
(2) delivery of such Security to the
Paying Agent at any time after delivery
of the Purchase Notice (together with all
necessary endorsements) at the offices of
the Paying Agent, such delivery being a
condition to receipt by the Holder of the
Purchase
Price therefor; provided, however, that such
Purchase Price shall be so paid pursuant to this
Section 3.07 only if the Security so delivered to
the Paying Agent shall conform in all respects to
the description thereof in the related Purchase
Notice.
If a Holder, in such Holder's Purchase Notice and
in any written notice of withdrawal delivered by
such
Holder pursuant to the terms of Section
3.09, fails to indicate such Holder's
choice with respect to the election set
forth in clause (D) of Section 3.07(1),
such Holder shall be deemed to have
elected to receive cash in respect of the
entire Purchase Price for all Securities
subject to such Purchase Notice in the
circumstances set forth in such clause
(D).
The Company shall purchase from the
Holder thereof, pursuant to this Section
3.07, a portion of a Security, if the
principal amount at maturity of such
portion is $1,000 or an integral multiple
of $1,000. Provisions of this Indenture
that apply to the purchase of all of a
Security also apply to the purchase of such
portion of such Security.
Any purchase by the Company
contemplated pursuant to the provisions of
this Section 3.07 shall be consummated by
the delivery of the consideration to be
received by the Holder promptly following
the later of the Purchase Date and the time
of delivery of the Security.
Notwithstanding anything herein to the
contrary, any Holder delivering to the
Paying Agent the Purchase Notice
contemplated by this Section 3.07 shall
have the right to withdraw such Purchase
Notice at any time prior to the close of
business on the three business days prior
to the Purchase Date by delivery of a
written notice of withdrawal to the Paying
Agent in accordance with Section 3.10.
The Paying Agent shall promptly notify
the Company of the receipt by it of any
Purchase Notice or written notice of
withdrawal thereof.
Section 3.08. Purchase Of Securities
At Option Of The Holder Upon Change Of
Control. (a) (1) If a Change of Control
occurs (subject to certain exceptions set
forth below), the Securities not previously
purchased by the Company shall be purchased
by the Company, at the option of the Holder
thereof, at a purchase price equal to the
Issue Price of those Securities, plus
accrued Original Issue Discount and accrued
and unpaid Liquidated Damages, if any, on
those Securities (the "Change of Control
Purchase Price"), as of the date that is 30
days after the date of a notice of Change
of Control delivered by the Company (the
"Change of Control Purchase Date"), subject
to satisfaction by or on behalf of the
Holder of the requirements set forth in
Section 3.08(c).
A "Change of Control" will be deemed to
have
occurred at such time after the Securities
are originally issued when any of the
following events shall occur:
(i) the acquisition by any person,
including any syndicate or group deemed to
be a "person" under
Section 13(d)(3) of the Exchange Act of
beneficial
ownership, directly or indirectly through a
purchase, merger or other acquisition
transaction or series of purchase, merger
or other acquisition transactions, of
shares of the Capital Stock of the Company
entitling that person to exercise 50% or
more of the total voting power of all
shares of the Capital Stock of the Company
entitled to vote generally in elections of
directors, other than any acquisition by
the Company, any of its subsidiaries or any
of its employee benefit plans (except that
any of those persons shall be deemed to
have beneficial ownership of all securities
it has the right to acquire, whether the
right is currently exercisable or is
exercisable only upon the occurrence of a
subsequent condition); or
(ii) the first day on which a majority of the
members
of the board of directors of the Company are not
Continuing Directors; or
(iii) the Company consolidates or
merges with or into any other person, any
merger of another person into the Company,
or any conveyance, transfer, sale, lease or
other disposition of all or substantially
all of the Company's properties and assets
to another person, other than: (A) any
transaction: (1) that does not result in
any reclassification, conversion, exchange
or cancellation of outstanding shares of
the Company's Capital Stock; and (2)
pursuant to which holders of the Company's
Capital Stock immediately prior to the
transaction have the entitlement to
exercise, directly or indirectly 50% or
more of the total voting power of all
shares of Capital Stock entitled to vote
generally in elections of directors of the
continuing or surviving Person immediately
after giving effect to such issuance; and
(B) any merger, share exchange, transfer of
assets or similar transaction solely for
the purpose of changing the Company's
jurisdiction of incorporation and resulting
in a reclassification, conversion or
exchange of outstanding shares of Common
Stock, if at all, solely into shares of
common stock, ordinary shares or American
Depositary Shares of the surviving Person
or a direct or indirect parent of the
surviving corporation.
A "Continuing Director" shall mean:
(i) An individual who was a
member of the Board of Directors of
the Company first elected by the
stockholders or by the Board of
Directors prior to the date hereof or
prior to the time that any person
becomes after the date hereof the
holder of record of in excess of 20%
of the Capital Stock of the Company
entitled to vote in the election of
directors; or
(ii) An individual designated
(before such individual's initial
election as a director) as a
Continuing Director by a majority of
the then Continuing Directors.
(2) Notwithstanding the provisions of
Section
3.08(a)(1), the Company shall not be
required to purchase the Securities of the
Holders upon a Change of Control pursuant
to this Section 3.08 if:
(i) the Closing Price per share of
Common Stock for any five trading
days within (1) the period of 10
consecutive trading days ending
immediately after the later of
the Change of Control or the
public announcement of the Change
of Control, in the case of a
Change of Control under clause
(i) or (ii) above, or (2) the
period of 10 consecutive trading
days ending immediately before
the Change of Control, in the
case of a Change of Control under
clause (iii) above, equals or
exceeds 120% of the Accreted
Conversion Price of the
Securities in effect on each of
those five trading days; or
(ii) 100% of the consideration in the
transaction or transactions
(other than cash payments for
fractional shares and cash
payments made in
respect of dissenters' appraisal
rights) constituting a Change of
Control consists of shares of
common stock, ordinary shares or
American Depositary Shares traded
or to be traded immediately
following a Change of Control on
a national securities exchange or
the Nasdaq National Market, and,
as a result of the transaction or
transactions, the Securities
become convertible into that
common stock, ordinary shares or
American Depositary Shares (and
any rights attached thereto).
For the purposes of this Section 3.08,
(x) whether a person is a "beneficial
owner" shall be determined in accordance
with Rule 13d-3 under the Exchange Act and
(y) the term "person" includes any
syndicate or group that would be deemed to
be a "person" under Section 13(d)(3) of the
Exchange Act.
(b) No later than 30 days after the
occurrence of a Change of Control, the
Company shall mail a written
notice of the Change of Control by first
class mail to the Trustee and to each
Holder (and to beneficial owners as
required by applicable law). The notice
shall include a form of Change of Control
Purchase Notice to be completed by the
Holder and shall state:
(1) briefly, the events causing a Change
of Control and the date of such
Change of Control;
(2) the date by which the Change of
Control Purchase Notice pursuant to this
Section 3.08 must be delivered
to the Paying Agent in order for a Holder to
exercise
the repurchase rights;
(3) the Change of Control Purchase Date;
(4) the Change of Control Purchase Price;
(5) whether the Change of Control
Purchase Price will be paid in cash or
Applicable Stock, or a combination thereof;
(6) the name and address of the Paying
Agent and the Conversion Agent;
(7) the Conversion Rate;
(8) that the Securities as to which a Change of
Control Purchase Notice has been given may be
converted
if they are otherwise convertible pursuant to
Article
10 hereof only if the Change of Control
Purchase Notice has been withdrawn in
accordance with the terms of this Indenture;
(9) that the Securities must be
surrendered to the Paying Agent to collect
payment;
(10) that the Change of Control
Purchase Price for any Security as to which
a Change of Control Purchase
Notice has been duly given and not
withdrawn will be paid promptly following
the later of the Change of Control Purchase
Date and the time of surrender of such
Security as described in (9);
(11) briefly, the procedures the Holder
must follow to exercise rights under this Section
3.08;
(12) briefly, the conversion rights, if any, on
the Securities;
(13) the procedures for withdrawing a
Change of Control Purchase Notice;
(14) that, unless the Company defaults in making
payment of such Change of Control Purchase Price,
Original Issue Discount and Liquidated
Damages, if any, on Securities surrendered
for purchase by the Company will cease to
accrue on and after the Change of Control
Purchase Date; and
(15) the CUSIP number(s) of the Securities.
(c) A Holder may exercise its rights
specified in Section 3.08(a) upon delivery
of a written notice of purchase (a "Change
of Control Purchase Notice") to the Paying
Agent at any time on or prior to the close
of business on the Business Day immediately
preceding the Change of Control Purchase
Date:
(1) the certificate number of the Security which
the
Holder will deliver to be purchased or the
appropriate Depositary procedures if
Certificated Securities have not been
issued;
(2) the portion of the principal amount at maturity
of
the Security which the Holder will deliver to be
purchased, which portion must be $1,000 or an
integral multiple of $1,000;
(3) that such Security shall be purchased
pursuant to the terms and conditions specified
in Section 6 of the Securities and in this
Indenture; and
(4) in the event the Company elects, pursuant
to
Section 3.09, to pay the Change of Control
Purchase
Price, in whole or in part, in shares of
Applicable Stock but such portion of the
Change of Control Purchase Price shall
ultimately be paid to such Holder entirely
in cash because any of the conditions to
payment of the Change of Control Purchase
Price in shares of Applicable Stock is not
satisfied prior to the close of business on
the third Business Day prior to the
relevant Change of Control Purchase Date,
as set forth in Section 3.09, whether such
Holder elects (i) to withdraw such Change
of Control Purchase Notice as to some or
all of the Securities to which such Change
of Control Purchase Notice relates (stating
the principal amount at maturity and
certificate numbers, if any, of the
Securities as to which such withdrawal
shall relate), or (ii) to receive cash in
respect of the entire Change of Control
Purchase Price for all Securities (or
portions thereof) to which such Change of
Control Purchase Notice relates.
"Applicable Stock" means (i) the
Common Stock and (ii) in the event of a
merger, consolidation or other similar
transaction involving the Company that is
otherwise permitted hereunder in which the
Company is not the surviving corporation,
the common stock, ordinary shares or
American Depositary Shares of such
surviving corporation or its direct or
indirect parent corporation.
The delivery of such Security to the
Paying Agent with the Change of Control
Purchase Notice (together with all
necessary endorsements) at the offices of
the Paying Agent shall be a condition to
the receipt by the Holder of the Change of
Control Purchase Price therefor; provided,
however, that such Change of Control
Purchase Price shall be so paid pursuant to
this Section 3.08 and Section 3.09 only if
the Security so delivered to the Paying
Agent shall conform in all respects to the
description thereof set forth in the
related Change of Control Purchase Notice.
If a Holder, in such Holder's Change
of Control Purchase Notice and in any
written notice of withdrawal delivered by
such Holder pursuant to the terms of
Section 3.10, fails to indicate such
Holder's choice with respect to the
election set forth in Section 3.08(c)(4),
such Holder shall be deemed to have elected
to receive cash in respect of the entire
Change of Control Purchase Price for all
Securities subject to such Change of
Control Purchase Notice in the
circumstances set forth in such Section
3.08(c)(4).
The Company shall purchase from the
Holder thereof, pursuant to this Section
3.08 and Section 3.09, a portion of a
Security if the principal amount at
maturity of such portion is $1,000 or an
integral multiple of $1,000. Provisions of
this Indenture that apply to the purchase
of all of a Security also apply to the
purchase of such portion of such Security.
Any purchase by the Company
contemplated pursuant to the provisions of
this Section 3.08 and Section 3.09 shall be
consummated by the delivery of the
consideration to be received by the Holder
on the Change of Control Purchase Date.
Notwithstanding anything herein to the
contrary, any Holder delivering to the
Paying Agent the Change of Control Purchase
Notice contemplated by this Section 3.08(c)
shall have the right to withdraw such
Change of Control Purchase Notice at any
time prior to the close of business on the
last Business Day immediately preceding the
Change of Control Purchase Date by delivery
of a written notice of withdrawal to the
Paying Agent in accordance with Section
3.10.
The Paying Agent shall promptly notify
the Company of the receipt by it of any
Change of Control Purchase Notice or
written withdrawal thereof.
Section 3.09. Company's Right To
Elect Manner Of Payment Of Purchase Price
And Change Of Control Purchase Price For
Payment. (a) The Securities to be
purchased on any Purchase Date or Change of
Control Purchase Date, as the case may be,
pursuant to Section 3.07 and 3.08(a),
respectively, may be paid for, in whole or
in part, at the election of the Company, in
U.S. legal tender ("cash") or shares of
Applicable Stock, or in any combination of
cash and shares of Applicable Stock,
subject to the conditions set forth in
Sections 3.09(c) and (d). The Company shall
designate, in the Company Notice delivered
pursuant to Section 3.09(d), whether the
Company will purchase the Securities for
cash or shares of Applicable Stock, or,
if a combination thereof, the percentages
of the Purchase Price or Change of Control
Purchase Price, as the case may be, of
Securities in respect of which it will pay
in cash or shares of Applicable Stock;
provided that the Company will pay cash for
fractional interests in shares of
Applicable Stock. For purposes of
determining the existence of potential
fractional interests, all Securities
subject to purchase by the Company held by
a Holder shall be considered together (no
matter how many separate certificates are
to be presented). Each Holder whose
Securities are purchased pursuant to
Section 3.07 or 3.08, as the case may be,
shall receive the same percentage of cash
or shares of Applicable Stock in payment of
the Purchase Price for such Securities,
except (i) as provided in this Section
3.09(a) with regard to the payment of cash
in lieu of fractional shares of Applicable
Stock and (ii) in the event that the
Company is unable to purchase the
Securities of a Holder or Holders for
shares of Applicable Stock because any
necessary qualifications or registrations
of the shares of Applicable Stock under
applicable state securities laws cannot be
obtained, the Company may purchase the
Securities of such Holder or Holders for
cash. The Company may not change its
election with respect to the consideration
(or components or percentages of components
thereof) to be paid once the Company has
given its Company Notice to Holders except
pursuant to [Section 3.09(b)] or pursuant
to Section 3.09(c) in the event of a
failure to satisfy, prior to the close of
business on the Business Day immediately
preceding the Purchase Date or Change of
Control Purchase Date, as the case may be,
any condition to the payment of the
Purchase Price or Change of Control
Purchase Price, as the case may be, in
whole or in part, in shares of Applicable
Stock.
At least three Business Days before
each Company Notice Date, the Company shall
deliver an Officers' Certificate to the
Trustee specifying:
(i) the manner of payment selected by the
Company,
(ii) the information required by Section
3.09(d)in the Company Notice,
(iii) if the Company elects to pay the
Purchase
Price or Change of Control Purchase Price, as
the case may be, or a specified percentage
thereof, in shares of Applicable Stock, that the
conditions to such manner of payment set forth
in Section 3.09(c) have been or will be complied
with, and
(iv) whether the Company desires the Trustee to
give
the Company Notice required by Section 3.09(d).
(b) Purchase with Cash. At the option of
the Company, the Purchase Price or Change of
Control Purchase Price,
as the case may be, of Securities in
respect of which a Purchase Notice pursuant
to Section 3.07(1) or Change of Control
Purchase Notice pursuant to Section
3.08(c), as the case may be, has been
given, or a specified percentage thereof,
may be paid by the Company with cash equal
to the aggregate Purchase Price or Change
of Control Purchase Price, as the case may
be, of such Securities. The Purchase Price
or Change of Control Purchase Price, as the
case may be, of Securities in
respect of which a Purchase Notice pursuant
to Section 3.07(1) or Change of Control
Purchase Notice pursuant to Section
3.08(c), as the case may be, has been given
shall, for all other Purchase Dates or
Change of Control Purchase Dates, as the
case may be, be paid in cash. The Company
Notice, as provided in Section 3.09(d),
shall be sent to Holders (and to beneficial
owners as required by applicable law) not
less than 20 Business Days prior to such
Purchase Date or Change of Control Purchase
Date, as the case may be (the "Company
Notice Date").
(c) Payment by Issuance of Shares of
Common Stock. At the option of the Company, the
Purchase Price or Change
of Control Purchase Price, as the case may be,
of Securities in respect of which a Purchase
Notice
pursuant to Section 3.07(1) or Change of
Control Purchase Notice pursuant to Section
3.08(c), as the case may be, has been
given, or a specified percentage thereof,
may be paid by the Company by the issuance
of a number of shares of Applicable Stock
equal to the quotient obtained by dividing
(i) the portion of the Purchase Price or
Change of Control Purchase Price, as the
case may be, to be paid in shares of
Applicable Stock by (ii) 97.5% of the
Market Price determined by the Company in
the Company Notice, subject to the next
succeeding paragraph.
The Company will not issue fractional
shares of
Applicable Stock in payment of the Purchase
Price or Change of Control Purchase Price,
as the case may be. Instead, the Company
will pay cash based on the current market
price for all fractional shares. It is
understood that if a Holder elects to have
more than one Security purchased, the
number of shares of Applicable Stock shall
be based on the aggregate amount of
Securities to be purchased.
If the Company elects to purchase the
Securities by the issuance of shares of
Applicable Stock or in any combination of
cash and Applicable Stock, the Company
Notice, as provided in Section 3.09(d),
shall be sent to the Holders (and to
beneficial owners as required by applicable
law) not later than the Company Notice
Date.
The Company's right to exercise its
election to
purchase Securities through the issuance of
shares of Applicable Stock shall be
conditioned upon:
(i) the Company's not having given its
Company Notice of an election to pay
entirely in cash and its giving of timely
Company Notice of an election to purchase
all or a specified percentage of the
Securities with shares of Common Stock as
provided herein;
(ii) the registration of such shares of
Applicable
Stock under the Securities Act and the Exchange
Act, in
each case, if required;
(iii) the listing of such shares of Applicable
Stock on a national securities exchange or the
quotation of such shares of Applicable Stock in
an inter-dealer quotation system of any
registered United States national securities
association;
(iv) any necessary qualification or
registration under
applicable state securities laws or the
availability of an exemption from such
qualification and registration; and
(v) the receipt by the Trustee of an
Officers' Certificate and an Opinion of
Counsel each stating that (A) the terms of
the issuance of the shares of Applicable
Stock are in conformity with this Indenture
and (B) the shares of Applicable Stock to
be issued by the Company in payment of the
Purchase Price or Change of Control
Purchase Price, as the case may be, in
respect of Securities have been duly
authorized and, when issued and delivered
pursuant to the terms of this Indenture in
payment of the Purchase Price or Change of
Control Purchase Price, as the case may be,
in respect of the Securities, will be
validly issued, fully paid and non-
assessable and, to the best of such
counsel's knowledge, free from preemptive
rights, and, in the case of such Officers'
Certificate, stating that the conditions
above and the condition set forth in the
second succeeding sentence have been
satisfied and, in the case of such Opinion
of Counsel, stating that the conditions in
clauses (i) through (iv) above have been
satisfied.
