-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L+MfJ7LO2XbX9kqKwA3Xl7JRksyD1zG7ks9tURSy3A+NOdlHDU7mv1r/nhhzhiVI NUlbm0SnMG+sluhURt8neA== 0000904280-01-500082.txt : 20010828 0000904280-01-500082.hdr.sgml : 20010828 ACCESSION NUMBER: 0000904280-01-500082 CONFORMED SUBMISSION TYPE: 8-A12B PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20010827 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHECKPOINT SYSTEMS INC CENTRAL INDEX KEY: 0000215419 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATIONS EQUIPMENT, NEC [3669] IRS NUMBER: 221895850 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-A12B SEC ACT: 1934 Act SEC FILE NUMBER: 001-11257 FILM NUMBER: 1723830 BUSINESS ADDRESS: STREET 1: 101 WOLF DR STREET 2: P O 188 CITY: THOROFARE STATE: NJ ZIP: 08086 BUSINESS PHONE: 6096481800 8-A12B 1 fm8a-checkpoint.txt FORM 8-A CHECKPOINT SYSTEMS, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-A FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 CHECKPOINT SYSTEMS, INC. (Exact name of registrant as specified in its charter) PENNSYLVANIA 22-1895850 (State of incorporation or organization) (I.R.S. Employer Identification No.) 101 WOLF DRIVE THOROFARE, NEW JERSEY 08086 (Address of principal executive offices) (Zip Code) If this Form relates to the registration of a class of debt securities and is effective upon filing pursuant to General Instruction A.(c)(1), please check the following box. [X] If this Form relates to the registration of a class of debt securities and is to become effective simultaneously with the effectiveness of a concurrent registration statement under the Securities Act of 1933 pursuant to General Instruction A.(c)(2), please check the following box. [ ] Securities to be registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which to be so registered each class is to be registered $120,000,000 5 1/4% CONVERTIBLE NEW YORK STOCK EXCHANGE SUBORDINATED DEBENTURES DUE 2005 Securities to be registered pursuant to Section 12(g)of the Act: NONE ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED. GENERAL This section contains a summary of certain of the key provisions of the Debentures. The Debentures are issued and outstanding under an Indenture dated as of October 24, 1995, as amended by a First Supplemental Indenture dated as of February 27, 1998, and as further amended by a Second Supplemental Indenture dated as of July 31, 2001 (collectively, the "Indenture"), between the Company and The Chase Manhattan Bank, as Trustee (the "Trustee"). Neither the Trustee nor any of its affiliates is affiliated with or has any material relationship with the Company or any of the Company's affiliates. The terms of the Debentures and the Indenture are discussed in detail herein. The Indenture is included as an exhibit to this Registration Statement. The following description of the Debentures and the Indenture is qualified in its entirety by reference to the Indenture. Capitalized terms used herein without definition have the meaning ascribed to them in the Indenture and/or in "Certain Definitions" below. The Debentures were originally issued in three separate components, as follows: (i) $47,160,000 in face amount pursuant to Rule 144A, (ii) $90,000 in face amount pursuant to Regulation D, and (iii) $72,750,000 in face amount pursuant to Regulation S. Shortly after issuance, the Reg. D Debenture was transferred to a qualified institutional buyer and thus the Rule 144A Debentures increased to $47,250,000 in principal amount. Due to some early exchanges of Reg. S Debentures for Rule 144A Debentures, the total outstanding face amount of Regulation S Debentures is $60,908,000, of which $4,960,000 are in registered, or book entry form, and the remaining $55,948,000 of which are in bearer form. Pursuant to the Second Supplemental Indenture, holders of Reg. S Debentures in registered form may, at their election, exchange such Reg. S Debentures for an equal face amount of Rule 144A Debentures. This exchange will allow holders of Reg. S Debentures to receive securities that will be listed for trading on the New York Stock Exchange, pursuant to a listing application the Company plans to file with the New York Stock Exchange on or about August 31, 2001 with respect to Rule 144A Debentures having a total face amount of $120,000,000. As used herein, "Debentures" shall refer to the Rule 144A Debentures generally. INTEREST AND MATURITY The Debentures bear interest on the principal amount outstanding from time to time at the rate of 5.25 % per annum. Interest on the Debentures began to accrue on October 24, 1995, and is payable semi-annually on each May 1 and November 1, until maturity or earlier redemption or conversion, to the registered holder (each a "Holder" and collectively the "Holders") of the Debentures at the close of business on the record date (April 15 or October 15) next preceding the interest payment date. Interest is calculated on the basis of a 360-day year consisting of twelve 30-day months. The Company has made all interest payments heretofore due and payable, on a timely basis. Subject to earlier redemption or conversion, the Debentures will mature on November 1, 2005. -2- SUBORDINATION The Debentures are unsecured, general obligations of the Company, and are subordinated in right of payment to all existing and future Senior Indebtedness of the Company and will rank pari passu in all respects with other unsecured subordinated indebtedness of the Company. At July 1, 2001, the Company's Senior Indebtedness was approximately $232.5 million. The rights of Holders are subordinated by operation of law to all existing and future indebtedness of the Company's Subsidiaries, which as of July 1, 2001, was approximately $207.0 million of trade payables and accrued liabilities. The Indenture does not restrict the incurrence of Senior Indebtedness or other indebtedness by the Company or its Subsidiaries. The Company currently has a credit facility from a syndicate of banks, which allows for borrowings of up to $375 million. Borrowings under this credit facility constitute Senior Indebtedness. The Indenture provides that no payment may be made by the Company on account of the principal of, premium, if any, interest on, or Additional Amounts with respect to, the Debentures, or to acquire any of the Debentures (including repurchases of Debentures at the option of the Holder) for cash or property (other than Junior Securities), or on account of the redemption provisions of the Debentures, (i) upon the maturity of any Senior Indebtedness of the Company by lapse of time, acceleration (unless waived) or otherwise, unless and until all principal of, premium, if any, and interest on such Senior Indebtedness and all other Obligations in respect thereof are first paid in full (or such payment is duly provided for), or (ii) in the event of default in the payment of any principal of, premium, if any, interest on or any other Obligation in respect of any Senior Indebtedness of the Company when it becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise (a "Payment Default"), unless and until such Payment Default has been cured or waived or otherwise has ceased to exist. Upon (i) the happening of an event of default (other than a Payment Default) that permits the holders of Designated Senior Indebtedness or their representative immediately to accelerate its maturity and (ii) written notice of such event of default given to the Company and the Trustee by the holders of such Designated Senior Indebtedness or their representative (a "Payment Notice"), then, unless and until such event of default has been cured or waived or otherwise has ceased to exist, no payment (by setoff or otherwise) may be made by or on behalf of the Company on account of the principal of, premium, if any, interest on, or Additional Amounts with respect to, the Debentures, or to acquire or repurchase any of the Debentures for cash or property, or on account of the redemption provisions of the Debentures, in any such case other than payments made with Junior Securities of the Company. Notwithstanding the foregoing, unless (i) the Designated Senior Indebtedness in respect of which such event of default exists has been declared due and payable in its entirety within 179 days after the Payment Notice is delivered as set forth above (the "Payment Blockage Period"), and (ii) such declaration has not been rescinded or waived, at the end of the Payment Blockage Period, the Company shall be required to pay all sums not paid to the Holders of the Debentures during the Payment Blockage Period due to the foregoing prohibitions and to resume all other payments as and when due on the Debentures. Any number of Payment Notices may be given; provided, however, that (i) not -3- more than one Payment Notice shall be given within a period of any 360 consecutive days, and (ii) no default that existed upon the date of such Payment Notice or the commencement of such Payment Blockage Period (whether or not such event of default is on the same issue of Designated Senior Indebtedness) shall be made the basis for the commencement of any other Payment Blockage Period. In the event that, notwithstanding the foregoing, any payment or distribution of assets of the Company (other than Junior Securities) shall be received by the Trustee or the Holders at a time when such payment or distribution is prohibited by the foregoing provisions, such payment or distribution shall be held in trust for the benefit of the holders of Senior Indebtedness of the Company, and shall be paid or delivered by the Trustee or such Holders, as the case may be, to the holders of the Senior Indebtedness of the Company remaining unpaid or unprovided for or their representative or representatives, or to the trustee or trustees under any indenture pursuant to which any instruments evidencing any of such Senior Indebtedness of the Company may have been issued, ratably according to the aggregate amounts remaining unpaid on account of the Senior Indebtedness of the Company held or represented by each, for application to the payment of all Senior Indebtedness of the Company remaining unpaid, to the extent necessary to pay or to provide for the payment of all such Senior Indebtedness in full after giving effect to any concurrent payment or distribution to the holders of such Senior Indebtedness. Upon any distribution of assets of the Company upon any dissolution, winding up, total or partial liquidation or reorganization of the Company, whether voluntary or involuntary, in bankruptcy, insolvency, receivership or a similar proceeding or upon assignment for the benefit of creditors or any marshalling of assets or liabilities, (i) the holders of all Senior Indebtedness of the Company will first be entitled to receive payment in full (or have such payment duly provided for) before the Holders are entitled to receive any payment on account of the principal of, premium, if any, interest on, or Additional Amounts with respect to, the Debentures (other than Junior Securities) and (ii) any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities (other than Junior Securities) to which the Holders or the Trustee on behalf of the Holders would be entitled (by setoff or otherwise), except for the subordination provisions contained in the Indenture, will be paid by the liquidating trustee or agent or other person making such a payment or distribution directly to the holders of Senior Indebtedness of the Company or their representative to the extent necessary to make payment in full of all such Senior Indebtedness remaining unpaid, after giving effect to any concurrent payment or distribution to the holders of such Senior Indebtedness. No provision contained in the Indenture or the Debentures will affect the obligation of the Company, which is absolute and unconditional, to pay, when due, principal of, premium, if any, interest on, and Additional Amounts with respect to, the Debentures. The subordination provisions of the Indenture and the Debentures will not prevent the occurrence of any Default or Event of Default under the Indenture or limit the rights of the Trustee or any Holder, subject to the two preceding previous paragraphs, to pursue any other rights or remedies with respect to the Debentures. As a result of these subordination provisions, in the event of the liquidation, bankruptcy, reorganization, insolvency, receivership or similar proceeding or an assignment for the benefit of the creditors of the Company or any of its Subsidiaries or a marshalling of assets or liabilities of -4- the Company and its Subsidiaries, Holders of the Debentures may receive ratably less than other creditors. The Debentures are obligations exclusively of the Company and not of its Subsidiaries. Because a significant portion of the operations of the Company are currently conducted through its Subsidiaries, the cash flow and the consequent ability to service debt of the Company, including the Debentures, are dependent, in part, upon the ability of its Subsidiaries to make cash distributions to the Company. The Subsidiaries are separate and distinct legal entities and have no obligation, contingent or otherwise, to pay any amounts due pursuant to the Debentures or to make any funds available therefor, whether by dividends, loans or other payments. In addition, the payment of dividends and the making of loans and advances to the Company by its Subsidiaries may be subject to statutory or contractual restrictions, are contingent upon the earnings of those Subsidiaries and are subject to various business considerations. The Debentures are structurally subordinated in right of payment to all indebtedness and other liabilities, including current liabilities and commitments under leases, if any, of the Company's Subsidiaries. Any right of the Company to receive assets of any of its Subsidiaries upon liquidation or reorganization of the Subsidiary (and the consequent right of the holders of the Debentures to participate in those assets) will be effectively subordinated to the claims of that Subsidiary's creditors, except to the extent that the Company is itself recognized as a creditor of such Subsidiary, in which case the claims of the Company would still be subject to any security interests in the assets of such Subsidiary and subordinated to any indebtedness of such Subsidiary senior to that held by the Company. DELIVERY AND FORM OF DEBENTURES The Debentures were initially issued in three separate components, as follows: (i) $47,160,000 in face amount pursuant to Rule 144A, (ii) $90,000 in face amount pursuant to Regulation D, and (iii) 72,750,000 in face amount pursuant to Regulation S (the "Regulation S Debentures"). Shortly after issuance, the Regulation D Debenture as transferred to a qualified institutional buyer and thus the Rule 144A Debentures increased to $47,250,000 in principal amount (the "Rule 144A Debentures"). The Rule 144A Debentures were initially represented by a single global Debenture (the "Rule 144A Global Security"), which was deposited with, or on behalf of, the Depository and registered in the name of Cede & Co., as nominee of the Depository (such nominee being referred to herein as the "Rule 144A Global Security Holder"). The Rule 144A Debentures are eligible for trading on the Private Offerings, Resale and Trading through Automatic Linkages ("PORTAL") System of the National Association of Securities Dealers, Inc. Due to the expiration of the trading restrictions imposed on the Regulation S Debentures by Regulation S, and pursuant to the Second Supplemental Indenture, the Indenture has been amended to allow holders of Regulation S Debentures to exchange their Regulation S Debentures for debentures bearing the same, unrestricted CUSIP number as the Rule 144A Debentures. Further, the Rule 144A Global Security was amended to accommodate the principal amount of the Regulation S Debentures which may now be converted into such unrestricted debentures. See "-- Exchange and Transfer," below. -5- The Depository, The Depository Trust Company, is a limited-purpose trust company that was created to hold securities for its participating organizations (collectively, the "Participants" or the "Depository's Participants") and to facilitate the clearance and settlement of transactions in such securities between Participants through electronic book-entry changes in accounts of its Participants. The Depository's Participants include securities brokers and dealers, banks and trust companies, clearing corporations and certain other organizations. Access to the Depository's system is also available to other entities such as banks, brokers, dealers and trust companies (collectively, the "Indirect