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Filed pursuant to Rule 424(b)(5)
Registration Statement No. 333-36614
PRICING SUPPLEMENT NO. 2
March 7, 2001
(To Prospectus Supplement dated June 23, 2000
and Prospectus dated June 23, 2000)
$150,000,000
PEPSIAMERICAS, INC.
(formerly known as Whitman Corporation)
5.79% REMARKETABLE NOTES DUE MARCH 17, 2013
(REMARKETING DATE: MARCH 17, 2003)
The Notes will bear interest at the rate of 5.79% per year from their
date of issuance to, but excluding, March 17, 2003, which is the first
Remarketing Date, and then at a fixed or floating rate. Interest on the Notes
is payable on March 15 and September 15 of each year, beginning on September 15,
2001 and continuing until March 17, 2003, and then at the intervals described in
this pricing supplement.
On any Remarketing Date, the Notes will either be mandatorily tendered to
and purchased by Banc of America Securities LLC, as Remarketing Dealer, or
mandatorily redeemed by us. If purchased by the Remarketing Dealer, the Notes
will bear interest from the Remarketing Date at a rate to be determined as
described in this pricing supplement.
The Notes will mature on March 17, 2013, unless extended to the tenth
anniversary of the Fixed Rate Remarketing Date, which shall be no later than
March 17, 2014. We may redeem all of the Notes on any Remarketing Date and at
any time after the Fixed Rate Remarketing Date.
The Notes will be our unsecured and unsubordinated obligations and will
rank equal in priority with all of our existing and future unsecured and
unsubordinated indebtedness.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus supplement or the accompanying prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
Per Note Total
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Price to Public (1).................................. 99.995% $149,992,500
Underwriting Discount................................ 0.300% $ 450,000
Proceeds to PepsiAmericas (before expenses) (2)...... 99.695% $149,542,500
(1) Plus accrued interest from March 14, 2001, if settlement occurs after that
date.
(2) Excludes consideration for the option to remarket the Notes paid to us by
the Remarketing Dealer.
The underwriters are offering the Notes subject to various conditions. The
underwriters expect to deliver the Notes to purchasers on or about March 14,
2001 through the book-entry facilities of The Depository Trust Company.
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BANC OF AMERICA SECURITIES LLC SALOMON SMITH BARNEY
BANC ONE CAPITAL MARKETS, INC. CHASE SECURITIES INC.
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SUMMARY OF TERMS OF THE NOTES
The following summary is a short description of the main terms of the
offering of the Notes. For that reason, this summary does not contain all of the
information that may be important to you. To fully understand the terms of the
offering of the Notes, you will need to read both this pricing supplement and
the accompanying prospectus supplement and prospectus, each in its entirety.
Issuer................................. PepsiAmericas, Inc.
Trustee................................ Bank One Trust Company, National
Association.
Offered Securities..................... We will issue $150,000,000 aggregate
principal amount of 5.79% Remarketable
Notes due March 17, 2013. The Notes
will mature on March 17, 2013, unless
extended to the tenth anniversary of
the Fixed Rate Remarketing Date, which
shall be no later than March 17, 2014;
however, we may redeem, or be required
to redeem, all of the Notes before the
maturity date.
Interest Rates......................... The Notes will bear interest at the
rate of 5.79% per year from the date of
issuance to, but excluding, March 17,
2003, which is the first Remarketing
Date, and then at a rate or rates
described under "Certain Terms of the
Notes."
Interest Payment Dates................. We will pay interest on the Notes on
March 15 and September 15 of each
year, beginning on September 15, 2001
and continuing to March 17, 2003, and
then at intervals discussed under
"Certain Terms of the Notes."
Interest Accrual....................... The Notes will accrue interest at a
rate of 5.79% per annum from the date
of issuance to, but excluding,
March 17, 2003, computed on the basis
of a 360-day year consisting of twelve
30-day months. From March 17, 2003, the
Notes will accrue interest at a fixed
or floating rate, depending on our
decision. If the rate is fixed,
interest will be computed on the basis
of a 360-day year consisting of twelve
30-day months. If the rate is
floating, interest will be computed on
the basis of the actual number of days
in the applicable floating rate reset
period over a 360-day year.
For a more detailed description of the
payment of interest, you should refer
to the sections of this pricing
supplement entitled "Certain Terms of
the Notes -- Interest and Interest
Payment Dates," " -- Interest Rate to
Maturity" and " -- Floating Rate
Period."