Such Officers' Certificate shall also
set forth the number of shares of
Applicable Stock to be issued for each
$1,000 principal amount at maturity of
Securities and the Closing Price of a share
of Applicable Stock on each trading day
during the period commencing on the first
trading day of the period during which the
Market Price is calculated and ending on
the third day prior to the applicable
Purchase Date or Change of Control Purchase
Date, as the case may be. If the foregoing
conditions are not satisfied with respect
to a Holder or Holders prior to the close
of business on the last day prior to the
Purchase Date or Change of Control Purchase
Date, as the case may be, and the Company
has elected to purchase the Securities
pursuant to this Section 3.09 through the
issuance of shares of Applicable Stock, the
Company shall pay the entire Purchase Price
or Change of Control Purchase Price, as the
case may be, of the Securities of such
Holder or Holders in cash.
The "Market Price" means the average
of the Closing Prices of the shares of
Applicable Stock for the 20-trading day
period immediately preceding and including
the third day prior to the applicable
Purchase Date or Change of Control Purchase
Date, as the case may be, (if the third
Business Day prior to the applicable
Purchase Date is a trading day, or if not,
then on the last trading day prior to the
third Business Day), appropriately adjusted
to take into account the occurrence, during
the period commencing on the first of the
trading days during the 20-trading day
period and ending on the Purchase Date or
Change of Control Purchase Date, as the
case may be, of any event described in
Sections 10.03 or 10.04.
Upon determination of the actual
number of shares of Applicable Stock to be
issued upon redemption or repurchase of
Securities, the Company shall be required
to disseminate a press release through Dow
Jones & Company, Inc. or Bloomberg Business
News containing this information or publish
the information on the
Company's Web site or through such other
public medium as the Company may use at
that time.
(d) Notice of Election. In
connection with any purchase of Securities
pursuant to Section 6 of the Securities,
the Company shall give notice to Holders
setting forth information specified in
this Section 3.09(d) (the "Company
Notice").
In the event the Company has elected to
pay the
Purchase Price or Change of Control
Purchase Price, as the case may be (or a
specified percentage thereof), with shares
of Applicable Stock, the Company Notice
shall:
(1) state that each Holder will receive a number of
shares of Applicable Stock with a value
equal to 97.5% of the Market Price
determined as of a specified date prior to
the Purchase Date or Change of Control
Purchase Date, as the case may be, equal to
such specified percentage of the Purchase
Price or Change of Control Purchase Price,
as the case may be, of the Securities held
by such Holder (except any cash amount to
be paid in lieu of fractional shares);
(2) set forth the method of calculating the Market
Price of the shares of Applicable Stock; and
(3) state that because the Market Price of shares
of
Applicable Stock will be determined prior to the
Purchase Date or Change of Control Purchase
Date, as the case may be, Holders of the
Securities will bear the market risk with
respect to the value of the shares of
Applicable Stock to be received from the
date such Market Price is determined to the
Purchase Date or Change of Control Purchase
Date, as the case may be.
In any case, each Company Notice shall
include a form of Purchase Notice or Change
of Control Purchase Notice, as the case may
be, to be completed by a Holder and shall
state:
(i) the Purchase Price or Change of
Control Purchase Price, as the case may be,
and the Conversion Rate;
(ii) the name and address of the
Paying Agent and the Conversion Agent;
(iii) that Securities as to which a
Purchase Notice or Change of Control
Purchase Notice, as the case may be, has
been given may be converted if they are
otherwise convertible only in accordance
with Article 10 hereof and Section 8 of the
Securities if the applicable Purchase
Notice or Change of Control Purchase
Notice, as the case may be, has been
withdrawn in accordance with the terms of
this Indenture;
(iv) that Securities must be surrendered to
the
Paying Agent to collect payment;
(v) that the Purchase Price or Change
of Control Purchase Price, as the case may
be, for any security as to which a Purchase
Notice or Change of Control Purchase
Notice, as the case may be, has been given
and not withdrawn will be paid promptly
following the later
of the Purchase Date or Change of Control
Purchase Date, as the case may be, and the
time of surrender of such Security as
described in (iv);
(vi) the procedures the Holder must
follow to exercise its put rights under
Section 3.07 or 3.08, as the case may be,
and a brief description of those rights;
(vii) briefly, the conversion rights, if
any,
with respect to the Securities;
(viii) the procedures for withdrawing
a
Purchase Notice or Change of Control
Purchase Notice, as the case may be
(including, without limitation, for a
conditional withdrawal pursuant to the
terms of Section 3.07(1)(D), Section
3.08(c)(4)or Section 3.10);
(ix) that, unless the Company defaults
in making payment on Securities for which a
Purchase Notice or Change of Control
Purchase Notice, as the case may be, has
been submitted, Original Issue Discount or
Liquidated Damages, if any, on such
Securities will cease to accrue on and
after the Purchase Date or Change of
Control Purchase Date, as the case may be;
and
(x) the CUSIP number of the Securities.
At the Company's request, the Trustee
shall give such Company Notice in the
Company's name and at the Company's
expense; provided, however, that, in all
cases, the text of such Company Notice
shall be prepared by the Company.
(e) Covenants of the Company. All
shares of Common Stock delivered upon
purchase of the Securities shall
be newly issued shares or treasury shares,
shall be
duly authorized, validly issued, fully paid
and nonassessable, and shall be free from
preemptive rights and free of any lien or
adverse claim.
(f) Taxes. If a Holder of a purchased
Security is paid in shares of Applicable
Stock, the Company shall pay any
documentary, stamp or similar issue or
transfer tax due on such issue of Applicable
Stock. However, the Holder shall pay any
such tax which is due because the Holder
requests the Applicable Stock to be issued
in a name other than the Holder's name. The
Paying Agent may refuse to deliver the
certificates representing the shares of
Applicable Stock being issued in a name
other than the Holder's name until the
Paying Agent receives
a sum sufficient to pay any tax which will
be due because the shares of Applicable
Stock are to be issued in a name other than
the Holder's name. Nothing herein shall
preclude any income tax withholding
required by law or regulations.
Section 3.10. Effect Of Purchase
Notice Or Change Of Control Purchase
Notice. (a) Upon receipt by the Paying
Agent of the Purchase Notice or Change of
Control Purchase Notice specified in
Section 3.07(1) or Section 3.08(c), as
applicable, the Holder of the Security in
respect of which such Purchase Notice or
Change of Control Purchase Notice, as the
case may be, was given shall (unless such
Purchase Notice or Change
of Control Purchase Notice, as the case may
be, is withdrawn as specified in the
following two paragraphs) thereafter be
entitled to receive solely the Purchase
Price or Change of Control Purchase Price,
as the case may be, with respect to such
Security. Such Purchase Price or Change of
Control Purchase Price shall be paid to
such Holder, subject to receipts of funds
and/or securities by the Paying Agent,
promptly following the later of (x) the
Purchase Date or the Change of Control
Purchase Date, as the case may be, with
respect to such Security (provided the
conditions in Section 3.07(1) or Section
3.08(c), as applicable, have been
satisfied)
and (y) the time of delivery of such
Security to the Paying Agent by the Holder
thereof in the manner required by Section
3.07 or Section 3.08(c), as applicable.
Securities in respect of which a Purchase
Notice or Change of Control Purchase Notice
has been given by the Holder thereof may
not be converted pursuant to Article 10
hereof on or after the date of the delivery
of such Purchase Notice or Change of
Control Purchase Notice unless such
Purchase Notice or Change of Control
Purchase Notice has first been validly
withdrawn as specified in the following two
paragraphs.
(b) A Purchase Notice or Change of
Control Purchase Notice may be withdrawn by
means of a written notice of withdrawal
delivered to the office of the Paying Agent
in accordance with the Purchase Notice or
Change of Control Purchase Notice, as the
case may be, at any time prior to the close
of business on the third Business Day prior
to the Purchase Date or the close of
business on the Business Day immediately
preceding the Change of Control Purchase
Date, as the case may be, specifying:
(1) the certificate number, if any, of the
Security in respect of which such
notice of withdrawal is being
submitted,
(2) the principal amount at maturity of the
Security
with respect to which such notice of withdrawal
is
being submitted, and
(3) the principal amount at maturity, if any,
of such
Security which remains subject to the original
Purchase Notice or Change of Control Purchase
Notice, as the
case may be, and which has been or will be
delivered for purchase by the Company.
(c) A written notice of withdrawal of
a Purchase Notice may be in the form set
forth in Section 3.10(b) or may be in the
form of (i) a conditional withdrawal
contained in a Purchase Notice pursuant to
the terms of Section 3.07(1)(D) or (ii)
a conditional withdrawal
containing the information set forth in
Section 3.07(1)(D) and Section 3.10(b) and
contained in a written notice of withdrawal
delivered to the Paying Agent as set forth
in the preceding paragraph.
(d) A written notice of withdrawal of
a Change of Control Purchase Notice may be
in the form set forth in Section 3.10(b)
or may be in the form of (i) a
conditional withdrawal contained in a
Purchase Notice pursuant to the terms of
Section 3.08(c)(4) or (ii) a conditional
withdrawal containing the information set
forth in Section 3.08(c)(4) and Section
3.10(b) and contained in a written notice
of withdrawal delivered to the Paying Agent
as set forth in the preceding paragraph.
(e) There shall be no purchase of any
Securities pursuant to Section 3.07 or 3.08
if there has occurred (prior to, on or
after, as the case may be, the giving, by
the Holders of such Securities, of the
required Purchase Notice or Change of
Control Purchase Notice, as the case may
be) and is continuing an Event of Default
(other than a default in the payment of the
Purchase Price or Change of Control
Purchase Price, as the case may be, with
respect to such Securities). The Paying
Agent will promptly return to the
respective Holders thereof any Securities
(x) with respect to which a Purchase Notice
or Change of Control Purchase Notice, as
the case may be, has been withdrawn in
compliance with this Indenture, or (y) held
by it during the continuance of an Event of
Default (other than a default in the
payment of the Purchase Price or Change of
Control Purchase Price, as the case may be,
with respect to such Securities) in which
case, upon such return, the Purchase Notice
or Change of Control Purchase Notice with
respect thereto shall be deemed to have
been withdrawn.
Section 3.11. Deposit Of Purchase
Price Or Change Of Control Purchase Price.
Prior to 10:00 a.m. (local time in The City
of New York) on the Business Day following
the Purchase Date or the Change of Control
Purchase Date, as the case may be, the
Company shall deposit with the Trustee or
with the Paying Agent (or, if the Company
or a Subsidiary or an Affiliate of either
of them is acting as the Paying Agent,
shall segregate and hold in trust as
provided in Section 2.04) an amount of cash
(in immediately available funds if
deposited on such Business Day) or
Applicable Stock, if permitted hereunder,
sufficient to pay the aggregate Purchase
Price or Change of Control Purchase Price,
as the case may be, of all the Securities
or portions thereof which are to be
purchased as of the Purchase Date or Change
of Control Purchase Date, as the case may
be.
As soon as practicable after the
Purchase Date or Change of Control Purchase
Date, as the case may be, the Company shall
deliver to each Holder entitled to receive
shares of Applicable Stock through the
Paying Agent, a certificate for the number
of full shares of Applicable Stock issuable
in payment of the Purchase Price or Change
of Control Purchase Price, as the case may
be, and cash in lieu of any fractional
interests. The person in whose name the
certificate for the shares of Applicable
Stock is registered shall be treated as a
holder of record of Applicable Stock on the
Business Day following the Purchase Date or
Change of Control Purchase Date, as the
case may be. Subject to Section 3.09(c),
no payment or adjustment will be made for
dividends on the shares of Applicable Stock
the record date for which occurred on or
prior to the Purchase Date or Change of
Control Purchase Date, as the case may be.
Section 3.12. Securities Purchased In
Part. Any Certificated Security which is
to be purchased only in
part shall be surrendered at the office of
the Paying Agent (with, if the Company or
the Trustee so requires, due endorsement
by, or a written instrument of transfer in
form satisfactory to the Company and the
Trustee duly executed by, the Holder
thereof or such Holder's attorney duly
authorized in writing) and the Company
shall execute and the Trustee shall
authenticate and deliver to the Holder of
such Security, without service charge, a
new Security or Securities, of any
authorized denomination as requested by
such Holder in aggregate principal amount
at maturity equal to, and in exchange for,
the portion of the principal amount at
maturity of the Security so surrendered
which is not purchased.
Section 3.13. Covenant To Comply With
Securities Laws Upon Purchase Of
Securities. When complying with the
provisions of Section 3.07 or 3.08 hereof
(provided that such offer or purchase
constitutes an "issuer tender offer" for
purposes of Rule 13e-4 (which term, as used
herein, includes any successor provision
thereto) under the Exchange Act at the time
of such offer or purchase), and subject to
any exemptions available under applicable
law, the Company shall (i) comply with Rule
13e-4 and Rule 14e-1 (or any successor
provision) under the Exchange Act, (ii)
file the related Schedule TO (or any
successor schedule, form or report) under
the Exchange Act, and (iii) otherwise
comply with all Federal and state
securities laws so as to permit the rights
and obligations under Sections 3.07 and
3.08 to be exercised in the time and in the
manner specified in Sections 3.07 and 3.08.
Section 3.14. Repayment To The
Company. The Trustee and the Paying Agent
shall return to the Company any cash or
shares of Common Stock that remain
unclaimed as provided in Section 12 of the
Securities, together with interest or
dividends, if any, thereon (subject to the
provisions of Section 7.01(f)), held by
them for the payment of the Purchase Price
or Change of Control Purchase Price, as the
case may be; provided, however, that to the
extent that the aggregate amount of cash or
shares of Common Stock deposited by the
Company pursuant to Section 3.11 exceeds
the aggregate Purchase Price or Change of
Control Purchase Price, as the case may be,
of the Securities or portions thereof which
the Company is obligated to purchase as of
the Purchase Date or Change of Control
Purchase Date, as the case may be, then,
unless otherwise agreed in writing with the
Company, promptly after the Business Day
following the Purchase Date or Change of
Control Purchase Date, as the case may be,
the Trustee shall return any such excess to
the Company together with interest or
dividends, if any, thereon (subject to the
provisions of Section 7.01(f)).
ARTICLE 4
Covenants
Section 4.01. Payment of Securities.
The Company shall promptly make all
payments in respect of the Securities on
the dates and in the manner provided in the
Securities or pursuant to this Indenture.
Any amounts of cash or shares of Applicable
Stock to be given to the Trustee or Paying
Agent, shall be deposited with the Trustee
or Paying Agent by 10:00 a.m., New York
City time, by the Company. The
principal amount at maturity or any portion
thereof, including the Issue Price and
accrued Original Issue Discount, Liquidated
Damages, if any, and the Redemption Price,
Purchase Price and the Change of Control
Purchase Price shall be considered paid on
the applicable date due if on such date
(or, in the case of a Purchase Price or
Change of Control Purchase Price, on the
Business Day following the applicable
Purchase Date or Change of Control Purchase
Date, as the case may be) the Trustee or
the Paying Agent holds, in accordance with
this Indenture, cash or securities, if
permitted hereunder, sufficient to pay all
such amounts then due.
Section 4.02. SEC And Other Reports.
The Company shall file with the Trustee,
within 15 days after it files such annual
and quarterly reports, information,
documents and other reports with the SEC,
copies of its annual report and of the
information, documents and other reports
(or copies of such portions of any of the
foregoing as the SEC may by rules and
regulations prescribe) which the Company is
required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act.
In the event the Company is at any time no
longer subject to the reporting
requirements of Section 13 or 15(d) of the
Exchange Act, it shall continue to provide
the Trustee with reports containing
substantially the same information as would
have been required to be filed with the SEC
had the Company continued to have been
subject to such reporting requirements. In
such event, such reports shall be provided
at the times the Company would have been
required to provide reports had it
continued to have been subject to such
reporting requirements. The Company also
shall comply with the other provisions of
TIA Section 314(a). Delivery of such
reports, information and documents to the
Trustee is for informational purposes only
and the Trustee's receipt of 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
conclusively on Officers' Certificates).
Section 4.03. Compliance Certificate.
The Company shall deliver to the Trustee
within 120 days after the end of each fiscal
year of the Company (beginning with the
fiscal year ending on December 31, 2001) an
Officers' Certificate, stating whether or
not to the knowledge of the signers thereof,
the Company is in default in the performance
and observance of any of the terms,
provisions and conditions of this Indenture
(without regard to any period of grace or
requirement
of notice provided hereunder) and if the
Company shall be in default, specifying all
such defaults and the nature and status
thereof of which they may have knowledge.
Section 4.04. Further Instruments And
Acts. Upon request of the Trustee, the
Company will execute and deliver such
further instruments and do such further acts
as may be reasonably necessary or proper to
carry out more effectively the purposes of
this Indenture.
Section 4.05. Maintenance Of Office Or
Agency. The
Company will maintain in the Borough of
Manhattan, the City of New York, an office
or agency of the Trustee, Registrar, Paying
Agent and Conversion Agent where Securities
may be presented or surrendered for
payment, where Securities may be
surrendered for registration of transfer,
exchange, purchase, redemption or
conversion and where notices and demands to
or upon the Company in respect of the
Securities and this Indenture may be
served. The office of SunTrust Bank,
located at Computer Share, c/o SunTrust
Bank, 88 Pine Street, 19th floor, New York,
New York 10005 (Attention: George Hogan),
shall initially be such office or agency
for all of the aforesaid purposes. The
Company shall give prompt written notice to
the Trustee of the location, and of any
change in the location, of any such office
or agency (other than a change in the
location of the office of the Trustee). If
at any time the Company shall fail to
maintain any such required office or agency
or shall fail to furnish the Trustee with
the address thereof, such presentations,
surrenders, notices and demands may be made
or served at the address of the Trustee set
forth in Section 11.02.