Participants" or the "Depository's Indirect Participants") that clear through or maintain a custodial relationship with a Participant, either directly or indirectly. Persons who are not Participants may beneficially own securities held by or on behalf of the Depository only through the Depository's Participants or the Depository's Indirect Participants. So long as the Rule 144A Global Security Holder is the registered owner of any Debentures, the Rule 144A Global Security Holder will be considered the sole Holder under the Indenture of any Debentures evidenced by the Rule 144A Global Security. Beneficial owners of Debentures evidenced by the Rule 144A Global Security will not be considered the owners or Holders thereof under the Indenture for any purpose, including with respect to the giving of any directions, instructions or approvals to the Trustee. Neither the Company nor the Trustee will have any responsibility or liability for any aspect of the records of the Depository or for maintaining, supervising or reviewing any records of the Depository relating to the Debentures. Payments in respect of the principal of, premium, if any, interest on, and Additional Amounts with respect to, any Debentures registered in the name of the Rule 144A Global Security Holder on the applicable record date will be payable by the Trustee to or at the direction of the Rule 144A Global Security Holder in its capacity as the registered holder under the Indenture. Under the terms of the Indenture, the Company and the Trustee may treat the persons in whose names the Debentures, including the Rule 144A Global Security, are registered as the owners thereof for the purpose of receiving such payments. Consequently, neither the Company nor the Trustee has or will have any responsibility or liability for the payment of such amounts to beneficial owners of Debentures. The Company believes, however, that it is currently the policy of the Depository immediately to credit the accounts of the relevant Participants with such payments, in amounts proportionate to their respective holdings of beneficial interests in the relevant security as shown on the records of the Depository. Payments by the Depository's Participants and the Depository's Indirect Participants to the beneficial owners of Debentures will be governed by standing instructions and customary practice and will be the responsibility of the Depository's Participants or the Depository's Indirect Participants. EXCHANGE AND TRANSFER At the option of the Holder and subject to the terms of the Debentures and of the Indenture, Debentures will be exchangeable for an equal aggregate principal amount of Debentures of different authorized denominations, in each case without service charge (other than the cost of delivery) and upon payment of any taxes and other governmental charges. Debentures shall be registered as provided in the Indenture and may not be issued as bearer instruments. The Holder of a Debenture will be treated by the Company, the Trustee and their respective agents for all purposes as the owner of such Debenture. -6- Pursuant to the terms of the Second Supplemental Indenture, holders of Regulation S Debentures in registered form may, at their option, exchange their Regulation S Debentures for debentures bearing the same, unrestricted CUSIP number as the Rule 144A Debentures. Therefore, any holder of a registered Regulation S Debenture that wishes to hold a debenture that is not restricted as to trading in the United States, and which will be registered under the Securities Act of 1933, as amended, may make such exchange. Holders of Regulation S Debentures in bearer form may, pursuant to the existing terms of the Indenture, exchange such bearer securities for Regulation S Debentures in registered form, which in turn may then be exchanged for 144A Debentures pursuant to the Second Supplemental Indenture. Regulation S Debentures may be presented in exchange for unrestricted debentures at the office of the Trustee in New York City, without service charge (other than the cost of delivery) and upon payment of any taxes or other governmental charges. The transfer of Debentures may be registered, and Debentures may be presented in exchange for other Debentures of different authorized denominations, at the office of the Trustee in New York City, without service charge (other than the cost of delivery) and upon payment of any taxes or other governmental charges. Debentures may also be presented for transfer or exchange at the offices of the paying agents in London, Luxembourg or elsewhere as may be applicable. In the event of a redemption in part, the Company will not be required (i) to register the transfer of Debentures for a period of 15 days immediately preceding the date notice is given identifying the serial numbers of the Debentures called for such redemption; or (ii) to register the transfer or exchange of any such Debenture, or portion thereof, called for redemption. Subject to certain conditions, any person having a beneficial interest in the Rule 144A Global Security may, upon request to the Trustee, exchange such beneficial interest for Debentures in the form of certificated Debentures. Upon any such issuance, the Trustee is required to register such certificated Debentures in the name of, and cause the same to be delivered to, such person or persons (or the nominee of any thereof). If (i) the Company notifies the Trustee in writing that the Depository is no longer willing or able to act as a depository and the Company is unable to locate a qualified successor within 90 days or (ii) the Company, at its option, notifies the Trustee in writing that it elects to cause the issuance of Debentures in the form of certificated Debentures under the Indenture, then, upon surrender by the Rule 144A Global Security Holder of the Rule 144A Global Security, Debentures in certificated form will be issued to each person that the Rule 144A Global Security Holder and the Depository identify as being the beneficial owner of the related Debentures. Neither the Company nor the Trustee will be liable for any delay by the Rule 144A Global Security Holder or the Depository in identifying the beneficial owners of Debentures, and the Company and the Trustee may conclusively rely on, and will be protected in relying on, instructions from the Rule 144A Global Security Holder or the Depository for all purposes. CONVERSION RIGHTS The Debentures are convertible into shares of common stock of the Company, $.10 par value per share (the "Common Stock"), at the conversion price of $18.375 per share, at any time -7- prior to redemption or maturity. The right to convert a Debenture called for redemption or delivered for repurchase will terminate at the close of business on the fifth day next preceding the redemption date for such Debenture (or if such date is not a Business Day, on the next succeeding Business Day). The right of conversion attaching to any Debenture may be exercised by the Holder by delivering the Debenture at the specified office of a conversion agent accompanied by a duly signed and completed notice of conversion. The conversion date shall be the date on which the Debenture and the duly signed and completed notice of conversion shall have been so delivered. A Holder delivering a Debenture for conversion will not be required to pay any taxes or duties payable in respect of the issuance or delivery of Common Stock on conversion but will be required to pay any tax or duty which may be payable in respect of any transfer involved in the issuance or delivery of the Common Stock in a name other than that of the Holder of the Debenture. Certificates representing shares of Common Stock will not be issued or delivered unless all taxes and duties, if any, payable by the Holder have been paid. Such certificates will be delivered to the address specified by the Holder in its completed notice of conversion. In the case of any Debenture that has been converted after any Interest Record Date, but on or before the next Interest Payment Date, interest, the stated due date of which is on such Interest Payment Date, shall be payable on such Interest Payment Date notwithstanding such conversion, and such interest shall be paid to the Holder of such Debenture who is a Holder on such Interest Record Date. Any Debenture so converted must be accompanied by payment of an amount equal to the interest payable on such Interest Payment Date on the principal amount of Debentures being surrendered for conversion. The conversion price will be subject to adjustment in certain events, including (a) dividends (and other distributions) payable in Common Stock on any class of capital stock of the Company, (b) the issuance to all holders of Common Stock of rights, options or warrants entitling them to subscribe for or purchase Common Stock at less than the then current market price (as determined in accordance with the Debentures) unless holders of Debentures are entitled to receive the same upon conversion, (c) subdivisions, combinations and reclassifications of Common Stock and (d) distributions to all holders of Common Stock of evidences of indebtedness of the Company or assets (including securities, but excluding those rights, options, warrants, dividends and distributions referred to above, dividends and distributions paid in cash out of the retained earnings of the Company and regular quarterly dividends consistent with past practice). In addition to the foregoing adjustments, the Company will be permitted to make such downward adjustments in the conversion price as it considers to be advisable in order that any event treated for United States Federal income tax purposes as a dividend of stock or stock rights will not be taxable to the holders of the Common Stock. Adjustments in the conversion price of less than $0.25 will not be required, but any adjustment that would otherwise be required to be made will be taken into account in the computation of any subsequent adjustment. Fractional shares of Common Stock are not to be issued or delivered upon conversion, but, in lieu thereof, a cash adjustment will be paid based upon the then current market price of Common Stock. Subject to the foregoing, no payments or adjustments will be made upon conversion on account of accrued interest on the Debentures or for any dividends or distributions on any shares of Common Stock delivered upon such conversion. Notice of any adjustment of the conversion price will be given in the manner set forth herein under "Notices." -8- If at any time the Company makes a distribution of property to its stockholders that would be taxable to such stockholders as a dividend for United States Federal income tax purposes (e.g., distribution of evidences of indebtedness or assets of the Company, but generally not stock dividends or rights to subscribe for Common Stock) and, pursuant to the antidilution provisions of the Debentures, the conversion price of the Debentures is reduced, such reduction may be deemed to be the payment of a taxable dividend to Holders of Debentures. Such a deemed dividend might be subject to a 30% or then applicable United States withholding tax unless the holder is entitled to a reduction of the tax under a tax treaty and provides appropriate evidence thereof to the Company and the dividend disbursing agent. In the event that the Company should merge with another company, become a party to a consolidation or sell or transfer all or substantially all of its assets to another company, each Debenture then outstanding would, without the consent of any Holder, become convertible only into the kind and amount of securities, cash and other property receivable upon the merger, consolidation or transfer by a Holder of the number of shares of Common Stock into which such Debenture might have been converted immediately prior to such merger, consolidation or transfer. REDEMPTION Unless previously redeemed, converted or purchased and canceled by the Company, the Debentures will mature on November 1, 2005 and shall be redeemed at their principal amount. Optional Redemption The Debentures may be redeemed, at the option of the Company, in whole or in part, at any time on and after November 10, 1998, upon notice as described in "Notices" below, at a redemption price equal to 102% of their principal amount if redeemed during the 12-month period commencing November 1, 1999, 101% of their principal amount if redeemed during the 12-month period commencing November 1, 2000, and 100% of their principal amount if redeemed on or after November 1, 2001, in each case together with accrued and unpaid interest to the date fixed for redemption. In the event of a partial redemption, the Debentures to be redeemed will be selected by the Trustee not more than 75 days before the date fixed for redemption, by such method as the Trustee shall deem fair and appropriate. Debentures may be redeemed, as a whole but not in part, upon notice as described in "Notices" below, at the option of the Company at any time, if the Company shall determine that as a result of any change in or amendment to the laws or any regulations or rulings of the United States or any political subdivision or taxing authority thereof or therein affecting taxation, or any amendment to, or change in, an official application or interpretation of such laws, regulations or rulings, which amendment or change is announced or becomes effective on or after October 17, 1995, the Company has or will become obligated to pay Additional Amounts on the Debentures, as described below under "Payment of Additional Amounts," and such obligation cannot be avoided by the Company taking reasonable measures available to it; provided that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Company would be obligated to pay such Additional Amounts were a payment in respect of the Debentures then due; and provided further, that at the time such notice is given, such obligation to pay such -9- Additional Amounts remains in effect. In case of any such redemption, the redemption price will be 100% of the principal amount of the Debentures, together in each case with accrued and unpaid interest to the date fixed for redemption. The Company is required to deliver to the Trustee a certificate stating that the Company is entitled to effect such redemption and that the conditions precedent to the right of the Company to redeem the Debentures have occurred and an opinion of counsel stating that the legal conditions precedent to the right of the Company to effect such redemption have occurred. The Company has not delivered any such certificate to the Trustee as of July 1, 2001. Mandatory Redemption Upon a Change of Control (as defined in the Indenture and described herein) with respect to the Company, then each Holder shall have the right, at such Holder's option, to require the Company to purchase such Holder's Debentures, in whole but not in part, at a redemption price equal to 100% of the principal amount, together with accrued and unpaid interest to the date fixed for redemption. Notices of Redemption Notice of intention to redeem Debentures will be given as described under "Notices" below. In the case of redemption of all Debentures, notice will be given once not more than 60 nor less than 30 days prior to the date fixed for redemption. In the case of a partial redemption, notice will be given twice, the first such notice to be given not more than 60 nor less than 45 days prior to the date fixed for redemption and the second such notice to be given not more than 45 nor less than 30 days prior to the date fixed for redemption. Notices of redemption will specify the date fixed for redemption, the applicable redemption price, the date the conversion privilege expires and, in the case of a partial redemption, the aggregate principal amount of Debentures to be redeemed and the aggregate principal amount of the Debentures which will be outstanding after such partial redemption. In addition, in the case of a partial redemption, the first notice will specify the last date on which exchanges or transfers of Debentures may be made pursuant to the provisions of "Exchange and Transfer" above and the second notice will specify the serial numbers of the Debentures and the portions thereof called for redemption. As used herein, "United States" means the United States of America (including the states and the District of Columbia), its territories, its possessions and other areas subject to its jurisdiction. The term "United States Alien" means any person who, for United States Federal income tax purposes, is (i) a foreign corporation, (ii) a foreign partnership one or more of the members of which are, for United States