1
Exhibit 4(b)
=======================================
FIRST SUPPLEMENTAL INDENTURE
between
Wendy's International, Inc.
and
NBD Bank
Dated as of September 20, 1996
========================================
2
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITION OF TERMS...............................................................2
ARTICLE II
GENERAL TERMS AND CONDITIONS
OF THE CONVERTIBLE DEBENTURES
SECTION 2.1. DESIGNATION AND PRINCIPAL AMOUNT..................................................4
SECTION 2.2. MATURITY..........................................................................4
SECTION 2.3. FORM AND PAYMENT..................................................................4
SECTION 2.4. GLOBAL DEBENTURE..................................................................5
SECTION 2.5. INTEREST..........................................................................6
SECTION 2.6. ENFORCEMENT RIGHTS................................................................7
ARTICLE III
REDEMPTION OF THE CONVERTIBLE DEBENTURES
SECTION 3.1. SPECIAL EVENT REDEMPTION..........................................................8
SECTION 3.2. OPTIONAL REDEMPTION BY COMPANY....................................................9
SECTION 3.3. NO SINKING FUND..................................................................10
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. EXTENSION OF INTEREST PAYMENT PERIOD.............................................10
SECTION 4.2. NOTICE OF EXTENSION..............................................................11
SECTION 4.3. LIMITATION OF TRANSACTIONS.......................................................11
ARTICLE V
EXPENSES
i
3
Page
----
SECTION 5.1. PAYMENT OF EXPENSES..............................................................12
SECTION 5.2. PAYMENT UPON RESIGNATION OR REMOVAL..............................................13
ARTICLE VI
COVENANT TO LIST ON EXCHANGE
SECTION 6.1. LISTING ON AN EXCHANGE...........................................................13
ARTICLE VII CONVERSION OF CONVERTIBLE DEBENTURES
SECTION 7.1. CONVERSION RIGHTS................................................................14
SECTION 7.2. CONVERSION PROCEDURES............................................................14
SECTION 7.3. CONVERSION PRICE ADJUSTMENTS.....................................................16
SECTION 7.4. ADJUSTMENT OF CONVERSION PRICE -
FUNDAMENTAL CHANGE....................................................................27
SECTION 7.5. NOTICE OF CERTAIN EVENTS.........................................................32
SECTION 7.6. COMPANY TO PROVIDE STOCK.........................................................33
SECTION 7.7. DIVIDEND OR INTEREST REINVESTMENT PLANS
.....................................................................................34
SECTION 7.8. CERTAIN ADDITIONAL RIGHTS........................................................34
SECTION 7.9. PREFERRED STOCK PURCHASE RIGHTS..................................................35
ARTICLE VIII
FORM OF CONVERTIBLE DEBENTURE
SECTION 8.1. FORM OF CONVERTIBLE DEBENTURE....................................................37
ARTICLE IX
ORIGINAL ISSUE OF CONVERTIBLE DEBENTURES
SECTION 9.1. ORIGINAL ISSUE OF CONVERTIBLE DEBENTURES
.....................................................................................51
ARTICLE X
MISCELLANEOUS
ii
4
Page
----
SECTION 10.1. RATIFICATION OF INDENTURE; FIRST
SUPPLEMENTAL INDENTURE CONTROLS.................................................51
SECTION 10.2. TRUSTEE NOT RESPONSIBLE FOR RECITALS
.....................................................................................51
SECTION 10.3. GOVERNING LAW...................................................................51
SECTION 10.4. SEPARABILITY....................................................................52
SECTION 10.5. COUNTERPARTS....................................................................52
iii
5
FIRST SUPPLEMENTAL INDENTURE, dated as of September 20, 1996
(the "First Supplemental Indenture"), between Wendy's International, Inc., an
Ohio corporation (the "Company"), and NBD Bank, as trustee (the "Trustee") under
the Indenture dated as of September 16, 1996 between the Company and the Trustee
(the "Indenture").
WHEREAS, the Company executed and delivered the Indenture to
the Trustee to provide for the future issuance of the Company's unsecured
subordinated debt securities to be issued from time to time in one or more
series as might be determined by the Company under the Indenture, in an
unlimited aggregate principal amount which may be authenticated and delivered as
provided in the Indenture;
WHEREAS, pursuant to the terms of the Indenture, the Company
desires to provide for the establishment of a new series of its Securities to be
known as its 5% Convertible Subordinated Debentures (the "Convertible
Debentures"), the form and substance of such Convertible Debentures and the
terms, provisions and conditions thereof to be set forth as provided in the
Indenture and this First Supplemental Indenture;
WHEREAS, Wendy's Financing I, a Delaware statutory business
trust (the "Trust"), has offered to the public $200,000,000 aggregate
liquidation amount of its $2.50 Term Convertible Securities, Series A (the
"Trust Preferred Securities"), representing undivided beneficial interests in
the assets of the Trust and proposes to invest the proceeds from such offering,
together with the proceeds of the issuance and sale by the Trust to the Company
of $2,020,250 aggregate liquidation amount of its Common Securities, in
$202,020,250 aggregate principal amount of the Convertible Debentures; and
WHEREAS, the Company has requested that the Trustee execute
and deliver this First Supplemental Indenture and all requirements necessary to
make this First Supplemental Indenture a valid instrument in accordance with its
terms, and to make the Convertible Debentures, when executed by the Company and
authenticated and delivered by the Trustee, the valid obligations of the
Company, have been performed, and the execution and delivery of this First
Supplemental Indenture has been duly authorized in all respects:
NOW THEREFORE, in consideration of the purchase and acceptance
of the Convertible Debentures by the Holders thereof, and for the purpose of
setting forth, as provided in the Indenture, the form and substance of the
Convertible
1
6
Debentures and the terms, provisions and conditions thereof, the Company
covenants and agrees with the Trustee as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITION OF TERMS.
For all purposes of the First Supplemental Indenture, except
as otherwise expressly provided or unless the context otherwise requires:
(a) the terms which are defined in the Indenture have the same
meanings when used in this First Supplemental Indenture;
(b) the terms defined in this Article have the meaning
assigned to them in this Article and include the plural as well as the singular;
(c) all other terms used herein which are defined in the Trust
Indenture Act, whether directly or by reference therein, have the meanings
assigned to them therein;
(d) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States of America, and, except as otherwise herein
expressly provided, the term "generally accepted accounting principles" with
respect to any computation required or permitted hereunder shall mean such
accounting principles as are generally accepted in the United States of America
at the date of such computation;
(e) a reference to a Section or Article is to a Section or
Article of this First Supplemental Indenture;
(f) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this First Supplemental Indenture as a whole
and not to any particular Article, Section or other subdivision;
(g) headings are for convenience of reference only and do not
affect interpretation; and
(h) the following terms have the meanings given to them in the
Declaration: (i) Business Day; (ii) Clearing Agency; (iii) Common Stock; (iv)
Trust Preferred Security Certificate; (v) Delaware Trustee; (vi) Dissolution Tax
2
7
Opinion; (vii) Distribution; (viii) DTC; (ix) Institutional Trustee: (x)
Investment Company Event; (xi) No-Recognition Opinion; (xii) Redemption Tax
Opinion; (xiii) Regular Trustees; (xiv) Special Event; (xv) Tax Event; and (xvi)
Underwriting Agreement.
"ADDITIONAL INTEREST" shall have the meaning set forth in Section 2.5.
"COMPOUNDED INTEREST" shall have the meaning specified in Section 4.1.
"DECLARATION" means the Amended and Restated Declaration of Trust of
Wendy's Financing I, a Delaware statutory business trust, dated as of September
20, 1996.
"DEFERRED INTEREST" has the meaning specified in Section 4.1.
"DISSOLUTION EVENT" means that, as a result of the occurrence and
continuation of a Special Event, the Trust is to be dissolved in accordance with
the Declaration, and the Convertible Debentures held by the Institutional
Trustee are to be distributed to the holders of the Trust Securities issued by
the Trust pro rata in accordance with the Declaration.
"EXTENDED INTEREST PAYMENT PERIOD" has the meaning specified in Section
4.1.
"GLOBAL DEBENTURE" has the meaning specified in Section 2.4.
"MATURITY DATE" means the date on which the Convertible Debentures
mature and on which the principal shall be due and payable together with all
accrued and unpaid interest thereon including Compounded Interest and Additional
Interest, if any.
"NON BOOK-ENTRY TRUST PREFERRED SECURITIES" has the meaning set forth
in Section 2.4.
"OPTIONAL REDEMPTION PRICE" has the meaning specified in Section 3.2.
"TRADING DAY" shall mean a day on which any securities are traded on
the national securities exchange or quotation system used to determine the
Closing Price.
3
8
"TRUST PREFERRED SECURITIES" has the meaning specified in the recitals
to this First Supplemental Indenture.
ARTICLE II
GENERAL TERMS AND CONDITIONS
OF THE CONVERTIBLE DEBENTURES
SECTION 2.1. DESIGNATION AND PRINCIPAL AMOUNT.
There is hereby authorized a series of Debentures designated the "5%
Convertible Subordinated Debentures," limited in aggregate principal amount to
$202,020,250, which amount shall be as set forth in any written order of the
Company for the authentication and delivery of Convertible Debentures pursuant
to Section 303 of the Indenture.
SECTION 2.2. MATURITY.
The Maturity Date is September 15, 2026.
SECTION 2.3. FORM AND PAYMENT.
Except as provided in Section 2.4, the Convertible Debentures shall be
issued in fully registered certificated form without Coupons in denominations of
$50 in principal amount and integral multiples thereof. Principal and interest
on the Convertible Debentures issued in certificated form will be payable, the
transfer of such Convertible Debentures will be registrable and such Convertible
Debentures will be exchangeable for Convertible Debentures bearing identical
terms and provisions at the office or agency of the Trustee; PROVIDED, HOWEVER,
that payment of interest may be made at the option of the Company by check
mailed to the Holder at such address as shall appear in the Security Register.
Notwithstanding the foregoing, so long as the Holder of any Convertible
Debentures is the Institutional Trustee, the payment of the principal of and
interest (including Compounded Interest and Additional Interest, if any) on such
Convertible Debentures held by the Institutional Trustee will be made at such
place and to such account as may be designated by the Institu tional Trustee.
4
9
SECTION 2.4. GLOBAL DEBENTURE.
(a) In connection with a Dissolution Event,
(i) the Convertible Debentures in certificated form may be
presented to the Trustee by the Institutional Trustee in exchange for a
global Debenture in an aggregate principal amount equal to the
aggregate principal amount of all outstanding Convertible Debentures (a
"GLOBAL DEBENTURE"), to be registered in the name of DTC, or its
nominee, and delivered by the Trustee to DTC for crediting to the
accounts of its participants pursuant to the instructions of the
Regular Trustees. The Company upon any such presentation shall execute
a Global Debenture in such aggregate principal amount and deliver the
same to the Trustee for authentication and delivery in accordance with
the Indenture and this First Supplemental Indenture. Payments on the
Convertible Debentures issued as a Global Debenture will be made to
DTC; and
(ii) if any Trust Preferred Securities are held in non
book-entry certificated form, any Trust Preferred Security Certificate
which represents Trust Preferred Securities other than Trust Preferred
Securities held by the Clearing Agency or its nominee ("NON BOOK-ENTRY
TRUST PREFERRED SECURITIES") will be deemed to represent beneficial
interests in Convertible Debentures having an aggregate principal
amount equal to the aggregate liquidation amount of the Non Book-Entry
Trust Preferred Securities until such Trust Preferred Security
Certificates are presented to the Security Registrar for transfer or
reissuance at which time such Trust Preferred Security Certificates
will be cancelled and a Debenture, registered in the name of the holder
of the Trust Preferred Security Certificate or the transferee of the
holder of such Trust Preferred Security Certificate, as the case may
be, with an aggregate principal amount equal to the aggregate
liquidation amount of the Trust Preferred Security Certificate
cancelled, will be executed by the Company and delivered to the Trustee
for authentication and delivery in accordance with the Indenture and
this First Supplemental Indenture. On issue of such Convertible
Debentures, Convertible Debentures with an equivalent aggregate
principal amount that were presented by the Institutional Trustee to
the Trustee will be deemed to have been cancelled.