The Company may also from time to time
designate one or more other offices or
agencies where the Securities may be
presented or surrendered for any or all
such purposes and may from time to time
rescind such designations; provided,
however, that no such designation or
rescission shall in any manner relieve the
Company of its obligation to maintain an
office or agency in the Borough of
Manhattan, The City of New York, for such
purposes.
Section 4.06. Delivery Of Certain
Information. At any time when the Company
is not subject to Section 13 or 15(d) of
the Exchange Act, upon the request of a
Holder or any beneficial owner of
Securities or holder or beneficial owner of
shares of Common Stock issued upon
conversion thereof, or in accordance with
Section 3.08(c), the Company will promptly
furnish or cause to be furnished Rule 144A
Information (as defined below)
to such Holder or any beneficial owner of
Securities or holder or beneficial owner of
shares of Common Stock, or to a prospective
purchaser of any such security designated
by any such holder, as the case may be, to
the extent required to permit compliance by
such Holder or holder with Rule 144A under
the Securities Act in connection with the
resale of any such security. "Rule 144A
Information" shall be such information as
is specified pursuant to Rule 144A(d)(4)
under the Securities Act. Whether a person
is a beneficial owner shall be determined
by the Company to the Company's reasonable
satisfaction.
Section 4.07. Liquidated Damages
Notice. In the event that the Company is
required to pay Liquidated Damages to
holders of Securities pursuant to the
Registration Rights Agreement, the Company
will provide written notice ("Liquidated
Damages Notice") to the Trustee of its
obligation to pay Liquidated Damages no
later than fifteen days prior to the
proposed payment date for the Liquidated
Damages, and the Liquidated Damages Notice
shall set forth the amount of Liquidated
Damages to be paid by the Company on such
payment date. The Trustee shall not at any
time be under any duty to any holder of
Securities to determine the Liquidated
Damages, or with respect to the nature,
extent or calculation of the amount of
Liquidated Damages when made, or with
respect to the method employed in such
calculation of the Liquidated Damages.
ARTICLE 5
Successor Corporation
Section 5.01. When Company May Merge
Or Transfer Assets. The Company shall not
consolidate with or merge with or into any
other person or convey, transfer, sell,
lease or otherwise dispose of all or
substantially all of its properties and
assets to any person, unless:
(a) either (1) the Company shall be the
continuing corporation or (2) the Person
(if other than the Company) formed by such
consolidation or into which the Company is
merged or the Person which acquires by
conveyance, transfer or lease all or
substantially all of the properties and
assets of the Company substantially as an
entirety (i) shall be organized and validly
existing under the laws of the United
States or any State thereof or the District
of Columbia and (ii) shall expressly
assume, by an indenture supplemental
hereto, executed and delivered to the
Trustee, in form reasonably satisfactory to
the Trustee, all of the obligations of the
Company under the Securities and this
Indenture;
(b) immediately after giving effect
to such transaction, no Event of Default, and no
event that,
after notice or lapse of time or both, would become
an
Event of Default, shall have occurred and be
continuing; and
(c) the Company shall have delivered to
the Trustee an Officers' Certificate and an Opinion
of Counsel, each
stating that such consolidation, merger,
conveyance, transfer or lease and, if a
supplemental indenture is required in
connection with such transaction, such
supplemental indenture, comply with this
Article 5 and that all conditions precedent
herein provided for relating to such
transaction have been satisfied.
For purposes of the foregoing, the
transfer (by lease, assignment, sale or
otherwise) of the properties and assets of
one or more Subsidiaries (other than to the
Company or another Subsidiary), which, if
such assets were owned by the Company,
would constitute all or substantially all
of the properties and assets of the
Company, shall be deemed to be the transfer
of all or substantially all of the
properties and assets of the Company.
The successor Person formed by such
consolidation or into which the Company is
merged or the successor Person to which
such conveyance, transfer or lease is made
shall succeed to, and be substituted for,
and may exercise every right and power of,
the Company under this Indenture with the
same effect as if such successor had been
named as the Company herein; and
thereafter, except in the case of a lease
and obligations the Company may have under
a supplemental indenture, the Company shall
be discharged from all obligations and
covenants under this Indenture and the
Securities. Subject to Section 9.06, the
Company, the Trustee and the successor
Person shall enter into a supplemental
indenture to evidence the succession and
substitution of such successor Person and
such discharge and release of the Company.
ARTICLE 6
Defaults And Remedies
Section 6.01. Events Of Default. So
long as any Securities are outstanding,
each of the following shall be an "Event of
Default":
(1) the Company fails to convert any
portion of the principal amount at maturity
of any Security following the exercise by
the Holder of the right to convert such
Security into Common Stock pursuant to and
in accordance with Article 10 hereof;
(2) the Company defaults in its obligation to
repurchase any Security, or any portion
thereof, upon
the exercise by the Holder of such Holder's
right to require the Company to purchase such
Securities pursuant to and in accordance with
Section 3.07 and 3.08 hereof;
(3) the Company defaults in its
obligation to redeem any Security, or any
portion thereof, called for redemption by the
Company pursuant to and in accordance with
Section 3.01 hereof.
(4) the Company defaults in the payment of
the
principal amount at maturity on any Security
when the
same becomes due and payable at its Stated
Maturity or the payment of any portion of
the principal amount at maturity,
including the Issue Price and accrued
Original Discount on any Security, when
the same becomes due and payable;
(5) the Company defaults in the
payment of any Liquidated Damages when due
and payable, and continuance of such
default for a period of 30 days; (6)
the Company fails to comply with any of
its
agreements or covenants in the Securities
or this Indenture (other than those
referred to in clause (1) through (5)
above) and such failure continues for 60
days after receipt by the Company of a
Notice of Default;
(7) a failure to pay when due at
maturity or a default that results in the
acceleration of maturity of any
indebtedness for borrowed money of the
Company or any Designated Subsidiary in an
aggregate amount of $40.0 million or more,
unless the acceleration is rescinded,
stayed or annulled within 30 days after
written notice
of default is given to the Company by the
Trustee or Holders of not less than 25% in
aggregate principal amount at maturity of
the Securities then outstanding; (8)
the entry by a court having jurisdiction in
the
premises of (i) a decree or order for
relief in respect of the Company or any of
its Subsidiaries that is a Designated
Subsidiary or any group of two or more
Subsidiaries that, taken as a whole, would
constitute a Designated Subsidiary, in an
involuntary case or proceeding under any
applicable bankruptcy, insolvency,
reorganization or other similar law or (ii)
a decree or order adjudging the Company or
any of its Subsidiaries that is a
Designated Subsidiary or any group of two
or more Subsidiaries that, taken as a
whole, would constitute a Designated
Subsidiary, a bankrupt or insolvent, or
approving as properly filed a petition
seeking reorganization, arrangement,
adjustment or composition of or in respect
of the Company or any of its Subsidiaries
that is a Designated Subsidiary or any
group of two or more Subsidiaries that,
taken as a whole, would constitute a
Designated Subsidiary, under any applicable
law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator
or other similar official of the Company or
of any substantial part of its property, or
ordering the winding up or liquidation of
its affairs, and the continuance of any
such decree or order for relief or any such
other decree or order unstayed and in
effect for a period of 60 consecutive days;
or
(9) the commencement by the Company or any
of its Subsidiaries that is a Designated
Subsidiary or any group of two or more
Subsidiaries that, taken as a whole, would
constitute a Designated Subsidiary, of a
voluntary case or proceeding under any
applicable bankruptcy, insolvency,
reorganization or other similar law or of
any other case or proceeding to be
adjudicated a bankrupt or insolvent, or the
consent by the Company or any of its
Subsidiaries that is a Designated
Subsidiary or any group of two or more
Subsidiaries that, taken as a whole, would
constitute a Designated Subsidiary, to the
entry of a decree or order for relief in
respect of the Company or any of its
Subsidiaries that is a Designated
Subsidiary or any group of two or more
Subsidiaries that, taken as a whole, would
constitute a Designated Subsidiary, in an
involuntary case or proceeding under any
applicable bankruptcy, insolvency,
reorganization or other similar law or to
the commencement of any bankruptcy or
insolvency case or proceeding against the
Company, or the filing by the Company or
any of its Subsidiaries that is a
Designated Subsidiary or any group of two
or more Subsidiaries that, taken as a
whole, would constitute a Designated
Subsidiary, of a petition or answer or
consent seeking reorganization or relief
under any applicable law, or the consent by
the Company to the filing of such petition
or to the appointment of or the taking
possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator
or other similar official of the Company or
of any substantial part of its property, or
the making by the Company or any of its
Subsidiaries that is a Designated
Subsidiary or any group of two or more
Subsidiaries that, taken as a whole, would
constitute a Designated Subsidiary, of an
assignment for the benefit of creditors, or
the admission by the Company or any of its
Subsidiaries that is a Designated
Subsidiary or any group of two or more
Subsidiaries that, taken as a whole, would
constitute a Designated Subsidiary, in
writing of its inability to pay its debts
generally as they become due, or the taking
of corporate action by the Company or any
of its Subsidiaries that is a Designated
Subsidiary or any group of two or more
Subsidiaries that, taken as a whole, would
constitute a Designated Subsidiary,
expressly in furtherance of any such
action.
A Default under clause (6) above is
not an Event of Default until the Trustee
notifies the Company, or the Holders of at
least 25% in aggregate principal amount at
maturity of the Securities at the time
outstanding notify the Company and the
Trustee, of the Default and the Company
does not cure such Default (and such
Default is not waived) within the time
specified in clause (6) above after actual
receipt of such notice. Any such notice
must specify the Default, demand that it be
remedied and state that such notice is a
"Notice of Default."
"Designated Subsidiary" shall mean any
existing or future, direct or indirect,
Subsidiary of the Company whose assets
constitute 15% or more of the total assets
of the Company on a consolidated basis.
The Trustee shall, within 90 days of
the occurrence of a Default, give to the
Holders of the Securities notice of all
uncured Defaults known to it and written
notice of any event which with the giving
of notice or the lapse of time, or both,
would become an Event of Default, its
status and what action the Company is
taking or proposes to take with respect
thereto; provided, however, the Trustee
shall be protected in withholding such
notice if it, in good faith, determines
that the withholding of such notice is in
the best interest of such Holders, except
in the case of a Default in the payment of
the principal amount at maturity, or any
portion thereof, including the Issue Price
and accrued Original Issue Discount, or
Liquidated Damages, if any, on any of the
Securities when due or in the payment of
any redemption or purchase obligation of
the Company.
Section 6.02. Acceleration. If an
Event of Default (other than an Event of
Default specified in Section 6.01(8) or
6.01(9)) occurs and is continuing, the
Trustee by notice to the Company, or the
Holders of at least 25% in aggregate
principal amount at maturity of the
Securities at the time outstanding by
notice to the Company and the Trustee, may
declare the principal amount at maturity,
or any portion thereof, including the Issue
Price and accrued Original Issue Discount
and Liquidated Damages, if any, on all the
Securities to be immediately due and
payable. Upon such a declaration, such
accelerated amount shall be due and payable
immediately. If an Event of Default
specified in Section 6.01(8) or 6.01(9)
occurs and is continuing, the principal
amount at maturity, or any portion thereof,
including the Issue Price and accrued
Original Issue Discount and Liquidated
Damages, if any, on all the Securities
shall become and be immediately due and
payable without any declaration or other
act on the part of the Trustee or any
Securityholders. The Holders of a majority
in aggregate principal amount at maturity
of the Securities at the time outstanding,
by notice to the Trustee (and without
notice to any other Securityholder) may
rescind an acceleration and its
consequences if the rescission would not
conflict with any judgment or decree and if
all existing Events of Default have been
cured or waived except nonpayment of the
principal amount at maturity, or any
portion thereof, including the Issue Price
and accrued Original Issue Discount and
Liquidated Damages, if any, that have
become due solely as a result of
acceleration and
if all amounts due to the Trustee under
Section 7.07 have been paid. No such
rescission shall affect any subsequent
Default or impair any right consequent
thereto.
Section 6.03. Other Remedies. If an
Event of Default occurs and is continuing,
the Trustee may pursue any available remedy
to collect the payment of the principal
amount at maturity, or any portion thereof,
including the Issue Price and accrued
Original Issue Discount and Liquidated
Damages, if any, on the Securities or to
enforce the performance of any provision of
the Securities or this Indenture.
The Trustee may maintain a proceeding
even if the Trustee does not possess any of
the Securities or does not produce any of
the Securities in the proceeding. A delay
or omission by the Trustee or any
Securityholder in exercising any right or
remedy accruing upon an Event of Default
shall not impair the right or remedy or
constitute a waiver of, or acquiescence in,
the Event of Default. No remedy is
exclusive of any other remedy. All
available remedies are cumulative.
Section 6.04. Waiver Of Past
Defaults. The Holders of a majority in
aggregate principal amount at maturity of
the Securities at the time outstanding, by
notice to the Trustee (and without notice
to any other Securityholder), may waive an
existing Default and its consequences
except (1) an Event of Default described
in Section 6.01(1) or 6.01(2), (2) a
Default in respect of a provision that
under Section 9.02 cannot be amended
without the consent of each Securityholder
affected or (3) a Default which constitutes
a failure to convert any Security in
accordance with the terms of Article 10.
When a Default is waived, it is deemed
cured, but no such waiver shall extend to
any subsequent or other Default or impair
any consequent right. This Section 6.04
shall be in lieu of Section 316(a)1(B) of
the TIA and such Section 316(a)1(B) is
hereby expressly excluded from this
Indenture, as permitted by the TIA.
Section 6.05. Control By Majority.
The Holders of a majority in aggregate
principal amount at maturity of the
Securities at the time outstanding may
direct the time, method and place of
conducting any proceeding for any remedy
available to the Trustee or of exercising
any trust or power conferred on the
Trustee. However, the Trustee may refuse to
follow any direction that conflicts with
law or this Indenture or that the Trustee
determines in good faith is unduly
prejudicial to the rights of other
Securityholders or would involve the
Trustee in personal liability unless the
Trustee is offered indemnity satisfactory
to it. This Section 6.05 shall be in lieu
of Section 316(a)1(A) of the TIA and such
Section 316(a)1(A) is hereby expressly
excluded from this Indenture, as permitted
by the TIA.
Section 6.06. Limitation On Suits. A
Securityholder may not pursue any remedy
with respect to this Indenture or the
Securities unless:
(1) the Holder gives to the Trustee
written notice stating that an Event of
Default is continuing;
(2) the Holders of at least 25% in
aggregate principal amount at maturity of the
Securities at the time
outstanding make a written request to the
Trustee to
pursue the remedy;
(3) such Holder or Holders offer to the
Trustee
security or indemnity satisfactory to the
Trustee
against any loss, liability or expense;
(4) the Trustee does not comply with the
request
within 60 days after receipt of such notice,
request
and offer of security or indemnity; and
(5) the Holders of a majority in
aggregate principal amount at maturity of the
Securities at the time outstanding do not give
the Trustee a direction inconsistent with the
request during such 60-day
period.
A Securityholder may not use this Indenture
to
prejudice the rights of any other
Securityholder or to obtain a preference or
priority over any other Securityholder.
Section 6.07. Rights Of Holders To
Receive Payment. Notwithstanding any other
provision of this Indenture, the right of any
Holder to receive payment of the principal
amount at maturity, or any portion thereof,
including the Issue Price and accrued
Original Issue Discount, Redemption Price,
Purchase Price, Change of Control Purchase
Price or Liquidated Damages, if any,
in respect of the Securities held by such
Holder, on or after the respective due
dates expressed in the Securities or any
Redemption Date, and to convert the
Securities in accordance with Article 10,
or to bring suit for the enforcement of any
such payment on or after such respective
dates or the right to convert, shall not be
impaired or affected adversely without the
consent of such Holder.
Section 6.08. Collection Suit By Trustee.
If an Event of Default described in Section
6.01(2), 6.01(3) or 6.01(4) occurs and is
continuing, the Trustee may
recover judgment in its own name and as
trustee of an express trust against the
Company for the whole amount owing with
respect to the Securities and the amounts
provided for in Section 7.07.
Section 6.09. Trustee May
File Proofs Of Claim. In case of
the pendency of any receivership,
insolvency, liquidation,
bankruptcy, reorganization,
arrangement, adjustment,
composition or other judicial
proceeding relative to the
Company or any other obligor upon
the Securities or the property of
the Company or of such other
obligor or their creditors, the
Trustee (irrespective of whether
the principal amount at maturity,
or any portion thereof, including
the Issue Price and accrued
Original Issue Discount,
Redemption Price, Purchase Price,
Change of Control Purchase Price
or Liquidated Damages, if any, in
respect of the Securities shall
then be due and payable as
therein expressed or by
declaration or otherwise and
irrespective of whether the
Trustee shall have made any
demand on the Company for the
payment of any such amount) shall
be entitled and empowered, by
intervention in such proceeding
or otherwise.
(a) to file and prove a claim for the
whole amount of the principal amount at
maturity, or any portion
thereof, including the Issue Price and
accrued Original Issue Discount, Redemption
Price, Purchase Price, Change of Control
Purchase Price, or Liquidated Damages, if
any, and to file such other papers or
documents as may be necessary or advisable
in order to have the claims of the Trustee
(including any claim for the reasonable
compensation, expenses, disbursements and
advances of the Trustee, its agents and
counsel or any other amounts due the
Trustee under Section 7.07) and of the
Holders allowed in such judicial
proceeding, and
(b) to collect and receive any moneys
or other property payable or deliverable on
any such claims and to distribute the same;
and any custodian, receiver, assignee,
trustee, liquidator, sequestrator or
similar official in any such judicial
proceeding is hereby authorized by each
Holder to make such payments to the Trustee
and, in the event that the Trustee shall
consent to the making of such payments
directly to the Holders, to pay the Trustee
any amount due it for the reasonable
compensation, expenses, disbursements and
advances of the Trustee, its agents and
counsel, and any other amounts due the
Trustee under Section 7.07.