federal income tax purposes, foreign corporations, non-resident alien individuals or a nonresident alien fiduciaries of a foreign estate or trust, (iii) a non-resident alien individual or (iv) a nonresident alien fiduciary of a foreign estate or trust. In addition, the Company may at any time and from time to time repurchase the Debentures in the open market or in private transactions at prices it considers attractive. Debentures repurchased by the Company will be canceled. -10- CHANGE OF CONTROL Each Holder of a Debenture has the right, at such Holder's option, to cause the Company to purchase such Debenture, in whole but not in part, for a cash amount equal to 100% of the principal amount, together with accrued and unpaid interest to the repurchase date, if a Change of Control occurs or has occurred. Notice with respect to the occurrence of a Change of Control will be given as described under "Notices" below and not later than 30 days after the occurrence of such Change of Control. The date fixed for such purchase will be a date not less than 30 nor more than 60 days after notice of the occurrence of a Change of Control is given (except as otherwise required by law). To be purchased, a Debenture must be received with a duly executed written notice, substantially in the form provided on the reverse side of such Debenture, at the office of a paying agent not later than the fifth day prior to the date fixed for such purchase. All Debentures purchased by the Company will be canceled. Holders who have tendered a notice of purchase will be entitled to revoke their election by delivering a written notice of such revocation to a paying agent on or prior to the date fixed for such purchase. In addition, Holders of Debentures will retain the right to require such Debentures to be converted into Common Stock (or other securities, property or cash, payable in lieu thereof by reference to the adjustment price as provided under the adjustment provision, see "Conversion Rights") prior to the purchase date, so long as notice to that effect, including the Holder's nontransferable receipt for the Debentures from a paying agent, is delivered to a paying agent on or prior to the close of business on the fifth day next preceding the applicable Redemption Date. The Indenture provides that a "Change of Control" occurs (i) upon any merger or consolidation of the Company with or into any person or any sale, transfer or other conveyance, whether direct or indirect, of all or substantially all of the assets of the Company, on a consolidated basis, in one transaction or a series of related transactions, if, immediately after giving effect to such transaction, any person" or "group" (as such terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act, whether or not applicable) is or becomes the "beneficial owner," directly or indirectly, of more than 50% of the total voting power in the aggregate normally entitled to vote in the election of directors, managers, or trustees, as applicable, of the transferee or surviving entity, (ii) when any "person" or "group" (as such terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act, whether or not applicable) is or becomes the "beneficial owner," directly or indirectly, of more than 50% of the total voting power in the aggregate normally entitled to vote in the election of directors of the Company, or (iii) when, during any period of 12 consecutive months after the Closing Date, individuals who at the beginning of any such 12-month period constituted the Board of Directors of the Company (together with any new directors whose election by such Board or whose nomination for election by the shareholders of the Company was approved by a vote of a majority of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved), cease for any reason to constitute a majority of the Board of Directors of the Company then in office. The phrase "all or substantially all" of the assets of the Company is likely to be interpreted by reference to applicable state law at the relevant time, and will be dependent on the facts and circumstances existing at such time. As a result, there may be a degree of uncertainty -11- in ascertaining whether a sale or transfer of "all or substantially all" of the assets of the Company has occurred. For purposes of this definition, (i) the terms "person" and "group" shall have the meaning used for purposes of Rules 13d-3 and 13d-5 of the Exchange Act as in effect on the Closing Date, whether or not applicable; and (ii) the term "beneficial owner" shall have the meaning used in Rules 13d-3 and 13d-5 under the Exchange Act as in effect on the Closing Date, whether or not applicable, except that a "person" shall be deemed to have "beneficial ownership" of all shares that any such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time or upon the occurrence of certain events. The Change of Control provisions described above may make more difficult or discourage a takeover of the Company, and, thus, the removal of incumbent management. The Change of Control provisions will not prevent a leveraged buyout led by Company management, a recapitalization of the Company or change in a majority of the members of the Board of Directors which is approved by the then-present Board of Directors and may not afford the Holders of Debentures protection in the event of a highly leveraged transaction, reorganization, restructuring, merger, spin-off or similar transaction that may adversely affect such Holders, if such transaction does not constitute a Change of Control, as set forth above. The Company will comply with the provisions of Rule 13e-4 and any other tender offer rules under the Exchange Act which may then be applicable and will file a Schedule 13E-4 or any other schedule required thereunder in connection with any offer by the Company to purchase Debentures at the option of Holders upon a Change of Control. The Change of Control purchase feature is not, however, the result of management's knowledge of any specific efforts to accumulate shares of Common Stock or to obtain control of the Company by means of a merger, tender offer, solicitation of proxies or consents or otherwise, or part of a plan to implement a series of anti-takeover measures. The Company, could, in the future, enter into certain transactions, including certain recapitalizations of the Company, that would not constitute a Change of Control under the Debentures, but that would increase the amount of Senior Indebtedness (or any other indebtedness) outstanding at such time. There are no restrictions in the Debentures or the Indenture on the creation of additional Senior Indebtedness (or any other indebtedness), and, under certain circumstances, the incurrence of significant amounts of additional indebtedness could have an adverse effect on the Company's ability to service its indebtedness, including the Debentures. If such a Change of Control were to occur, there can be no assurance that the Company would have sufficient funds at the time of such event to pay the Change of Control purchase price for all Debentures tendered by the Holders thereof. A default by the Company on its obligation to pay the Change of Control purchase price could, pursuant to cross-default provisions, result in acceleration of the payment of other indebtedness of the Company outstanding at that time. Certain of the Company's existing and future agreements relating to their indebtedness could prohibit the purchase by the Company of the Debentures pursuant to the exercise by a Holder of the foregoing option, depending on the financial circumstances of the Company at the time any such purchase may occur, because such purchase could cause a breach of certain covenants contained in such agreements. Such a breach may constitute an event of default under such indebtedness as a result of which any repurchase could, absent a waiver, be blocked by the -12- subordination provision of the Debentures. See "Subordination" above. Failure of the Company to repurchase the Debentures when required would result in an Event of Default with respect to the Debentures whether or not such repurchase is permitted by the subordination provisions. PAYMENTS, PAYING AGENTS AND CONVERSION AGENTS The principal of and premium, if any, and interest on Debentures will be payable in United States dollars. Payments of such principal and premium, if any, will be made against surrender of such Debentures at the corporate trust office of the Trustee in New York City or, subject to any applicable laws and regulations, at the offices of the paying agents in London or Luxembourg (or such other paying agencies as may be specified in notices to the Holders of the Debentures in accordance with "Notices" below), by United States dollar check drawn on, or wire transfer to a United States dollar account maintained by the Holder with, a bank located in New York City. Payments of any installment of interest on Debentures will be made by a United States dollar check drawn on a bank in New York City mailed to the Holder at such Holder's registered address or (if arrangements satisfactory to the Company and the Trustee are made) by wire transfer to a dollar account maintained by the Holder with a bank in New York City. Payment of such interest on any Interest Payment Date will be made to the person in whose name such Debenture is registered at the close of business on the Interest Record Date prior to the relevant Interest Payment Date. Accrued interest payable on any Debenture that is redeemed will be payable against surrender of such Debenture in the manner described above with respect to payments of principal on Debentures, except Debentures that are redeemed on a date after the close of business on the Interest Record Date immediately preceding such Interest Payment Date and on or before the Interest Payment Date, on which interest will be paid to the Holder of record on the Interest Record Date. The Debentures may be surrendered for conversion or exchange at the corporate trust office of the Trustee in New York City or, at the option of the Holder and subject to applicable laws and regulations, at the office of any of the conversion agents. The Company has initially appointed the Trustee as paying agent and conversion agent. This appointment may be terminated at any time and additional or other paying and conversion agents may be appointed, provided that until the Debentures have been delivered for cancellation, or monies sufficient to pay the principal of and premium, if any, and interest on the Debentures have been made available for payment and either paid or returned to the Company as provided in the Indenture, a paying, conversion and transfer agent will be maintained (a) in New York City for the payment of the principal of and premium, if any, and interest on Debentures only and for the surrender of Debentures for conversion and (b) in a European city that, so long as the Debentures are listed on the Luxembourg Stock Exchange and the rules of such exchange so require, will be Luxembourg, for the payment of the principal of and premium, if any, and interest on Debentures and for the surrender of Debentures for conversion, payment, redemption or transfer. Notice of any such termination or appointment and of any change in the office through which any paying, conversion, or transfer agent will act will be given in accordance with "Notices" below. All monies paid by the Company to a paying agent for the payment of principal of and premium, if any, or interest on any Debenture that remain unclaimed at the end of two years after -13- such principal, premium or interest shall have become due and payable will be repaid to the Company, and the Holder of such Debenture will thereafter look only to the Company for payment thereof. PAYMENT OF ADDITIONAL AMOUNTS The Company will pay to the Holder of any Debenture who is a United States Alien (as defined below) such Additional Amounts as may be necessary in order that every net payment of the principal of, premium, if any, and interest on such Debenture, and any cash payments made in lieu of issuing shares of Common Stock upon conversion of a Debenture, after withholding for or on account of any present or future tax, assessment or governmental charge imposed upon or as a result of such payment by the United States or any political subdivision or taxing authority thereof or therein, will not be less than the amount provided for in such Debenture to be then due and payable; provided, however, that the foregoing obligations to pay Additional Amounts shall not apply to any one or more of the following: (a) any tax, assessment or other governmental charge which would not have been so imposed but for (i) the existence of any present or former connection between such Holder (or between a fiduciary, settlor, beneficiary, member or stockholder of, or a person holding a power over, such Holder, if such Holder is an estate, trust, partnership or corporation) and the United States, including, without limitation, such Holder (or such fiduciary, settlor, beneficiary, member, stockholder or person holding a power) being or having been a citizen or resident or treated as a resident thereof or being or having been engaged in a trade or business therein or being or having been present therein or having or having had a permanent establishment therein, (ii) such Holder's present or former status as a personal holding company, foreign personal holding company, passive foreign investment company, foreign private foundation or other foreign tax-exempt entity, or controlled foreign corporation for United States tax purposes or a corporation which accumulates earnings to avoid United States Federal income tax, or (iii) such Holder's status as a bank extending credit pursuant to a loan agreement entered into in the ordinary course of business; (b) any tax, assessment or other governmental charge which would not have been so imposed but for the presentation by the Holder of such Debenture for payment on a date more than 10 days after the date on which such payment became due and payable or on the date on which payment thereof is duly provided, whichever occurs later; (c) any estate, inheritance, gift, sales, transfer or personal or intangible property tax or any similar tax, assessment or other governmental charge; (d) any tax, assessment or other governmental charge which would not have been imposed but for the failure to comply with certification, information, documentation or other reporting requirements concerning the nationality, residence, identity or present or former connection with the United States of the Holder or beneficial owner of such Debenture if such compliance is required by statute, regulation or ruling of the United States or any political subdivision or taxing authority thereof or therein as a precondition to relief or exemption from such tax, assessment or other governmental charge; -14- (e) any tax, assessment or other governmental charge which is payable otherwise than by deduction or withholding from payments of principal of and premium, if any, or interest on such Debenture; (f) any tax, assessment or other governmental charge imposed on interest received by a person holding, actually or constructively, 10 percent or more of the total combined voting power of all classes of stock of the Company entitled to vote; or (g) any tax, assessment or other governmental charge required to be withheld by any paying agent from any payment of principal of, or premium, if any, or interest on any Debenture or interest appertaining thereto if such payment can be made without such withholding by any other paying agent; nor will Additional Amounts be paid with respect to payment of the principal of, premium, if any, or interest on any such Debenture (or cash in lieu of issuance of shares of Common Stock upon conversion) to a person other than the sole beneficial owner of such payment, or that is a partnership or a fiduciary to the extent such beneficial owner, member of such partnership or beneficiary or settlor with respect to such fiduciary would not have been entitled to the Additional Amounts had such beneficial owner, member, beneficiary or settlor been the Holder of such Debenture. The term "United States Alien" means any person who, for United States federal income tax purposes, is (i) a foreign corporation, (ii) a foreign partnership one or more of the members of which are, for United States federal income tax purposes, foreign corporations, non-resident alien individuals or a non-resident alien fiduciary of a foreign estate or trust, (iii) a non-resident alien individual, or (iv) a non-resident alien fiduciary of a foreign estate or trust. EVENTS