5
10
(b) A Global Debenture may be transferred, in whole but not in
part, only to another nominee of DTC, or to a successor depositary selected or
approved by the Company or to a nominee of such successor depositary.
SECTION 2.5. INTEREST.
(a) Each Convertible Debenture will bear interest at the rate
of 5% per annum (the "COUPON RATE") from September 20, 1996 until the principal
thereof becomes due and payable, and on any overdue principal and (to the extent
that payment of such interest is enforceable under applicable law) on any
overdue installment of interest at the Coupon Rate, compounded quarterly,
payable (subject to the provisions of Article IV) quarterly in arrears on March
15, June 15, September 15 and December 15 of each year (each, an "INTEREST
PAYMENT DATE"), commencing on December 15, 1996, to the Person in whose name
such Convertible Debenture or any predecessor Convertible Debenture is
registered, at the close of business on the Regular Record Date for such
interest installment, which, in respect of (i) Convertible Debentures of which
the Institutional Trustee is the Holder and the related Trust Preferred
Securities are in book-entry only form or (ii) a Global Debenture, shall be the
close of business on the Business Day next preceding that Interest Payment Date;
PROVIDED, that if the Interest Payment Date is a Redemption Date, then the
record date for the interest payment shall be as of the opening of business on
such day for the purpose of permitting the Holder of a Convertible Debenture to
convert on such record date while continuing to be the record holder for the
interest payment and therefore entitled to receive the interest payment on the
Interest Payment Date notwithstanding conversion on the record date.
Notwithstanding the foregoing sentence, if (i) the Convertible Debentures are
held by the Institutional Trustee and the Trust Preferred Securities are no
longer in book-entry only form or (ii) the Convertible Debentures are not
represented by a Global Debenture, the Company may select a Regular Record Date
for such interest installment which shall be any date at least one Business Day
before an Interest Payment Date.
(b) The amount of interest payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months. Except as
provided in the following sentence, the amount of interest payable for any
period shorter than a full quarterly period for which interest is computed, will
be computed on the basis of the actual number of days elapsed per 30-day month.
In the event that any date on which interest is payable on the Convertible
Debentures is not a Business Day, then payment of interest
6
11
payable on such date will be made on the next succeeding day which is a Business
Day (and without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar year, then
such payment shall be made on the immediately preceding Business Day, in each
case with the same force and effect as if made on such date.
(c) If, at any time while the Institutional Trustee is the
Holder of any Convertible Debentures, the Trust or the Institutional Trustee is
required to pay any taxes, duties, assessments or governmental charges of
whatever nature (other than withholding taxes) imposed by the United States, or
any other taxing authority, then, in any such case, the Company will pay as
additional interest ("ADDITIONAL INTEREST") on the Convertible Debentures held
by the Institutional Trustee, such additional amounts as shall be required so
that the net amounts received and retained by the Trust and the Institutional
Trustee after paying such taxes, duties, assessments or other governmental
charges will be equal to the amounts the Trust and the Institutional Trustee
would have received had no such taxes, duties, assessments or other governmental
charges been imposed.
SECTION 2.6. ENFORCEMENT RIGHTS.
The holders of a majority in liquidation amount of the Trust
Preferred Securities will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Institutional Trustee
or to direct the exercise of any trust or power conferred upon the Institutional
Trustee under the Declaration, including the right to direct the Institutional
Trustee to exercise the remedies available to it as a Holder of the Convertible
Debentures. If the Institutional Trustee fails to enforce its rights under the
Convertible Debentures, a holder of Trust Preferred Securities, to the extent
permitted by law, may institute a legal proceeding directly against the Company
to enforce the Institutional Trustee's rights under the Convertible Debentures
without first instituting any legal proceeding against the Institutional Trustee
or any other person or entity. Notwithstanding the foregoing, if an Event of
Default has occurred and is continuing and such event is attributable to the
failure of the Company to pay interest or principal on the Convertible
Debentures on the date such interest or principal is otherwise payable (or in
the case of redemption, on the redemption date), then the registered holder of
the Trust Preferred Securities may directly institute a proceeding for
enforcement of payment to such holder of the principal of or interest on the
7
12
Convertible Debentures having a principal amount equal to the aggregate
liquidation amount of the Trust Preferred Securities of such holder (a "Direct
Action") on or after the respective due date specified in the Convertible
Debentures. In connection with such Direct Action, the Company will be
subrogated to the rights of such holder of Trust Preferred Securities under the
Declaration to the extent of any payment made by the Company to such holder of
Trust Preferred Securities in such Direct Action. The holders of Trust Preferred
Securities will not be able to exercise any other remedy available to the
holders of the Convertible Debentures.
ARTICLE III
REDEMPTION OF THE CONVERTIBLE DEBENTURES
SECTION 3.1. SPECIAL EVENT REDEMPTION.
If a Special Event has occurred and is continuing and:
(a) the Company has received a Redemption Tax Opinion;
or
(b) after receiving a Dissolution Tax Opinion, the Trustees
shall have been informed by tax counsel rendering the Dissolution Tax
Opinion that a No-Recognition Opinion cannot be delivered to the Trust,
then, notwithstanding Section 3.2(a) but subject to Section 3.2(b), the Company
shall have the right upon not less than 30 days nor more than 60 days notice to
the Holders of the Convertible Debentures to redeem the Convertible Debentures,
in whole or in part, for cash within 90 days following the occurrence of such
Tax Event (the "90-DAY PERIOD") at a redemption price equal to 100% of the
principal amount to be redeemed plus any accrued and unpaid interest thereon to
the date of such redemption (the "REDEMPTION PRICE"), PROVIDED that if at the
time there is available to the Company or the Trust the opportunity to
eliminate, within the 90-Day Period, the Tax Event by taking some ministerial
action ("MINISTERIAL ACTION"), such as filing a form or making an election, or
pursuing some other similar reasonable measure which has no adverse effect on
the Company, the Trust or the Holders of the Trust Securities issued by the
Trust, the Company shall pursue such Ministerial Action in lieu of redemption,
and, PROVIDED, FURTHER, that the Company shall
8
13
have no right to redeem the Convertible Debentures while the Trust is pursuing
any Ministerial Action pursuant to its obligations under the Declaration. The
Redemption Price shall be paid prior to 12:00 noon, New York time, on the date
of such redemption or such earlier time as the Company determines, PROVIDED that
the Company shall deposit with the Trustee an amount sufficient to pay the
Redemption Price prior to the redemption date.
SECTION 3.2. OPTIONAL REDEMPTION BY COMPANY.
(a) Subject to the provisions of Section 3.2(b) and to the
provisions of Article Eleven of the Indenture, except as otherwise may be
specified in Section 3.1 or elsewhere in this First Supplemental Indenture, the
Company shall have the right to redeem the Convertible Debentures, in whole or
in part, from time to time, on or after September 17, 2000. Any redemption
pursuant to this paragraph will be made upon not less than 30 days nor more than
60 days notice to the Holder of the Convertible Debentures, at the following
prices (expressed as percentages of the principal amount of the Convertible
Debentures) (the "OPTIONAL REDEMPTION PRICE") together with accrued and unpaid
interest, including Compounded and Additional Interest to, but excluding, the
Redemption Date, if redeemed during the 12-month period beginning September 15:
Year Redemption Price
---- ----------------
2000 103.00%
2001 102.50
2002 102.00
2003 101.50
2004 101.00
2005 100.50
and 100% if redeemed on or after September 15, 2006.
If Convertible Debentures are redeemed on any March 15, June
15, September 15, or December 15, accrued and unpaid interest shall be payable
to Holders of record on the relevant record date.
So long as the corresponding Trust Preferred Securities are
outstanding, the proceeds from the redemption of the Convertible Debentures will
be used to redeem Trust Preferred Securities.
If the Convertible Debentures are only partially redeemed
pursuant to this Section 3.2, the Convertible Debentures will be redeemed PRO
RATA or by lot or by any
9
14
other method utilized by the Trustee. The Optional Redemption Price shall be
paid prior to 12:00 noon, New York time, on the Redemption Date or at such
earlier time as the Company determines provided that the Company shall deposit
with the Trustee an amount sufficient to pay the Optional Redemption Price by
10:00 a.m., New York time, on the date such Optional Redemption Price is to be
paid.
(b) If a partial redemption of the Convertible Debentures
would result in the delisting of the Trust Preferred Securities issued by the
Trust from any national securities exchange or other organization on which the
Trust Preferred Securities are then listed, the Company shall not be permitted
to effect such partial redemption and may only redeem the Convertible Debentures
in whole.
SECTION 3.3. NO SINKING FUND.
The Convertible Debentures are not entitled to the benefit of
any sinking fund.
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. EXTENSION OF INTEREST PAYMENT PERIOD.
So long as an Event of Default under Section 501 of the
Indenture shall not have occurred and be continuing, the Company shall have the
right, at any time and from time to time during the term of the Convertible
Debentures, to defer payments of interest by extending the interest payment
period of such Convertible Debentures for a period not exceeding 20 consecutive
quarters (the "EXTENDED INTEREST PAYMENT PERIOD"), during which Extended
Interest Payment Period no interest shall be due and payable; PROVIDED that no
Extended Interest Payment Period may extend beyond the Maturity Date or any
earlier Redemption Date. To the extent permitted by applicable law, interest,
the payment of which has been deferred because of the extension of the interest
payment period pursuant to this Section 4.1, will bear interest thereon at the
Coupon Rate compounded quarterly for each quarter of the Extended Interest
Payment Period ("COMPOUNDED INTEREST"). At the end of the Extended Interest
Payment Period, the Company shall pay all accrued and unpaid interest on the
Convertible Debentures, including any Additional Interest and Compounded
Interest (together, "DEFERRED INTEREST") that shall be payable to the Holders of
the Convertible Debentures in whose names the Convertible Debentures are
registered in the Security Register on the first record date after the end of
the Extended Interest
10
15
Payment Period. Before the termination of any Extended Interest Payment Period,
the Company may further extend such period, provided that such period together
with all such further extensions thereof shall not exceed 20 consecutive
quarters, or extend beyond the maturity date of the Convertible Debentures. Upon
the termination of any Extended Interest Payment Period and upon the payment of
all Deferred Interest then due, the Company may commence a new Extended Interest
Payment Period, subject to the foregoing requirements. No interest shall be due
and payable during an Extended Interest Payment Period, except at the end
thereof, but the Company may prepay at any time all or any portion of the
interest accrued during an Extended Interest Payment Period.