Nothing herein contained shall be
deemed to authorize the Trustee to
authorize or consent to or accept or adopt
on behalf of any Holder any plan of
reorganization, arrangement, adjustment or
composition affecting the Securities or the
rights of any Holder thereof, or to
authorize the Trustee to vote in respect of
the claim of any Holder in any such
proceeding.
Section 6.10. Priorities. If the
Trustee collects any money pursuant to this
Article 6, it shall pay out the money in the
following order:
FIRST: to the Trustee for amounts due under
Section 7.07;
SECOND: to Securityholders for amounts
due and unpaid on the Securities for the
principal amount at maturity, or any portion
thereof, including the Issue Price and
accrued Original Issue Discount, Redemption
Price, Purchase Price, Change of Control
Purchase Price or Liquidated Damages, if
any, as the case may be, ratably, without
preference or priority of any kind,
according to such amounts due and payable on
the Securities; and
THIRD: the balance, if any, to the Company.
The Trustee may fix a record date and
payment date for any payment to
Securityholders pursuant to this Section
6.10. At least 15 days before such record
date, the Trustee shall mail to each
Securityholder and the Company a notice
that states the record date, the payment
date and the amount to be paid.
Section 6.11. Undertaking For Costs.
In any suit for the enforcement of any
right or remedy under this Indenture or in
any suit against the Trustee for any action
taken or omitted by it as Trustee, a court
in
its discretion may require the filing by
any party litigant (other than the Trustee)
in the suit of an undertaking to pay the
costs of the suit, and the court in its
discretion may assess reasonable costs,
including reasonable attorneys' fees and
expenses, against any party litigant in the
suit, having due regard to the merits and
good faith of the claims or defenses made
by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a
suit by a Holder pursuant to Section 6.07
or a suit by Holders of more than 10% in
aggregate principal amount at maturity of
the Securities at the time outstanding.
This Section 6.11 shall be in
lieu of Section 315(e) of the
TIA and such Section 315(e) is hereby
expressly excluded from this Indenture, as
permitted by the TIA.
Section 6.12. Waiver Of Stay,
Extension Or Usury Laws. The Company
covenants (to the extent that it may
lawfully do so) that it will not at any
time insist upon, or plead, or in any
manner whatsoever claim or take the benefit
or advantage of, any stay or extension law
or any usury or other law wherever enacted,
now or at any time hereafter in force,
which would prohibit or forgive the Company
from paying all or any portion of the
principal amount at maturity, including the
Issue Price and accrued Original Issue
Discount, Redemption Price, Purchase Price
or Change of Control Purchase Price in
respect of Securities, or Liquidated
Damages, if any, on Securities, as
contemplated herein, or which may affect
the covenants or the performance of this
Indenture; and the Company (to the extent
that it may lawfully do so) hereby
expressly waives all benefit or advantage
of any such law, and covenants that it will
not hinder, delay or impede the execution
of any power herein granted to the Trustee,
but will suffer and permit the execution of
every such power as though no such law had
been enacted.
ARTICLE 7
Trustee
Section 7.01. Duties Of Trustee. The
duties and responsibilities of the Trustee
shall be as provided by the TIA and as set
forth herein.
(a) If an Event of Default has
occurred and is continuing, the Trustee
shall exercise the rights and powers vested
in it by this Indenture and use the same
degree of care and skill in its exercise as
a prudent person would exercise or use
under the circumstances in the conduct of
such person's own affairs.
(b) Except during the continuance of
an Event of Default:
(1) the Trustee need perform only those
duties that are specifically set forth
in this Indenture and no others; and
(2) in the absence of bad faith on its
part, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the
opinions
expressed therein, upon 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
provision
hereof are specifically required to be
furnished to the Trustee, the Trustee shall
examine the certificates and opinions to
determine whether or not they conform to
the requirements of this Indenture, but
need not confirm or investigate the
accuracy of mathematical calculations or
other facts stated therein. This Section
7.01(b) shall be in lieu of Section 315(a)
of
the TIA and such Section 315(a) is hereby
expressly excluded from this Indenture, as
permitted by the TIA.
(c) The Trustee may not be relieved from
liability for its own negligent action, its own
negligent failure to
act or its own willful misconduct, except that:
(1) this Section (c) does not limit the effect
of
Section 7.01(b);
(2) the Trustee shall not be liable for
any error of judgment made in good faith by a
Responsible Officer
unless it is proved that the Trustee was
negligent in ascertaining the pertinent
facts; and
(3) the Trustee shall not be liable
with respect to any action it takes or omits
to take in good faith in accordance with a
direction received by it pursuant to Section
6.05.
Subparagraphs (c)(1), (2) and (3) shall
be in lieu of Sections 315(d)(1), 315(d)(2)
and 315(d)(3) of the
TIA and such Sections 315(d)(1), 315(d)(2) and
315(d)(3) are hereby expressly excluded from
this Indenture, as permitted by the TIA.
(d) Every provision of this Indenture
that in any way relates to the Trustee is
subject to Sections Error! Reference source not
found., 7.01(b), 7.01(c) and
7.01(e).
(e) The Trustee may refuse to perform
any duty or exercise any right or power or
extend or risk its own funds or otherwise
incur any financial liability unless it
receives indemnity satisfactory to it
against any loss, liability or expense.
(f) Money held by the Trustee in trust
hereunder need not be segregated from other
funds except to the extent required by law.
The Trustee (acting in any capacity
hereunder) shall be under no liability for
interest on
any money received by it hereunder unless
otherwise agreed in writing with the Company.
Section 7.02. Rights Of Trustee. Subject to
its
duties and responsibilities under the TIA.
(a) the Trustee may conclusively rely
and shall be protected in acting or
refraining from acting upon any resolution,
certificate, statement, instrument,
opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or
document believed by it to be genuine and to
have been signed or presented by the proper
party or parties;
(b) whenever in the administration of
this Indenture the Trustee shall deem it
desirable that a matter be
proved or established prior to taking,
suffering or
omitting any action hereunder, the Trustee
(unless other evidence be herein
specifically prescribed) may, in the
absence of bad faith on its part,
conclusively rely upon an Officers'
Certificate;
(c) the Trustee may execute any of
the trusts or powers hereunder or perform
any duties hereunder either directly or by
or through agents or attorneys and the
Trustee shall not be responsible for any
misconduct or negligence on the part of any
agent or attorney appointed with due care
by it hereunder;
(d) the Trustee shall not be liable for
any action taken, suffered, or omitted to be
taken by it in good faith which it believes to
be authorized or within its rights or powers
conferred under this Indenture;
(e) the Trustee may consult with counsel
selected by it and any advice or Opinion of
Counsel shall be full
and complete authorization and protection
in respect of any action taken or suffered
or omitted by it hereunder in good faith
and in accordance with such advice or
Opinion of Counsel;
(f) the Trustee shall be under no
obligation to exercise any of the rights or
powers vested in it by this Indenture at
the request, order or direction of any of
the Holders, pursuant to the provisions of
this Indenture, unless such Holders shall
have offered to the Trustee security or
indemnity satisfactory to it against the
costs, expenses and liabilities which may
be incurred therein or thereby;
(g) any request or direction of the
Company mentioned herein shall be
sufficiently evidenced by a Company
Request or Company Order and any resolution
of the Board of Directors may be
sufficiently evidenced by a Board
Resolution;
(h) the Trustee shall not be bound to make
any
investigation into the facts or matters
stated in any resolution, certificate,
statement, instrument, opinion, report,
notice, request, direction, consent, order,
bond, debenture, note, other evidence of
indebtedness or other paper or document,
but the Trustee, in its discretion, may
make such further inquiry or investigation
into such facts or matters as it may see
fit, and, if the Trustee shall determine to
make such further inquiry or investigation,
it shall be entitled to examine the books,
records and premises of the Company,
personally or by agent or attorney at the
sole cost of the Company and shall incur no
liability or additional liability of any
kind by reason of such inquiry or
investigation;
(i) the Trustee shall not be deemed to
have notice of any Default or Event of
Default unless a Responsible Officer of the
Trustee has actual knowledge thereof or
unless written notice of any event which is
in fact
such a default is received by the Trustee at
the Corporate Trust Office of the Trustee,
and such notice references the Securities and
this Indenture;
(j) the rights, privileges,
protections, immunities and benefits given to
the Trustee, including, without limitation,
its right to be indemnified, are extended
to, and shall be enforceable by, the Trustee
in each of its capacities hereunder, and to
each agent, custodian and other person
employed to act hereunder; and
(k) the Trustee may request that the
Company deliver an Officers' Certificate
setting forth the names of individuals and/or
titles of officers authorized at
such time to take specified actions
pursuant to this Indenture, which Officers'
Certificate may be signed by any person
authorized to sign an Officers'
Certificate, including any person specified
as so authorized in any such certificate
previously delivered and not superseded.
Section 7.03. Individual Rights Of
Trustee. The Trustee in its individual or
any other capacity may become the owner or
pledgee of Securities and may otherwise
deal with the Company or its Affiliates
with the same rights it would have if it
were not Trustee. Any Paying Agent,
Registrar, Conversion Agent or coregistrar
may do the same with like rights. However,
the Trustee must comply with Sections 7.10
and 7.11.
Section 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to
the validity or adequacy of this Indenture
or the Securities, it shall not be
accountable for the Company's use or
application of the proceeds from the
Securities, it shall not be responsible for
any statement in the registration statement
for the Securities under the Securities Act
or in any offering document for the
Securities, the Indenture or the Securities
(other than its certificate of
authentication), or the determination as to
which beneficial owners are entitled to
receive any notices hereunder.
Section 7.05. Notice Of Defaults. If
a Default occurs and if it is known to the
Trustee, the Trustee shall give to each
Securityholder notice of the Default within
90 days after it occurs or, if later,
within 15 days after it is known to the
Trustee, unless such Default shall have
been cured or waived before the giving of
such notice. Notwithstanding the preceding
sentence, except in the case of a Default
described in Section 6.01(1) and 6.01(2),
the Trustee may withhold the notice if and
so long as a committee of its Responsible
Officers in good faith determines that
withholding the notice is in the interest
of the Securityholders. The preceding
sentence shall be in lieu of the proviso to
Section 315(b) of the TIA and such proviso
is hereby expressly excluded from this
Indenture, as permitted by the TIA. The
Trustee shall not be deemed to have
knowledge of a Default unless a Responsible
Officer of the Trustee has received written
notice of such Default, which notice
specifically references this Indenture and
the Securities.
Section 7.06. Reports By Trustee To
Holders. Within 60 days after each May 15
beginning with the May 15 following the
date of this Indenture, the Trustee shall
mail to each Securityholder a brief report
dated as of such May 15 that complies with
TIA Section 313(a), if required by such
Section 313(a). The Trustee also shall
comply with TIA Section 313(b).
A copy of each report at the time of
its mailing
to Securityholders shall be filed with the
SEC and each securities exchange, if any,
on which the Securities are listed. The
Company agrees to notify the Trustee
promptly whenever the Securities become
listed on any securities exchange and of
any delisting thereof.
Section 7.07. Compensation And Indemnity.
The
Company agrees:
(a) to pay to the Trustee from time
to time such compensation as the Company
and the Trustee shall from time to time
agree in writing for all services rendered
by it hereunder (which compensation shall
not be limited (to the extent permitted by
law) by any provision of law in regard to
the compensation of a trustee of an express
trust);
(b) to reimburse the Trustee upon its
request for all reasonable expenses,
disbursements and advances
incurred or made by the Trustee in
accordance with any provision of this
Indenture (including the reasonable
compensation and the expenses, advances and
disbursements of its agents and counsel),
except any such expense, disbursement or
advance as may be attributable to its
negligence or bad faith; and
(c) to indemnify the Trustee or any
predecessor Trustee and their agents for,
and to hold them harmless against, any
loss, damage, claim, liability, cost or
expense (including attorney's fees and
expenses, and taxes (other than taxes based
upon, measured by or determined by the
income of the Trustee)) incurred without
negligence or bad faith on its part,
arising out of or in connection with the
acceptance or administration of this trust,
including the costs and expenses of
defending itself against any claim (whether
asserted by the Company or any Holder or
any other person) or liability in
connection with the exercise or performance
of any of its powers or duties hereunder.
To secure the Company's payment
obligations in this Section 7.07, the
Trustee shall have a lien prior to the
Securities on all money or property held or
collected by the Trustee, except that held
in trust to pay the principal amount at
maturity, or any portion thereof, including
the Issue Price and accrued Original Issue
Discount, Redemption Price, Purchase Price,
Change of Control Purchase Price or
Liquidated Damages, if any, as the case may
be, on particular Securities.
The Company's payment obligations
pursuant to this Section 7.07 shall survive
the discharge of this Indenture and the
resignation or removal of the Trustee.
When the Trustee incurs expenses after the
occurrence of a Default specified in
Section 6.01(5) or 6.01(6), the expenses
including the reasonable charges and
expenses of its counsel, are intended to
constitute expenses of administration under
any bankruptcy law.
Section 7.08. Replacement Of
Trustee. The Trustee may resign by
so notifying the Company; provided,
however, no such resignation shall be
effective until a successor Trustee
has accepted its appointment pursuant
to this Section 7.08. The Holders of
a majority in aggregate principal
amount at maturity of the
Securities at the time outstanding
may remove the
Trustee by so notifying the Trustee and the
Company.
The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section
7.10;
(2) the Trustee is adjudged bankrupt or
insolvent;
(3) a receiver or public officer takes charge
of the
Trustee or its property; or
(4) the Trustee otherwise becomes
incapable of acting.
If the Trustee resigns or is removed or if
a
vacancy exists in the office of Trustee for
any reason, the Company shall promptly
appoint, by resolution of its Board of
Directors, a successor Trustee.
A successor Trustee shall deliver a
written acceptance of its appointment to
the retiring Trustee and to the Company
satisfactory in form and substance to the
retiring Trustee and the Company. Thereupon
the resignation or removal of the retiring
Trustee shall become effective, and the
successor Trustee shall have all the
rights, powers and duties of the Trustee
under this Indenture. The successor
Trustee shall mail a notice of its
succession to Securityholders. The
retiring Trustee shall promptly transfer
all property held by it as Trustee to the
successor Trustee, subject to the lien
provided for in Section 7.07.
If a successor Trustee does not take
office within 30 days after the retiring
Trustee resigns or is removed, the retiring
Trustee, the Company or the Holders of a
majority in aggregate principal amount at
maturity of the Securities at the time
outstanding may petition any court of
competent jurisdiction at the expense of
the Company for the appointment of a
successor Trustee.
If the Trustee fails to comply with
Section 7.10, any Securityholder may
petition any court of competent
jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Section 7.09. Successor Trustee By
Merger. If the Trustee consolidates with,
merges or converts into, or transfers all or
substantially all its corporate trust
business or assets to, another corporation,
the resulting, surviving or transferee
corporation without any further act shall be
the successor Trustee.
Section 7.10. Eligibility;
Disqualification. The Trustee shall at all
times satisfy the requirements
of TIA Sections 310(a)(1) and 310(b). The
Trustee (or its parent holding company)
shall have a combined capital and surplus of
at least $50,000,000 as set
forth in its most recent published annual
report of condition. Nothing herein
contained shall prevent the Trustee from
filing with the Commission the application
referred to in the penultimate paragraph of
TIA Section 310(b).
Section 7.11. Preferential Collection
Of Claims Against Company. The Trustee
shall comply with TIA Section 311(a),
excluding any creditor relationship listed
in TIA Section 311(b). A Trustee who has
resigned or been removed shall be
subject to TIA Section 311(a) to the
extent indicated therein.
ARTICLE 8
Discharge Of
Indenture
Section 8.01. Discharge Of Liability
On Securities. When (i) the Company
delivers to the Trustee all outstanding
Securities (other than Securities replaced
or repaid pursuant to Section 2.07) for
cancellation or (ii) all outstanding
Securities have become due and payable and
the Company deposits with the Trustee cash
sufficient to pay all amounts due and owing
on all outstanding Securities (other than
Securities replaced pursuant to Section
2.07), and if in either case the Company
pays all other sums payable hereunder by
the Company, then this Indenture shall,
subject to Section 7.07, cease to be of
further effect. The Trustee shall join in
the execution of a document prepared by the
Company acknowledging satisfaction and
discharge of this Indenture on demand of
the Company accompanied by an Officers'
Certificate and Opinion of Counsel and at
the cost and expense of the Company.
Section 8.02. Repayment To The
Company. The Trustee and the Paying Agent
shall return to the Company upon written
request any money or securities held by
them for the payment of any amount with
respect to the Securities that remains
unclaimed for two years, subject to
applicable unclaimed property law. After
return to the Company, Holders entitled to
the money or securities must look to the
Company for payment as general creditors
unless an applicable abandoned property law
designates another person and the Trustee
and the Paying Agent shall have no further
liability to the Securityholders with
respect to such money or securities for
that period commencing after the return
thereof.