OF DEFAULT The Indenture defines an Event of Default as (i) the failure by the Company to pay any installment of interest on, or Additional Amounts with respect to, the Debentures as and when due and payable and the continuance of any such failure for 30 days, (ii) the failure by the Company to pay all or any part of the principal of, or premium, if any, on the Debentures when and as the same becomes due and payable at maturity, redemption, by acceleration or otherwise, including, without limitation, default in the payment of the Redemption Price on the Redemption Date, (iii) the failure of the Company to perform any conversion of Debentures required under the Indenture and the continuance of any such failure for 30 days, (iv) the failure by the Company to observe or perform any other covenant or agreement contained in the Debentures or the Indenture and, subject to certain exceptions, the continuance of such failure for a period of 60 days after written notice is given to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in aggregate principal amount of the Debentures outstanding (which for purposes of this section includes the debentures issued under the Indenture pursuant to Regulation S under the Securities Act of 1933, as amended), (v) certain events of bankruptcy, insolvency or reorganization in respect of the Company or any of its Significant Subsidiaries, (vi) a default in the payment of principal, premium or interest when due that extends beyond any stated period of grace applicable thereto or an acceleration for any other reason of the maturity of any Indebtedness of the Company or any of its Significant Subsidiaries -15- with an aggregate principal amount in excess of $10 million, and (vii) final judgments not covered by insurance aggregating in excess of $2 million, at any one time tendered against the Company or any of its Significant Subsidiaries and not satisfied, stayed, bonded or discharged within 75 days. The Indenture provides that if a Default occurs and is continuing, the Trustee must, within 90 days after the occurrence of such default, give to the Holders notice of such default. The Indenture provides that if an Event of Default occurs and is continuing (other than an Event of Default specified in clause (v) above), then in every such case, unless the principal of all of the Debentures shall have already become due and payable, either the Trustee or the Holders of 25% in aggregate principal amount of the Debentures then outstanding, by notice in writing to the Company (and to the Trustee if given by Holders) (an "Acceleration Notice"), may declare all principal and accrued interest thereon to be due and payable immediately. If an Event of Default specified in clause (v) above occurs, all principal and accrued interest thereon will be immediately due and payable on all outstanding Debentures without any declaration or other act on the part of the Trustee or the Holders. The Holders of no less than a majority in aggregate principal amount of Debentures generally are authorized to rescind such acceleration if all existing Events of Default, other than the non-payment of the principal of, premium, if any, and interest on the Debentures that have become due solely by such acceleration, have been cured or waived. Prior to the declaration of acceleration of the maturity of the Debentures, the Holders of a majority in aggregate principal amount of the Debentures at the time outstanding may waive on behalf of all the Holders any default, except a default in the payment of principal of or interest on any Debenture yet cured, or a default with respect to any covenant or provision that cannot be modified or amended without the consent of the Holder of each outstanding Debenture affected. Subject to the provisions of the Indenture relating to the duties of the Trustee, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request, order or direction of any of the Holders, unless such Holders have offered to the Trustee reasonable security or indemnity. Subject to all provisions of the Indenture and applicable law, the Holders of a majority in aggregate principal amount of the Debentures at the time outstanding will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee. LIMITATION ON MERGER, SALE OR CONSOLIDATION The Indenture provides that the Company may not, directly or indirectly, consolidate with or merge with or into another person or sell, lease, convey or transfer all or substantially all of its assets (computed on a consolidated basis), whether in a single transaction or a series of related transactions, to another Person or group of affiliated Persons, unless (i) either (a) in the case of a merger or consolidation the Company is the surviving entity or (b) the resulting, surviving or transferee entity is a corporation organized under the laws of the United States, any state thereof or the District of Columbia and expressly assumes by supplemental indenture all of the obligations of the Company in connection with the Debentures and the Indenture; and (ii) no Default or Event of Default shall exist or shall occur immediately after giving effect on a pro forma basis to such transaction. -16- Upon any consolidation or merger or any transfer of all or substantially all of the assets of the Company in accordance with the foregoing, the successor corporation formed by such consolidation or into which the Company is merged or to which such transfer is made, shall succeed to, and be substituted for, and may exercise every right and power of, the Company under the Indenture with the same effect as if such successor corporation had been named therein as the Company, and the Company will be released from its obligations under the Indenture and the Debentures, except as to any obligations that arise from or as a result of such transaction. AMENDMENTS AND SUPPLEMENTS The Indenture contains provisions permitting the Company and the Trustee to enter into a supplemental indenture for certain limited purposes without the consent of the Holders. With the consent of the Holders of not less than a majority in aggregate principal amount of the Debentures at the time outstanding (which for purposes of this section includes the debentures issued under the Indenture pursuant to Regulation S under the Securities Act of 1933, as amended), the Company and the Trustee are permitted to amend or supplement the Indenture or any supplemental indenture or modify the rights of the Holders; provided, that no such modification may, without the consent of each Holder affected thereby: (i) change the Stated Maturity of any Debenture or reduce the principal amount thereof or the rate (or extend the time for payment) of interest thereon or any premium payable upon the redemption thereof, or change the place of payment where, or the coin or currency in which, any Debenture or any premium or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment or the conversion of any Debenture on or after the due date thereof (including, in the case of redemption, on or after the redemption date), or reduce the redemption price, or alter the redemption or Change of Control provisions in a manner adverse to the Holders, or (ii) reduce the percentage in principal amount of the outstanding Debentures, the consent of whose Holders is required for any such amendment, supplemental indenture or waiver provided for in the Indenture, or (iii) adversely affect the right of such Holder to convert Debentures, or (iv) modify any of the waiver provisions, except to increase any required percentage or to provide that certain other provisions of the Indenture cannot be modified or waived without the consent of the Holder of each outstanding Debenture affected thereby. REPORTS Whether or not the Company is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company shall deliver to the Trustee and to each Holder, within 15 days after it is or would have been required to file such with the Securities and Exchange Commission (the "SEC"), annual and quarterly consolidated financial statements substantially equivalent to financial statements that would have been included in reports filed with the SEC if the Company was subject to the requirements of Section 13 or 15(d) of the Exchange Act, including, with respect to annual information only, a report thereon by the Company's certified independent public accountants as such would be required in such reports to the SEC and, in each case, together with a management's discussion and analysis of financial condition and results of operations as such would be so required. -17- NOTICES Notices to Holders of the Debentures will be given by publication in a leading daily newspaper of general circulation in New York City, in London, and so long as any of the debentures issued under the Indenture are listed on the Luxembourg Stock Exchange, in a daily newspaper of general circulation in Luxembourg or, if publication in either London or Luxembourg is not practical, in Europe. Such publication is expected to be The Wall Street Journal (Eastern Edition), the Financial Times and the Luxembourg Wort. In addition, notices to Holders will be given by mail to the addresses of such Holders as they appear in the register maintained by the Trustee on the fifteenth day prior to such mailing. Such notices will be deemed to have been given on the date of such publication or mailing or, if published in such newspapers on different dates, on the date of the first such publication. REPLACEMENT OF DEBENTURES Debentures that become mutilated, destroyed, stolen or lost will be replaced by the Company at the expense of the Holder upon delivery to the Trustee of the Debentures or evidence of the loss, theft or destruction thereof satisfactory to the Company and the Trustee. In the case of a lost, stolen or destroyed Debenture an indemnity satisfactory to the Company and the Trustee may be required at the expense of the Holder of such Debenture before a replacement Debenture will be issued. GOVERNING LAW The Debentures and the Indenture are governed by and construed in accordance with the laws of the State of New York, without giving effect to its conflicts of law rules. CERTAIN DEFINITIONS "Business Day" means, with respect to any act to be performed pursuant to the Indenture or the terms of the Debentures, each Monday, Tuesday, Wednesday, Thursday or Friday that is not a day on which banking institutions in the place where such act is to occur are authorized or obligated by applicable law, regulation or executive order to close. "Capital Stock" means, with respect to any corporation, any and all shares, interests, rights to purchase (other than convertible or exchangeable indebtedness), warrants, options, participations or other equivalents of or interests (however designated) in stock issued by that corporation. "Designated Senior Indebtedness" means (i) the Indebtedness outstanding under (y) the Note Agreement dated as of March 1, 1994, and as amended as of January 15, 1995, pursuant to which the Company issued its 8.27% Series A Senior Notes due 2002 and (z) the Terms Agreement dated as of January 15, 1995, pursuant to which the Company issued its 9.35% Series B Senior Notes due 2003 and (ii) any other Senior Indebtedness having a principal amount of at least $5.0 million that is designated as "Designated Senior Indebtedness" by written notice from the Company to the Trustee. The Designated Senior Indebtedness referred to in subparagraph (i) above has been repaid in full. Further, the Company has provided notice to the Trustee in accordance with subparagraph (ii) above with respect to additional Designated Senior -18- Indebtedness currently outstanding under the Credit Agreement by and among the Company, First Union National Bank, as Administrative Agent, PNC Bank, National Association, as documentation agent, Bank One, NA, as syndication agent, First Union Securities, Inc., as arranger, and the banks from time to time party thereto and the Notes (as defined therein) issued in connection therewith. "Indebtedness" of any person means, without duplication, (a) all liabilities and obligations, contingent or otherwise, of any such person, (i) in respect of borrowed money (whether or not the recourse of the lender is to the whole of the assets of such person or only to a portion thereof), (ii) evidenced by bonds, notes, debentures or similar instruments, (iii) representing the balance deferred and unpaid of the purchase price of any property or services, except such as would constitute trade payables to trade creditors in the ordinary course of business that are not more than 90 days past their original due date, (iv) evidenced by bankers' acceptances or similar instruments issued or accepted by banks, (v) for the payment of money relating to a capitalized lease obligation, or (vi) evidenced by a letter of credit or a reimbursement obligation of such person with respect to any letter of credit; (b) all net obligations of such person under interest swap and hedging obligations; (c) all liabilities of others of the kind described in the preceding clauses (a) or (b) that such person has guaranteed or that is otherwise its legal liability and all obligations to purchase, redeem or acquire any Capital Stock; and (d) any and all deferrals, renewals, extensions, refinancings and refundings (whether direct or indirect) of any liability of the kind described in any of the preceding clauses (a), (b) or (c), or this clause (d), whether or not between or among the same parties. "Junior Securities" of any Person means any Qualified Capital Stock and any Indebtedness of such Person that is (i) subordinated in right of payment to the Debentures and has no scheduled installment of principal due, by redemption, sinking fund payment or otherwise, on or prior to the Stated Maturity of the Debentures and (ii) subordinated in right of payment to all Senior Indebtedness at least to the same extent as the Debentures. "Obligations" means any principal, premium, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Senior Indebtedness. "Senior Indebtedness" of the Company means any Indebtedness of the Company, whether outstanding on the date of the Indenture or thereafter created, incurred, assumed, guaranteed or in effect guaranteed by the Company, unless the instrument creating or evidencing such Indebtedness provides that such Indebtedness is not senior or superior in right of payment to the Debentures or to other Indebtedness which is pari passu with, or subordinated to, the Debentures; provided that in no event shall Senior Indebtedness include (a) Indebtedness of the Company owed or owing to any Subsidiary of the Company or any officer, director or employee of the Company or any Subsidiary of the Company, (b) Indebtedness to trade creditors, or (c) any liability for taxes owed or owing by the Company. "Stated Maturity" when used with respect to any Debenture, means November 1, 2005. "Subsidiary," with respect to any person, means (i) a corporation a majority of whose Capital Stock with voting power normally entitled to vote in the election of directors is at the -19- time, directly or indirectly, owned by such person, by such person and one or more Subsidiaries of such person or by one or more Subsidiaries of such person, (ii) a partnership in which such Person or a subsidiary of such person is, at the time, a general partner, or (iii) any other person (other than a corporation) in which such person, one or more Subsidiaries of such person, or such person and one or more subsidiaries of such person, directly or indirectly, at the date of determination thereof has at least majority ownership interest. -20- ITEM 2. EXHIBITS Exhibit No. Exhibit - ---------- ------- 3.1 Articles of Incorporation, as amended, are hereby incorporated by reference to Item 14(a), Exhibit 3(i) of the Registrant's 1990 Form 10-K, filed with the SEC on March 14, 1991. 3.2 By-Laws, as Amended and Restated, are hereby incorporated by Reference to the Registrants 1992 Form 10-K, filed with the SEC on March 25, 1993. 4.1 Rights Agreement by and between Registrant and American Stock and Transfer and Trust Company dated as of March 10, 1997, is hereby incorporated by reference to Item 14(a), Exhibit 4.1 of the Registrant's 1996 Form 10-K filed with the SEC on March 17, 1997. 4.2 Indenture dated as of October 24, 1995 by and between Registrant and the Chase Manhattan Bank, as Trustee is hereby incorporated herein by reference to Exhibit 4.3 to Registrant's form 10-Q/A filed with the SEC on December 13, 1995. 4.3 First Supplemental Indenture dated as of February 27, 1998 (amending Indenture dated as of October 24, 1995) is hereby incorporated herein by reference to Exhibit 4.4 to Registrant's Form 10-K for 1997 filed with the SEC on March 23, 1998. 