SECTION 4.2. NOTICE OF EXTENSION.
(a) If the Institutional Trustee is the only registered Holder
of the Convertible Debentures at the time the Company selects an Extended
Interest Payment Period, the Company shall give written notice to the Regular
Trustees, the Institutional Trustee and the Trustee of its selection of such
Extended Interest Payment Period one Business Day before the earlier of (i) the
next succeeding date on which Distributions on the Trust Securities issued by
the Trust are payable, or (ii) the date the Trust is required to give notice of
the record date, or the date such Distributions are payable, to the New York
Stock Exchange or other applicable self-regulatory organization or to holders of
the Trust Preferred Securities issued by the Trust, but in any event at least
one Business Day before such record date.
(b) If the Institutional Trustee is not the only Holder of the
Convertible Debentures at the time the Company selects an Extended Interest
Payment Period, the Company shall give the Holders of the Convertible Debentures
and the Trustee written notice of its selection of such Extended Interest
Payment Period at least 10 Business Days before the earlier of (i) the next
succeeding Interest Payment Date, or (ii) the date the Company is required to
give notice of the record or payment date of such interest payment to the New
York Stock Exchange or other applicable self-regulatory organization or to
Holders of the Convertible Debentures.
(c) The quarter in which any notice is given pursuant to
paragraphs (a) or (b) of this Section 4.2 shall be counted as one of the 20
quarters permitted in the maximum Extended Interest Payment Period permitted
under Section 4.1.
SECTION 4.3. LIMITATION OF TRANSACTIONS.
11
16
If the Company shall exercise its right to defer payment of
interest as provided in Section 4.1, then (i) the Company shall not declare or
pay any dividend on, make any distributions with respect to, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of its
capital stock (other than (A) purchases or acquisitions of shares of its common
stock in connection with the satis faction by the Company of its obligations
under any employee benefit plans, (B) as a result of a reclassification of its
capital stock or the exchange or conversion of one class or series of its
capital stock for another class or series of its capital stock , (C) the
purchase of fractional interests in shares of its capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged or (D) purchases or acquisitions of shares of Common
Stock to be used in connection with acquisitions of Common Stock by shareholders
pursuant to the Company's dividend reinvestment plan), (ii) the Company shall
not make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities issued by the Company which rank pari
passu with or junior to the Convertible Debentures and (iii) the Company shall
not make any guarantee payment with respect to the foregoing (other than
pursuant to the Guarantee).
ARTICLE V
EXPENSES
SECTION 5.1. PAYMENT OF EXPENSES.
In connection with the offering, sale and issuance of the
Convertible Debentures to the Institutional Trustee and in connection with the
sale of the Trust Securities by the Trust, the Company, in its capacity as
borrower with respect to the Convertible Debentures, shall:
(a) pay all costs and expenses relating to the offering, sale
and issuance of the Convertible Debentures, including commissions to the
underwriters payable pursuant to the Underwriting Agreement and compensation of
the Trustee under the Indenture in accordance with the provisions of Section 607
of the Indenture;
(b) pay all costs and expenses of the Trust (including, but
not limited to, costs and expenses relating to the organization of the Trust,
the fees and expenses of the Institutional Trustee and the Delaware Trustee, the
costs and expenses relating to the operation of the Trust, including without
limitation, costs and expenses of
12
17
accountants, attorneys, statistical or bookkeeping services, expenses for
printing and engraving and computing or accounting equipment, paying agent(s),
registrar(s), transfer agent(s), duplicating, travel and telephone and other
telecommunications expenses and costs and expenses incurred in connection with
the acquisition, financing, and disposition of Trust assets);
(c) pay all costs and expenses related to the
enforcement by the Institutional Trustee of the rights of
the holders of the Trust Preferred Securities;
(d) be primarily liable for any indemnification
obligations arising with respect to the Declaration; and
(e) pay any and all taxes (other than United States
withholding taxes attributable to the Trust or its assets) and all liabilities,
costs and expenses with respect to such taxes of the Trust.
SECTION 5.2. PAYMENT UPON RESIGNATION OR REMOVAL.
Upon termination of this First Supplemental Indenture or the
Indenture or the removal or resignation of the Trustee pursuant to Section 610
of the Indenture, the Company shall pay to the Trustee all amounts accrued to
the date of such termination, removal or resignation. Upon termination of the
Declaration or the removal or resignation of the Delaware Trustee or the
Institutional Trustee, as the case may be, pursuant to Section 5.07 of the
Declaration, the Company shall pay to the Delaware Trustee or the Institutional
Trustee, and their respective counsel, as the case may be, all amounts accrued
to the date of such termination, removal or resignation.
ARTICLE VI
COVENANT TO LIST ON EXCHANGE
SECTION 6.1. LISTING ON AN EXCHANGE.
If the Convertible Debentures are to be distributed to the
holders of the Trust Preferred Securities issued by the Trust upon a Dissolution
Event, the Company will use its best efforts to list such Convertible Debentures
on the New York Stock Exchange, Inc. or on such other exchange as the Trust
Preferred Securities are then listed.
ARTICLE VII
13
18
CONVERSION OF CONVERTIBLE DEBENTURES
SECTION 7.1. CONVERSION RIGHTS.
Subject to and upon compliance with the provisions of this
Article VII, the Convertible Debentures are convertible, at the option of the
Holder, at any time through the close of business on September 15, 2026 (or, in
the case of Convertible Debentures called for redemption, prior to the close of
business on the Business Day prior to the corresponding redemption date) into
fully paid and nonassessable shares of Common Stock of the Company at an initial
conversion rate of 1.8932 shares of Common Stock for each $50 in aggregate
principal amount of Convertible Debentures (equal to a conversion price (as
adjusted from time to time, the "Conversion Price") of $26.41 per share of
Common Stock), subject to adjustment as described in this Article VII. A Holder
of Convertible Debentures may convert any portion of the principal amount of the
Convertible Debentures into that number of fully paid and nonassessable shares
of Common Stock obtained by dividing the principal amount of the Convertible
Debentures to be converted by such conversion price. All calculations under this
Article VII shall be made to the nearest cent or to the nearest 1/100th of a
share, as the case may be.
SECTION 7.2. CONVERSION PROCEDURES.
(a) In order to convert all or a portion of the Convertible
Debentures, the Holder thereof shall deliver to the Conversion Agent an
irrevocable Notice of Conversion setting forth the principal amount of
Convertible Debentures to be converted, together with the name or names, if
other than the Holder, in which the shares of Common Stock should be issued upon
conversion and, if such Convertible Debentures are definitive Convertible
Debentures, surrender to the Conversion Agent the Convertible Debentures to be
converted, duly endorsed or assigned to the Company or in blank. In addition, a
holder of Trust Preferred Securities may exercise its right under the
Declaration to convert such Trust Preferred Securities into Common Stock by
delivering to the Conversion Agent an irrevocable Notice of Conversion setting
forth the information called for by the preceding sentence and directing the
Conversion Agent (i) to exchange such Trust Preferred Security for a portion of
the Convertible Debentures held by the Trust (at an exchange rate of $50
principal amount of Convertible Debentures for each Trust Preferred Security)
and (ii) to immediately convert such Convertible Debentures, on behalf of such
holder, into Common Stock of the Company pursuant to this Article VII and, if
such Trust Preferred Securities are in
14
19
definitive form, surrendering such Trust Preferred Securities, duly endorsed or
assigned to the Company or in blank. So long as any Trust Preferred Securities
are outstanding, the Trust shall not convert any Convertible Debentures except
pursuant to a Notice of Conversion delivered to the Conversion Agent by a holder
of Trust Preferred Securities.
If a Trust Preferred Security is surrendered for conversion
after the close of business on any regular record date for payment of a
Distribution and before the opening of business on the corresponding
Distribution payment date, then, notwithstanding such conversion, the
Distribution payable on such Distribution payment date will be paid in cash to
the person in whose name the Convertible Debenture is registered at the close of
business on such record date, and (other than a Convertible Debenture or a
portion of a Convertible Debenture called for redemption on a redemption date
occurring after such record date and on or prior to such Distribution payment
date) when so surrendered for conversion, the Convertible Debenture must be
accompanied by payment of an amount equal to the Distribution payable on such
Distribution payment date. Except as otherwise provided in the immediately
preceding sentence, in the case of any Convertible Debenture which is converted,
interest whose Maturity Date is after the date of conversion of such Convertible
Debenture shall not be payable, and the Company shall not make nor be required
to make any other payment, adjustment or allowance with respect to accrued but
unpaid interest on the Convertible Debentures being converted, which shall be
deemed to be paid in full. Each conversion shall be deemed to have been effected
immediately prior to the close of business on the day on which the Notice of
Conversion was received (the "CONVERSION DATE") by the Conversion Agent from the
Holder or from a holder of the Trust Preferred Securities effecting a conversion
thereof pursuant to its conversion rights under the Declaration, as the case may
be. 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 Conversion Date. As promptly as
practicable on or after the Conversion Date, the Company shall issue and deliver
at the office of the Conversion Agent, unless otherwise directed by the Holder
in the Notice of Conversion, a certificate or certificates for the number of
full shares of Common Stock issuable upon such conversion, together with the
cash payment, if any, in lieu of any fraction of any share to the Person or
Persons entitled to receive the same. The Conversion Agent shall deliver such
certificate or certificates to such Person or Persons.
15
20
(b) The Company's delivery upon conversion of the fixed number
of shares of Common Stock into which the Convertible Debentures are convertible
(together with the cash payment, if any, in lieu of fractional shares) shall be
deemed to satisfy the Company's obligation to pay the principal amount at
Maturity of the portion of Convertible Debentures so converted and any unpaid
interest (including Compounded Interest) accrued on such Convertible Debentures
at the time of such conversion.
(c) No fractional shares of Common Stock will be issued as a
result of conversion, but in lieu thereof, the Company shall pay to the
Conversion Agent a cash adjustment in an amount equal to the same fraction of
the Closing Price of such fractional interest on the date on which the
Convertible Debentures were duly surrendered to the Conversion Agent for
conversion, or, if such day is not a Trading Day, on the next Trading Day, and
the Conversion Agent in turn will make such payment, if any, to the Holder of
the Convertible Debentures or the holder of the Trust Preferred Securities so
converted.
(d) In the event of the conversion of any Convertible
Debenture in part only, a new Convertible Debenture or Convertible Debentures
for the unconverted portion thereof will be issued in the name of the Holder
thereof upon the cancellation thereof in accordance with Section 1402 of the
Indenture.
(e) In effecting the conversion transactions described in this
Section 7.2, the Conversion Agent is acting as agent of the holders of Trust
Preferred Securities (in the exchange of Trust Preferred Securities for
Convertible Debentures) and as agent of the Holders of Convertible Debentures
(in the conversion of Convertible Debentures into Common Stock), as the case may
be. The Conversion Agent is hereby authorized (i) to exchange Convertible
Debentures held by the Trust from time to time for Trust Preferred Securities in
connection with the conversion of such Trust Preferred Securities in accordance
with this Article VII and (ii) to convert all or a portion of the Convertible
Debentures into Common Stock and thereupon to deliver such shares of Common
Stock in accordance with the provisions of this Article VII and to deliver to
the Trust a new Convertible Debenture or Convertible Debentures for any
resulting unconverted principal amount.