ARTICLE 9
Amendments
Section 9.01. Without Consent Of
Holders. The Company and the Trustee may
amend this Indenture or the Securities
without the consent of any Securityholder
to:
(a) add to the covenants of the
Company for the benefit of the Holders
of Securities;
(b) surrender any right or power
herein conferred upon the Company;
(c) provide for conversion rights of
Holders of Securities if any reclassification
or change of the Common Stock or any
consolidation, merger or sale of
all or substantially all of the Company's
assets occurs;
(d) provide for the assumption of
the Company's obligations to the Holders of
Securities in the case of a merger,
consolidation, conveyance, transfer or
lease pursuant to Article 5 hereof;
(e) increase the Conversion
Rate; provided, however, that such
increase in the Conversion Rate shall
not
adversely affect the interests of the
Holders of Securities (after taking
into account tax and other consequences
of such increase);
(f) comply with the requirements of the
SEC in order to effect or maintain the
qualification of this
Indenture under the TIA;
(g) make any changes or modifications
necessary in connection with the registration
of the Securities
under the Securities Act as contemplated in the
Registration Rights Agreement; provided,
however, that such action pursuant to this
clause (g) does not, in the good faith opinion
of the Board of Directors of the Company (as
evidenced by a Board Resolution) and the
Trustee, adversely affect the interests of the
Holders of Securities in any material respect;
(h) cure any ambiguity, to correct or
supplement any provision herein which may be
inconsistent with any
other provision herein or which is otherwise
defective, or to make any other provisions
with respect to matters or questions arising
under this Indenture which the Company may
deem necessary or desirable and which shall
not be inconsistent with the provisions of
this Indenture; provided, however, that such
action pursuant to this clause (h) does not,
in the good faith opinion of the Board of
Directors of the Company (as evidenced by a
Board Resolution) and the Trustee, adversely
affect the interests of the Holders of
Securities in any material respect; and
(i) add or modify any other provisions
herein with respect to matters or questions
arising hereunder which the Company and the
Trustee may deem necessary or desirable and
which will not adversely affect the interests
of the Holders of Securities.
Section 9.02. With Consent Of Holders.
Except as provided below in this Section
9.02, this Indenture or the Securities may be
amended, modified or
supplemented, and noncompliance in any
particular instance with any provision of
this Indenture or the Securities may be
waived, in each case with the written
consent of the Holders of at least a
majority of the principal amount at
maturity of the Securities at the time
outstanding.
Without the written consent or the
affirmative vote of each Holder of
Securities affected thereby, an amendment,
supplement or waiver under this Section
9.02 may not:
(a) change the maturity of the principal
amount at maturity of, or any installment of
Liquidated Damages, on, any Security;
(b) reduce the principal amount at
maturity principal amount at maturity, or any
portion thereof, including
the Issue Price and accrued Original Issue
Discount, or Liquidated Damages, payable on, or
the Redemption Price, Purchase Price or Change
of Control Purchase Price of, any Security;
(c) impair or adversely affect the
conversion rights of any Holder of Securities;
(d) reduce the rate at which Original
Issue Discount accrues on the Securities;
(e) change the currency of any amount
owed or owing under the Security or any interest
thereon from U.S. Dollars;
(f) alter or otherwise modify the rate
of Liquidated Damages on any Security, or the
manner of calculation thereof, or extend time
for payment of any amounts due
and payable to the Holders of the Securities;
(g) impair the right of any Holder to
institute suit for the enforcement of any payment
or with respect to,
or conversion of, any Security;
(h) modify the obligation of the Company
to maintain an office or agency in The City of New
York pursuant to Section 4.05;
(i) adversely affect the purchase right of
the Holders of the Securities as provided in
Article 3 or the right
of the Holders of the Securities to convert any
Security as provided in Article 10;
(j) modify the provisions of Article 3 in a
manner
adverse to the Holders of the Securities;
(k) modify any of the provisions of this
Section, or reduce the principal amount at
maturity of outstanding Securities required to
waive a percentage of the
aggregate Default, except to provide that
certain other provisions of this Indenture
cannot be modified or waived without the consent
of the Holder of each outstanding Security
affected thereby; or
(l) reduce the percentage of the
aggregate principal amount at maturity of the
outstanding Securities the
consent of whose Holders is required for any
such supplemental indenture entered into in
accordance with this Section 9.02 or the
consent of whose Holders is required for any
waiver provided for in this Indenture.
It shall not be necessary for the consent of
the
Holders under this Section 9.02 to approve
the particular form of any proposed
amendment, but it shall be sufficient if
such consent approves the substance thereof.
After an amendment under this Section
9.02 becomes effective, the Company shall
mail to each Holder a notice briefly
describing the amendment.
Nothing in this Section 9.02 shall
impair the ability of the Company and the
Trustee to amend this Indenture or the
Securities without the consent of any
Securityholder to provide for the assumption
of the Company's obligations to the Holders
of Securities in the case of a merger,
consolidation, conveyance, transfer or lease
pursuant to Article V hereof.
Section 9.03. Compliance With Trust
Indenture Act. Every supplemental indenture
executed pursuant to this Article shall
comply with the TIA.
Section 9.04. Revocation And Effect
Of Consents, Waivers And Actions. Until an
amendment, waiver or other action by
Holders becomes effective, a consent
thereto by a Holder of a Security hereunder
is a continuing consent by the Holder and
every subsequent Holder of that Security or
portion of the Security that evidences the
same obligation as the consenting Holder's
Security, even if notation of the consent,
waiver or action is not made on the
Security. However, any such Holder or
subsequent Holder may revoke the consent,
waiver or action as to such Holder's
Security or portion of the Security if the
Trustee receives the notice of revocation
before the date the amendment, waiver or
action becomes effective. After an
amendment, waiver or action becomes
effective, it shall bind every
Securityholder.
Section 9.05. Notation On Or Exchange
Of Securities. Securities authenticated
and delivered after the execution of any
supplemental indenture pursuant to this
Article may, and shall if required by the
Trustee, bear a notation in form approved
by the Trustee as to any matter provided
for in such supplemental indenture. If the
Company shall so determine, new Securities
so modified as to conform, in the opinion
of the Trustee and the Board of Directors,
to any such supplemental indenture may be
prepared and executed by the Company and
authenticated and delivered by the Trustee
in exchange for outstanding Securities.
Section 9.06. Trustee To Sign
Supplemental Indentures. The Trustee shall
sign any supplemental indenture authorized
pursuant to this Article 9 if the amendment
contained therein does not adversely affect
the rights, duties, liabilities or
immunities of the Trustee. If it does, the
Trustee may, but need not, sign such
supplemental indenture. In signing such
supplemental indenture the Trustee shall
receive, and (subject to the provisions of
Section 7.01) shall be fully protected in
relying upon, an Officers' Certificate and
an Opinion of Counsel stating that such
amendment is authorized or permitted by
this Indenture.
Section 9.07. Effect Of Supplemental
Indentures. Upon the execution of any
supplemental indenture under this Article,
this Indenture shall be modified in
accordance therewith, and such supplemental
indenture shall form a part of this
Indenture for all purposes; and every
Holder of Securities theretofore or
thereafter authenticated and delivered
hereunder shall be bound thereby.
ARTICLE 10
Conversions
Section 10.01. Conversion Privilege.
(a) Subject to and upon compliance with
the provisions of this Article 10, a Holder
of a Security shall have the
right, at such Holder's option, to convert
all or any portion (if the portion to be
converted is $1,000 or an integral multiple
of $1,000) of such Security into shares of
Common Stock at the Conversion Rate in
effect on the date of conversion:
(1) during any Conversion Period, if the
Closing Price of the Common Stock for at least
20 Trading Days in the
30 Trading Day period ending on the first day of
such Conversion Period was more than 120% of the
Accreted Conversion Price in effect on such 30th
Trading Day;
(2) at any time prior to the close of
business on the second Business Day preceding the
date fixed for
redemption, if such Security has been
called for redemption pursuant to Article 3
hereof;
(3) during any period after the 30th day
following the original issuance of the
Securities in which (A) the credit rating
assigned to the Securities by both Moody's
Investor Services, Inc. and Standard &
Poor's Rating Services is below Baa3 or BBB-
, respectively, (B) the credit rating
assigned to the Securities by both such
rating agencies is suspended or withdrawn
or (C) neither of such rating agencies is
then rating the Securities; or only one
rating agency is rating the Securities and
the rating is below the level specified
above; or
(4) as provided in Section (b) of this
Section 10.01.
The Company or a designated agent shall determine
on a daily basis whether the Securities shall be
convertible as a result of the occurrence
of an event specified in clause (1) above
and, if the Securities shall be so
convertible, the Company shall deliver to
the Trustee and Conversion Agent written
notice thereof. Whenever the Securities
shall become convertible pursuant to
Section 10.01, the Company or, at the
Company's request, the Trustee in the name
and at the expense of the Company, shall
notify the Holders of the event triggering
such convertibility in the manner provided
in Section 11.02, and the Company shall
also publicly announce such information and
publish it on the Company's Web site. Any
notice so given shall be conclusively
presumed to have been duly given, whether
or not the Holder receives such notice.
(b) In addition, in the event that:
(1) (A) the Company distributes to all
holders of its shares of Common Stock
rights or warrants entitling
them (for a period expiring within 60 days of the
Record Date for such distribution) to
subscribe for or purchase shares of Common
Stock, at a price per share less than the
Closing Price of the Common Stock on the
Business Day immediately preceding the
announcement of such distribution, (B) the
Company distributes to all holders of its
shares of Common Stock, cash or other
assets, debt securities or rights or
warrants to purchase its securities, where
the Fair Market Value (as determined by the
Board of Directors) of such distribution
per share of Common Stock exceeds 10% of
the Closing Price of a share of Common
Stock on the Business Day immediately
preceding the date of declaration of such
distribution, or (C) a Change of Control
occurs but Holders of Securities do not
have the right to require the Company to
purchase their Securities as a result of
such Change of Control, because of the
provisions set forth in 3.08(a)(2), then,
in each case, the Securities may be
surrendered for conversion at any time on
and after the date that the Company gives
notice to the Holders of such right, which
shall be not less than 20 days prior to the
ExDividend Time for such distribution, in
the case of (A)
or (B), or within 30 days after the
occurrence of the Change of Control, in
the case of (C), until the earlier of the
close of business on the Business Day
immediately preceding the Ex-Dividend Time
or the date the Company announces that
such distribution will not take place, in
the case of (A) or (B), or the earlier of
30 days after the Company's delivery of
the Change of Control Purchase Notice or
the date the Company announces that the
Change of Control will not take place, in
the case of (C).
(2) the Company consolidates with or
merges into another corporation, or is a party to a
binding share
exchange pursuant to which the shares of
Common Stock would be converted into cash,
securities or other property as set forth
in Section 10.04 hereof, then the
Securities may be surrendered for
conversion at any time from and after the
date which is 15 days prior to the date
announced by the Company as the anticipated
effective time of such transaction until 15
days after the actual date of such
transaction.
"Conversion Period" means the period
from and including the thirtieth trading
day in a fiscal quarter to, but not
including, the thirtieth trading day in the
immediately following fiscal quarter.
"Ex-Dividend Time" means, with
respect to any issuance or distribution on
shares of Common Stock, the first date on
which the shares of Common Stock trade
regular way on the principal securities
market on which the shares of Common Stock
are then traded without the right to
receive such issuance or distribution.
Section 10.02. Conversion Procedure;
Conversion Price; Fractional Shares.
(a) Each Security shall be
convertible at the office of the Conversion
Agent into fully paid and
nonassessable shares (calculated to the
nearest 1/100th of a share) of Common
Stock. The rate at which shares of Common
Stock shall be delivered upon conversion
(the "Conversion Rate") shall be initially
18.08 shares of Common Stock for each
$1,000 principal amount at maturity of
Securities. The Conversion Rate shall be
adjusted in certain instances as provided
in Section 10.03 hereof. No payment or
adjustment shall be made in respect of
dividends on the Common Stock on a
converted Security. The Company shall not
issue any fraction of a share of Common
Stock in connection with any conversion of
Securities, but instead shall, subject to
Section 10.03(i) hereof, make a cash
payment (calculated to the nearest cent)
equal to such fraction multiplied by the
Closing Price of the Common Stock on the
last Trading Day prior to the date of
conversion. Notwithstanding the foregoing,
a Security in respect of which a Holder has
delivered a Purchase Notice or Change of
Control Purchase Notice exercising such
Holder's option to require the Company to
repurchase such Security may be converted
only if such notice of exercise is
withdrawn in accordance with the Section
3.10 hereof.
(b) Before any Holder of a Security
shall be entitled to convert the same into
Common Stock, such Holder
shall, in the case of Securities issued in
global form,
comply with the procedures of the
Depositary in effect at that time, and in
the case of definitive Securities,
surrender such Securities, duly endorsed to
the Company or in blank, at the office of
the Conversion Agent, and shall give
written notice to the Company at said
office or place that such Holder elects to
convert the same and shall state in writing
therein the principal amount at maturity of
Securities to be converted and the name or
names (with addresses) in which such Holder
wishes the certificate or certificates for
Common Stock to be issued.
Before any such conversion, a Holder
also shall pay all taxes or duties, if any,
as provided in Section 10.05.
If more than one Security shall be
surrendered for conversion at one time by
the same Holder, the number of full shares
of Common Stock which shall be deliverable
upon conversion shall be computed on the
basis of the aggregate principal amount at
maturity of the Securities (or specified
portions thereof to the extent permitted
thereby) so surrendered. Subject to the
next succeeding sentence, the Company will,
as soon as practicable thereafter, issue
and deliver at said office or place to such
Holder of a Security, or to such Holder's
nominee or nominees, certificates for the
number of full shares of Common Stock to
which such Holder shall be entitled as
aforesaid, together, subject to the last
sentence of Section 10.02(a) above, with
cash in lieu of any fraction of a share to
which such Holder would otherwise be
entitled. The Company shall not be
required to deliver certificates for shares
of Common Stock while the stock transfer
books for such stock or the security
register are duly closed for any purpose,
but certificates for shares of Common Stock
shall be issued and delivered as soon as
practicable after the opening of such books
or security register.
(c) A Security shall be deemed to
have been converted as of the close of
business on the date of the
surrender of such Securities for conversion
as provided above, and the person or
persons entitled to receive the Common
Stock issuable upon such conversion shall
be treated for all purposes as the record
Holder or Holders of such Common Stock as
of the close of business on such date.
(d) In case any Security shall be
surrendered for partial conversion, the
Company shall execute and the Trustee shall
authenticate and deliver to or upon the
written order of the Holder of the Security so
surrendered, without charge to such Holder
(subject to the provisions of Section 10.05
hereof), a new Security or Securities in
authorized denominations in an aggregate
principal amount at maturity equal to the
unconverted portion of the surrendered
Securities.
(e) By delivering to the Holder the
number of shares of Common Stock issuable upon
conversion, together with cash in lieu of any
fractional shares as provided in Section
10.02(b) hereof, the Company will satisfy its
obligation with respect to the Security, and
upon such delivery accrued Original Issue
Discount with respect
to such Security will be deemed to be paid
in full
rather than canceled, extinguished or
forfeited.
Section 10.03. 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
hereafter pay a dividend or make a
distribution to all holders of the
outstanding Common Stock in shares of
Common Stock, the Conversion Rate shall be
increased so that the same shall equal the
rate determined by dividing the Conversion
Rate in effect at the opening of business
on the date following the date fixed for
the determination of stockholders entitled
to receive such dividend or other
distribution by a fraction,
(i) the numerator of which shall be the
number of shares of the Common Stock
outstanding at the close of business on the
date fixed for such determination; and
(ii) the denominator of which shall be the
sum of such number of shares and the total number of
shares
constituting such dividend or other
distribution,
such reduction to become effective
immediately after the opening of business
on the day following the date fixed for
such determination. For the purpose of
this paragraph (a), the number of shares
of Common Stock at any time outstanding
shall not include shares held in the
treasury of the Company. The Company will
not pay any dividend or make any
distribution on shares of Common Stock
held in the treasury of the Company. If
any dividend or distribution of the type
described in this Section 10.03(a) is
declared but not so paid or made, the
Conversion Rate shall again be adjusted to
the Conversion Rate that would then be in
effect if such dividend or distribution
had not been declared.
(b) In case the Company shall issue
rights or warrants to all holders of its
outstanding shares of Common
Stock entitling them (for a period expiring
within forty-five (45) days after the date
fixed for determination of stockholders
entitled to receive such rights or
warrants) to subscribe for or purchase
shares of Common Stock at a price per share
less than the Current Market Price (as
defined below) on the date fixed for
determination of stockholders entitled to
receive such rights or warrants, the
Conversion Rate shall be adjusted so that
the same shall equal the rate determined by
dividing the Conversion Rate in effect
immediately prior to the date fixed for
determination of stockholders entitled to
receive such rights or warrants by a
fraction,
(i) the numerator of which shall be
the number of shares of Common Stock
outstanding at the close of business on the
date fixed for determination of stockholders
entitled to receive such rights or
warrants plus the number of shares that the
aggregate
offering price of the total number of shares
so offered would purchase at such Current
Market Price, and
(ii) the denominator of which shall be
the number of shares of Common Stock outstanding on
the date fixed
for determination of stockholders entitled
to receive such rights or warrants plus the
total number of
additional shares of Common Stock offered
for subscription or purchase.
Such adjustment shall be successively
made whenever any such rights or warrants
are issued, and shall become effective
immediately after the opening of business
on the day following the date fixed for
determination of stockholders entitled to
receive such rights or warrants. To the
extent that shares of Common Stock are not
delivered after the expiration of such
rights or warrants, the Conversion Rate
shall be readjusted to the Conversion Rate
that would then be in effect had the
adjustments made upon the issuance of such
rights or warrants been made on the basis
of delivery of only the number of shares of
Common Stock actually delivered. In the
event that such rights or warrants are not
so issued, the Conversion Rate shall again
be adjusted to be the Conversion Rate that
would then be in effect if such date fixed
for the determination of stockholders
entitled to receive such rights or warrants
had not been fixed. In determining whether
any rights or warrants entitle the holders
to subscribe for or purchase shares of
Common Stock at less than such Current
Market Price, and in determining the
aggregate offering price of such shares of
Common Stock, there shall be taken into
account any consideration received by the
Company for such rights or warrants and any
amount payable on exercise or conversion
thereof, the value of such consideration,
if other than cash, to be determined by the
Board of Directors.
(c) In case outstanding shares of
Common Stock shall be subdivided into a
greater number of shares of Common Stock,
the Conversion Rate in effect at the
opening of business on the day following
the day upon which such subdivision becomes
effective shall be proportionately
increased, and conversely, in case
outstanding shares
of Common Stock shall be combined into a
smaller number of shares of Common Stock,
the Conversion Rate in effect at the
opening of business on the day following
the day upon which such combination becomes
effective shall be proportionately reduced,
such increase or reduction, as the case may
be, to become effective immediately after
the opening of business on the day
following the day upon which such
subdivision or combination becomes
effective.