4.4 Second Supplemental Indenture dated as of July 31, 2001 (amending Indenture dated as of October 24, 1995, as amended). SIGNATURE Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereto duly authorized. CHECKPOINT SYSTEMS, INC. Date:August 24, 2001 By: /s/ William J. Reilly, Jr. ------------------------------- Name: William J. Reilly, Jr. ------------------------- Title:Chief Operating Officer ------------------------- EX-4 3 ex4fm8a-checkpoint.txt EXHIBIT 4.4 ----------------------------------------------- CHECKPOINT SYSTEMS, INC., Issuer and THE CHASE MANHATTAN BANK, Trustee -------------------- SECOND SUPPLEMENTAL INDENTURE Dated as of July 31, 2001 -------------------- U.S. $120,000,000 5-1/4% Convertible Subordinated Debentures due 2005 ------------------------------------------------- (Amending Indenture Dated as of October 24, 1995, as amended by that certain First Supplemental Indenture dated as of February 27, 1998) THIS SECOND SUPPLEMENTAL INDENTURE is dated as of July 31, 2001, between CHECKPOINT SYSTEMS, INC., a Pennsylvania corporation (the "Company"), and THE CHASE MANHATTAN BANK (formerly known as Chemical Bank), a New York corporation, as Trustee (the "Trustee"). BACKGROUND ---------- The Company and the Trustee have heretofore executed and delivered a certain Indenture dated as of October 24, 1995, as amended by that certain First Supplemental Indenture dated as of February 27, 1998 (together, the "Indenture"), pursuant to which U.S. $120,000,000 principal amount of the Company's 5-1/4% Convertible Subordinated Debentures due 2005 (the "Securities") were issued, The Securities were issued in three separate components as follows: (i) $47,160,000 in face amount pursuant to Rule 144A promulgated by the Securities and Exchange Commission ("SEC") pursuant to the United States Securities Act of 1933, as amended (the "Securities Act") (the "Rule 144A Securities"), (ii) $90,000 in face amount pursuant to Regulation D promulgated by the SEC pursuant to the Securities Act (the "Regulation D Securities"), and (iii) $72,750,000 in face amount pursuant to Regulation S promulgated by the SEC pursuant to the Securities Act (the "Regulation S Securities"). The CUSIP Service Bureau assigned in October, 1995, No. 162825 AA 1 to the Rule 144A Securities and the Regulation D Securities. The CUSIP Service Bureau also assigned No. U16197 AA 0 to the Regulation S Securities. The Company filed a Registration Statement on Form S-3 with the SEC with respect to the Rule 144A Securities and the Regulation D Securities and the common stock of the Company into which such Securities are convertible, for $47,250,000 in principal amount of the Securities. All of the Regulation D Securities have been converted into Rule 144A Securities. The Registration Statement was declared effective on April 19, 1996 (Registration No. 333-01085). The Company was thereafter assigned a new CUSIP number in March, 1997, namely 162825 AB 9, for the Rule 144A Securities and Regulation D Securities. Section 9.1 of the Original Indenture provides that the Company and the Trustee may amend or supplement the Original Indenture without the consent of any Holder to create additional covenants of the Company for the benefit of the Holders, or to surrender any right or power conferred upon the Company in the Original Indenture or to make any other change that does not adversely affect the rights of any Holder. The Company has requested the Trustee to join with the Company in the execution and delivery of this Second Supplemental Indenture for the purpose of amending the Indenture to permit holders of Regulation S Securities in registered form to exchange such securities for Rule 144A Securities bearing CUSIP number 162825 AB 9. All defined terms used herein and not defined shall have the meanings ascribed to them in the Original Indenture. In consideration of the premises, and for the equal and ratable benefit of all Holders of the Securities, intending to be legally bound, the parties hereto agree as follows. Section 1. Amendments to Indenture. Section 2.7 of the Indenture is ------------------------ hereby amended by adding new subsections (i) and (j) which shall read in their entirety as follows: "(i) At any time after July 31, 2001, the holder of any Registered Regulation S Security may exchange such Security for a new Rule 144A Security in definitive form of like aggregate principal amount and bearing CUSIP No. 162825 AB 9 or for an interest in the Rule 144A Global Security bearing CUSIP No. 162825 AB 9. Upon any exchange as provided in the preceding sentence, the Trustee shall cancel such Registered Regulation S Security and, in the case of an exchange for an interest in said Rule 144A Global Security, shall cause, or direct any custodian for such Rule 144A Global Security to cause, in accordance with the standing instructions and procedures existing between the Depositary and any such custodian, the aggregate principal amount of the Securities represented by said Rule 144A Global Security to be increased by the principal amount of the Registered Regulation S Security so cancelled. The Trustee shall not be required to receive in connection with any such exchange any certifications or opinions with respect to compliance with the United States securities laws and in connection with any such exchange may conclusively assume such compliance. Section 2. Exchange of Registered Regulation S Securities. ---------------------------------------------- A. In order to facilitate any exchange provided for in Section 2.7(i) or transfer provided for in Section 2B below of Registered Regulation S Securities for an interest in the Rule 144A Global Security bearing CUSIP No. 162825 AB 9, a new Rule 144A Global Security in the form attached hereto as Exhibit 1A not bearing the restrictive legend provided in Section 2.6(h) and - ---------- reflecting CUSIP No. 162825 AB 9 shall be immediately issued by the Company in an initial aggregate principal amount equal to the principal amount of the Securities represented by the currently outstanding Rule 144A Global Security simultaneously with the cancellation and return to the Company of the currently outstanding Rule 144A Global Security. The principal amount of the Securities represented by such new Rule 144A Global Security may be adjusted to reflect exchanges pursuant to Section 2.7(i) or transfers pursuant to Section 2B below. B. In order to facilitate any exchange provided for in Section 2.7(i) or any transfer provided for in the following paragraph of Registered Regulation S Securities bearing CUSIP No. U16197 AA 0 for definitive Rule 144A Securities, the Company immediately shall execute and deliver to the Trustee a supply of definitive Rule 144A Securities bearing CUSIP No.162825 AB 9 in the form attached hereto as Exhibit 1A but without the restrictive legend provided in ---------- Section 2.6(h) or the legend relating to global form (or the Schedule of Exchanges of 2 Definitive Notes annexed thereto) (a "Definitive Rule 144A Security") in such quantities as shall be reasonably requested by the Trustee. Any Holder of a Registered Regulation S Security bearing CUSIP No. U16197 AA 0 may transfer such Security to a person who will receive in lieu thereof either a Definitive Rule 144A Security or an interest in the Rule 144A Global Security bearing CUSIP No. 162825 AB 9. Upon any transfer as provided in the preceding sentence, the Trustee shall cancel such Registered Regulation S Security and, in the case of a transfer in exchange for an interest in said Rule 144A Global Security, shall cause, or direct any custodian for such Rule 144A Global Security to cause, in accordance with the standing instructions and procedures existing between the Depositary and any such custodian, the aggregate principal amount of the Securities represented by said Rule 144A Global Security to be increased by the principal amount of the Registered Regulation S Security so cancelled. The Trustee shall not be required to receive in connection with any such transfer any certifications or opinions with respect to compliance with the United States securities laws and in connection with any such transfer may conclusively assume such compliance. Section 3. Miscellaneous. ------------- A. Except as expressly amended by this Second Supplemental Indenture, the Indenture, as heretofore amended, shall continue in full force and effect in accordance with its terms. B. The parties may sign any number of copies of this Second Supplemental Indenture. Each signed copy shall be an original, but all of them together shall represent the same agreement. One signed copy shall be enough to prove this Second Supplemental Indenture. C. The Trustee and the Company agree to cooperate with The Depository Trust Company to communicate notice of this Second Supplemental Indenture to all holders of the Regulation S Securities as promptly and as effectively as practicable upon execution of this Second Supplemental Indenture in order to permit such holders to effect an exchange of their Securities for Securities bearing CUSIP No. 162825 AB 9, as promptly as possible. D. The recitals contained herein shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness of same. The Trustee makes no representations as to the adequacy of this Second Supplemental Indenture, the validity hereof as to the Company or the due execution hereof by the Company. 3 IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental Indenture to be duly executed as of the date first written above. CHECKPOINT SYSTEMS, INC. Attest:/s/ Neil D. Austin By: /s/ W. Craig Burns ----------------------------- ------------------------------- Secretary Executive Vice President THE CHASE MANHATTAN BANK, as Trustee Attest:/s/ Denise Moore By: /s/ David G. Safer ----------------------------- ------------------------------- Trust Officer Vice President 4 EXHIBIT 1A - RULE 144A GLOBAL SECURITY Unless and until it is exchanged in whole or in part for Securities in definitive form, this Security may not be transferred except as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (55 Water Street, New York, New York) ("DTC"), to the issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or such other name as may be requested by an authorized representative of DTC (and any payment is made to Cede & Co. or such other entity as may be requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. CHECKPOINT SYSTEMS, INC. (Incorporated in the State of Pennsylvania) 5 1/4% CONVERTIBLE SUBORDINATED DEBENTURE DUE 2005 CUSIP No. 162825 AB 9 No. R-4 U.S. $59,092,000 Checkpoint Systems, Inc., a corporation duly incorporated and existing under the laws of the Commonwealth of Pennsylvania (the "Company"), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of $59,092,000 United States Dollars on November 1, 2005 upon presentation and surrender hereof and to pay interest thereon, from October 24, 1995 or from the most recent Interest Payment Date (as defined below) to which interest has been paid or duly provided for, semiannually in arrears on May 1 and November 1 in each year (each an "Interest Payment Date"), commencing May 1, 1996, at the rate of 5 1/4% per annum until the principal hereof is paid or made available for payment. Interest hereon shall be calculated on the basis of a 360-day year comprised of twelve 30-day months. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture (as defined on the reverse hereof), be paid to the person in whose name this Security is registered at the close of business on the Interest Record Date for such interest payment, which shall be October 15 or April 15 (whether or not a Business Day) next preceding such Interest Payment Date. To the extent lawful, the Company shall pay interest on overdue principal and overdue installments of interest at the rate borne by this Security, compounded semi-annually. Except as otherwise provided in the Indenture, any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Interest Record Date and, together with Defaulted Interest relating thereto, may be paid at any time in any lawful manner, all as more fully provided in the Indenture. Payment of interest on this Security shall be made by United States dollar check (or in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts) drawn on a bank in the City of New York and mailed to the person entitled thereto at his address as it shall appear in the Security Register, or (if arrangements satisfactory to the Company and the Trustee (as defined on the reverse hereof) are made) by wire transfer to a United States dollar account maintained by the payee with a bank in the City of New York; provided, however, that if such mailing is not possible and no such application - -------- ------- shall have been made, payment of interest shall be made at the principal corporate trust office of the Trustee, or such other office or agency of the Company as may be designated for such purpose in the City of New York, in United States currency. Reference is hereby made to the further provisions of this Security set forth under Terms and Conditions of the Securities on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. This Security shall not become valid or enforceable for any purpose unless and until the certificate of authentication hereon shall have been manually signed by a duly authorized officer of the Trustee. IN WITNESS WHEREOF, the Company has caused this Security to be duly executed in its corporate name and under its corporate seal by the manual or facsimile signature of a duly authorized signatory. Dated: July 31, 2001 CHECKPOINT SYSTEMS, INC. [Corporate Seal] By:/s/ W. Craig Burns ----------------------------------------- Name: W. Craig Burns Title: Executive Vice President Attest: /s/ Neil D. Austin - ---------------------------- CERTIFICATE OF AUTHENTICATION This is one of the Securities described in the within-mentioned Indenture. THE CHASE MANHATTAN BANK as Trustee By: ----------------------------------------- Authorized Officer Dated: ______, 2001 -2- (REVERSE OF SECURITY) Terms and Conditions of the Securities 1. General. ------- (a) This Security is one of a duly authorized issue of securities of the Company designated as its 5 1/4% Convertible Subordinated Debentures due 2005 (herein called the "Securities"), limited in aggregate principal amount to U.S.$120,000,000. The Company issued the Securities under an Indenture, dated as of October 24, 1995, between the Company and The Chase Manhattan Bank (formerly called Chemical Bank), as trustee (the "Trustee"), which was subsequently amended by that certain First Supplemental Indenture dated as of February 27, 1998 and that certain Second Supplemental Indenture dated as of July 31, 2001 (as amended, the "Indenture"). Capitalized terms herein are used as defined in the Indenture unless otherwise defined herein. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act, as in effect on the date of the Indenture. The Securities are subject to all such terms, and Holders of Securities are referred to the Indenture and said Act for a statement of them. The Securities are general unsecured obligations of the Company. (b) The Securities are issuable as bearer securities (the "Bearer Securities"), with interest Coupons attached, in the denominations of U.S.$1,000 and U.S.$10,000, and as registered securities (the "Registered Securities"), without coupons, in denominations of U.S. $1,000 and integral multiples thereof. The Registered Securities, and transfers thereof, shall be registered as provided in the Indenture. The holder of any Bearer Security or any Coupon and the registered holder of a Registered Security shall (to the fullest extent permitted by applicable law) be treated at all times, by all persons and for all purposes, except as provided in the Indenture, as the absolute owner of such Security or Coupon, as the case may be, regardless of any notice of ownership, theft or loss or of any writing thereon. 