SECTION 7.3. CONVERSION PRICE ADJUSTMENTS.
16
21
(a) The Conversion Price shall be adjusted from
time to time as follows:
(i) In case the Company shall pay or make a dividend
or other distribution on Common Stock in shares of Common
Stock, then the Conversion Price in effect at the opening of
business on the day following the date fixed for the
determination of shareholders entitled to receive such
dividend or other distribution shall be reduced by multiplying
such Conversion Price by a fraction the numerator of which
shall be the number of shares of Common Stock outstanding at
the close of business on the date fixed for such determination
and 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
purposes of this subparagraph (i), the number of shares of
Common Stock at any time outstanding shall not include shares
held in the treasury of the Company (except to the extent such
dividend or distribution is being made with respect to such
shares) but shall include (x) shares issuable in respect of
scrip certificates issued in lieu of fractions of shares of
Common Stock and (y) any shares of Common Stock of the Company
issuable in exchange for any Exchangeable Non-Voting Shares of
WENTIM Ltd. held by Xxxxxx X. Xxxxx or his successors or
assigns.
(ii) In case the outstanding shares of Common Stock
shall be subdivided into a greater number of shares of Common
Stock, then the Conversion Price in effect at the opening of
business on the day following the day upon which such
subdivision becomes effective shall be proportionately
reduced, and, conversely, in case the outstanding shares of
Common Stock shall be combined into a smaller amount of shares
of Common Stock, then the Conversion Price in effect at the
opening of business on the day following the day upon which
such combination becomes effective shall be proportionately
increased, such reduction or increase, as the case may be, to
become effective immediately after the opening of business on
the day following the day upon which such subdivision or
combination becomes effective.
17
22
(iii) In case the Company shall issue rights or
warrants to all holders of Common Stock entitling them (for a
period expiring within 45 days after the record date fixed for
a distribution of 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 hereinafter defined) per share
(determined as provided in subparagraph (vii) below) of Common
Stock on the date fixed for the determination of shareholders
entitled to receive such rights or warrants (other than
pursuant to a dividend reinvestment plan), then the Conversion
Price in effect at the opening of business on the day
following the date fixed for such determination shall be
reduced by multiplying such Conversion Price by a fraction the
numerator of which shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed
for such determination plus the number of shares of Common
Stock which the aggregate of the offering price of the total
number of shares of Common Stock so offered for subscription
or purchase would purchase at such Current Market Price and
the denominator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for
such determination plus the number of shares of Common Stock
so offered for subscription or purchase, such reduction to
become effective immediately after the opening of business on
the day following the date fixed for such determination. For
the purposes of this subparagraph (iii), 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
(x) shares issuable in respect of scrip certificates issued in
lieu of fractions of shares of Common Stock and (y) any shares
of Common Stock of the Company issuable in exchange for any
Exchangeable Non-Voting Shares of WENTIM Ltd. held by Xxxxxx
X. Xxxxx or his successors or assigns. The Company agrees not
to issue any rights or warrants in respect of shares of Common
Stock held in the treasury of the Company. To the extent that
shares of Common Stock are not delivered after the expiration
of such rights or warrants, the Conversion Price shall be
readjusted to the Conversion Price which would then be in
effect had the adjustments made in respect of the issuance of
such rights or warrants been made on the basis of delivery of
18
23
only the number of shares of Common Stock actually
delivered.
(iv) Subject to the second paragraph of this
subparagraph (iv), in case the Company shall, by dividend or
otherwise, distribute to all holders of Common Stock (A)
shares of capital stock of the Company (other than Common
Stock), (B) evidence of indebtedness of the Company and/or (C)
other assets (including securities, but excluding (1) any
rights or warrants referred to in subparagraph (iii) above,
(2) any rights or warrants to obtain capital stock of a
company other than the Company or any subsidiary of the
Company (including any rights offerings of the Company with
respect to capital stock of companies in which the Company has
an investment (a "Rights Offering")), (3) dividends or
distributions in connection with the liquidation, dissolution
or winding-up of the Company, (4) dividends payable solely in
cash that may from time to time be fixed by the Board of
Directors of the Company and (5) dividends or distributions
referred to in subparagraph (i) above), then in each case
(unless the Company makes the election referred to in the next
sentence) the Conversion Price shall be adjusted so that the
same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the close of
business on such record date by a fraction the numerator of
which shall be the Current Market Price per share (determined
as provided in subparagraph (vii) below) of the Common Stock
on such record date (the "Reference Date") less the then fair
market value on the Reference Date (as determined in good
faith by the Board of Directors of the Company, whose
determination shall be conclusive and shall be described in a
statement filed with the Depositary and the Trustee) of the
portion of the shares of capital stock of the Company,
evidences of indebtedness or other assets so distributed (and
for which an adjustment to the Conversion Price has not been
made previously pursuant to the terms of this Article VII)
applicable to one share of Common Stock and the denominator
shall be such 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 the Reference
Date. However, the Company may elect, in its sole discretion,
in lieu of the foregoing adjustment, to make adequate
19
24
provision so that each holder of Securities shall have the
right to receive upon conversion thereof the amount and kind
of shares of capital stock, evidences of indebtedness or other
assets such holder would have received had such holder
converted such shares on such record date. If the Board of
Directors of the Company determines the fair market value of
any distribution for purposes of this subparagraph (iv) by
reference to the actual or when issued trading market for any
securities (including shares of capital stock or evidence of
indebtedness of the Company) comprising a distribution of
securities, it must in doing so consider the price in such
market over the period used in computing the Current Market
Price of the Common Stock.
For purposes of this subparagraph (iv), any dividend
or distribution that includes both (x) any of the items
described in clauses (A), (B) or (C) of the first paragraph of
this subparagraph (iv) and (y) Common Stock or rights or
warrants to subscribe for or purchase Common Stock of the type
referred to in subparagraph (iii) shall be deemed to be (1) a
dividend or distribution of shares of capital stock of the
Company (other than Common Stock), evidences of indebtedness
of the Company or other assets of the type referred to in
clause (C) of the first paragraph of this subparagraph (iv)
(making any Conversion Price reduction required by this
subparagraph (iv)) immediately followed by (2) a dividend or
distribution of such Common Stock or rights or warrants to
purchase Common Stock of the type referred to in subparagraph
(iii) (making any further Conversion Price reduction required
by subparagraph (i) or (iii) of this Section 7.3(a)), except
(A) the Reference Date of such dividend or distribution as
defined in this subparagraph (iv) shall be substituted as "the
date fixed for the determination of shareholders entitled to
receive such rights or warrants" and "the date fixed for such
determination" within the meaning of subparagraphs (i) and
(iii) of this Section 7.3(a) 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 subparagraph (i)
of this Section 7.3(a).
20
25
The occurrence of a distribution or the occurrence of
any other event as a result of which holders of Convertible
Debentures converting such notes into Common Stock hereunder
will not be entitled to receive rights issued pursuant to any
shareholder protective rights agreement now or hereafter in
effect (the "Other Rights") in the same amount and manner as
if such holders had converted such shares immediately prior to
the occurrence of such distribution or other event shall be
deemed a distribution of Other Rights for the purposes of
conversion adjustments pursuant to this subparagraph (iv). In
lieu of making any adjustment to the Conversion Price under
this subparagraph (iv) as a result of such a distribution of
Other Rights, the Company may elect, in its sole discretion,
to provide that Other Rights shall be issuable in the same
amount and manner upon conversion of the Convertible
Debentures without regard to whether the shares of Common
Stock issuable upon conversion of the Convertible Debentures
were issued before or after such distribution or other event.
(v) In case the Company shall, by dividend or
otherwise, at any time distribute cash to all holders of
Common Stock, excluding (A) any cash dividends on Common Stock
to the extent that the aggregate cash dividends per share of
Common Stock in any consecutive 12-month period do not exceed
the greater of (x) the amount per share of Common Stock of the
cash dividends paid on the Common Stock in the immediately
preceding 12-month period, to the extent that such dividends
for the immediately preceding 12-month period did not require
an adjustment to the Conversion Price pursuant to this
subparagraph (v) (as adjusted to reflect subdivisions or
combinations of the Common Stock) and (y) 15% of the average
of the daily Closing Prices (as hereinafter defined) of the
Common Stock for the ten consecutive Trading Days immediately
prior to the date of declaration of such dividend and (B) any
dividend or distribution in connection with the liquidation,
dissolution or winding-up of the Company, whether voluntary or
involuntary, or any redemption of the Rights or any Other
Rights; provided, however, that no adjustment shall be made
pursuant to this subparagraph (v) if such distribution would
otherwise constitute a Fundamental Change (as hereinafter
defined) and be reflected in a
21
26
resulting adjustment to the Conversion Price as provided in
this Article VII) then, in each case (unless the Company makes
the election referred to in the proviso following this
clause), the Conversion Price shall be reduced so that the
same shall equal the price determined by multiplying the
Conversion Price in effect at the close of business on such
record date by a fraction the numerator of which shall be the
Closing Price of a share of Common Stock on such record date
less the amount of cash so distributed (to the extent not
excluded as provided above) applicable to one share of Common
Stock, and the denominator shall be the Closing Price of a
share of Common Stock, such reduction to become effective
immediately prior to the opening of business on the day
following such record date; provided, however, that the
Company may elect, in its sole discretion, in lieu of the
foregoing adjustment, to make adequate provision so that each
holder of Securities shall thereafter have the right to
receive upon conversion the amount of cash such holder would
have received had such holder converted each Security on such
record date. If any adjustment is required to be made as set
forth in this subparagraph (v) as a result of a distribution
which is a dividend described in clause (A) of this
subparagraph (v), such adjustment will be based upon the
amount by which such distribution exceeds the amount of the
dividend permitted to be excluded pursuant to such clause (A)
of this subparagraph (v). If an adjustment is required to be
made pursuant to this subparagraph (v) as a result of a
distribution which is not such a dividend, such adjustment
would be based upon the full amount of such distribution.
(vi) In case of the consummation of a tender or
exchange offer (other than an odd-lot tender offer) made by
the Company or any subsidiary of the Company for all or any
portion of the outstanding shares of Common Stock to the
extent that the cash and fair market value (as determined in
good faith by the Board of Directors of the Company, whose
determination shall be conclusive and shall be described in a
resolution of such Board) of any other consideration included
in such payment per share of Common Stock at the last time
(the "Expiration Time") tenders or exchanges may be made
pursuant to such tender or exchange offer
22
27
(as amended) exceed by more than 10%, with any smaller excess
being disregarded in computing the adjustment to the
Conversion Price provided in this subparagraph (vi), the first
reported sale price per share of Common Stock on the Trading
Day next succeeding the Expiration Time, then the Conversion
Price shall be reduced so that the same shall equal the price
determined by multiplying the Conversion Price in effect
immediately prior to the Expiration Time by a fraction the
numerator of which shall be the number of shares of Common
Stock outstanding (including any tendered or exchanged shares)
on the Expiration Time multiplied by the first reported sale
price of the Common Stock on the Trading Day next succeeding
the Expiration Time and the denominator shall be the sum of
(x) the fair market value (determined as aforesaid) of the
aggregate consideration payable to shareholders based on the
acceptance (up to any maximum specified in the terms of the
tender or exchange offer) of all shares validly tendered or
exchanged and not withdrawn as of the Expiration Time (the
shares deemed so accepted, up to any such maximum, being
referred to as the "Purchased Shares") and (y) the product of
the number of shares of Common Stock outstanding (less any
Purchased Shares) on the Expiration Time and the first
reported sale price of the Common Stock on the Trading Day
next succeeding the Expiration Time, such reduction to become
effective immediately prior to the opening of business on the
day following the Expiration Time.