Ranking................................ The Notes will rank equal in priority
with all of our existing and future
unsecured and unsubordinated
indebtedness. The Notes will rank
senior in right of payment to all of
our existing and future subordinated
debt.
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Mandatory Tender....................... We will enter into a Remarketing
Agreement with Banc of America
Securities LLC, as Remarketing Dealer.
This agreement gives the Remarketing
Dealer the option to purchase all of
the Notes on March 17, 2003 or on the
subsequent Remarketing Date, unless we
redeem them. The purchase price for
the Notes will be equal to 100% of the
aggregate principal amount outstanding
on the first Remarketing Date or the
Dollar Price (as defined in the
section of this pricing supplement
entitled "Certain Terms of the Notes
-- Interest Rate to Maturity") on the
subsequent Remarketing Date.
For a more detailed description of the
mandatory tender provisions of the
Notes, you should refer to the section
of this pricing supplement entitled
"Certain Terms of the Notes --
Mandatory Tender."
Mandatory Redemption................... If the Remarketing Dealer does not
purchase the Notes on any Remarketing
Date, the trustee, on behalf of the
beneficial owners, will require us to
redeem all of the Notes at a price
equal to 100% of the aggregate
principal amount outstanding on the
first Remarketing Date or the Dollar
Price on the subsequent Remarketing
Date, plus accrued and unpaid
interest, if any.
For a more detailed description of the
mandatory redemption provisions of the
Notes, you should refer to the section
of this pricing supplement entitled
"Certain Terms of the Notes --
Mandatory Redemption."
Optional Redemption.................... If the Remarketing Dealer elects to
purchase the Notes, we will have the
option to redeem all of the Notes on
March 17, 2003 or on the subsequent
Remarketing Date at a price equal to
the Dollar Price, plus accrued and
unpaid interest, if any.
Post-Remarketing Optional Redemption... We may redeem some or all of the Notes
at any time after the Fixed Rate
Remarketing Date at the
redemption prices plus accrued
and unpaid interest, if any, to
the post-remarketing redemption
date, as described in the section of
this pricing supplement entitled
"Certain Terms of the Notes --
Post-Remarketing Optional Redemption."
Ratings................................ The Notes are rated "A-" by Standard &
Poor's Ratings Group and "Baa1" by
Moody's Investors Service, Inc.
Sinking Fund........................... The Notes are unsecured and are not
entitled to any sinking fund.
Use of Proceeds........................ Our net proceeds from the sale of the
Notes (excluding consideration for the
option to remarket the Notes paid to us
by the Remarketing Dealer) will be
approximately $149.5 million. We
expect to use the net proceeds
primarily to repay outstanding
commercial paper. See "Use of
Proceeds."
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RECENT DEVELOPMENTS
On January 22, 2001, we filed a Certificate of Ownership and Merger with
the Secretary of State of the State of Delaware to effect a change in our name
from "Whitman Corporation" to "PepsiAmericas, Inc." On January 24, 2001, shares
of our common stock began trading on The New York Stock Exchange under the name
PepsiAmericas and symbol "PAS."
USE OF PROCEEDS
We intend to use our net proceeds from the sale of the Notes, which will
be approximately $149.5 million (excluding consideration for the option to
remarket the Notes paid to us by the Remarketing Dealer), primarily to repay
outstanding commercial paper maturing within 30 days and having an average
interest rate of 6.0% as of March 7, 2001.
CERTAIN TERMS OF THE NOTES
The following description of the particular terms of the Notes, which
constitute an issue of our Medium Term Notes, Series C, supplements and, to the
extent that it is inconsistent, replaces the description of the general terms
and provisions of the Notes set forth under the heading "Description of the
Notes" in the accompanying prospectus supplement and under the heading
"Description of the Debt Securities" in the accompanying prospectus. We will
issue the Notes under the Indenture dated as of January 15, 1993, as
supplemented by the First Supplemental Indenture dated as of May 20, 1999 (as so
supplemented, the "Indenture"), between us and Bank One Trust Company, National
Association, as Trustee. We have summarized select portions of our Indenture
below. The summary is not complete and is qualified in its entirety by reference
to our Indenture.
GENERAL
The Notes will initially be limited to $150,000,000 aggregate principal
amount and will mature on March 17, 2013, unless extended to the tenth
anniversary of the Fixed Rate Remarketing Date (as defined below), which shall
be no later than March 17, 2014. We may redeem, or be required to redeem, the
Notes before that maturity date as described in "Mandatory Redemption" below. We
may also redeem all of the Notes on any Remarketing Date, as described in
"Optional Redemption," and at any time after the Fixed Rate Remarketing Date, as
described in "Post-Remarketing Optional Redemption" below. The Notes may also be
purchased by the Remarketing Dealer as described in "Mandatory Tender" below.