2. Additional Amounts. The Company will pay, as additional interest -------------------- ("Additional Amounts"), to the Holder of this Security or of any Coupon appertaining hereto who is a United States Alien (as defined below) such amounts as may be necessary in order that every net payment of the principal of and premium, if any, and interest on this Security, after withholding for or on account of any present or future tax, assessment or other governmental charge imposed upon or as a result of such payment by the United States or any political subdivision or taxing authority thereof or therein, will not be less than the interest provided herein or any Coupon appertaining hereto to be then due and payable; provided, however, -------- ------- that the foregoing obligation to pay Additional Amounts shall not apply to: (a) any tax, assessment or other governmental charge which would not have been so imposed but for (i) the existence of any present or former connection between such Holder (or between a fiduciary, settlor, beneficiary, member or stockholder of, or a person holding a power over, such Holder, if such Holder is an estate, trust, partnership or corporation) and the United States, including, without limitation, such Holder (or such fiduciary, settlor, beneficiary, member, stockholder or person holding a power) being or having been a citizen or resident or treated as a resident thereof or being or having been engaged in a trade or business therein or being or having been present therein or having or having had a permanent establishment therein, (ii) such Holder's present or former status as a personal holding company, foreign personal holding company, passive foreign investment company, foreign private foundation or other foreign tax-exempt entity or controlled foreign corporation for United States tax purposes or a corporation which accumulates earnings to avoid United States Federal income tax, or (iii) such Holder's status as a bank extending credit pursuant to a loan agreement entered into in the ordinary course of business; (b) any tax, assessment or other governmental charge which would not have been so imposed but for the presentation by the Holder of this Security or any Coupon appertaining hereto for payment on a date more than 10 days after the date on which such payment became due and payable or on the date on which payment thereof is duly provided, whichever occurs later; (c) any estate, inheritance, gift, sales, transfer or personal or intangible property tax or any similar tax, assessment or other governmental charge; (d) any tax, assessment or other governmental charge which would not have been imposed but for the failure to comply with certification, information, documentation or other reporting requirements concerning the nationality, residence, identity or present or former connection with the United States of the Holder or beneficial owner of such Security or any related Coupon if such compliance is required by statute, regulation or ruling of the United States or any political subdivision or taxing authority thereof or therein as a precondition to relief or exemption from such tax, assessment or other governmental charge; (e) any tax, assessment or other governmental charge which is payable otherwise than by deduction or withholding from payments of principal of and premium, if any, or interest on this Security; (f) any tax, assessment or other governmental charge imposed on interest received by a person holding, actually or constructively, 10% or more of the total combined voting power of all classes of stock of the Company entitled to vote; or (g) any tax, assessment or other governmental charge required to be withheld by any paying agent from any payment of principal of and premium, if any, or interest on any Security or interest on any Coupon appertaining thereto if such payment can be made without such withholding by any other paying agent; nor shall Additional Amounts be paid with respect to any payment of the principal of or premium, if any, or interest on this Security (or cash in lieu of issuance of shares of Common Stock upon conversion) to a person other than the sole beneficial owner of such payment or that is a partnership or fiduciary to the extent such beneficial owner, member of such partnership or beneficiary or settlor with respect to such fiduciary would not have been entitled to the payment -2- of Additional Amounts had such beneficial owner, member, beneficiary or settlor been the holder of this Security or any Coupon appertaining hereto. The term "United States Alien" means any person who, for United States Federal income tax purposes, is (i) a foreign corporation, (ii) a foreign partnership one or more of the members of which are, for United States federal income tax purposes, foreign corporations, non-resident alien individuals or a nonresident alien fiduciaries of a foreign estate or trust, (iii) a non-resident alien individual or (iv) a non-resident alien fiduciary of a foreign estate or trust, and the term "United States" means the United States of America (including the several States and the District of Columbia), its territories, its possessions and other areas subject to its jurisdiction. Except as specifically provided herein and in the Indenture, the Company shall not be required to make any payment with respect to any tax, assessment or other governmental charge imposed by any government or any political subdivision or taxing authority thereof or therein. Whenever any Additional Amounts are to be paid on the Securities, the Company will give notice to the Trustee, the Paying Agent and any paying agency of the Company, all as provided in the Indenture. 3. Redemption. ---------- (a) The Company, at its option, may redeem the Securities, in whole or in part (but if in part, in aggregate principal amounts of no less than $1,000), at any time or times, upon notice as hereinafter prescribed, at a redemption price equal to 101% of their principal amount if redeemed before November 1, 2001 and 100% of their principal amount if redeemed on or after November 1, 2001, in each case together with accrued and unpaid interest to the date fixed for redemption. If fewer than all of the then outstanding Securities are to be redeemed, the Securities to be redeemed will be selected by the Trustee not more than 75 days prior to the date fixed for redemption, by such method as the Trustee shall deem fair and appropriate. Provisions of this Security that apply to Securities called for redemption also apply to portions of Securities called for redemption. The Trustee shall notify the Company promptly of the Securities or portions of Securities to be called for redemption. (b) If, at any time, the Company shall determine that as a result of any change in or amendment to the laws (or any regulations or rulings promulgated thereunder) of the United States or any political subdivision or taxing authority thereof or therein affecting taxation, or any amendment to or change in an official application or interpretation of such laws, regulations or rulings which change or amendment becomes effective on or after October 17, 1995 the Company has or will become obligated to pay to the holder of any Security or Coupon Additional Amounts and such obligation cannot be avoided by the Company taking reasonable measures available to it, then the Company may, at its election exercised at any time when such conditions continue to exist, redeem such Securities as a whole but not in part, upon notice as hereinafter prescribed, at a redemption price equal to 100% of the principal amount, together with accrued interest, if any, to the date fixed for redemption; provided that no such notice of redemption shall be given earlier than 90 days - -------- prior to the earliest date on which the Company would be obliged to pay such Additional Amounts were a payment in respect of such Securities -3- then due; and provided further, that at the time such notice is given, such -------- ------- obligation to pay such Additional Amounts remains in effect. Prior to any redemption of the Securities pursuant to the preceding paragraph, the Company shall provide the Trustee with one or more certificates (signed by the President or any Vice President and the Treasurer or the Secretary) of the Company on which the Trustee may conclusively rely to the effect that the Company is entitled to redeem such Securities pursuant to such paragraph and that the conditions precedent to the right of the Company to redeem such Securities pursuant to such paragraph have occurred and a written Opinion of Counsel (who may be an employee of the Company) stating that all legal conditions precedent to the right of the Company to redeem such Securities pursuant to such paragraph have occurred. (c) The Company shall, except as set forth in the next succeeding paragraph, redeem the Bearer Securities as a whole but not in part, upon notice as hereinafter prescribed, at 100% of their principal amount, together with interest accrued and unpaid to the date fixed for redemption, less applicable withholding taxes, if any, plus any applicable Additional Amounts payable, after the Company determines, based on a written Opinion of Counsel, that any certification, identification or information reporting requirement of any present or future United States law or regulation with regard to the nationality, residence or identity of a beneficial owner of a Bearer Security or a Coupon appertaining thereto who is a United States Alien would be applicable to a payment of principal of or interest on a Bearer Security or a Coupon appertaining thereto made outside the United States by the Company or a paying agent (other than a requirement (a) which would not be applicable to a payment made by the Company or any one of its paying agents (i) directly to the beneficial owner or (ii) to a custodian, nominee or other agent of the beneficial owner, or (b) which could be satisfied by the Holder, custodian, nominee or other agent certifying that the beneficial owner is a United States Alien, provided, however, in each case referred to in clauses (a)(ii) and (b) -------- ------- payment by such custodian, nominee or agent of the beneficial owner is not otherwise subject to any requirement referred to in this sentence). The Company shall make such determination and will notify the Trustee thereof in writing as soon as practicable, stating in the notice the effective date of such certification, identification, or information reporting requirement and the dates within which the redemption shall occur, and the Trustee shall give prompt notice thereof in accordance with the Indenture. The Company shall determine the Redemption Date by notice to the Trustee at least 75 days before the Redemption Date, unless shorter notice is acceptable to the Trustee. Such redemption of the Securities must take place on such date, not later than one year after the publication of the initial notice of the Company's determination of the existence of such certification, identification or information reporting requirement. The Company shall not so redeem the Bearer Securities, however, if the Company shall, based on a subsequent event, determine, based on a written Opinion of Counsel, not less than 30 days prior to the date fixed for redemption, that no such payment would be subject to any requirement described above, in which case the Company shall notify the Trustee, which shall give prompt notice of that determination in accordance with the Indenture and any earlier redemption notice shall thereupon be revoked and of no further effect. Notwithstanding the preceding paragraph, if and so long as the certification, identification or information reporting requirement referred to in the preceding paragraph would be fully satisfied by payment of United States withholding, backup withholding or similar taxes, the Company may elect, prior to the giving of the notice of redemption, to have the provisions of this paragraph apply in lieu of the provisions of -4- the preceding paragraph. In that event, the Company will pay such Additional Amounts (without regard to Section 2 hereof) as are necessary in order that, following the effective date of such requirements, every net payment made outside the United States by the Company or a paying agent of the principal of and interest on a Bearer Security or a Coupon appertaining thereto to a Holder who is a United States Alien (without regard to a certification, identification or information reporting requirement as to the nationality, residence or identity of such Holder), after deduction for United States withholding, backup withholding or similar taxes (other than withholding, backup withholding or similar taxes (i) which would not be applicable in the circumstances referred to in the parenthetical clauses of the first sentence of the next preceding paragraph or (ii) are imposed as a result of presentation of such Bearer Security or Coupon for payment more than 10 days after the date on which such payment becomes due and payable or on which payment thereof is duly provided for, whichever is later), will not be less than the amount provided in the Bearer Security or the Coupon to be then due and payable. If the Company elects to pay such Additional Amounts and as long as it is obligated to pay such Additional Amounts, the Company may subsequently redeem the Bearer Securities, at any time, in whole but not in part, upon not more than 60 days nor less than 30 days notice, given as hereinafter prescribed, at 100% of their principal amount, plus accrued interest to the date fixed for redemption and Additional Amounts, if any. (d) If there shall occur a Change of Control (as defined in the Indenture) with respect to the Company, then the Holder of this Security shall have the right, at such Holder's option, exercised in accordance with this Section 3(d), to require the Company to purchase this Security, in whole but not in part, on the Holder Redemption Date at a Redemption Price equal to 100% of the principal amount, together with accrued interest to the Holder Redemption Date. Notwithstanding the fact that a Security is called for redemption by the Company otherwise than pursuant to this Section 3(d), each Holder of a Security desiring to exercise the option for redemption set forth in this Section 3(d) shall, as a condition to such redemption, on or before the close of business on the fifth Business Day prior to the Holder Redemption Date, surrender the Security to be redeemed (together with all unmatured Coupons, if applicable), in whole but not in part, together with the Redemption Notice hereon duly executed at the place or places specified in the notice required by Section 3(e) and otherwise comply with the provisions of Section 3(f). A Holder of a Security who has tendered a Redemption Notice (i) will be entitled to revoke its election by delivering a written notice of such revocation together with the Holder's non-transferable receipt for such Security to the office or agency of the Company designated as the place for the payment of the Securities to be so redeemed on or before the Holder Redemption Date and (ii) will retain the right to convert its Securities into shares of Common Stock of the Company on or before the close of business on the fifth day (or if such day is not a Business Day, on the next succeeding Business Day) next preceding the Holder Redemption Date. In connection with any repurchase of Securities pursuant to this Section 3(d), the Company will comply with any applicable rules and regulations promulgated by the U.S. Securities and Exchange Commission and nothing herein, including the time periods in which redemption is to occur, shall require the Company to take action which violates such applicable rules and regulations. -5- (e) Notice of any redemption or notice in connection with a Change of Control will be given in accordance with Section 3.1 of the Indenture. (f) If (i) notice of redemption has been given in the manner set forth in Section 3.1 of the Indenture with respect to Securities to be redeemed at the option of the Company, or (ii) notice of redemption has been given by the Holder of a Security to be redeemed pursuant to Section 3(d) hereof, the Securities so to be redeemed shall become due and payable on the applicable Redemption Date specified in such notice and upon presentation and surrender of the Securities at the place or places specified in the notice given by the Company with respect to such redemption, together in the case of Bearer Securities with all appurtenant Coupons, if any, maturing subsequent to the Redemption Date, the Securities shall be paid and redeemed by the Company, at the places and in the manner and currency herein specified and at the Redemption Price together with accrued interest, if any, to the Redemption Date; provided, however, that -------- ------- interest due in respect of Coupons maturing on or prior to the Redemption Date shall be payable only upon the presentation and surrender of such Coupons (at an office or agency located outside of the United States of America). If any Bearer Security surrendered for redemption shall not be accompanied by all appurtenant Coupons maturing after the Redemption Date, such Security may be paid after deducting from the amount otherwise payable an amount equal to the face amount of all such missing Coupons, or the surrender of such missing Coupon or Coupons may be waived by the Company and the Trustee if they are furnished with such security or indemnity as they may require to save each of them and each other paying agency of the Company harmless. From and after the Redemption Date, if monies for the redemption of Securities shall have been available at the principal corporate trust office of the Trustee for redemption on the Redemption Date, the Securities shall cease to bear interest, the Coupons for interest appertaining to Bearer Securities maturing subsequent to the Redemption Date shall be void, and the only right of the holders of such Securities shall be to receive payment of the Redemption Price together with accrued interest to the Redemption Date. If monies for the redemption of the Securities are not made available by the Company for payment until after the Redemption Date, the Securities shall not cease to bear interest until such monies have been so made available. 