(d) In case the Company shall, by
dividend or otherwise, distribute to all
holders of its Common Stock shares of any
class of capital stock of the Company or
evidences of its indebtedness or assets
(including securities, but excluding any
rights or warrants referred to in Section
10.03(b) and excluding any dividend or
distribution (x) paid exclusively in cash
or (y) referred to in Section 10.03(a) (any
of the foregoing hereinafter in this
Section 10.03(d) called the "Distributed
Assets"), then, in each such case (unless
the Company elects to reserve such
Distributed Assets for distribution to the
Holders upon the conversion of the
Securities so that any such holder
converting Securities will receive upon
such conversion, in addition to the shares
of Common Stock to which such holder is
entitled, the amount and kind of such
Distributed Assets which such holder would
have received if such holder had converted
its Securities
into Common Stock immediately prior to the Record Date
(as defined in Section 10.03(h)(4) for such
distribution of the Distributed Assets)), the
Conversion Rate shall be adjusted so that the same
shall be equal to the rate determined by dividing the
Conversion Rate in effect on the Record Date with
respect to such distribution by a fraction,
(i) the numerator of which shall be the
Current Market Price per share of the Common Stock
on such Record Date
less the fair market value (as determined
by the Board of Directors, whose
determination shall be conclusive, and
described in a resolution of the Board of
Directors) on the Record Date of the
portion of the Distributed Assets so
distributed applicable to one share of
Common Stock; and
(ii) the denominator of which shall be
the Current Market Price per share of the Common
Stock,
such adjustment to become effective immediately
prior
to the opening of business on the day
following such Record Date; provided,
however, that in the event the then fair
market value (as so determined) of the
portion of the Distributed Assets 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 Holder shall
have the right to receive upon conversion
the amount of Distributed Assets such
holder would have received had such holder
converted each Security on the Record Date.
In the event that such dividend or
distribution is not so paid or made, the
Conversion Rate shall again be adjusted to
be the Conversion Rate that would then be
in effect if such dividend or distribution
had not been declared. If the Board of
Directors determines the fair market value
of any distribution for purposes of this
Section 10.03(d) by reference to the actual
or when issued trading market for any
securities, it must in doing so consider
the prices in such market over the same
period used in computing the Current Market
Price of the Common Stock.
Rights or warrants distributed by the
Company to all holders of Common Stock
entitling the holders thereof to subscribe
for or purchase shares of the Company's
capital stock (either initially or under
certain circumstances), which rights or
warrants, until the occurrence of a
specified event or events ("Trigger
Event"): (i) are deemed to be transferred
with such shares of Common Stock; (ii) are
not exercisable; and (iii) are also issued
in respect of future issuances of Common
Stock, shall be deemed not to have been
distributed for purposes of this Section
10.03 (and no adjustment to the Conversion
Rate under this Section 10.03 will be
required) until the occurrence of the
earliest Trigger Event, whereupon such
rights and warrants shall be deemed to have
been distributed and an appropriate
adjustment (if any is required) to the
Conversion Rate shall be made under this
Section 10.03(d). If any such right or
warrant, including any such existing rights
or warrants distributed prior to the date
of this Indenture, are subject to events,
upon the occurrence of which such rights or
warrants become exercisable to purchase
different securities, evidences
of indebtedness or other assets, then the
date of the occurrence of any and each such
event shall be deemed to be the date of
distribution and record date with respect
to new rights or warrants with such rights
(and a termination or expiration of the
existing rights or warrants without
exercise by any of the holders thereof). In
addition, in the event of any distribution
(or deemed distribution) of rights or
warrants, or any Trigger Event or other
event (of the type described in the
preceding sentence) with respect thereto
that was counted for purposes of
calculating a distribution amount for which
an adjustment to the Conversion Rate under
this Section 10.03 was made, (1) in the
case of any such rights or warrants that
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 or holders of Common
Stock with respect to such rights or
warrants (assuming such holder had retained
such rights or warrants), made to all
holders of Common Stock as of the date of
such redemption or repurchase, and (2) in
the case of such rights or warrants that
shall have expired or been terminated
without exercise by any holders thereof,
the Conversion Rate shall be readjusted as
if such rights and warrants had not been
issued.
No adjustment of the Conversion Rate
shall be made pursuant to this Section
10.03(d) in respect of rights or warrants
distributed or deemed distributed on any
Trigger Event to the extent that such
rights or warrants are actually
distributed, or reserved by the Company for
distribution to holders of Securities upon
conversion by such holders of Securities to
Common Stock.
For purposes of this Section 10.03(d)
and Sections 10.03(a) and (b), any dividend
or distribution to which this Section
10.03(d) is applicable that also includes
shares of Common Stock, or rights or
warrants to subscribe for or purchase
shares of Common Stock (or both), shall be
deemed instead to be (1) a dividend or
distribution of the evidences of
indebtedness, assets or shares of capital
stock other than such shares of Common
Stock or rights or warrants (and any
Conversion Rate adjustment required by this
Section 10.03(d) with respect to such
dividend or distribution shall then be
made) immediately followed by (2) a
dividend or distribution of such shares of
Common Stock or such rights or warrants
(and any further Conversion Rate adjustment
required by Sections 10.03(a) and (b) with
respect to such dividend or distribution
shall then be made), except (A) the Record
Date of such dividend or distribution shall
be substituted as "the date fixed for the
determination of stockholders entitled to
receive such dividend or other
distribution", "the date fixed for the
determination of stockholders entitled to
receive such rights or warrants" and "the
date fixed for such determination" within
the meaning of Sections 10.03(a) and (b),
and (B) any shares of Common Stock included
in such dividend or distribution shall not
be deemed "outstanding at the close of
business on the date fixed for such
determination" within the meaning
of Section 10.03(a).
(e) 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 next preceding
quarterly cash dividend on the Common Stock
to the extent that such preceding quarterly
dividend did not require any adjustment of
the Conversion Rate pursuant to this
Section 10.03(e) (as adjusted to reflect
subdivisions, or combinations of the Common
Stock), and (B) 3.75% of the arithmetic
average of the Closing
Price (determined as set forth in Section
10.03(h)) during the ten Trading Days (as
defined in Section 10.03(h)) immediately
prior to 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, the
Conversion Rate shall be adjusted so that
the same shall equal the rate determined by
dividing the Conversion Rate in effect
immediately prior to the close of business
on such record date by a fraction,
(i) the numerator of which
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
(ii) the denominator of which shall be
such Current Market Price of the Common Stock,
such adjustment 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 Holder shall have the right to
receive upon conversion the amount of cash
such holder would have received had such
holder converted each Security on the record
date. In the event that such dividend or
distribution is not so paid or made, the
Conversion Rate shall again be adjusted to be
the Conversion Rate that 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
Section 10.03(e) 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 Section 10.03(e) 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.
(f) In case a tender or exchange offer
made by the Company or any Subsidiary for all
or any portion of the Common Stock shall
expire and such tender or exchange offer (as
amended upon the expiration thereof) shall
require the payment to stockholders of
consideration
per share of Common Stock having a fair market value
(as determined by the Board of Directors, whose
determination shall be conclusive and described in a
resolution of the Board of Directors) that as of the
last time (the "Expiration Time") tenders or exchanges
may be made pursuant to such tender or exchange offer
(as it may be amended) exceeds the last reported
Closing Price of the Common Stock (determined as
provided in the definition of Current Market Price) 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
(i) the numerator of which 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 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) at the Expiration Time
and the last reported Closing Price of the
Common Stock (determined as provided in the
definition of Current Market Price) on the
Trading Day next succeeding the Expiration
Time, and
(ii) the denominator of which
shall be the number of shares of Common
Stock outstanding (including any
tendered or exchanged shares) at the
Expiration Time multiplied by last reported
Closing Price of the Common Stock
(determined as provided in the definition
of the Current Market Price) on the Trading
Day next succeeding the Expiration Time,
such adjustment to become effective
immediately prior to the opening of
business on the day following the
Expiration Time. In the event that 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
that would then be in effect if such tender
or exchange offer had not been made.
(g) In case of a tender or exchange
offer made by a Person other than the
Company or any Subsidiary for an amount
that increases the offeror's ownership of
Common Stock to more than twenty-five
percent (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
conclusive, and described in a resolution
of the Board of Directors) that as of 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
last reported Closing Price of the Common
Stock (determined as provided in the
definition of the Current Market Price) 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 Rate shall be adjusted so
that the same shall equal the rate
determined by multiplying the Conversion
Rate in effect immediately prior to the
Offer Expiration Time by a fraction
(i) the numerator of which 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) at the Offer
Expiration Time and the last reported
Closing Price of the Common Stock
(determined as provided in the definition
of the Current Market Price) on the Trading
Day next succeeding the Offer Expiration
Time, and
(ii) the denominator of which
shall be the number of shares of Common
Stock outstanding (including any
tendered or exchanged shares) at the Offer
Expiration Time multiplied by the last
reported Closing Price of the Common Stock
(determined as provided in the definition
of the Current Market Price) on the Trading
Day next succeeding the Offer Expiration
Time,
such adjustment 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 Rate shall
again be adjusted to be the Conversion Rate
that would then be in effect if such tender
or exchange offer had not been made.
Notwithstanding the foregoing, the
adjustment described in this Section
10.03(g) 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 Twelve.
(h) For purposes of this Section 10.03, the
following terms shall have the meaning indicated:
(1) "Closing Price" with respect to any
security on any day shall mean the closing
Closing Price, regular
way, on such day or, in case no such sale takes
place
on such day, the average of the reported
closing bid and asked prices, regular way,
in each case as quoted on the Nasdaq
National Market or, if such security is not
quoted or listed or admitted to trading on
such Nasdaq National Market, on the
principal national securities exchange or
quotation system on which such security is
quoted or listed or admitted to trading or,
if not quoted or listed or admitted to
trading on any national securities exchange
or quotation system, the average of the
closing bid and asked prices of such
security on the over-the-counter market on
the day in question as reported by the
National Quotation Bureau
Incorporated, or a similar generally
accepted reporting service, or if not so
available, in such manner as furnished by
any New York Stock Exchange member firm
selected from time to time by the Board of
Directors for that purpose, or a price
determined in good faith by the Board of
Directors or, to the extent permitted by
applicable law, a duly authorized committee
thereof, whose determination shall be
conclusive.
(2) "Current Market Price" shall mean the
average of the daily Closing Prices per share of
Common Stock for
the ten consecutive Trading Days selected by the
Company commencing no more than 30 Trading
Days before and ending not later than the
earlier of such date of determination and
the day before the "ex" date with respect
to the issuance, distribution, subdivision
or combination requiring such computation
immediately prior to the date in question.
For purpose of this paragraph, the term
"ex" date, (1) when used with respect to
any issuance or distribution, means the
first date on which the Common Stock
trades, regular way, on the relevant
exchange or in the relevant market from
which the Closing Price was obtained
without the right to receive such issuance
or distribution, and (2) when used with
respect to any subdivision or combination
of shares of Common Stock, means the first
date on which the Common Stock trades,
regular way, on such exchange or in such
market after the time at which such
subdivision or combination becomes
effective.
In the event that another
issuance, distribution, subdivision,
combination or tender or exchange
offer to which Section 10.03 applies
occurs during the period applicable
for calculating "Current Market Price"
pursuant to the definition in the
preceding paragraph, "Current Market
Price" shall be calculated for such
period in a manner determined by the
Board of Directors to reflect the
impact of such issuance, distribution,
subdivision, combination or tender or
exchange offer on the Closing Price of
the Common Stock during such period.
(3) "Fair Market Value", or "fair
market value" shall mean the amount which a
willing buyer would pay a willing seller in
an arm's-length transaction.
(4) "Record Date" shall mean, with
respect to any dividend, distribution or other
transaction or event in
which the holders of Common Stock have the
right to receive any cash, securities or
other property or in which the Common Stock
(or other applicable security) is exchanged
for or converted into any combination of
cash, securities or other property, the
date fixed for determination of
stockholders entitled to receive such cash,
securities or other property (whether such
date is fixed by the Board of Directors or
by statute, contract or otherwise).
(i) The Company may make such
increases in the Conversion Rate, in
addition to those required by Sections
10.03(a), (b), (c), (d), (e), (f) or (g) as
the Board of Directors considers to be
advisable to avoid or diminish any income
tax to holders of Common Stock or rights to
purchase 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.
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
twenty (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 increased pursuant
to the preceding sentence, the Company
shall mail to holders of record of the
Securities a notice of the increase at
least fifteen (15) days prior to the date
the increased Conversion Rate takes effect,
and such notice shall state the increased
Conversion Rate and the period during which
it will be in effect.
(j) No adjustment in the Conversion
Rate shall be required unless such
adjustment would require an increase or
decrease of at least one percent (1%) in
such rate; provided, however, that any
adjustments that by reason of this Section
10.03) are not required to be made shall be
carried forward and taken into account in
any subsequent adjustment. All calculations
under this Article 10 shall be made by the
Company and shall be made to the nearest
cent or to the nearest onehundredth of a
share, as the case may be, with one half
cent and 0.005 of a share, respectively,
being rounded upward. No adjustment need
be made for rights to purchase Common Stock
pursuant to a Company plan for reinvestment
of dividends or interest. To the extent
the Securities become convertible into
cash, assets, property or securities (other
than capital stock of the Company), no
adjustment need be made thereafter as to
the cash, assets, property or such
securities.
(k) 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. Unless and until a Responsible
Officer of the Trustee shall have received
such Officers' Certificate, the Trustee
shall not be deemed to have knowledge of
any adjustment of the Conversion Rate and
may assume that the last Conversion Rate of
which it has knowledge is still in effect.
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 each adjustment
becomes effective and shall mail such
notice of such adjustment of the Conversion
Rate to the holder of each Security at his
last address appearing on the Security
register provided for in Section 2.03 of
this Indenture, within twenty (20) days
after execution thereof. Failure to
deliver such notice shall not affect the
legality or validity of any such
adjustment.
(l) In any case in which this
Section 10.03 provides that an
adjustment shall become effective
immediately
after (1) a record date or Record Date
for an event, (2) the date fixed for the
determination of stockholders entitled
to receive a dividend or
distribution pursuant to Section 10.03(a),
(3) a date fixed for the determination of
stockholders entitled to receive rights or
warrants pursuant to Section 10.03(b), (4)
the Expiration Time for any tender or
exchange offer pursuant to Section
10.03(f), or (5) the Offer Expiration Time
for a tender or exchange offer pursuant to
Section 10.03(g) (each a "Determination
Date"), the Company may elect to defer
until the occurrence of the relevant
Adjustment Event (as hereinafter defined)
(x) issuing to the holder of any Security
converted after such Determination Date and
before the occurrence of such Adjustment
Event, the additional shares of Common
Stock or other securities issuable upon
such conversion by reason of the adjustment
required by such Adjustment Event over and
above the Common Stock issuable upon such
conversion before giving effect to such
adjustment and (y) paying to such holder
any amount in cash in lieu of any fraction
pursuant to Section 10.03(a). For purposes
of this Section 10.03(l), the term
"Adjustment Event" shall mean:
(i) in any case referred to in
clause (1) hereof the occurrence of
such event,
(ii) in any case referred to in
clause (2) hereof, the date any such
dividend or distribution is paid or made,
(iii) in any case referred to in clause
(3) hereof, the date of expiration of such rights
or warrants, and
(iv) in any case referred to in clause
(4) or clause (5) hereof, the date a sale or
exchange of Common Stock pursuant to such tender
or exchange offer is
consummated and becomes irrevocable.
(m) For purposes of this Section 10.03,
the number of shares of Common Stock at any time
outstanding shall
not include shares held in the treasury of
the Company but shall include shares
issuable in respect of scrip certificates
issued in lieu of fractions of shares of
Common Stock. The Company will not pay any
dividend or make any distribution on shares
of Common Stock held in the treasury of the
Company.
Section 10.04. Effect of
Reclassification, Consolidation, Merger or
Sale. If any of the following events
occur, namely (i) any reclassification or
change of the outstanding shares of Common
Stock (other than a subdivision or
combination to which Section 10.03(c)
applies), (ii) any consolidation, merger,
statutory share exchange or combination of
the Company with another Person as a result
of which holders of Common Stock shall be
entitled to receive stock, other securities
or other property or assets (including
cash) with respect to or in exchange for
such Common Stock, or (iii) any sale or
conveyance of all or substantially all of
the properties and assets of the Company to
any other Person as a result of which
holders of Common Stock shall be entitled
to receive stock, other securities or other
property or assets (including cash) with
respect to or in exchange for such Common
Stock, then the Company or the successor or
purchasing Person, as the case may be,
shall execute with the Trustee a
supplemental indenture (which shall comply
with the
Trust Indenture Act as in force at the date
of execution of such supplemental
indenture) providing that each Security
shall be convertible into the kind and
amount of shares of stock, other securities
or other property or assets (including
cash) receivable upon such
reclassification, change, consolidation,
merger, statutory share exchange
combination, sale or conveyance by a holder
of a number of shares of Common Stock
issuable upon conversion of such Securities
(assuming, for such purposes, a sufficient
number of authorized shares of Common Stock
are available to convert all such
Securities) immediately prior to such
reclassification, change, consolidation,
merger, statutory share exchange
combination, sale or conveyance assuming
such holder of Common Stock did not
exercise his rights of election, if any, as
to the kind or amount of stock, other
securities or other property or assets
(including cash) receivable upon such
reclassification, change, consolidation,
merger, statutory share exchange
combination, sale or conveyance (provided
that, if the kind or amount of stock, other
securities or other property or assets
(including cash) receivable upon such
reclassification, change, consolidation,
merger, statutory share exchange
combination, sale or conveyance is not the
same for each share of Common Stock in
respect of which such rights of election
shall not have been exercised ("nonelecting
share"), then for the purposes of this
Section 10.04 the kind and amount of stock,
other securities or other property or
assets (including cash) receivable upon
such reclassification, change,
consolidation, merger, statutory share
exchange combination, sale or conveyance
for each nonelecting share shall be deemed
to be the kind and amount so receivable per
share by a plurality of the nonelecting
shares). 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 10.