The Notes will rank equal in priority with all of our existing and future
unsecured and unsubordinated indebtedness. The Notes will rank senior in right
of payment to all of our existing and future subordinated debt.
The Notes are unsecured and are not entitled to any sinking fund.
The Notes will initially be issued only in registered, book-entry form, in
denominations of $1,000 and any integral multiple of $1,000 as described under
"Book-Entry Only Issuance -- DTC." We will issue global securities in
denominations that together equal the total principal amount of the outstanding
Notes.
If any interest, principal or other payment date of the Notes (including
any payment date in connection with the mandatory tender or any mandatory
redemption as described below) does not fall on a Business Day, a payment
otherwise payable on that day will be made on the next succeeding Business Day.
It will have the same effect as if made on the actual payment date, and no
interest will accrue for the period from and after such Interest Payment Date,
maturity date or other payment date, except in the case of an Interest Payment
Date or other payment date occurring during the Floating Rate Period.
"Business Day" means any day other than a Saturday or Sunday or a day on
which banking institutions in New York City are authorized or obligated by law
or executive order to close.
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We will agree with the Remarketing Dealer that we will not cause or permit
the terms or provisions of the Notes to be modified in any way and that we may
not make open market or other purchases of the Notes prior to the first
Remarketing Date, without the prior written consent of the Remarketing Dealer.
INTEREST AND INTEREST PAYMENT DATES
The Notes will bear interest at a rate of 5.79% per year, from the date
of issuance to, but excluding, March 17, 2003. We will pay interest semiannually
on March 15 and September 15, beginning on September 15, 2001.
"Remarketing Date(s)" means:
- March 17, 2003, if the Remarketing Dealer has elected to purchase
the Notes and we have not elected to exercise our Floating Period
Option (as defined under "Floating Rate Period" below); or
- March 17, 2003 and a subsequent Remarketing Date which shall fall on
the 17th day of any one of the 12 consecutive months thereafter
until March 17, 2004 on which the Floating Period Termination Date
(as defined under "Floating Rate Period" below) occurs, if the
Remarketing Dealer has elected to purchase the Notes and we have
elected to exercise our Floating Period Option.
Unless we have chosen, or are required, to redeem the Notes, we will pay
interest on the Notes, accruing from the Fixed Rate Remarketing Date (as defined
below), semiannually on each day that is a six-month anniversary of such date.
Interest on the Notes from the Fixed Rate Remarketing Date will be computed on
the basis of a 360-day year consisting of twelve 30-day months.
"Fixed Rate Remarketing Date" means March 17, 2003, if the Remarketing
Dealer has elected to purchase the Notes and we have not elected to exercise our
Floating Period Option, or the subsequent Remarketing Date on which the Floating
Period Termination Date occurs in the event that we have elected to exercise our
Floating Period Option.
Interest on the Notes accruing during any Floating Rate Reset Period (as
defined under "Floating Rate Period" below) will be payable on the next
succeeding Reference Rate Reset Date (as defined under "Floating Rate Period"
below). Interest on the Notes during any Floating Rate Reset Period will be
computed on the basis of the actual number of days in such Floating Rate Reset
Period over a 360-day year.
Interest payable on any Interest Payment Date will be payable to the
persons in whose names the Notes are registered at the close of business on the
15th calendar day (whether or not a Business Day) immediately preceding the
related Interest Payment Date.
Interest payments will be in the amount of interest accrued from and
including the next preceding Interest Payment Date (or from and including the
date of issuance if no interest has been paid or duly provided with respect to
the Notes) to, but excluding, the relevant Interest Payment Date, Remarketing
Date or the maturity date, as the case may be.
INTEREST RATE TO MATURITY
If the Remarketing Dealer elects to purchase the Notes, then by 3:30 p.m.,
New York City time, on the third Business Day immediately preceding any
Remarketing Date (a "Floating Rate Spread Determination Date" or the "Fixed Rate
Determination Date," depending on the following election, and each, a
"Determination Date"), the Remarketing Dealer will determine either (a) the
Floating Rate Spread (as defined under "Floating Rate Period" below) in the case
where we have elected to exercise our Floating Period Option or (b) the Interest
Rate to Maturity (as determined below) to the nearest 0.01% per annum, unless we
have chosen, or are required, to redeem the Notes. Each Floating Period Interest
Rate (as defined under "Floating Rate Period" below) will equal the sum of a
Reference Rate and a Floating Rate Spread. The Interest Rate to Maturity will be
equal to the sum of 5.0% (the "Base Rate") and the Applicable Spread (as defined
below), which will be based on the Dollar Price (as defined
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below) of the Notes. The Floating Period Interest Rate, the Interest Rate to
Maturity and the Dollar Price for the Notes as announced by the Remarketing
Dealer, absent manifest error, will be binding and conclusive upon the
beneficial owners, us and the trustee.