(vii) For the purpose of any computation under this
Article VII, the "Current Market Price per share" of Common
Stock on any day shall be deemed to be the average of the
daily Closing Prices (as hereinafter defined) per share of
Common Stock for the ten consecutive Trading Days prior to and
including the date in question; provided, however, that (1) if
the "ex" date (as hereinafter defined) for any event (other
than the issuance, distribution or Fundamental Change
requiring such computation) that requires an adjustment to the
Conversion Price pursuant to this Article VII (the "Other
Event") occurs during such ten consecutive Trading Days and
prior to the "ex" date for the issuance, distribution or
Fundamental Change requiring such computation (the "Current
Event"), the Closing Price for each Trading Day prior to the
"ex" date for such Other
23
28
Event shall be adjusted by multiplying such Closing Price by
the same fraction by which the Conversion Price is so required
to be adjusted as a result of such Other Event, (2) if the
"ex" date for any Other Event occurs on or after the "ex" date
for the Current Event and on or prior to the date in question,
the Closing Price for each Trading Day on and after the "ex"
date for such Other Event shall be adjusted by multiplying
such Closing Price by the reciprocal of the fraction by which
the Conversion Price is so required to be adjusted as a result
of such Other Event (provided that in the event that such
fraction is required to be determined at a date subsequent to
the date in question and with reference to events taking place
subsequent to the date in question, the Board of Directors of
the Company or, to the extent permitted by applicable law, a
duly authorized committee thereof, whose determination shall
be conclusive and described in a resolution of the Board of
Directors of the Company or such duly authorized committee
thereof, as the case may be, shall in good faith estimate such
fraction based on assumptions it deems reasonable regarding
such events taking place subsequent to the date in question,
and such estimated fraction shall be used for purposes of such
adjustment until such time as the actual fraction by which the
Conversion Price is so required to be adjusted as a result of
such Other Event is determined), and (3) if the "ex" date for
the Current Event is on or prior to the date in question,
after taking into account any adjustment required pursuant to
clause (1) or (2) of this proviso, the Closing Price for each
Trading Day on or after such "ex" date shall be adjusted by
adding thereto the amount of any cash and the fair market
value (as determined in good faith by the Board of Directors
of the Company or, to the extent permitted by applicable law,
a duly authorized committee thereof in a manner consistent
with any determination of such value for purposes of this
Article VII, whose determination shall be conclusive and
described in a resolution of the Board of Directors of the
Company or such duly authorized committee thereof, as the case
may be) of the shares of capital stock, evidences of
indebtedness or other assets being distributed applicable to
one share of Common Stock as of the close of business on the
day before such "ex" date. For purposes of this subparagraph
(vii),
24
29
the term "ex" date, (1) when used with respect to any
issuance, distribution or Fundamental Change, 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, such distribution or the cash, securities, property
or other assets distributable in such Fundamental Change to
holders of the Common Stock, (2) when used with respect to any
subdivision or combination of shares of Common Stock, means
the first date on which the Common Stock trades regular way on
such exchange or in such market after the time at which such
subdivision or combination becomes effective and (3) when used
with respect to any tender or exchange offer means the first
date on which the Common Stock trades regular way on such
exchange or in such market after the Expiration Time of such
offer.
(viii) No adjustment in the Conversion Price shall be
required pursuant to this Section 7.3(a) unless the adjustment
would require a change of at least 1% of such price; provided,
however, that any adjustments which by reason of this
subparagraph (viii) are not required to be made shall be
carried forward and taken into account in any subsequent
adjustment. All calculations shall be made to the nearest cent
(with .005 being rounded upward) or to the nearest 1/100th of
a share (with .005 of a share being rounded upward), as the
case may be. Notwithstanding anything to the contrary in this
Article VII, the Company from time to time may, to the extent
permitted by law, reduce the Conversion Price by any amount
for any period of at least 20 Business Days, in which case the
Company shall give at least 15 days' notice of such reduction
to the holders of Securities and the Trustee. In addition, the
Company may, at its option, make such reductions in the
Conversion Price in addition to those set forth in this
Article VII, as it considers to be advisable in order to avoid
or diminish any income tax to any holders of shares of Common
Stock resulting from any dividend or distribution of stock or
issuance of rights or warrants to purchase or subscribe for
stock or from any event treated as such for income tax
purposes or for any other reasons.
25
30
(ix) In any case in which this Article VII provides
that an adjustment shall become effective immediately after a
record date for an event, the Company may defer until the
occurrence of such event (A) issuing to the holder of any
Convertible Debentures converted after such record date and
before the occurrence of such event the additional shares of
Common Stock issuable upon such conversion by reason of the
adjustment required by such event over and above the Common
Stock issuable upon such conversion before giving effect to
such adjustment and (B) paying to such holder any amount in
cash in lieu of any fractional shares pursuant to this Article
VII.
(x) For purposes of this Article VII, "Common Stock"
includes any stock of any class of the Company which has no
preference in respect of dividends or of amounts payable in
the event of any voluntary or involuntary liquidation,
dissolution or winding-up of the Company and which is not
subject to redemption by the Company. However, subject to the
provisions of this Article VII, shares issuable on conversion
of Convertible Debentures shall include only shares of the
class designated as the Company Common Stock on the date of
the initial issuance of Convertible Debentures by the Company
or shares of any class or classes resulting from any
reclassification or reclassification thereof and which have no
preference in respect of dividends or of amounts payable in
the event of any voluntary or involuntary liquidation,
dissolution or winding-up of the Company and which are not
subject to redemption by the Company; provided, however, that
if at any time there shall be more than one such resulting
class, the shares of each such class then so issuable shall be
substantially in the proportion which the total number of
shares of such class resulting from all such reclassifications
bears to the total number of shares of all such classes
resulting from all such reclassifications.
(b) Whenever the Conversion Price is adjusted as
herein provided:
(i) the Company shall compute the adjusted Conversion Price
and shall prepare a certificate signed by the Chief Financial Officer
or the Treasurer of the Company setting forth the adjusted Conversion
Price and
26
31
showing in reasonable detail the facts upon which such adjustment is
based, and such certificate shall forthwith be filed with the Trustee
and the transfer agent for the Trust Preferred Securities and the
Convertible Debentures; and
(ii) a notice stating the Conversion Price has been adjusted
and setting forth the adjusted Conversion Price shall as soon as
practicable be mailed by the Company to all record holders of Trust
Preferred Securities and the Convertible Debentures at their last
addresses as they appear upon the stock transfer books of the Company
and the Trust.
SECTION 7.4. ADJUSTMENT OF CONVERSION PRICE - FUNDAMENTAL
CHANGE.
(a) In the event that the Company shall be a party to any transaction
or series of transactions constituting a Fundamental Change, including, without
limitation, (i) any recapitalization or reclassification of shares of Common
Stock (other than a change in the par value or as a result of a subdivision or
combination of the Common Stock), (ii) any consolidation of the Company with, or
merger of the Company into, any other corporation or any merger of another
corporation into the Company as a result of which holders of Common Stock shall
be entitled to receive securities or other property or assets (including cash)
with respect to or in exchange for Common Stock (other than a merger which does
not result in a reclassification, conversion, exchange or cancellation of
outstanding shares of Common Stock), (iii) any sale or transfer of all or
substantially all of the assets of the Company, or (iv) any compulsory share
exchange, pursuant to any of which the holders of Common Stock shall be entitled
to receive other securities, cash or other property, then appropriate provision
shall be made as part of the terms of such transaction or series of transactions
so that the holder of each Convertible Debenture then outstanding shall have the
right thereafter to convert such Convertible Debenture only into (A) if any such
transaction does not constitute a Common Stock Fundamental Change (as
hereinafter defined), the kind and amount of the securities, cash or other
property that would have been receivable upon such recapitalization,
reclassification, consolidation, merger, sale, transfer or share exchange by a
holder of the number of shares of Common Stock into which such Convertible
Debenture might have been converted immediately prior to such recapitalization,
reclassification, consolidation, merger, sale, transfer or share exchange,
after, in the case of a Non-Stock Fundamental Change (as hereinafter defined),
giving effect
27
32
to any adjustment in the Conversion Price required by the provisions which
follow in subparagraph (i) of Section 7.4(c), and (B) in the case of a Common
Stock Fundamental Change (as hereinafter defined), common stock of the kind
received by holders of Common Stock as a result of such Common Stock Fundamental
Change in an amount determined pursuant to the provisions which follow in
subparagraph (ii) of Section 7.4(c). The company formed by such consolidation or
resulting from such merger or which acquires such assets or which acquires the
Common Stock, as the case may be, shall enter into a supplemental indenture with
the Trustee, satisfactory in form to the Trustee, the provisions of which
provide for adjustments which, for events subsequent to the effective date of
such supplemental indenture, shall be as nearly equivalent as may be practicable
to the adjustments provided for in this Article VII. The above provisions shall
similarly apply to successive recapitalizations, reclassifications,
consolidations, mergers, sales, transfers or share exchanges.
(b) Notwithstanding any other provisions in this Article VII to the
contrary, if any Fundamental Change (as hereinafter defined) occurs, then the
Conversion Price in effect will be adjusted immediately following such
Fundamental Change as described below in Section 7.4(c). In addition, in the
event of a Common Stock Fundamental Change, each Convertible Debenture shall be
convertible solely into common stock of the kind received by holders of Common
Stock as the result of such Common Stock Fundamental Change as more specifically
provided below in Section 7.4(c).
(c) For purposes of calculating any adjustment to be made pursuant to
this Article VII in the event of a Fundamental Change, immediately following
such Fundamental Change (and for such purposes a Fundamental Change shall be
deemed to occur on the earlier of (a) the occurrence of such Fundamental Change
and (b) the date, if any, fixed for determination of shareholders entitled to
receive the cash, securities, property or other assets distributable in such
Fundamental Change to holders of the Common Stock);
(i) in the case of a Non-Stock Fundamental Change, the
Conversion Price per share of Common Stock shall be the lower of (A)
the Conversion Price in effect immediately prior to such Non-Stock
Fundamental Change, but after giving effect to any other adjustments
effected pursuant to this Article VII, and (B) the product of (1) the
greater of the Applicable Price (as hereinafter defined) or the then
applicable Reference Market Price (as hereinafter defined) and (2) a
fraction the numerator of which shall be $100 and the
28
33
denominator of which shall be the amount set forth below (based on the
date on which such Non-Stock Fundamental Change occurs). For the twelve
month period beginning September 15:
Year Denominator
---- -----------
1996 105.00%
1997 104.50
1998 104.00
1999 103.50
2000 103.00
2001 102.50
2002 102.00
2003 101.50
2004 101.00
2005 100.50
and thereafter, 100.00;
(ii) in the case of a Common Stock Fundamental Change, the
Conversion Price per share of Common Stock shall be the Conversion
Price in effect immediately prior to such Common Stock Fundamental
Change, but after giving effect to any other adjustments effected
pursuant to this Article VII, multiplied by a fraction, the numerator
of which is the Purchaser Stock Price (as hereinafter defined) and the
denominator of which is the Applicable Price; provided, however, that
in the event of a Common Stock Fundamental Change in which (A) 100% of
the value of the consideration received by a holder of Common Stock is
common stock of the successor, acquiror or other third party (and cash,
if any, paid with respect to any fractional interests in such common
stock resulting from such Common Stock Fundamental Change) and (B) all
of the Common Stock shall have been exchanged for, converted into or
acquired for common stock (and cash, if any, with respect to fractional
interests) of the successor, acquiror or other third party, the
Conversion Price per share of Common Stock immediately following such
Common Stock Fundamental Change shall be the Conversion Price in effect
immediately prior to such Common Stock Fundamental Change divided by
the number of shares of common stock of the successor, acquiror, or
other third party received by a holder of one share of Common Stock as
a result of such Common Stock Fundamental Change.