4. Conversion. ---------- (a) Subject to and upon compliance with the provisions of the Indenture, a holder of Securities is entitled, at its option, at any time on and after the Exchange Date and prior to the close of business on November 1, 2005 to convert such Security (or any portion of the principal amount thereof which is U.S.$1,000 or an integral multiple thereof), at the principal amount thereof, or of such portion, into fully paid and nonassessable shares ("Conversion Shares") of common stock, par value $.10 per share ("Common Stock"), of the Company (calculated as to each conversion to the nearest 1/1000 of a share) at a Conversion Price equal to U.S.$36.75 aggregate principal amount of Securities for each Conversion Share (the "Conversion Price") (or at the current adjusted Conversion Price if an adjustment has been made as provided herein) by surrender of the Security, together with (i) if a Bearer Security, all unmatured Coupons and any matured Coupons in default appertaining thereto, or (ii) if a Registered Security (if so required by the Company or the Trustee), instruments of transfer in form satisfactory to the Company and the Trustee, duly executed by the registered holder or by his duly authorized attorney, and, in either case, (iii) the Conversion Notice hereon duly executed (x) at the principal corporate trust office of the Trustee, or at such other office or agency of the Company as may be designated by -6- it for such purpose in the City of New York, or (y) subject to any laws or regulations applicable thereto and subject to the right of the Company to terminate the appointment of any such conversion agency, at the London office of The Chase Manhattan Bank (formerly Chemical Bank) located at Trinity Tower, 9 Thomas More Street, London E1W1YT, England, and Banque Internationale a Luxembourg S.A., 69, route d'Esch, L1470 Luxembourg, or at such other offices or agencies as the Company may designate; provided, however, that if any Security -------- ------- or a portion thereof is called for redemption by the Company, or the holder thereof elects to have such Security redeemed in whole by the Company pursuant to Section 3(d) hereof, then in respect of such Security (or, in the case of partial redemption by the Company, such portion thereof) the right to convert such Security (or, in the case of partial redemption by the Company, such portion thereof) shall expire (unless the Company defaults in making the payment due upon redemption) at the close of business on the fifth day (or if such date is not a Business Day, on the next succeeding Business Day) next preceding the Redemption Date or the Holder Redemption Date (unless in the latter case the holder shall have first revoked his redemption election in accordance with Section 3(d) hereof). (b) In the case of any Registered Security which is converted after any Interest Record Date and on or prior to the next succeeding Interest Payment Date, interest that is payable on such Interest Payment Date shall be payable on such Interest Payment Date notwithstanding such conversion, and such interest shall be paid to the person in whose name that Registered Security is registered at the close of business on such Interest Record Date. Except as otherwise provided in the immediately preceding sentence, no payment or adjustment shall be made upon any conversion on account of any interest accrued on the Securities surrendered for conversion or on account of any dividends or distributions on the Conversion Shares issued upon conversion. Registered Securities surrendered for conversion during the period after the close of business on any Interest Record Date next preceding any Interest Payment Date to the close of business on such Interest Payment Date shall (except in the case of Registered Securities or portions thereof which are called for redemption on a Redemption Date within such period) be accompanied by payment of an amount equal to the interest payable on such Interest Payment Date on the principal amount being surrendered for conversion. No fractions of shares or scrip representing fractions of shares will be issued or delivered on conversion, but instead of any fractional interest the Company shall pay a cash adjustment as provided in the Indenture. (c) (i) In case at any time the Company shall pay or make a stock dividend or other distribution on any class of equity securities of the Company in shares of Common Stock, the Conversion Price in effect at the opening of business on the day following the date fixed for the determination of stockholders entitled to receive such dividend or other distribution shall be reduced so that the same shall equal the price determined by multiplying such Conversion Price by a fraction of which the numerator 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 shall be the sum of such number of shares and the total number of shares of Common Stock constituting such dividend or other distribution, such adjustment to become effective immediately after the opening of business on the day following the date fixed for such determination; and in the event that such dividend or other distribution is not so made, or is made in part, the Conversion Price shall again be adjusted to be the Conversion Price which would -7- then be in effect (i) if such record date has not been fixed or (ii) based on the actual number of shares actually issued, as the case may be. (ii) In case at any time the Company shall (A) subdivide its outstanding shares of Common Stock into a greater number of shares, (B) combine its outstanding shares of Common Stock into a smaller number of shares, or (C) issue by reclassification of its shares of Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing corporation) any shares of capital stock, the Conversion Price in effect at the effective date of such subdivision, combination or reclassification shall be proportionately adjusted so that the holder of any Security surrendered for conversion after such time shall be entitled to receive the aggregate number and kind of shares which, if such Security had been converted immediately prior to such time, he would have owned upon such conversion and been entitled to receive upon such subdivision, combination or reclassification. Such adjustment shall become effective immediately after the effective date of such subdivision, combination or reclassification. Such adjustment shall be made successively whenever any event listed above shall occur. (iii) In case at any time the Company shall fix a record date for the issuance of rights or warrants to all holders of its Common Stock entitling them to subscribe for or purchase Common Stock at a price per share less than the Current Market Price per share of Common Stock on such record date, the Conversion Price in effect at the opening of business on the day following such record date shall be reduced so that the same shall equal the price determined by multiplying such Conversion Price by a fraction of which the numerator shall be the number of shares of Common Stock outstanding at the close of business on such record date plus the number of shares of Common Stock which the aggregate of the offering price of the total number of shares so offered for subscription or purchase would purchase at such Current Market Price per share of Common Stock and the denominator shall be the number of shares of Common Stock outstanding at the close of business on such record date plus the number of shares so offered for subscription or purchase, such reduction to become effective immediately after the opening of business on the day following such record date; provided, however, that no adjustment to the Conversion Price shall -------- ------- be made pursuant to this Section 4(c)(iii) if the holders of Securities receive, or are entitled to receive upon conversion or otherwise, the same rights or warrants as are issued to the holders of Common Stock, on the same terms and conditions as such rights or warrants are so issued to the holders of Common Stock. Such reduction shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, or are issued in part, or are issued but all or part of which expire unexercised, the Conversion Price shall again be adjusted to be the Conversion Price which would then be in effect (i) if such record date had not been fixed or (ii) based on the actual number of rights or warrants actually issued, as the case may be. (iv) In case at any time the Company shall fix a record date for the making of a distribution, by dividend or otherwise, to all holders of its shares of Common Stock, of evidences of its indebtedness or assets (including securities, but excluding (x) any dividend or distribution referred to in paragraph (i) of this subsection (c) and any rights or warrants referred to in paragraph (iii) of this subsection (c), and (y) any dividend, return of capital or distribution paid in cash out of the retained earnings of the Company), then in each such case the Conversion Price -8- in effect after such record date shall be determined by multiplying the Conversion Price in effect immediately prior to such record date by a fraction, of which the numerator shall be the total number of outstanding shares of Common Stock multiplied by the Current Market Price per share of Common Stock on such record date, less the fair market value (as determined by the Board of Directors of the Company, whose determination shall be conclusive and described in a statement filed with the Trustee) of the portion of the assets or evidences of indebtedness so to be distributed, and of which the denominator shall be the total number of outstanding shares of Common Stock multiplied by such Current Market Price per share of Common Stock. Such adjustment shall be made successively whenever such a record date is fixed and shall become effective immediately after the record date for the determination of stockholders entitled to receive the distribution; and in the event that such distribution is not so made, the Conversion Price shall again be adjusted to be the Conversion Price which would then be in effect if such record date has not been fixed. (v) The Company may make such adjustments in the Conversion Price, in addition to those required by paragraphs (i), (ii), (iii) and (iv) of this section, as it considers to be advisable in order that any event treated for United States Federal income tax purposes as a dividend of stock or stock rights shall not be taxable to the recipients. (vi) No adjustment in the Conversion Price shall be required unless such adjustment would require an increase or decrease of at least U.S.$.25 in such Conversion Price; provide, however, that any adjustment which by reason of ------- ------- this paragraph (vi) is not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this subsection (c) shall be made to the nearest cent or to the nearest 1/1000 of a share, as the case may be. (d) Whenever the Conversion Price is adjusted and in the event of certain other corporate actions, as herein provided, the Company shall give notice, all as provided in the Indenture. (e) The Company shall use its reasonable best efforts to cause all registrations with, and to obtain any approvals by, any governmental authority under any Federal or state law of the United States that may be required before the Conversion Shares (or other securities issuable upon conversion of the Securities) may be lawfully issued or transferred and delivered. 5. Transfer and Exchange of Securities. ----------------------------------- (a) Title to Bearer Securities and coupons shall pass by delivery. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of Registered Securities is registrable on the Security Register upon surrender of a Registered Security for registration of transfer at the office or agency of the Trustee in the City of New York, or, subject to applicable laws and regulations, at the office of the paying agency in Luxembourg, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the holder thereof or his attorney duly authorized in writing, and thereupon one or more new Registered Securities, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. -9- (b) As provided in the Indenture and subject to certain limitations therein set forth, Bearer Securities (with all unmatured Coupons appertaining thereto) are exchangeable at, subject to applicable laws and regulations, the offices of the paying agencies in London and Luxembourg or as designated by the Company for such purpose pursuant to the Indenture, for an equal aggregate principal amount of Registered Securities and/or Bearer Securities of authorized denominations, and Registered Securities are exchangeable at the principal corporate trust office of the Trustee in the City of New York or, subject to applicable laws and regulations, the offices of the paying agencies in London and Luxembourg or as designated by the Company for such purpose pursuant to the Indenture, for an equal aggregate principal amount of Registered Securities of authorized denominations as requested by the Holder surrendering the same. Registered Securities will not be exchangeable for Bearer Securities. The Company shall not be required (a) to exchange Bearer Securities for Registered Securities during the period between the close of business on any Interest Record Date and the opening of business on the next succeeding Interest Payment Date, (b) to exchange any Bearer Security (or portion thereof) for a Registered Security if the Company shall determine and inform the Trustee in writing that, as a result thereof, the Company may incur adverse consequences under the Federal income tax laws and regulations (including proposed regulations) of the United States in effect or proposed at the time of such exchange, or (c) in the event of a redemption in part, (i) to register the transfer of Registered Securities or to exchange Bearer Securities for Registered Securities during a period of 15 days immediately preceding the date notice is given identifying the serial numbers of the Securities called for such redemption; (ii) to register the transfer of or exchange any such Registered Securities, or portion thereof, called for redemption; or (iii) to exchange any such Bearer Securities called for redemption; provided, however, that a Bearer Security called for redemption -------- ------- may be exchanged for a Registered Security which is simultaneously surrendered, with written instruction for payment on the Redemption Date, unless the Redemption Date is during the period between the close of business on any Interest Record Date and the close of business on the next succeeding Interest Payment Date, in which case such exchange may only be made prior to the close of business on the Interest Record Date immediately preceding the Redemption Date. The Company also shall not be required to exchange Securities if, as a result thereof, the Company would incur adverse consequences under United States Federal income tax laws in effect at the time of such exchange. In the event of redemption or conversion of a Registered Security in part only, a new Registered Security or Securities for the unredeemed or unconverted portion hereof will be issued in the name of the holder thereof. (c) The costs and expenses of effecting any exchange or registration of transfer pursuant to the foregoing provisions, except for the expenses of delivery (if any) by other than regular mail and except, if the Company shall so require, the payment of a sum sufficient to cover any tax or other governmental charge or insurance charges that may be imposed in relation thereto, will be borne by the Company. (d) The Company has initially appointed the Trustee as registrar, transfer agent, paying agent and conversion agent acting through the Trustee's principal corporate trust office in the City of New York and its agents in London. The Company has also initially appointed Banque Internationale a Luxembourg S.A. as a transfer agent, paying agent and conversion agent. The Company may at any time terminate the appointment of the registrar and such agents and appoint additional or other registrars and agents or approve any change in an office through which the registrar or any agent acts; provided -------- -10- that, until all of the Securities have been delivered to the Trustee for cancellation, or monies sufficient to pay the Securities have been made available for payment and either paid or returned to the Company as provided in the Securities and the Indenture, the Company will maintain a paying agent and a conversion agent (i) in the City of New York in the United States for the payment of the principal and interest on Registered Securities and for the surrender of Securities for conversion or redemption and (ii) in a European city that, so long as the Securities are listed on the Luxembourg Stock Exchange and such exchange shall so require, shall be Luxembourg, for the payment of the principal and interest on Securities and for the surrender of Securities for conversion or redemption. 