For this purpose, the following terms have the following meanings:
"Applicable Spread" means the lowest Fixed Rate Bid (as defined below),
expressed as a spread (in the form of a percentage or in basis points) above the
Base Rate for the Notes, obtained by the Remarketing Dealer by 3:30 p.m., New
York City time, on the Fixed Rate Determination Date, from the Fixed Rate Bids
quoted to the Remarketing Dealer by up to five Reference Corporate Dealers (as
defined below).
"Comparable Treasury Issues" for the Notes means the U.S. Treasury
security or securities selected by the Remarketing Dealer, as of the first
Determination Date, as having an actual or interpolated maturity or maturities
comparable to the remaining term of the Notes being purchased by the Remarketing
Dealer.
"Comparable Treasury Price" means, with respect to the first Remarketing
Date:
- the offer prices for the Comparable Treasury Issues
(expressed, in each case, as a percentage of its principal
amount) at 12:00 p.m., New York City time, on the first
Determination Date, as set forth on "Telerate Page 500" (or
such other page as may replace "Telerate Page 500"); or
- if such page (or any successor page) is not displayed or does
not contain such offer prices on such Determination Date, the
average of the Reference Treasury Dealer Quotations (as
defined below) for such Determination Date, after excluding
the highest and lowest such Reference Treasury Dealer
Quotations, or if the Remarketing Dealer obtains fewer than
four such Reference Treasury Dealer Quotations, the average of
all such Reference Treasury Dealer Quotations.
"Dollar Price" means, with respect to the Notes, (1) the principal amount
of the Notes, plus (2) the premium equal to the excess, if any, of (A) the
present value, as of the first Remarketing Date, of the Remaining Scheduled
Payments (as defined below) for such Notes, discounted to the first Remarketing
Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Treasury Rate (as defined below), over (B) the principal amount
of the Notes.
A "Fixed Rate Bid" means an irrevocable offer to purchase the aggregate
outstanding principal amount of the Notes at the Dollar Price, but assuming:
- a settlement date that is the Fixed Rate Remarketing Date
applicable to such Notes;
- a maturity date that is the tenth anniversary of the Fixed
Rate Remarketing Date; and
- a stated annual interest rate equal to the Base Rate plus the
spread bid by the applicable Reference Corporate Dealer.
"Fixed Rate Determination Date" means the third Business Day prior to the
Fixed Rate Remarketing Date.
"Reference Corporate Dealer" means each of up to five leading dealers of
publicly traded debt securities, including our debt securities, which shall be
selected by us. We will advise the Remarketing Dealer of our selection of
Reference Corporate Dealers no later than five Business Days prior to the Fixed
Rate Remarketing Date. One of the Reference Corporate Dealers we select will be
the Remarketing Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer, the offer prices for the Comparable Treasury Issues
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Remarketing Dealer by such Reference Treasury Dealer, by 3:30
p.m., New York City time, on the first Determination Date.
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"Reference Treasury Dealer" means each of up to five primary U.S.
government securities dealers (each, a "Primary Treasury Dealer") to be selected
by us, and their respective successors; provided, that if any of the foregoing
ceases to be, and has no affiliate that is, a Primary Treasury Dealer, we will
substitute for it another Primary Treasury Dealer. One of the Reference Treasury
Dealers we select will be the Remarketing Dealer.
"Remaining Scheduled Payments" means, with respect to the Notes, the
remaining scheduled payments of the principal and interest thereon, calculated
at the Base Rate applicable to such Notes, that would be due from but excluding
the first Remarketing Date to and including the maturity date; provided, that if
such Remarketing Date is not an Interest Payment Date, the amount of the next
succeeding scheduled interest payment, calculated at the Base Rate, will be
reduced by the amount of interest accrued, calculated at the Base Rate only, to
the first Remarketing Date.
"Telerate Page 500" means the display designated as "Telerate Page 500" on
Dow Jones Markets (or such other page as may replace "Telerate Page 500" on such
service), or such other service displaying the offer prices for the Comparable
Treasury Issues as may replace Dow Jones Markets.