(d) The following definitions shall apply to
terms used in this Article VII:
(i) "Applicable Price" shall mean (A) in the
event of a Non-Stock Fundamental Change in which the
29
34
holders of Common Stock receive only cash, the amount of cash
receivable by a holder of one share of Common Stock and (B) in the
event of any other Fundamental Change, the average of the Closing
Prices for one share of Common Stock during the ten Trading Days
immediately prior to the record date for the determination of the
holders of Common Stock entitled to receive cash, securities, property
or other assets in connection with such Fundamental Change or, if there
is no such record date, prior to the date upon which the holders of
Common Stock shall have the right to receive such cash, securities,
property or other assets.
(ii) "Closing Price" with respect to any securities on any day
shall mean the closing sale 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 on the New York
Stock Exchange or, if such security is not listed or admitted to
trading on such Exchange, 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 date in question as reported by the
National Quotation Bureau Incorporated, or a similarly 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 of the Company for that purpose or a
price determined in good faith by the Board of Directors of the
Company.
(iii) "Common Stock Fundamental Change" shall mean any
Fundamental Change in which more than 50% of the value (as determined
in good faith by the Board of Directors of the Company) of the
consideration received by the holders of Common Stock pursuant to such
transactions consists of shares of common stock that, for the ten
consecutive Trading Days immediately prior to such Fundamental Change,
has been admitted for listing or admitted for listing subject to notice
of issuance on a national securities exchange or quoted on the Nasdaq
National Market; provided, however, that a Fundamental Change shall not
be a Common Stock Fundamental Change unless either (A) the Company
continues to exist after the occurrence of such Fundamental Change and
the outstanding Convertible Debentures continue to exist as outstanding
Convertible
30
35
Debentures, or (B) the outstanding Convertible Debentures continue to
exist as Convertible Debentures and are convertible into common stock
of the successor to the Company.
(iv) "Fundamental Change" shall mean the occurrence of any
transaction or event or series of transactions or events pursuant to
which all or substantially all of the Common Stock shall be exchanged
for, converted into, acquired for or constitutes solely the right to
receive cash, securities, property or other assets (whether by means of
an exchange offer, liquidation, tender offer, consolidation, merger,
combination, reclassification, recapitalization or otherwise);
provided, however, in the case of a plan involving more than one such
transaction or event, for purposes of adjustment of the Conversion
Price, such Fundamental Change shall be deemed to have occurred when
substantially all of the Common Stock has been exchanged for, converted
into, or acquired for or constitutes solely the right to receive cash,
securities, property or other assets, but the adjustment shall be based
upon the consideration which the holders of Common Stock received in
such transaction or event as a result of which more than 50% of the
Common Stock shall have been exchanged for, converted into, or acquired
for or shall constitute solely the right to receive cash, securities,
property or other assets.
(v) "Non-Stock Fundamental Change" shall mean any
Fundamental Change other than a Common Stock
Fundamental Change.
(vi) "Purchaser Stock Price" shall mean, with respect to any
Common Stock Fundamental Change, the average of the Closing Prices for
one share of the common stock received by holders of Common Stock in
such Common Stock Fundamental Change during the ten Trading Days
immediately prior to the record date for the determination of the
holders of Common Stock entitled to receive such common stock or, if
there is no such record date, prior to the date upon which the holders
of Common Stock shall have the right to receive such common stock.
(vii) "Reference Market Price" shall initially mean $14.08
(which is an amount equal to 66-2/3% of the last reported sale price
for the Common Stock on the New York Stock Exchange on September 16,
1996) and, in the event of any adjustment to the Conversion Price
31
36
other than as a result of a Fundamental Change, the Reference Market
Price shall also be adjusted so that the ratio of the Reference Market
Price to the Conversion Price after giving effect to any such
adjustment shall always be the same as the ratio of $14.08 to the
initial Conversion Price set forth in this Article VII.
(e) In determining the amount and type of consideration
received by a holder of Common Stock in the event of a Fundamental Change,
consideration received by a holder of Common Stock pursuant to a statutory right
of appraisal will be disregarded.
SECTION 7.5. NOTICE OF CERTAIN EVENTS. In case:
(i) the Company shall declare a dividend (or any
other distribution) on Common Stock that would cause an
adjustment to the Conversion Price of the Convertible
Debentures pursuant to the terms of any of the subparagraphs
above (including such an adjustment that would occur but for
the terms of the first sentence of Section 7.3(a)(viii)
above); or
(ii) the outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock or
combined into a smaller number of shares of Common Stock; or
(iii) the Company shall authorize the granting to the
holders of Common Stock generally of rights or warrants (for a
period expiring within 45 days after the record date fixed for
a distribution of such rights and warrants) to subscribe for
or purchase any shares of the Company's capital stock or other
capital stock of any class or of any other rights (including
any Rights Offerings); or
(iv) of any reclassification of Common Stock (other than a
subdivision or combination of the outstanding shares of Common
Stock), or of any consolidation, merger or share exchange to
which the Company is a party and for which approval of any
shareholders of the Company is required, or of the sale or
transfer of all or substantially all of the assets of the
Company or a compulsory share exchange; or
32
37
(v) of the voluntary or involuntary
dissolution, liquidation or winding-up of the
Company;
then the Company shall (i) if any Trust Preferred Securities are outstanding,
cause to be filed with the transfer agent for the Trust Preferred Securities,
and shall cause to be mailed to the holders of record of the Trust Preferred
Securities, at their last addresses as they shall appear upon the stock transfer
books of the Trust or (ii) shall cause to be mailed to all Holders at their last
addresses as they shall appear in the Security Register, at least 15 days prior
to the applicable record or effective date hereinafter specified, a notice
stating (A) the date on which a record (if any) is to be taken for the purpose
of such dividend, distribution, 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, rights or warrants are to be determined or (B)
the date on which such reclassification, consolidation, merger, sale, transfer,
share exchange, dissolution, liquidation or winding up is expected to become
effective, and the date as of which it is expected that holders of Common Stock
of record shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution, liquidation
or winding up (but no failure to mail such notice or any defect therein or in
the mailing thereof shall affect the validity of the corporate action required
to be specified in such notice).
SECTION 7.6. COMPANY TO PROVIDE STOCK.
The Company shall reserve, free from pre-emptive rights, out
of its authorized but unissued shares, sufficient shares to provide for the
conversion of the Convertible Debentures from time to time as such Convertible
Debentures are presented for conversion, provided, that nothing contained herein
shall be construed to preclude the Company from satisfying its obligations in
respect of the conversion of Convertible Debentures by delivery of repurchased
shares of Common Stock which are held in the treasury of the Company.
If any shares of Common Stock to be reserved for the purpose
of conversion of Convertible Debentures hereunder require registration with or
approval of any governmental authority under any Federal or State law before
such shares may be validly issued or delivered upon
33
38
conversion, then the Company covenants that it will in good faith and as
expeditiously as possible endeavor to secure such registration or approval, as
the case may be, PROVIDED, HOWEVER, that nothing in this Section 7.6 shall be
deemed to affect in any way the obligations of the Company to convert
Convertible Debentures into Common Stock as provided in this Article VII.
Before taking any action which would cause an adjustment
reducing the Conversion Price below the then par value, if any, of the Common
Stock, the Company will take all corporate action which may, in the Opinion of
Counsel, be necessary in order that the Company may validly and legally issue
fully paid and non-assessable shares of Common Stock at such adjusted Conversion
Price.
The Company covenants that all shares of Common Stock which
may be issued upon conversion of Convertible Debentures will upon issue be fully
paid and non-assessable by the Company and free of pre-emptive rights.
SECTION 7.7. DIVIDEND OR INTEREST REINVESTMENT PLANS.
Notwithstanding the foregoing provisions, the issuance of any
shares of Common Stock pursuant to any plan providing for the reinvestment of
dividends or interest payable on securities of the Company and the investment of
additional optional amounts in shares of Common Stock under any such plan, and
the issuance of any shares of Common Stock or options or rights to purchase such
shares pursuant to any employee benefit plan or program of the Company or
pursuant to any option, warrant, right or exercisable, exchangeable or
convertible security outstanding as of September 20, 1996, shall not be deemed
to constitute an issuance of Common Stock or exercisable, exchangeable or
convertible securities by the Company to which any of the adjustment provisions
described above applies. There shall also be no adjustment of the Conversion
Price in case of the issuance of any stock (or securities convertible into or ex
changeable for stock) of the Company except as specifically described in this
Article VII.
SECTION 7.8. CERTAIN ADDITIONAL RIGHTS.
In case the Company shall, by dividend or otherwise, declare
or make a distribution on the Common Stock referred to in Section 7.3(a)(iv) or
7.3(a)(v) (including, without limitation, dividends or distributions referred to
in the last sentence of Section 7.3(a)(vi)), the Holder of the Convertible
Debentures, upon the conversion thereof subsequent to the close of business on
the date
34
39
fixed for the determination of stockholders entitled to re ceive such
distribution and prior to the effectiveness of the Conversion Price adjustment
in respect of such distribution, shall also be entitled to receive for each
share of Common Stock into which the Convertible Debentures are converted, the
portion of the shares of Common Stock, rights, warrants, evidences of
indebtedness, shares of capital stock, cash and assets so distributed applicable
to one share of Common Stock; PROVIDED, HOWEVER, that, at the election of the
Company (whose election shall be evidenced by a resolution of the Board of
Directors) with respect to all Holders so converting, the Company may, in lieu
of distributing to such Holder any portion of such distribution not consisting
of cash or securities of the Company, pay such Holder an amount in cash equal to
the fair market value thereof (as determined in good faith by the Board of
Directors, whose determination shall be conclusive and described in a resolution
of the Board of Directors). If any conversion of Convertible Debentures
described in the immediately preceding sentence occurs prior to the payment date
for a distribution to holders of Common Stock which the Holder of Convertible
Debentures so converted is entitled to receive in accordance with the
immediately preceding sentence, the Company may elect (such election to be
evidenced by a resolution of the Board of Directors) to distribute to such
Holder a due xxxx for the shares of Common Stock, rights, warrants, evidences of
indebtedness, shares of capital stock, cash or assets to which such Holder is so
entitled, PROVIDED, that such due xxxx (a) meets any applicable requirements of
the principal national securities exchange or other market on which the Common
Stock is then traded and (b) requires payment or delivery of such shares of
Common Stock, rights, warrants, evidences of indebtedness, shares of capital
stock, cash or assets no later than the date of payment or delivery thereof to
holders of shares of Common Stock receiving such distribution.