The Company shall cause notice of the
execution of such supplemental indenture to
be mailed to each holder of Securities, at
its address appearing on the Security
register provided for in Section 2.03 of
this Indenture, within twenty (20) days
after execution thereof. Failure to deliver
such notice shall not affect the legality
or validity of such supplemental indenture.
The above provisions of this Section shall
similarly apply to successive
reclassifications, changes, consolidations,
mergers, statutory share exchanges
combinations, sales and conveyances.
If this Section 10.04 applies to any event
or
occurrence, Section 10.03 shall not apply.
Section 10.05. Taxes on Shares
Issued. The issue of stock certificates on
conversions of Securities shall
be made without charge to the converting
Holder for any tax in respect of the issue
thereof. The Company shall not, however, be
required to pay any tax which may be
payable in respect of any transfer involved
in the issue and delivery of stock in any
name other than that of the holder of any
Securities 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 10.06. 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
unissued shares or shares held in treasury,
sufficient shares of Common Stock to provide
for the conversion of the Securities from
time to time as such Securities are
presented for conversion.
Before taking any action which would
cause an adjustment increasing the
Conversion Rate to an amount that would
cause the Conversion Price to be reduced
below the then par value, if any, of the
shares of Common Stock issuable upon
conversion of the
Securities, the Company will take all
corporate action which may, in the opinion
of its counsel, be necessary in order that
the Company may validly and legally issue
shares of such Common Stock at such
adjusted Conversion Rate.
The Company covenants that all shares
of Common Stock which may be issued upon
conversion of Securities will upon issue be
fully paid and non-assessable 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 Securities 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, to the extent
then permitted by the rules and
interpretations of the Securities and
Exchange Commission (or any successor
thereto), 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 Nasdaq National Market or any
other national securities exchange or
automated quotation system, the Company
will, if permitted by the rules of such
exchange or automated quotation system,
list and keep listed, so long as the Common
Stock shall be so listed on such exchange
or automated quotation system, all Common
Stock issuable upon conversion of the
Security; provided, however, that, if the
rules of such exchange or automated
quotation system permit the Company to
defer the listing of such Common Stock
until the first conversion of the
Securities into Common Stock in accordance
with the provisions of this Indenture, the
Company covenants to list such Common Stock
issuable upon conversion of the Securities
in accordance with the requirements of such
exchange or automated quotation system at
such time.
Section 10.07. 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 Securities to determine the Conversion
Rate or 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
Security; and the Trustee and any other
conversion agent make no representations
with respect thereto. 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 Security for the purpose
of conversion or to comply with any of the
duties, responsibilities or covenants of
the Company contained in this Article 10.
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 10.04 relating either
to the kind or amount of shares of stock or
securities or property (including cash)
receivable by Holders upon the conversion
of their Securities after any event
referred to in such Section 10.04 or to any
adjustment to be made with respect thereto,
but, subject to the provisions of Section
7.01, may accept as conclusive evidence of
the correctness of any such provisions, and
shall 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 10.08. Notice To Holders Prior
To Certain Actions. In case:
(a) the Company shall declare a
dividend (or any other distribution) on its
Common Stock that would require an adjustment
in the Conversion Rate pursuant to Section
10.03; or
(b) the Company shall authorize the
granting to the holders of all or
substantially all 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 or
reorganization 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, merger or statutory share
exchange to which the Company is a party
and for which approval of any stockholders
of the Company is required, or of the sale
or transfer 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 Securities at his address appearing on
the register provided for in Section 2.03
of this Indenture, as promptly as possible
but in any event at least ten (10) 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, or statutory share
exchange sale, transfer, dissolution,
liquidation or winding up is expected to
become effective or occur, and the date as
of which it is expected that holders of
Common Stock of record shall be entitled to
exchange their Common Stock for securities
or other property deliverable upon such
reclassification, consolidation, merger, or
statutory share exchange sale, transfer,
dissolution, liquidation or winding up.
Failure to give such notice, or any defect
therein, shall not affect the legality or
validity of such dividend, distribution,
reclassification, consolidation, merger, or
statutory share exchange sale, transfer,
dissolution, liquidation or winding up.
Section 10.09. Rights Issued in
Respect of Common Stock Issued upon
Conversion. Each share of Common Stock
issued upon conversion of Securities
pursuant to this Article 10 shall be
entitled to receive the appropriate number
of rights, if any, and the certificates
representing the Common Stock issued upon
such conversion shall bear such legends, if
any, in each case as may be provided by the
terms of any shareholder rights agreement
adopted by the Company, as the same may be
amended from time to time.
Section 10.10. Unconditional Right Of
Holders To
Convert.
Notwithstanding any other provision in
this Indenture, the Holder of any Security
shall have the right, which is absolute and
unconditional, to convert its Security in
accordance with this Article X and to bring
an action for the enforcement of any such
right to convert, and such rights shall not
be impaired or affected without the consent
of such Holder.
ARTICLE 11
Miscellaneous
Section 11.01. Trust Indenture Act
Controls. If any provision of this
Indenture limits, qualifies, or conflicts
with another provision which is required to
be included in this Indenture by the TIA,
the required provision shall control.
Section 11.02. Notices. Any request,
demand, authorization, notice, waiver,
consent or communication shall be in
writing and delivered in person or mailed
by first-class mail, postage prepaid,
addressed as follows or transmitted by
facsimile transmission (confirmed by
guaranteed overnight courier) to the
following facsimile numbers:
if to the Company:
Brinker
International,
Inc. 6820 LBJ
Freeway
Dallas, Texas
75240
Attn: General
Counsel
Facsimile No.
972-770-1256
if to the Trustee:
SunTrust Bank
25 Park Place,
24th Floor
Atlanta,
Georgia 30303
Telephone No.
404-588-7591
Facsimile No.
404-588-7335
Attention:
George Hogan
The Company or the Trustee by notice
given to the other in the manner provided
above may designate additional or different
addresses for subsequent notices or
communications.
Any notice or communication given to a
Securityholder shall be mailed to the
Securityholder, by first-class mail,
postage prepaid, at the Securityholder's
address as it appears on the registration
books of the Registrar and shall be
sufficiently given if so mailed within the
time prescribed.
Failure to mail a notice or
communication to a Securityholder or any
defect in it shall not affect its
sufficiency with respect to other
Securityholders. If a notice or
communication is mailed in the manner
provided above, it is duly given, whether
or not received by the addressee.
If the Company mails a notice or
communication to the Securityholders, it
shall mail a copy to the Trustee and each
Registrar, Paying Agent, Conversion Agent
or co-registrar.
Section 11.03. Communication By
Holders With Other Holders.
Securityholders may communicate pursuant
to
TIA Section 312(b) with other
Securityholders with respect to their
rights under this Indenture or the
Securities. The Company, the Trustee, the
Registrar, the Paying Agent, the
Conversion Agent and anyone else shall
have the protection of TIA Section 312(c).
Section 11.04. Certificate And
Opinion As To Conditions Precedent. Upon
any request or application by the Company
to the Trustee to take any action under
this Indenture, the Company shall furnish
to the Trustee:
(1) an Officers' Certificate stating that,
in the opinion of the signers, all conditions
precedent, if any, provided for in this
Indenture relating to the proposed action have
been complied with; and
(2) an Opinion of Counsel stating that, in
the opinion of such counsel, all such conditions
precedent have
been complied with.
Section 11.05. Statements Required In
Certificate Or
Opinion. Each Officers' Certificate or
Opinion of
Counsel with respect to compliance with a covenant or
condition provided for in this Indenture shall
include:
(1) a statement that each person making
such Officers' Certificate or Opinion of Counsel
has read such
covenant or condition;
(2) a brief statement as to the nature and
scope of the examination or investigation upon which
the
statements or opinions contained in such
Officers' Certificate or Opinion of Counsel are
based;
(3) a statement that, in the opinion
of each such person, he has made such
examination or investigation
as is necessary to enable such person to express an
informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement that, in the opinion of
such person, such covenant or condition has been
complied with.
Section 11.06. Separability Clause. In case
any
provision in this Indenture or in the Securities
shall
be invalid, illegal or unenforceable, the
validity, legality and enforceability of
the remaining provisions shall not in any
way be affected or impaired thereby.
Section 11.07. Rules By Trustee,
Paying Agent,
conversion Agent and Registrar. The
Trustee may make reasonable rules for
action by or a meeting of Securityholders.
The Registrar, the Conversion Agent and the
Paying Agent may make reasonable rules for
their functions.
Section 11.08. Legal Holidays. A
"Legal Holiday" is any day other than a
Business Day. If any specified
date (including a date for giving notice) is
a Legal Holiday, the action shall be taken
on the next succeeding day that is not a
Legal Holiday, and, if the action to be
taken on such date is a payment in respect
of the Securities, no Original Issue
Discount shall accrue for the intervening
period.
Section 11.09. GOVERNING LAW. THIS
INDENTURE SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 11.10. No Recourse Against
Others. A director, officer, employee or
stockholder, as such, of the Company shall
not have any liability for any obligations
of the Company under the Securities or this
Indenture or for any claim based on, in
respect of or
by reason of such obligations or their
creation. By accepting a Security, each
Securityholder shall waive and release all
such liability. The waiver and release
shall be part of the consideration for the
issue of the Securities.
Section 11.11. Successors. All
agreements of the
Company in this Indenture and the
Securities shall bind its successor. All
agreements of the Trustee in this Indenture
shall bind its successor.
Section 11.12. Multiple Originals.
The parties may
sign any number of copies of this
Indenture. Each signed copy shall be an
original, but all of them together
represent the same agreement. One signed
copy is enough to prove this Indenture.
IN WITNESS WHEREOF, the undersigned, being
duly
authorized, have executed this Indenture on
behalf of the respective parties hereto as
of the date first above written.
BRINKER
INTERNATIONAL
, INC.
By:______________________
_____ Name:
Title:
SUNTRUST BANK
As Trustee
By:______________________
_____ Name:
Title:
EXHIBIT A
[FORM OF FACE OF GLOBAL SECURITY]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY TO THE ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (AND ANY PAYMENT HEREON IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY
AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL SINCE THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY
SHALL BE LIMITED TO TRANSFERS TO NOMINEES
OF THE DEPOSITORY TRUST COMPANY, OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN ARTICLE TWO OF
THE INDENTURE REFERRED TO ON THE REVERSE
HEREOF.
THE SECURITY EVIDENCED BY THIS
CERTIFICATE HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT OF 1933"), OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED OR
SOLD EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ACQUISITION HEREOF, THE
HOLDER:
(1) REPRESENTS THAT IT IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT OF 1933;
(2) AGREES THAT IT WILL NOT WITHIN TWO YEARS
AFTER THE
ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR
OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY
OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF
SUCH SECURITY EXCEPT (A) TO THE COMPANY OR ANY
SUBSIDIARY THEREOF, (B) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT OF 1933, (C) PURSUANT TO
THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT OF 1933 (IF
AVAILABLE), (D) TO ANY INSTITUTIONAL INVESTOR THAT
IS AN ACCREDITED INVESTOR WITHIN THE MEANING OF
RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D
UNDER THE SECURITIES ACT PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT (IF
AVAILABLE), OR (E) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT OF 1933 AND WHICH CONTINUES TO
BE EFFECTIVE AT THE TIME OF SUCH TRANSFER; AND
(3) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS
TRANSFERRED (OTHER
THAN A TRANSFER PURSUANT TO CLAUSE 2(C) OR
2(E) ABOVE), A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
The foregoing legend may be removed
from this Security on satisfaction of the
conditions specified in the Indenture.
BRINKER INTERNATIONAL, INC.
Zero Coupon Convertible Senior Debentures
Due 2021
REGISTERED
CUSIP:
ISSUE DATE: October __, 2001
ISSUE PRICE: $
(for each $1,000 principal amount at
maturity)
ORIGINAL ISSUE DISCOUNT: $
(for each $1,000 principal amount at
maturity)
No. R-
BRINKER INTERNATIONAL, INC., a
Delaware corporation, promises to pay to
Cede & Co. or registered assigns, the
principal amount at maturity of
[__________________ dollars ($__________)]
on October ____, 2021.
Reference is hereby made to the
further provisions of this Security set
forth on the reverse side of this Security,
which further provisions shall for all
purposes have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, the Company has caused
this
instrument to be duly executed under its
corporate seal.
Dated: October __, 2001 BRINKER
INTERNATIONAL INC.
By:______________
____________
Title:___________
____________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
__________________________
__,
(
)
as Trustee, certifies that
this is one of the
Securities referred to in
the within-mentioned
Indenture.
By________________________
__________ Authorized
Signatory
Dated: October __, 2001
[FORM OF REVERSE OF GLOBAL
SECURITY]
Zero Coupon Convertible Senior
Debentures Due 2021 This Security is
one of a duly authorized issue of
Zero Coupon Convertible Senior Debentures
Due 2021 (the "Securities") of Brinker
International, Inc., a Delaware corporation
(including any successor corporation under
the Indenture hereinafter referred to, the
"Company"), issued under an Indenture,
dated as of October __, 2001 (the
"Indenture"), between the Company and
_________________, as trustee (the
"Trustee"). The terms of the Security
include those stated in the Indenture,
those made part of the Indenture by
reference to the Trust Indenture Act of
1939, as amended ("TIA"), and those set
forth in this Security. This Security is
subject to all such terms, and Holders are
referred to the Indenture and the TIA for a
statement of all such terms. To the extent
permitted by applicable law, in the event
of any inconsistency between the terms of
this Security and the terms of the
Indenture, the terms of the Indenture shall
control. Capitalized terms used but not
defined herein have the meanings assigned
to them in the Indenture referred to below
unless otherwise indicated.
1. Interest; Original Issue Discount.
General. The Securities shall not
bear cash interest except as otherwise set
forth herein. If the principal amount at
maturity hereof or any portion thereof
including the Issue Price or accrued
Original Issue Discount, or Liquidated
Damages, if any, are not paid when due
(whether upon acceleration pursuant to
Section 6.02 of the Indenture, upon the
date set for
payment of the Redemption Price pursuant to
Section 5 hereof, upon the date set for
payment of the Purchase Price or Change in
Control Purchase Price pursuant to Section
6 hereof, upon the Stated Maturity of the
Securities or upon the Liquidated Damages
Payment Dates as defined in the
Registration Rights Agreement), then in
each such case the overdue amount shall, to
the extent permitted by law, bear cash
interest at the rate of 2% per annum,
compounded semiannually, which interest
shall accrue from the date such overdue
amount was originally due to the date
payment of such amount, including interest
thereon, has been made or duly provided
for. All such interest shall be payable in
cash on demand but if not so demanded shall
be paid quarterly to the Holders on the
last day of each
quarter. Original Issue Discount (the
difference between the Issue Price and the
principal amount at maturity of the
Securities) in the period during which a
Security remains outstanding, shall accrue
at ___% per annum, on a semiannual bond
equivalent basis using a 360-day year
comprised of twelve 30-day months, from the
Issue Date.
2. Method of Payment.
Subject to the terms and conditions of
the Indenture, the Company will make
payments in cash, shares of Common Stock or
a combination thereof, as the case may be,
in respect of Redemption Prices, Purchase
Prices, Change of Control Purchase Prices
and at Stated Maturity to Holders who
surrender Securities to a Paying Agent to
collect such payments in respect of the
Securities. The Company will pay cash
amounts in money of the United States that
at the time of payment is legal tender for
payment of public and private debts.
However, the Company may make such cash
payments by check payable in such money.
3. Paying Agent, Conversion Agent and
Registrar.
Initially, SunTrust Bank (the
"Trustee") will act as Paying Agent,
Conversion Agent and Registrar. The Company
may appoint and change any Paying Agent,
Conversion Agent or Registrar without
notice, other than notice to the Trustee;
provided that the Company will maintain at
least one Paying Agent in the State of New
York, City of New York, Borough of
Manhattan, which shall initially be an
office or agency of the Trustee. The
Company or any of its Subsidiaries or any
of their Affiliates may act as Paying
Agent, Conversion Agent or Registrar.
4. Indenture.
The Securities are general unsecured
obligations of the Company limited to
$___________ aggregate principal amount at
maturity. The Indenture does not limit
other indebtedness of the Company, secured
or unsecured.
5. Redemption at the Option of the
Company.
No sinking fund is provided for the
Securities. The Securities are redeemable
for cash at the option of the Company, in
whole or in part, at any time or from time
to time on, or after October __, 2004 upon
not less than 30 nor more than 60 days'
notice by mail for a redemption price equal
to the Issue Price of those Securities plus
accrued Original Issue Discount and accrued
and unpaid Liquidated Damages, if any, on
those Securities up to (but excluding) the
Redemption Date (the "Redemption Price").
The table below shows Redemption Prices of
a
Security per $1,000 principal amount at
maturity, assuming that no Liquidated
Damages have accrued, on the dates shown
below and at Stated Maturity, which prices
reflect accrued Original Issue Discount
calculated to each such date. The
Redemption Price of a Security redeemed
between such dates shall include an
additional amount reflecting the additional
Original
Issue Discount accrued since the next
preceding date in the table.
(1) (2)
(3)
Issue Price Accrued
Redemption
Original
Price
Issue
(1) + (2)
Discount
Redemption Date
October ___:
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
At Stated Maturity
In no event will any Security be
redeemable before October __, 2004.
6. Purchase By the Company at the Option
of the
Holder.
Subject to the terms and conditions of
the Indenture, the Company shall become
obligated to purchase, at the option of the
Holder, all or any portion of the
Securities held by such Holder on October
____, 2003, October ___, 2005, October ___,
2011 and October ___, 2016 in integral
multiples of $1,000 at a Purchase Price
equal to the Issue Price plus accrued
Original Issue Discount and accrued and
unpaid Liquidated Damages, if any, on those
Securities up to (but excluding) the
Purchase Date. To exercise such right, a
Holder shall deliver to the Company a
Purchase Notice containing the information
set forth in the Indenture, at any time
from the opening of business on the date
that is 20 Business Days prior to such
Purchase Date until the close of business
on the third Business Day prior to such
Purchase Date, and shall deliver the
Securities to the Paying Agent as set forth
in the Indenture.