"Treasury Rate" for the Notes means, with respect to the first Remarketing
Date, the rate per annum equal to the semiannual equivalent yield to maturity or
interpolated (on a day count basis) yield to maturity of the Comparable Treasury
Issues, assuming a price for the Comparable Treasury Issues (expressed as a
percentage of their principal amounts) equal to the Comparable Treasury Price
for such Remarketing Date.
FLOATING RATE PERIOD
Following the Remarketing Dealer's election to purchase the Notes in
connection with the first Remarketing Date, but prior to the fourth Business Day
preceding the first Remarketing Date (the "Floating Period Notification Date"),
we may elect to exercise our Floating Period Option. If we do, the Notes will
bear interest at the Floating Period Interest Rate until the earlier of March
17, 2004 or such date which otherwise would be the Reference Rate Reset Date
following the date on which we elect to terminate such Floating Rate Period (the
"Floating Rate Period Termination Notification Date") (March 17, 2004 or such
other Reference Rate Reset Date herein called the "Floating Period Termination
Date"). The Floating Rate Period Termination Notification Date shall be at least
four Business Days prior to such Reference Rate Reset Date. In the event that we
exercise our Floating Period Option, the maturity date of the Notes will be
extended to the tenth anniversary of the subsequent Remarketing Date, not to
exceed March 17, 2014. The amount of interest payable for each day that the
Notes are outstanding during the Floating Rate Period will be calculated by
dividing the Floating Period Interest Rate in effect for such day by 360 and
multiplying the result by the Dollar Price. The amount of interest payable for
any Floating Rate Reset Period (as defined below) will be calculated by adding
the interest payable for each day in the Floating Rate Reset Period.
For this purpose, the following terms have the following meanings:
"Floating Period Interest Rate" means the sum of the Reference Rate and
the Floating Rate Spread.
"Floating Period Option" means our right, on any date subsequent to the
Remarketing Dealer's election to purchase the Notes in connection with the first
Remarketing Date, but prior to the fourth Business Day preceding the first
Remarketing Date, to require the Remarketing Dealer to remarket the Notes at the
Floating Period Interest Rate.
"Floating Rate Period" means the period from and including the Floating
Rate Remarketing Date to, but excluding, the Floating Period Termination Date.
"Floating Rate Remarketing Date" means March 17, 2003 in the event we have
elected to exercise our Floating Period Option.
"Floating Rate Reset Period" means the period from and including the first
Reference Rate Reset Date to, but excluding, the next succeeding Reference Rate
Reset Date, and thereafter the period from and including a
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Reference Rate Reset Date to, but excluding, the next succeeding Reference Rate
Reset Date; provided, that the final Floating Rate Reset Period will run to, but
exclude, the Floating Period Termination Date.
A "Floating Rate Bid" means an irrevocable offer to purchase the aggregate
outstanding principal amount of the Notes at the Dollar Price, but assuming:
- a settlement date that is the Floating Rate Remarketing Date;
- a maturity date equal to the Floating Period Termination Date;
- a stated annual interest rate equal to the Reference Rate plus
the Floating Rate Spread;
- that the Notes are callable by the Remarketing Dealer at the
Dollar Price on the Floating Period Termination Date; and
- that we will redeem the Notes at the Dollar Price on the
Floating Period Termination Date, if not previously purchased
by the Remarketing Dealer.
"Floating Rate Spread" means the lowest Floating Rate Bid expressed as a
spread (in the form of a percentage or in basis points) above the Reference Rate
for the Notes obtained by the Remarketing Dealer by 3:30 p.m., New York City
time, on the Floating Rate Spread Determination Date (as defined below), from
the Floating Rate Bids quoted to the Remarketing Dealer by up to five Reference
Money Market Dealers (as defined below).
"Floating Rate Spread Determination Date" means the third Business Day
prior to the Floating Rate Remarketing Date.
"London Business Day" means any day on which dealings in U.S. dollars
are transacted in the London Inter-Bank Market.
"Reference Money Market Dealer" means each of up to five leading dealers
of publicly traded debt securities, including our debt securities, which we
shall select, who are also leading dealers in money market instruments. We will
advise the Remarketing Dealer of our selection of Reference Money Market Dealers
no later than five Business Days prior to the Floating Rate Remarketing Date.
One of the Reference Money Market Dealers we select will be the Remarketing
Dealer.