SECTION 7.9. PREFERRED STOCK PURCHASE RIGHTS.
(a) So long as Rights of a kind similar to those declared and
distributed by the Board of Directors in August 1988 pursuant to the Rights
Agreement between the Company and the American Stock Transfer and Trust Company,
as Rights Agent (as amended, the "Rights Agreement"), as the same may hereafter
be amended or reissued ("Rights"), are attached to the outstanding shares of
Common Stock, each share of Common Stock issued upon conversion of the
Convertible Debentures prior to the earliest of any Distribution Date, the date
of redemption of the Rights or the date of expiration of the Rights shall be
issued with Rights in a number equal to the
35
40
number of Rights then attached to each such outstanding share of Common Stock.
(b) For the purposes of Section 7.3(a)(iii), upon the earlier to occur
of (i) the eleventh day following a Stock Acquisition Date and (ii) an event (a
"Section 13(a) Event") described in clause (x), (y) or (z) of Section 13(a) of
the Rights Agreement, then an issuance of rights to purchase shares of Common
Stock during a period not exceeding 45 days from the date of such dividend or
other distribution shall be deemed to have occurred, unless a Redemption Date or
an Expiration Date has occurred prior to such eleventh day (as defined in the
Rights Agreement) or such Section 13(a) Event, as the case may be. For purposes
of the reduction of the conversion price provided for in Section 7.3(a)(iii)
upon such deemed issuance of rights, each share of a Preferred Stock shall be
deemed to constitute 10,000 shares of Common Stock (subject to adjustment as
provided in the Rights Agreement), and the date fixed for determination of
stockholders entitled to receive such rights shall be the close of business on
the tenth such day following such Stock Acquisition Date or the date of such
Section 13(a) Event, as the case may be; provided, however, that the current
market price per share of the Common Stock shall be determined based on the 10
consecutive Trading Days prior to and including the Distribution Date. In lieu
of any adjustment pursuant to this subsection (a), the Company may amend the
Rights Agreement to provide that upon conversion of the Convertible Debentures
the holders thereof will receive, in addition to the shares of Common Stock
issuable upon such conversion, the Rights which would have attached to such
shares of Common Stock if the Rights had not become separated from the Common
Stock pursuant to the provisions of the Rights Agreement.
(c) For purposes of Section 7.3(a)(iii) and Section
7.3(a)(iv), the redemption by the Company of Rights shall be
deemed to be an expiration of such Rights.
(d) If any Convertible Debenture has been converted on or after the
Distribution Date and on or before the tenth day following such Stock
Acquisition Date or the date of such Section 13(a) Event, as the case may be,
then as soon as practicable following the date on which the adjustment required
by subsections (a)(iii) and (a)(iv) of Section 7.3 is made, the Company shall
issue to the holder of the Convertible Debenture so converted a number of
additional shares of Common Stock (and cash in lieu of any fractional share)
that would have been issuable upon such conversion had such adjustment been made
immediately prior to such conversion.
36
41
ARTICLE VIII
FORM OF CONVERTIBLE DEBENTURE
SECTION 8.1. FORM OF CONVERTIBLE DEBENTURE.
The Convertible Debentures and the Trustee's Certificate of
Authentication to be endorsed thereon are to be substantially in the following
forms:
[(FORM OF FACE OF CONVERTIBLE DEBENTURE)]
[IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT THE
FOLLOWING - - This Debenture is a Global Debenture within the meaning of the
Indenture hereinafter referred to and is registered in the name of a Depositary
or a nominee of a Depositary. This Debenture is exchangeable for Convertible
Debentures registered in the name of a person other than the Depositary or its
nominee only in the limited circumstances described in the Inden ture, and no
transfer of this Debenture (other than a transfer of this Debenture as a whole
by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary) may be
registered except in limited circumstances.
Unless this Debenture is presented by an authorized
representative of The Depository Trust Company (55 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx) to the Company or its agent for registration of transfer, exchange or
payment, and any Debenture issued is registered in the name of Cede & Co. or
such other name as requested by an authorized representative of The Depository
Trust Company and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.]
No. CUSIP NO.
------------------------ ------------------------
WENDY'S INTERNATIONAL, INC.
___% CONVERTIBLE SUBORDINATED DEBENTURE
Wendy's International, Inc., an Ohio corporation (the
"Company", which term includes any successor corporation under the Indenture
hereinafter
37
42
referred to), for value received, hereby promises to pay to, ___________________
or registered assigns, the principal sum of _________________Dollars ($________
) on _______, 2026, and to pay interest on said principal sum from September __,
1996, or from the most recent interest payment date (each such date, an
"Interest Payment Date") to which interest has been paid or duly provided for,
quarterly (subject to deferral as set forth herein) in arrears on March 15, June
15, September 15, and December 15 of each year commencing December 15, 1996, at
the rate of __% per annum until the principal hereof shall have become due and
payable, and on any overdue principal and premium, if any, and (without
duplication and to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment of interest at the same rate per
annum compounded quarterly. The amount of interest payable on any Interest
Payment Date shall be computed on the basis of a 360-day year of twelve 30-day
months. Except as provided in the following sentence, the amount of interest
payable for any period shorter than a full quarterly period for which interest
is computed, will be computed on the basis of the actual number of days elapsed
per 30-day month. In the event that any date on which interest is payable on
this Convertible Debenture is not a Business Day, then payment of interest
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date. The interest installment
so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in the Indenture (referred to on the reverse hereof, be
paid to the person in whose name this Convertible Debenture (or one or more
Predecessor Securities, as defined in said Indenture) is registered on the
Regular Record Date for such interest installment, which shall be the close of
business on the Business Day next preceding such Interest Payment Date unless
otherwise provided in the Indenture. Any such interest installment not
punctually paid or duly provided for shall forthwith cease to be payable to the
registered Holders on such Regular Record Date and may be paid to the Person in
whose name this Convertible Debenture (or one or more Predecessor Securities) is
registered at the close of business on a special record date to be fixed by the
Trustee for the payment of such defaulted interest, notice whereof shall be
given to the registered Holders of the Convertible Debentures not less than 10
days prior to such special record date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any secu-
38
43
rities exchange on which the Convertible Debentures may be listed, and upon such
notice as may be required by such exchange, all as more fully provided in the
Indenture. The principal of (and premium, if any) and the interest on this
Convertible Debenture shall be payable at the office or agency of the Trustee
maintained for that purpose in any coin or currency of the United States of
America that at the time of payment is legal tender for payment of public and
private debts; PROVIDED, HOWEVER, that payment of interest may be made at the
option of the Company by check mailed to the registered Holder at such address
as shall appear in the Security Register. Notwithstanding the foregoing, so long
as the Holder of this Convertible Debenture is the Institutional Trustee, the
payment of the principal of (and premium, if any) and interest on this
Convertible Debenture will be made at such place and to such account as may be
designated by the Institutional Trustee.
The indebtedness evidenced by this Convertible Debenture is,
to the extent provided in the Indenture, subordinate and junior in right of
payment to the prior payment in full of all Senior Indebtedness, and this
Convertible Debenture is issued subject to the provisions of the Indenture with
respect thereto. Each Holder of this Convertible Debenture, by accepting the
same, (a) agrees to and shall be bound by such provisions, (b) authorizes and
directs the Trustee on his or her behalf to take such action as may be necessary
or appropriate to acknowledge or effectuate the subordination so provided and
(c) appoints the Trustee his or her attorney-in-fact for any and all such
purposes. Each Holder hereof, by his or her acceptance hereof, hereby waives all
notice of the acceptance of the subordination provisions contained herein and in
the Indenture by each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon said
provisions.
This Convertible Debenture shall not be entitled to any
benefit under the Indenture hereinafter referred to, be valid or become
obligatory for any purpose until the Certificate of Authentication hereon shall
have been signed by or on behalf of the Trustee.
The provisions of this Convertible Debenture are continued on
the reverse side hereof and such continued
39
44
provisions shall for all purposes have the same effect as though fully set forth
at this place.
40
45
IN WITNESS WHEREOF, the Company has caused this instrument to
be executed.
WENDY'S INTERNATIONAL, INC.
By:
---------------------------
Name:
Title
Attest:
By:
---------------------------------
Name:
Title:
41
46
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the Convertible Debentures of the series of
Convertible Debentures described in the within-mentioned Indenture.
Dated:
NBD BANK,
as Trustee or as Authentication Agent
By By
-------------------- ------------------------
Authorized Signatory Authorized Signatory
42
47
[FORM OF REVERSE OF DEBENTURE]
This Convertible Debenture is one of a duly authorized series
of Debentures of the Company (herein sometimes referred to as the "Debentures"),
specified in the Indenture, all issued or to be issued in one or more series
under and pursuant to an Indenture dated as of September __, 1996, duly executed
and delivered between the Company and NBD Bank, as Trustee (the "Trustee"), as
supplemented by the First Supplemental Indenture dated as of September __, 1996,
between the Company and the Trustee (the Indenture as so supplemented, the
"Indenture"), to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the Holders of the Convertible Debentures. By the terms of the Indenture, the
Debentures are issuable thereunder in series that may vary as to amount, date of
maturity, rate of interest and in other respects as provided in the Indenture.
This series of Debentures is limited in aggregate principal amount as specified
in said First Supplemental Indenture and herein sometimes referred to as the
"Convertible Debentures."
Because of the occurrence and continuation of a Special Event,
in certain circumstances, this Convertible Debenture may become due and payable
at the principal amount together with any interest accrued thereon (the
"Redemption Price"). The Redemption Price shall be paid prior to 12:00 noon, New
York time, on the date of such redemption or at such earlier time as the Company
determines. The Company shall have the right to redeem this Convertible
Debenture at the option of the Company, upon not less than 30 nor more than 60
days notice, without premium or penalty, in whole or in part at any time on or
after _______, 2000 (an "Optional Redemption") at the following prices
(expressed as percentages of the principal amount of the Convertible Debentures)
(the "Optional Redemption Price") together with accrued and unpaid interest,
including Additional Interest and Compounded Interest to, but excluding, the
redemption date, if redeemed during the 12-month period beginning _________:
43
48
Year Redemption Price
---- ----------------
2000
2001
2002
2003
2004
2005
and 100% if redeemed on or after _______, 2006.
If Convertible Debentures are redeemed on any March 15, June
15, September 15, or December 15, accrued and unpaid interest shall be payable
to holders of record on the relevant record date.
So long as the corresponding Trust Preferred Securities are
outstanding, the proceeds from the redemption of any of the Convertible
Debentures will be used to redeem Trust Preferred Securities.
If the Convertible Debentures are only partially redeemed by
the Company pursuant to an Optional Redemption, the Convertible Debentures will
be redeemed PRO RATA or by lot or by any other method utilized by the Trustee.
In the event of redemption of this Convertible Debenture in
part only, a new Convertible Debenture or Convertible Debentures of this series
for the unredeemed portion hereof will be issued in the name of the Holder
hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture,
shall have occurred and be continuing, the principal of all of the Convertible
Debentures may be declared, and upon such declaration shall become, due and
payable, in the manner, with the effect and subject to the conditions provided
in the Indenture.