The Purchase Price per $1,000
principal amount at maturity of Securities
as of each of the Purchase Date, assuming
that no Liquidated Damages have accrued,
will be:
Purchase Date Purchase Price
October __:
2003
2005
2011
2016
The Purchase Price may be paid, at the
option of the Company, in cash or by the
issuance and delivery of shares of
Applicable Stock, or in any combination
thereof, subject to the terms and
conditions of the Indenture.
At the option of the Holder and subject to
the
terms and conditions of the Indenture, the
Company shall become obligated to offer to
purchase the Securities held by such Holder
within 30 days (which purchase shall occur
30 days after the date of such offer) after
the occurrence of a Change of Control of
the Company for a Change of Control
Purchase Price equal to the Issue Price
plus accrued Original Issue Discount and
accrued and unpaid Liquidated Damages, if
any, on those Securities up to (but
excluding) the Change of Control Purchase
Date. The Change of Control Purchase Price
may be paid, at the option of the Company,
in cash or by the issuance and delivery of
shares of Applicable Stock, or in any
combination thereof, subject to the terms
and conditions of the Indenture.
Holders have the right to withdraw any
Purchase Notice or Change of Control
Purchase Notice, as the case may be, by
delivering to the Paying Agent a written
notice of withdrawal in accordance with the
provisions of the Indenture.
If cash (and/or Applicable Stock if
permitted
under the Indenture) sufficient to pay the
Purchase Price or Change of Control
Purchase Price, as the case may be, of all
Securities or portions thereof to be
purchased as of the Purchase Date or the
Change of Control Purchase Date, as the
case may be, is deposited with the Paying
Agent, on the Business Day following the
Purchase Date or the Change of Control
Purchase Date, Original Issue Discount and
Liquidated Damages, if any, will cease to
accrue on such Securities (or portions
thereof) immediately after such Purchase
Date or Change of Control Purchase Date,
and the Holder thereof shall have no other
rights as such other than the right to
receive the Purchase Price or Change of
Control Purchase Price upon surrender of
such Security.
7. Notice of Redemption.
Notice of redemption pursuant to
Section 5 of this Security will be mailed
at least 30 days but not more than 60 days
before the Redemption Date to each Holder
of Securities to be redeemed at the
Holder's registered address. If money
sufficient to pay the Redemption Price of
all Securities (or portions thereof) to be
redeemed on the Redemption Date is
deposited with the Paying Agent prior to or
on the Redemption Date, immediately on and
after such Redemption Date Original Issue
Discount and Liquidated Damages, if any,
cease to accrue on such Securities or
portions thereof. Securities in
denominations larger than $1,000 of
principal amount at maturity may be
redeemed in part but only in integral
multiples of $1,000 of principal amount at
maturity.
8. Conversion.
Subject to and in compliance with the
provisions of the Indenture (including,
without limitation, the conditions to
conversion of this Security set forth in
Section 10.01 thereof), a Holder is
entitled, at such Holder's option, to
convert the Holder's Security (or any
portion of the principal amount at maturity
thereof that is $1,000 or an integral
multiple $1,000), into fully paid and
nonassessable shares of Common Stock at the
Conversion Price in effect at the time of
conversion.
The Company will notify Holders of any
event
triggering the right to convert the
Securities as specified above in accordance
with the Indenture.
A Security in respect of which a Holder has
delivered a Purchase Notice or Change of
Control Purchase Notice, as the case may
be, exercising the option of such Holder to
require the Company to purchase such
Security may be converted only if such
Purchase Notice or Change of Control
Purchase Notice, as the case may be, is
withdrawn in accordance with the terms of
the Indenture.
The initial Conversion Rate is
______________ shares of Common Stock per
$1,000 principal amount at maturity,
subject to adjustment in certain events
described in the Indenture. A Holder which
surrenders Securities for conversion will
receive cash or a check in lieu of any
fractional share of Common Stock.
To surrender a Security for
conversion, a Holder must (1) complete and
manually sign the conversion notice below
(or complete and manually sign a facsimile
of such notice) and deliver such notice to
the Conversion Agent, (2) surrender the
Security to the Conversion Agent, (3)
furnish appropriate endorsements and
transfer documents and (4) pay any transfer
or similar tax, if required.
No fractional shares of Common Stock
shall be issued upon conversion of any
Security. Instead of any fractional share
of Common Stock that would otherwise be
issued upon conversion of such Security,
the Company shall pay a cash adjustment as
provided in the Indenture.
No payment or adjustment will be made
for dividends on the shares of Common
Stock, except as provided in the Indenture.
If the Company (i) is a party to a
consolidation, merger, statutory share
exchange or combination, (ii) reclassifies
the Common Stock, or (iii) conveys,
transfers or leases its properties and
assets substantially as an entirety to any
Person, the right to convert a Security
into shares of Common Stock may be changed
into a right to convert it into securities,
cash or other assets of the Company or such
other Person, in each case in accordance
with the Indenture.
9. Conversion Arrangement on Call for
Redemption.
Any Securities called for redemption,
unless surrendered for conversion before
the close of business on the day that is
two Business Days prior to the Redemption
Date, may be deemed to be purchased from
the Holders of such Securities at an amount
not less than the Redemption Price, by one
or more investment bankers or other
purchasers who may agree with the Company
to purchase such Securities from the
Holders, to convert them into shares of
Common Stock and to make payment for such
Securities to the Trustee in trust for such
Holders.
10. Denominations; Transfer; Exchange.
The Securities are in fully registered
form,
without coupons, in denominations of $1,000
of principal amount at maturity and
integral multiples of $1,000. A Holder may
transfer or exchange Securities in
accordance with the Indenture. The
Registrar may require a Holder, among other
things, to furnish appropriate endorsements
and transfer documents and to pay any taxes
and fees required by law or permitted by
the Indenture. The Registrar need not
transfer or exchange any Securities
selected for redemption (except, in the
case of a Security to be redeemed in part,
the portion of the Security not to be
redeemed) or any Securities in respect of
which a Purchase Notice or Change of
Control Purchase Notice has been given and
not withdrawn (except, in the case of a
Security to be purchased in part, the
portion of the Security not to be
purchased) or any Securities for a period
of 15 days before the mailing of a notice
of redemption of Securities to be redeemed.
11. Persons Deemed Owners.
The registered Holder of this Security
may be treated as the owner of this
Security for all purposes.
12. Unclaimed Money or Securities.
The Trustee and the Paying Agent shall
return to the Company upon written request
any money or securities held by them for
the payment of any amount with respect to
the Securities that remains unclaimed for
two years, subject to applicable unclaimed
property law. After return to the Company,
Holders entitled to the money or securities
must look to the Company for payment as
general creditors unless an applicable
abandoned property law designates another
person.
13. Amendment; Waiver.
Subject to certain exceptions set
forth in the Indenture, (i) the Indenture
or the Securities may be amended with the
written consent of the Holders of at least
a majority in aggregate principal amount at
maturity of the outstanding Securities and
(ii) certain Defaults may be waived with
the written consent of the Holders of a
majority in aggregate principal amount at
maturity of the outstanding Securities.
Subject to certain exceptions set forth in
the Indenture, without the consent of any
Securityholder, the Company and the
Trustee may amend the Indenture or the
Securities (i) to add to the covenants of
the Company for the benefit of the Holders
of Securities, (ii) to surrender any right
or power conferred upon the Company in the
Indenture, (iii) to provide for conversion
rights of Holders of Securities if any
reclassification or change of the Company's
Common Stock or any consolidation, merger
or sale of all or substantially all of the
Company's assets occurs, (iv) to provide
for the assumption of the Company's
obligations to the Holders of Securities in
the case of a merger, consolidation,
conveyance, transfer or lease pursuant to
Article 5 of the Indenture, (v) to increase
the Conversion Rate; provided, however,
that such increase in the Conversion Rate
shall not adversely affect the interest of
the Holders of Securities (after taking
into account tax and other consequences of
such increase), (vi) to comply with the
requirements of the SEC in order to effect
or maintain the qualification of the
Indenture under the TIA, (vii) to make any
changes or modifications necessary in
connection with the registration of the
Securities under the Securities Act as
contemplated in the Registration Rights
Agreement; provided, however, that such
action pursuant to this clause does not, in
the good faith opinion of the Board of
Directors of the Company (as evidenced by a
Board Resolution) and the Trustee,
adversely affect the interests of the
Holders of Securities in any material
respect, (viii) to cure any ambiguity, to
correct or supplement any provision in the
Indenture which may be inconsistent with
any other provision therein or which is
otherwise defective, or to make any other
provisions with respect to matters or
questions arising under the Indenture which
the Company may deem necessary or desirable
and which shall not be inconsistent with
the provisions of the Indenture; provided,
however, that such action pursuant to this
clause does not, in the good faith opinion
of the Board of Directors of the Company
(as evidenced by a Board Resolution) and
the Trustee, adversely affect the interests
of the Holders of Securities in any
material respect, and (ix) to add or modify
any other provisions in the Indenture with
respect to matters or questions arising
hereunder which the Company and the Trustee
may deem necessary or desirable and which
will not adversely affect the interests of
the Holders of Securities.
14. Defaults and Remedies.
If any Event of Default with respect
to Securities shall occur and be
continuing, the principal amount at
maturity, or any portion thereof, including
the Issue Price and accrued Original Issue
Discount, and Liquidated Damages, if any on
all the Securities may be declared due and
payable in the manner and with the effect
provided in the Indenture.
15. Trustee Dealings with the Company.
Subject to certain limitations imposed
by the TIA, the Trustee under the
Indenture, in its individual or any other
capacity, may become the owner or pledgee
of Securities and may otherwise deal with
and collect obligations owed to it by the
Company or its Affiliates and may otherwise
deal with the Company or its Affiliates
with the same rights it would have if it
were not Trustee.
16. Calculations in Respect of Securities.
The Company or its agents will be
responsible for making all calculations
called for under the Securities including,
but not limited to, determination of the
market prices for the Securities and of the
Common Stock and the amounts of Original
Issue Discount, if any, accrued on the
Securities. Any calculations made in good
faith and without manifest error will be
final and binding on Holders of the
Securities. The Company or its agents will
be required to deliver to the Trustee a
schedule of its calculations and the
Trustee will be entitled to conclusively
rely upon the accuracy of such calculations
without independent verification.
17. No Recourse Against Others.
A director, officer, employee or
shareholder, as such, of the Company shall
not have any liability for any obligations
of the Company under the Securities or the
Indenture or for any claim based on, in
respect of or by reason of such obligations
or their creation. By accepting a
Security, each Securityholder waives and
releases all such liability. The waiver and
release are part of the consideration for
the issue of the Securities.
18. Authentication.
This Security shall not be valid until
an authorize signatory of the Trustee
manually signs the Trustee's Certificate of
Authentication on the other side of this
Security.
19. Abbreviations.
Customary abbreviations may be used in
the name of a Securityholder or an
assignee, such as TEN COM (=tenants in
common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with
right of survivorship and not as tenants in
common), CUST (=custodian), and U/G/M/A
(=Uniform Gift to Minors Act).
20. GOVERNING LAW.
THE LAWS OF THE STATE OF NEW YORK
SHALL GOVERN THE INDENTURE AND THIS
SECURITY.
The Company will furnish to any
Securityholder upon written request and
without charge a copy of the Indenture
which has in it the text of this Security
in larger type. Requests may be made to:
BRINKER INTERNATIONAL, INC.
6820 LBJ Freeway
Dallas, Texas 75240
Attn: General Counsel and Secretary
Facsimile No. (972) 770-1256
21. Registration Rights.
The Holders of the Securities are
entitled to the benefits of a Resale
Registration Rights Agreement,
dated as of October __, 2001, among the
Company, Banc of America Securities LLC and
Salomon Smith Barney Inc., as
representatives of several initial
purchasers, including the receipt of
liquidated damages upon a registration
default (as defined in such agreement).
ASSIGNMENT FORM CONVERSION
NOTICE
To assign this To convert
this Security
Security, fill in the into Common
Stock of the
form below: Company, check
the box [ ]
I or we assign and To convert
only part of
transfer this Security to this Security,
state the
_________________________ principal
amount at
_________________________ maturity to be
converted
(Insert assignee's soc. (which must be
$1,000 or
sec. or tax ID no.) an integral
multiple of
_________________________ $1,000):
_________________________ If you want
the stock
certificate
made out in _________________________
another person's name
fill in the
form below: (Print or type assignee's
________________________
name, address and zip
________________________
code)
(Insert the
other
and irrevocably appoint person's soc.
sec. tax
ID no.)
____________________
________________________
agent to transfer this
________________________
Security on the books of
________________________
the Company. The agent
________________________
may substitute another to
________________________
act for him.
________________________
(Print or type
other person's
name, address
and zip code)
Date: __________ Your
Signature:______________________
___________________________________________
____________ (Sign exactly as your name
appears on the other side
of this Security)
Signature Guaranteed
________________________________
Participant in a Recognized Signature
Guarantee Medallion Program
By:_____________________________
Authorized Signatory
SCHEDULE OF INCREASES AND DECREASES OF
GLOBAL SECURITY
Initial Principal Amount at Maturity of
Global Security: ________($________).
Date Amount of Amount of
Principal Notation
Increase Decrease Amount
at by
in in Maturity
Registrar
Principal Principal of Global
or
Amount at Amount at Security
Security Maturity Maturity After
Custodian
of Global of Global Increase
Security Security or
Decrease
EXHIBIT B [FORM OF
FACE OF CERTIFICATED SECURITY]
THE SECURITY EVIDENCED BY THIS
CERTIFICATE HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT OF 1933") OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED OR
SOLD EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ACQUISITION HEREOF, THE
HOLDER:
(1) REPRESENTS THAT IT IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT
OF 1933;
(2) AGREES THAT IT WILL NOT WITHIN TWO
YEARS
AFTER THE ORIGINAL ISSUANCE OF
THIS SECURITY RESELL OR OTHERWISE
TRANSFER THE SECURITY EVIDENCED
HEREBY OR THE COMMON STOCK
ISSUABLE UPON CONVERSION OF SUCH
SECURITY EXCEPT (A)
TO THE COMPANY OR ANY SUBSIDIARY
THEREOF, (B) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE
WITH RULE 144A UNDER THE
SECURITIES ACT OF 1933, (C)
PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT OF 1933
(IF AVAILABLE), (D) TO ANY
INSTITUTIONAL INVESTOR THAT IS AN
ACCREDITED INVESTOR WITHIN THE
MEANING OF RULE 501(a)(1), (2),
(3) OR (7) OF REGULATION D UNDER
THE SECURITIES ACT PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT (IF
AVAILABLE), OR (E) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS
BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT OF 1933 AND WHICH
CONTINUES TO BE EFFECTIVE AT THE
TIME OF SUCH TRANSFER; AND
(3) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THE SECURITY
EVIDENCED HEREBY IS TRANSFERRED
(OTHER THAN A TRANSFER PURSUANT
TO CLAUSE 2(C) OR 2(E) ABOVE), A
NOTICE
SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND.
The foregoing legend may be removed
from this Security on satisfaction of the
conditions specified in the Indenture.
BRINKER INTERNATIONAL, INC.
Zero Coupon Convertible Senior Debentures
Due 2021
REGISTERED
CUSIP:
ISSUE DATE: October __, 2001
ISSUE PRICE: $
(for each $1,000 principal amount at
maturity)
ORIGINAL ISSUE DISCOUNT: $
(for each $1,000 principal amount at
maturity)
No. R-
BRINKER INTERNATIONAL, INC., a
Delaware corporation, promises to pay to
Cede & Co. or registered assigns, the
principal amount at maturity of
[__________________ dollars ($__________)]
on October ____, 2021.
Reference is hereby made to the
further provisions of this Security set
forth on the reverse side of this Security,
which further provisions shall for all
purposes have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, the Company has caused
this
instrument to be duly executed under its
corporate seal.
Dated: October __, 2001 BRINKER
INTERNATIONAL
INC.
By:______________
____________
Title:___________
____________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
____________________________,
( )
as Trustee, certifies that this is one
of the Securities referred to in the
within-mentioned Indenture.
By__________________________________
Authorized Signatory
Dated: October __, 2001
[FORM OF REVERSE OF CERTIFICATED
SECURITY IS IDENTICAL
TO EXHIBIT A]
EXHIBIT C Zero
Coupon Convertible Senior Debentures Due 2021
Transfer Certificate
In connection with any transfer of any
of the Securities within the period prior
to the expiration of the holding period
applicable to the sales thereof under Rule
144(k) under the Securities Act of 1933, as
amended (the "Securities Act") (or any
successor provision), the undersigned
registered owner of this Security hereby
certifies with respect to $____________
principal amount at maturity of the above-
captioned Securities presented or
surrendered on the date hereof (the
"Surrendered Securities") for registration
of transfer, or for exchange or conversion
where the securities issuable upon such
exchange or conversion are to be registered
in a name other than that of the
undersigned registered owner (each such
transaction being a "transfer"), that such
transfer complies with the restrictive
legend set forth on the face of the
Surrendered Securities for the reason
checked below:
[_] A transfer of the Surrendered
Securities
is made to the Company or any
subsidiaries;
or
[_] The transfer of the Surrendered
Securities complies with Rule 144A
under the Securities Act; or
[_] The transfer of the Surrendered
Securities complies with Rule
501(a)(1), (2), (3) or (7) of
Regulation D under the Securities
Act; or
[_] The transfer of the Surrendered
Securities is pursuant to an
effective registration statement
under the Securities Act; or
[_] The transfer of the Surrendered
Securities is pursuant to another
available exemption from the
registration requirement of the
Securities Act;
and unless the box below is checked, the
undersigned confirms that, to the
undersigned's knowledge, such Securities
are not being transferred to an "affiliate"
of the Company as defined in Rule 144 under
the Securities Act (an "Affiliate").
[_] The transferee is an Affiliate of the
Company.
DATE:
___________________________
Signature(s)
(If the registered owner is a
corporation, partnership or fiduciary, the
title of the person
signing on behalf of such registered
owner must be stated.)
Signature Guaranteed
________________________________
Participant in a Recognized Signature