"Reference Rate" means:
- the rate for each Floating Rate Reset Period which will be the
rate for deposits in U.S. dollars for a period of one month
which appears on the Telerate Page 3750 (or any successor
page) as of 11:00 a.m., London time, on the applicable
Reference Rate Determination Date; or
- if no rate appears on Telerate Page 3750 on the Reference Rate
Determination Date, the Remarketing Dealer will request the
principal London offices of four major reference banks in the
London Inter-Bank Market to provide the Remarketing Dealer, in
the case of each such bank, with its offered quotation for
deposits in U.S. dollars for the period of one month,
commencing on the first day of the Floating Rate Reset Period,
to prime banks in the London Inter-Bank Market at
approximately 11:00 a.m., London time, on that Reference Rate
Determination Date and in a principal amount that is
representative for a single transaction in U.S. dollars in
that market at that time. If at least two quotations are
provided, then the Reference Rate will be the average of those
quotations. If fewer than two quotations are provided, then
the Reference Rate will be the average (rounded, if necessary,
to the nearest one hundredth of a percent) of the rates quoted
at approximately 11:00 a.m., New York City time, on the
Reference Rate Determination Date by three major banks in New
York City selected by the Remarketing Dealer for loans in U.S.
dollars to leading European banks, having a one-month maturity
and in a principal amount that is representative for a single
transaction in U.S. dollars in that market at that time. If
the banks
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selected by the Remarketing Dealer are not providing
quotations in the manner described in this paragraph, the rate
for the Floating Rate Reset Period following the Reference
Rate Determination Date will be the rate in effect on that
Reference Rate Determination Date.
"Reference Rate Determination Date" will be the second London Business Day
preceding each Reference Rate Reset Date.
"Reference Rate Reset Date" means March 17, 2003 and the 17th day of each
month thereafter, if such date is a Business Day, or on the next succeeding
Business Day until, but excluding, the Floating Period Termination Date.
MANDATORY TENDER
On a Business Day not earlier than 15 Business Days prior to the first
Remarketing Date and not later than 4:00 p.m., New York City time, on the tenth
Business Day prior to the first Remarketing Date, or not later than four
Business Days prior to the occurrence of the subsequent Remarketing Date, the
Remarketing Dealer will notify us and the trustee as to whether it elects to
purchase the Notes for remarketing on such Remarketing Date (the "Notification
Date").
If, and only if, the Remarketing Dealer so elects, the Notes will be
subject to mandatory tender, and will be deemed tendered, to the Remarketing
Dealer for purchase and remarketing on such Remarketing Date, in accordance with
the terms and subject to the conditions described in this pricing supplement.
The Notes will be remarketed on the first Remarketing Date at a fixed rate
of interest equal to the Interest Rate to Maturity, unless we have elected to
exercise our Floating Period Option or have chosen, or are required, to redeem
the Notes on the first Remarketing Date. If we elect to exercise our Floating
Period Option, the Notes will bear interest at the Floating Period Interest Rate
until the Floating Period Termination Date, at which time the Notes will be
remarketed at a fixed rate of interest equal to the Interest Rate to Maturity
unless we have chosen, or are required, to redeem the Notes.
The purchase price of such tendered Notes will be equal to 100% of the
aggregate principal amount thereof on the first Remarketing Date, or the Dollar
Price on the subsequent Remarketing Date.
Subject to the Remarketing Dealer's election to purchase the Notes, on the
applicable Remarketing Date the Remarketing Dealer will sell the aggregate
principal amount of the Notes at the Dollar Price to the Reference Corporate
Dealer or to the Reference Money Market Dealer, whichever is applicable,
providing the lowest Fixed Rate Bid or Floating Rate Bid, in the case of the
first Remarketing Date, or the lowest Fixed Rate Bid, in the case of the
subsequent Remarketing Date. If the lowest applicable Bid is submitted by two or
more of the applicable Reference Dealers, the Remarketing Dealer will sell such
Notes to one or more of such Reference Dealers, as it will determine in its sole
discretion.
If the Remarketing Dealer elects to purchase the Notes, the obligation of
the Remarketing Dealer to purchase the Notes on any Remarketing Date is subject
to certain conditions set forth in the Remarketing Agreement.
If for any reason the Remarketing Dealer does not purchase the Notes on
any Remarketing Date, we will be required to redeem the Notes at a price equal
to 100% of their aggregate principal amount, plus accrued and unpaid interest,
if any, if such Remarketing Date is the first Remarketing Date, or at the Dollar
Price, plus accrued and unpaid interest, if any, on the subsequent Remarketing
Date.