6. Meetings of Holders. ------------------- A meeting of holders of Securities may be called at any time and from time to time in the manner and for the purposes set forth in the Indenture. The Trustee may at any time call a meeting of holders of the Securities to be held at such time and at such place in any of such designated locations as the Trustee shall determine. Notice of every meeting of holders shall be made as specified in the Indenture. 7. Amendment; Supplement: Waiver. ----------------------------- Subject to certain exceptions, the Indenture or the Securities may be amended or supplemented, and any existing Default or Event of Default or compliance with any provision may be waived, with the written consent of the Holders of a majority in aggregate principal amount of the Securities then outstanding. Without notice to or consent of any Holder, the parties thereto may amend or supplement the Indenture or the Securities to, among other things, cure any ambiguity, defect or inconsistency, or make any other change that does not adversely affect the rights of any Holder of a Security. 8. Subordination. ------------- Payment of principal, premium, if any, interest on and Additional Amounts with respect to the Securities is subordinated, in the manner and to the extent set forth in the Indenture, to the prior payment in full of all Senior Indebtedness. 9. Successors. ---------- Except as otherwise provided in the Indenture, when a successor assumes all the obligations of its predecessor under the Securities and the Indenture, the predecessor will be released from those obligations. 10. Defaults and Remedies. --------------------- If an Event of Default occurs and is continuing (other than an Event of Default relating to certain events of bankruptcy, insolvency or reorganization in which events all principal, accrued interest and Additional Amounts, if any, with respect to the Securities will be immediately due and payable without any declaration or other act on the part of the Trustee or the Holders), then in every such case, unless the principal of all of the Securities shall have already become due and payable, either the Trustee or the Holders of 25% in aggregate principal -11- amount of Securities then outstanding may declare all the Securities to be due and payable immediately in the manner and with the effect provided in the Indenture. Holders of Securities may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Securities. Subject to certain limitations, Holders of a majority in aggregate principal amount of the Securities then outstanding may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of Securities notice of any continuing Default or Event of Default (except a Default in payment of principal, interest or Additional Amounts), if it determines that withholding notice is in their interest. 11. No Recourse Against Others. -------------------------- No stockholder, director, officer or employee, as such, past, present or future, of the Company or any successor corporation shall have any personal liability in respect of the obligations of the Company under the Securities or the Indenture by reason of his, her or its status as such stockholder, director, officer or employee. Each Holder of a Security by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Securities. 12. Non-Business Days. In any case where the date of maturity of the principal ------------------ of or interest on (or Additional Amounts, if any) the Securities or the date fixed for redemption of any Security shall be at any place of payment a day other than a Business Day, then payment of principal or interest (or Additional Amounts, if any) need not be made on such date at such place but may be made on the next succeeding Business Day at such place of payment, with the same force and effect as if made on the date of maturity or the date fixed for redemption, and no interest shall accrue for the period after such date. 13. Notices. All notices to the Holders of Securities will be published on a ------- Business Day in Authorized Newspapers in the City of New York and in London, and, as long as the Securities are listed on the Luxembourg Stock Exchange, in an Authorized Newspaper in Luxembourg or, if either publication in London or Luxembourg is not practical, in an Authorized Newspaper in any country in Europe. Notices shall be deemed to have been given on the date of publication as aforesaid or, if published on different dates, on the date of the first such publication. A copy of each notice will be mailed by the Trustee, on behalf of and at the expense of the Company, by first-class mail to each holder of a Registered Security at the registered address of such holder as the same shall appear in the Security Register on the day fifteen days prior to such mailing. The Trustee shall promptly furnish to the Company, the Paying Agent and to each other paying agency of the Company a copy of each notice so published or mailed. 14. Governing Law. ------------- (a) The Indenture, this Security and any coupons appertaining hereto shall be governed by and construed in accordance with the laws of the State of New York, United States of America, without regard to principles of conflicts of laws. -12- (b) The Company has appointed the Trustee as its agent upon whom process may be served in any legal action or proceeding relating to or arising out of this Security, the Indenture or any Coupon appertaining hereto. 15. Authentication. This Security and any Coupon appertaining thereto shall not -------------- become valid or obligatory for any purpose until the certificate of authentication hereon shall have been duly signed by the Trustee acting under the Indenture. 16. Warranty of the Issuer. Subject to Section 15 hereof, the Company hereby ---------------------- certifies and warrants that all acts, conditions and things required to be done and performed and to have happened precedent to the creation and issuance of this Security and any coupons appertaining thereto, and to constitute the same legal, valid and binding obligations of the Company enforceable in accordance with their terms, have been done and performed and have happened in due and strict compliance with all applicable laws. 17. Status as United States Real Property Holding Corporation. To the best of ---------------------------------------------------------- its knowledge, as of the date of the issuance of this Security, the Company is not a "United States real property holding corporation" as defined in Section 897(c)(2) of the Internal Revenue Code of 1986, as amended (the "Code"). A nonUnited States person disposing of this Security may request from the Company a statement as to whether this Security constitutes a "United States real property interest" (as defined in Code Section 897(c)(1)) as of the date of disposition. It may be necessary to obtain a statement that this Security does not constitute a "United States real property interest" prior to the time that a tax return would otherwise be required to be filed with the Internal Revenue Service with respect to such disposition in order to avoid a withholding tax on such disposition. If, at any time while this Security is outstanding, the Company determines that it is at such time a "United States real property holding corporation," it shall provide notice of such determination in accordance with the provisions of Section 13 hereof. The Holder of this Security can contact the Company at 101 Wolf Drive, P.O. Box 188, Thorofare, New Jersey 08086 to obtain information as to the United States income tax consequences of the classification of the Company as a "United States real property holding corporation." 18. Abbreviations and Defined Terms. ------------------------------- Customary abbreviations may be used in the name of a Holder of a Security or an assignee, such as: TEN COM ( = tenants in common), TEN ENT ( = tenants by the entireties), JT TEN ( = joint tenants with right of survivorship and not as tenants in common), CUST ( = Custodian), and U/G/M/A ( = Uniform Gifts to Minors Act). 19. CUSIP Numbers. ------------- Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company will cause CUSIP numbers to be printed on the Securities as a convenience to the Holders of the Securities. No representation is made as to the accuracy of such numbers as printed on the Securities and reliance may be placed only on the other identification numbers printed hereon. -13- 20. Additional Rights of Holders of Restricted Securities. ----------------------------------------------------- In addition to the rights provided to Holders of Securities under the Indenture, Holders of Restricted Securities shall have all the rights set forth in the Registration Rights Agreement. 21. Accounting Terms. All accounting terms not otherwise defined herein shall ----------------- have the meanings assigned to them in accordance with generally accepted accounting principles as applied in the United States. 22. Descriptive Headings. The descriptive headings appearing herein are for --------------------- convenience of reference only and shall not alter, limit or define the provisions hereof. The Company will furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement. Request may be made to: Checkpoint Systems, Inc. 101 Wolf Drive P.O. Box 188 Thorofare, New Jersey 08086 Attention: Secretary -14- TRANSFER NOTICE FOR VALUE RECEIVED, the undersigned Holder hereby sell(s), assign(s) and transfers) unto _______________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ whose taxpayer identification number is _____________________ and whose address including postal/zip code is ___________________________________________________ ________________________________________________________________________________ the within Security and all rights thereunder, hereby irrevocably constituting and appointing _____________________________________ attorney-in-fact to transfer said Security on the books of the Company with full power of substitution in the premises. Dated: Name: ----------------------------- --------------------------- By: --------------------------- Title: ------------------------- NOTICE: The signature of the Holder to this assignment must correspond with the name as written upon the face of the within instrument in every particular, without enlargement or any change whatsoever. SIGNATURE GUARANTEED ________________________________________ -15- CONVERSION NOTICE If (i) Registered Security of denomination U.S.$1,000 or (ii) Bearer Security of denomination U.S.$1,000: The undersigned holder of this Security hereby irrevocably exercises the option to convert this Security into shares of Common Stock of Checkpoint Systems, Inc. in accordance with the terms of this Security and directs that such shares be registered in the name of and delivered, together with a check in payment for any fractional share, to the undersigned unless a different name has been indicated below. If shares are to be registered in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto. Dated: ---------------------- ----------------------------- Signature MUST BE GUARANTEED IF STOCK IS TO BE ISSUED IN A NAME OTHER THAN THE REGISTERED HOLDER OF THE SECURITY If shares are to be registered in the name of and delivered to a person other than the holder, please print such person's name and address and, if this is a Restricted Security, complete Transfer Notice: ___________________________________________ ___________________________________________ ___________________________________________ HOLDER Please print name and address of holder: _____________________________ _____________________________ _____________________________ -16- CONVERSION NOTICE If (i) Registered Security of denomination greater than U.S.$1,000 or (ii) Bearer Security of denomination U.S.$10,000: The undersigned holder of this Security hereby irrevocably exercises the option to convert this Security, or portion hereof (which is U.S.$1,000 or an integral multiple thereof) below designated, into shares of Common Stock of Checkpoint Systems, Inc. in accordance with the terms of this Security, and directs that such shares, together with a check in payment for any fractional share and any Securities representing any unconverted principal amount hereof, be delivered to and be registered (if a Registered Security) in the name of the undersigned unless a different name has been indicated below. If shares or Securities are to be registered in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto. Dated: ----------------- ------------------------------------- Signature MUST BE GUARANTEED IF THE STOCK IS TO BE ISSUED IN A NAME OTHER THAN THE REGISTERED HOLDER OF THE SECURITY If shares or Securities are to registered If only a portion of the Securities in the name of a Person other than the is to be converted, please indicate: holder, please print such person's name and address and, if this is a Restricted Security, complete Transfer Notice: 1. Principal Amount to be converted: U.S.$____________________________ ______________________________ 2. Kind, amount and denomination of Securities representing unconverted ______________________________ principal amount to be issued: ______________________________ Bearer-U.S.$________________________ Denominations: U.S.$_______________ (U. S. $1,000 or $10,000) Registered-U.S.$____________________ Denominations: U.S.$_______________ (U.S.$1,000 or an integral multiple thereof) REGISTERED SECURITIES ARE NOT EXCHANGEABLE FOR BEARER SECURITIES. -17- REDEMPTION NOTICE UNDER SECTION 3(d) The undersigned holder of this Security hereby requests and instructs the Company to redeem this Security in accordance with the terms of Section 3(d) of this Security and directs that a check in payment of the redemption amount be delivered to the undersigned unless a different name has been indicated below. The undersigned understands that this request can be revoked by delivering written notice to the Paying Agent on or before the Holder Redemption Date, together with the undersigned's non-transferable receipt for such Security. Dated ------------------------ ___________________________________________ Signature MUST BE GUARANTEED IF CHECK IS TO BE MADE PAYABLE TO A NAME OTHER THAN THE REGISTERED HOLDER OF THE SECURITY If a check in payment of the redemption amount is to be delivered to a person other than the holder, please print such person's name and address: ________________________________ ________________________________ ________________________________ HOLDER Please print name and address of holder: ________________________________________ ________________________________________ ________________________________________ -18- SCHEDULE OF EXCHANGES OF NOTES The following exchanges of a part of this Rule 144A Global Security for Registered Regulation S Securities have been made:
Principal Amount of this Global Amount of decrease Amount of increase Security following Signature of in Principal Amount in Principal Amount such authorized Officer of this Global of this Global decrease (or of Trustee or Date of Exchange Security Security increase) Security Registrar - ----------------------- --------------------- ------------------------- --------------------- ---------------------
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