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Debentures of each series affected at the time
outstanding, as defined in the Indenture, to execute supplemental indentures for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Debentures of such
series; PROVIDED, HOWEVER, that no such supplemental indenture shall (a) extend
the fixed maturity of any Debenture of any series, or reduce the principal
amount thereof, or reduce the rate or extend the
44
49
time of payment of interest thereon, or reduce any premium payable upon the
redemption thereof, or make any change that adversely affects the right to
convert any Debenture of any series or make any change in the subordination
provisions that adversely affects the rights of any Holders of any Debenture of
any series, without the consent of the Holder of each Debenture so affected, or
(b) reduce the aforesaid percentage of Debentures of such series, the Holders of
which are required to consent to any such supplemental indenture, without the
consent of the Holders of each Debenture of any series then outstanding and
affected thereby. The Indenture also contains provisions permitting the Holders
of a majority in aggregate principal amount of the Debentures of any series at
the time outstanding affected thereby, on behalf of all of the Holders of the
Debentures of such series, to waive any past default in the performance of any
of the covenants contained in the Indenture, or established pursuant to the
Indenture with respect to such series, and its consequences, except a default in
the payment of the principal of or premium, if any, or interest on any
Debentures of such series or a failure to convert any Debentures of such series
in accordance with its terms upon an election by the Holders thereof. Any such
consent or waiver by the registered Holder of this Convertible Debenture (unless
revoked as provided in the Indenture) shall be conclusive and binding upon such
Holder and upon all future Holders and owners of this Convertible Debenture and
of any Convertible Debenture issued in exchange therefor or in place hereof
(whether by registration of transfer or otherwise), irrespective of whether or
not any notation of such consent or waiver is made upon this Convertible
Debenture.
No reference herein to the Indenture and no provision of this
Convertible Debenture or of the Indenture shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Convertible Debenture at the time and
place and at the rate and in the money herein prescribed.
As long as an Event of Default under Section 501 of the
Indenture shall not have occurred and be continuing, the Company shall have the
right at any time during the term of the Convertible Debentures and from time to
time to extend the interest payment period of such Convertible Debentures for up
to 20 consecutive quarters (an "Extended Interest Payment Period"), at the end
of which period the Company shall pay all interest then accrued and unpaid
(together with interest thereon at the rate specified for the Convertible
Debentures to the extent that payment of
45
50
such interest is enforceable under applicable law). Before the termination of
any such Extended Interest Payment Period, the Company may further extend such
Extended Interest Payment Period, PROVIDED that such Extended Interest Payment
Period together with all such further extensions thereof shall not exceed 20
consecutive quarters. At the termination of any such Extended Interest Payment
Period and upon the payment of all accrued and unpaid interest and any
additional amounts then due, the Company may commence a new Extended Interest
Payment Period.
As provided in the Indenture and subject to certain
limitations therein set forth, this Convertible Debenture is transferable by the
registered Holder hereof on the Security Register of the Company, upon surrender
of this Convertible Debenture for registration of transfer at the office or
agency of the Trustee in the City and State of New York accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company or the
Trustee duly executed by the registered Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Convertible Debentures of
authorized denominations and for the same aggregate principal amount and series
will be issued to the designated transferee or transferees. No service charge
will be made for any such transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to due presentment for registration of transfer of this
Convertible Debenture, the Company, the Trustee, any paying agent and the
Security Registrar may deem and treat the registered holder hereof as the
absolute owner hereof (whether or not this Convertible Debenture shall be
overdue and notwithstanding any notice of ownership or writing hereon made by
anyone other than the Security Registrar) for the purpose of receiving payment
of or on account of the principal hereof and premium, if any, and interest due
hereon and for all other purposes, and neither the Company nor the Trustee nor
any paying agent nor any Security Registrar shall be affected by any notice to
the contrary.
No recourse shall be had for the payment of the principal of
or the interest on this Convertible Debenture, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture, against
any incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the
46
51
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance hereof and as part of the consideration for the issuance
hereof, expressly waived and released.
The Holder of any Convertible Debenture has the right,
exercisable at any time through the close of business (New York time) on
_______, 2026 (or, in the case of a Convertible Debenture called for redemption,
prior to the close of business on the Business Day prior to the corresponding
redemption date), to convert the principal amount thereof (or any portion
thereof that is an integral multiple of $50) into shares of Common Stock at the
initial conversion rate of ______ shares of Common Stock for each Convertible
Debenture (equivalent to a Conversion Price of $__ per share of Common Stock),
subject to adjustment under certain circumstances.
To convert a Convertible Debenture, a Holder must (a) complete
and sign a conversion notice substantially in the form attached hereto, (b)
surrender the Convertible Debenture to a Conversion Agent, (c) furnish
appropriate endorsements or transfer documents if required by the Conversion
Agent and (d) pay any transfer or similar tax, if required. If a Convertible
Debenture is surrendered for conversion after the close of business on any
regular record date for payment of a Distribution and before the opening of
business on the corresponding Distribution payment date, then, notwithstanding
such conversion, the Distribution payable on such Distribution payment date will
be paid in cash to the person in whose name the Convertible Debenture is
registered at the close of business on such record date, and (other than a
Convertible Debenture or a portion of a Convertible Debenture called for
redemption on a redemption date occurring after such record date and on or prior
to such Distribution payment date) when so surrendered for conversion, the
Convertible Debenture must be accompanied by payment of an amount equal to the
Distribution payable on such Distribution payment date. The number of shares
issuable upon conversion of a Convertible Debenture is determined by dividing
the principal amount of the Convertible Debenture converted by the Conversion
Price in effect on the Conversion Date. No fractional shares will be issued upon
conversion but a cash adjustment will be made for any fractional interest. The
outstanding principal amount of any Convertible Debenture shall be reduced by
the portion of the principal amount thereof converted into shares of Common
Stock.
[The Convertible Debentures of this series are issuable only
in registered form without Coupons in
47
52
denominations of $50 and any integral multiple thereof.] [This Global Debenture
is exchangeable for Convertible Debentures in definitive form only under certain
limited circumstances set forth in the Indenture. Convertible Debentures of this
series so issued are issuable only in registered form without Coupons in
denominations of $50 and any integral multiple thereof.] As provided in the
Indenture and subject to certain limitations] therein set forth, Convertible
Debentures of this series are exchange able for a like aggregate principal
amount of Convertible Debentures of this series of a different authorized
denomination, as requested by the Holder surrendering the same.
All terms used in this Convertible Debenture that are defined
in the Indenture shall have the meanings assigned to them in the Indenture.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE
INDENTURE AND THE CONVERTIBLE DEBENTURES WITHOUT REGARD TO CONFLICT OF LAW
PROVISIONS THEREOF.
48
53
[FORM OF ELECTION TO CONVERT]
ELECTION TO CONVERT
To: Wendy's International, Inc.
The undersigned owner of this Convertible Debenture hereby
irrevocably exercises the option to convert this Convertible Debenture, or the
portion below designated, into Common Stock of WENDY'S INTERNATIONAL, INC. in
accordance with the terms of the Indenture referred to in this Convertible
Debenture, and directs that the shares issuable and deliverable upon conversion,
together with any check in payment for fractional shares, be issued in the name
of and delivered to the undersigned, unless a different name has been indicated
in the assignment below. If shares are to be issued in the name of a person
other than the undersigned, the undersigned will pay all transfer taxes payable
with respect thereto.
Date: ,
-------------- ---
in whole Portions of Convertible Debenture
to be converted ($50 or integral
multiples thereof):
$
--------------------
----------------------------------------
Signature (for conversion only)
Please Print or Typewrite Name and
Address, Including Zip Code, and
Social Security or Other Identify-
ing Number
--------------------------------------
--------------------------------------
--------------------------------------
Signature Guarantee:1
---------------------
--------
1 Signature must be guaranteed by an "eligible guarantor institution" that
is a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Conversion Agent, which requirements
include membership of participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program" as
may be determined by the Conversion Agent in addition to, or in
substitution for, STAMP, all in accordance with the Securities and
Exchange Act of 1934, as amended.
49
54
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Convertible
Debenture to:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
--------------------------------------------------------
--------------------------------------------------------------------------------
___________________________________________________ agent to transfer this
Convertible Debenture on the books of the Trust. The agent may substitute
another to act for him or her.
Date:
---------------------------------------
Signature:
----------------------------------
(Sign exactly as your name appears on the other side of
this Convertible Debenture)
Signature
Guarantee*:
-------------------------------------------------
--------
* Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Conversion Agent, which
requirements include membership of participation in the Securities
Transfer Agents Medallion Program ("STAMP") or such other "signature
guarantee program" as may be determined by the Conversion Agent in
addition to, or in substitution for, STAMP, all in accordance with
the Securities and Exchange Act of 1934, as amended.
50
55
ARTICLE IX
ORIGINAL ISSUE OF CONVERTIBLE DEBENTURES
SECTION 9.1. ORIGINAL ISSUE OF CONVERTIBLE DEBENTURES.
Convertible Debentures in the aggregate principal amount of
$202,020,250 may, upon execution of this First Supplemental Indenture, be
executed by the Company and delivered to the Trustee for authentication, and the
Trustee shall thereupon authenticate and make available for delivery said
Convertible Debentures to or upon the written order of the Company, signed by
its Chairman, its Vice Chairman, its President, or any Vice President and its
Treasurer or an Assistant Treasurer, without any further action by the Company.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. RATIFICATION OF INDENTURE; FIRST SUPPLEMENTAL
INDENTURE CONTROLS.
The Indenture, as supplemented by this First Supplemental
Indenture, is in all respects ratified and confirmed, and this First
Supplemental Indenture shall be deemed part of the Indenture in the manner and
to the extent herein and therein provided. The provisions of this First
Supplemental Indenture shall supersede the provisions of the Indenture to the
extent the Indenture is inconsistent herewith.
SECTION 10.2. TRUSTEE NOT RESPONSIBLE FOR RECITALS.
The recitals herein contained are made by the Company and not
by the Trustee, and the Trustee assumes no responsibility for the correctness
thereof. The Trustee makes no representation as to the validity or sufficiency
of this First Supplemental Indenture.
SECTION 10.3. GOVERNING LAW.
This First Supplemental Indenture and each Convertible
Debenture shall be deemed to be a contract made under the internal laws of the
State of New York, and for all purposes shall be construed in accordance with
the laws of said State.
51
56
SECTION 10.4. SEPARABILITY.
In case any one or more of the provisions contained in this
First Supplemental Indenture or in the Convertible Debentures shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this First Supplemental Indenture or of the Convertible Debentures, but this
First Supplemental Indenture and the Convertible Debentures shall be construed
as if such invalid or illegal or unenforceable provision had never been
contained herein or therein.
SECTION 10.5. COUNTERPARTS.
This First Supplemental Indenture may be executed in any
number of counterparts each of which shall be an original; but such counterparts
shall together constitute but one and the same instrument.
52
57
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed on the date or dates indicated in the
acknowledgements and as of the day and year first above written.
WENDY'S INTERNATIONAL, INC.
By /s/ Xxxx X. Xxxxx
---------------------------------
Name: Xxxx X. Xxxxx
Title: Vice Chairman and Chief
Financial Officer
NBD BANK,
as Trustee
By /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: Trust Officer
53