NOTIFICATION OF INTEREST RATE TO MATURITY
Subject to the Remarketing Dealer's election to purchase the Notes, the
Remarketing Dealer will notify us, the trustee and The Depository Trust Company
("DTC") by telephone, confirmed in writing (which may include
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facsimile or other electronic transmission), by 4:00 p.m., New York City time,
on the Fixed Rate Determination Date, of the Interest Rate to Maturity effective
from and including the Fixed Rate Remarketing Date.
MANDATORY REDEMPTION
We will be required to redeem the Notes in whole on the applicable
Remarketing Date at a price equal to 100% of the aggregate principal amount of
the Notes, if such Remarketing Date is the first Remarketing Date, or at the
Dollar Price on the subsequent Remarketing Date, in each case plus accrued and
unpaid interest, if any, to the applicable Remarketing Date, in the event that:
- the Remarketing Dealer for any reason does not elect, by
notice to us and the trustee not later than such Notification
Date, to purchase the Notes for remarketing on such
Remarketing Date;
- the Remarketing Dealer for any reason does not notify us of
the Floating Period Interest Rate or of the Interest Rate to
Maturity by 4:00 p.m., New York City time, on the applicable
Determination Date;
- prior to any Remarketing Date, the Remarketing Dealer resigns
and no successor has been appointed on or before the
applicable Determination Date;
- at any time after the Remarketing Dealer elects on the
Notification Date to remarket the Notes, the Remarketing
Dealer elects to terminate the Remarketing Agreement in
accordance with its terms;
- the Remarketing Dealer for any reason does not deliver the
purchase price of the Notes to the trustee in same day funds
not later than 12:00 p.m., New York City time, on such
Remarketing Date, or does not purchase all tendered Notes on
such Remarketing Date; or
- we for any reason fail to redeem the Notes from the
Remarketing Dealer following our election to effect such
optional redemption.
OPTIONAL REDEMPTION
If the Remarketing Dealer elects to purchase the Notes, we will notify the
Remarketing Dealer and the trustee, not later than 4:00 p.m., New York City
time, on the Business Day immediately preceding any Determination Date, if we
irrevocably elect to exercise our right to redeem the Notes in whole on the
first Remarketing Date or on the Floating Period Termination Date immediately
following such Determination Date.
If we exercise our right to redeem the Notes, we will redeem the Notes in
whole on the applicable Remarketing Date at the Dollar Price, plus accrued and
unpaid interest, if any, to such Remarketing Date. No notice of such redemption
will be provided to holders of the Notes. In any case, we will make payment to
each beneficial owner of the Notes by book-entry through DTC. Other than as set
forth above, we will have no option to redeem the Notes prior to the Fixed Rate
Remarketing Date.
POST-REMARKETING OPTIONAL REDEMPTION
After the Fixed Rate Remarketing Date, the Notes are redeemable, in whole
or in part, at any time, and at our option, at a redemption price equal to the
greater of:
- 100% of the principal amount of the Notes then outstanding to
be redeemed, or
- the sum of the present values of the remaining scheduled
payments of principal and interest thereon (not including any
portion of such payments of interest accrued as of the
post-remarketing redemption date) discounted to such
redemption date on a semiannual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Adjusted Treasury
Rate, plus 25 basis points as calculated by an Independent
Investment Banker,
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plus, in either case, accrued and unpaid interest thereon to the applicable
post-remarketing redemption date.
"Adjusted Treasury Rate" means, with respect to any post-remarketing
redemption date:
- the yield, under the heading which represents the average for
the immediately preceding week, appearing in the most recently
published statistical release designated "H.15(519)" or any
successor publication which is published weekly by the Board
of Governors of the Federal Reserve System and which
establishes yields on actively traded U.S. Treasury securities
adjusted to constant maturity under the caption "Treasury
Constant Maturities," for the maturity corresponding to the
Post-Remarketing Comparable Treasury Issue (if no maturity is
within three months before or after the remaining term of the
Notes, yields for the two published maturities most closely
corresponding to the Post-Remarketing Comparable Treasury
Issue will be determined and the Adjusted Treasury Rate will
be interpolated or extrapolated from such yields on a straight
line basis, rounding to the nearest month); or
- if such release (or any successor release) is not published
during the week preceding the calculation date or does not
contain such yields, the rate per annum equal to the
semiannual equivalent yield to maturity of the
Post-Remarketing Comparable Treasury Issue, calculated using a
price for the Post-Remarketing Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to
the Post-Remarketing Comparable Treasury Price for such
redemption date.
The Adjusted Treasury Rate will be calculated on the third Business Day
preceding the applicable post-remarketing redemption date.
"Independent Investment Banker" means Banc of America Securities LLC and
any successor firm selected by us, or if such firm is unwilling or unable to
serve as such, an independent investment and banking institution of national
standing appointed by us.
"Post-Remarketing Comparable Treasury Issue" for the Notes means the U.S.
Treasury security selected by an Independent Investment Banker as having a
maturity comparable to the remaining term of the Notes to be redeemed that would
be utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of such Notes or, if, in the reasonable judgment
of the Independent Investment Banker, there is no such security, then the
Post-Remarketing Comparable Treasury Issue will mean the U.S. Treasury security
or securities selected by an Independent Investment Banker as having an actual
or interpolated maturity or maturities comparable to the remaining term of the
Notes.
"Post-Remarketing Comparable Treasury Price" means (1) the average of five
Post-Remarketing Reference Treasury Dealer Quotations for the post-remarketing
redemption date, after excluding the highest and lowest Post-Remarketing
Reference Treasury Dealer Quotations, or (2) if the Independent Investment
Banker obtains fewer than five such Post-Remarketing Reference Treasury Dealer
Quotations, the average of all such quotations.
"Post-Remarketing Reference Treasury Dealer" means each of up to five
Primary Treasury Dealers to be selected by us, and their respective successors;
provided, that if any of the foregoing ceases to be, and has no affiliate that
is, a Primary Treasury Dealer, we will substitute for it another Primary
Treasury Dealer.
"Post-Remarketing Reference Treasury Dealer Quotations" means, with
respect to each Post-Remarketing Reference Treasury Dealer and any
post-remarketing redemption date, the average, as determined by the Independent
Investment Banker of the bid and asked prices for the Post-Remarketing
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Independent Investment Banker at 5:00
p.m., New York City time, on the third Business Day preceding such redemption
date.
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We will mail a notice of redemption at least 30 days but not more than 60
days before a post-remarketing redemption date to each holder of Notes to be
redeemed. If we elect to partially redeem the Notes, the Trustee will select in
a fair and appropriate manner the Notes to be redeemed.
Unless we default in payment of the redemption price, interest will cease
to accrue on or after the post-remarketing redemption date on the Notes or
portions thereof called for redemption.
SETTLEMENT
In the event that the Notes are purchased by the Remarketing Dealer, the
Remarketing Dealer will pay to the trustee, in same day funds not later than
12:00 p.m., New York City time, on the first Remarketing Date, an amount equal
to 100% of the aggregate principal amount of the Notes, or on the subsequent
Remarketing Date, an amount equal to the Dollar Price.
On any such Remarketing Date, the Remarketing Dealer will cause the
trustee to make payment of the purchase price for such tendered Notes that have
been purchased for remarketing by the Remarketing Dealer to DTC for payment to
the DTC participant of each tendering beneficial owner of Notes. This payment
will be made against delivery through DTC of such beneficial owner's Notes by
book-entry through DTC by the close of business on such Remarketing Date.
The purchase price of such tendered Notes will be equal to 100% of the
aggregate principal amount thereof, on the first Remarketing Date, and the
Dollar Price, on the subsequent Remarketing Date. We will make, or cause the
trustee to make, payment of interest to DTC for payment to each beneficial owner
of Notes due on a Remarketing Date by book-entry through DTC, by the close of
business on such Remarketing Date.
The transactions described above will be executed on the applicable
Remarketing Date through DTC in accordance with the procedures of DTC, and the
accounts of the respective participants will be debited and credited, and the
Notes will be delivered by book-entry, as necessary to effect the purchases and
sales thereof.
Settlement for the Notes will be made by the underwriters in immediately
available funds. All payments of principal and interest in respect of the Notes
in book-entry form will be made in immediately available funds. The Notes will
trade in DTC's Same-Day Funds Settlement System until the maturity date,
Remarketing Date or the post-remarketing redemption date, as the case may be, or
until the Notes are issued in definitive form. Secondary market trading activity
in the Notes will be required by DTC to settle in immediately available funds.
The tender and settlement procedures described above, including the
provisions for payment to selling beneficial owners of tendered Notes, or for
payment by the purchasers of Notes, in a remarketing, may be modified to the
extent required by DTC or, if the book-entry system is no longer available for
the Notes at the time of a remarketing, to the extent required to facilitate the
tendering and remarketing of Notes in certificated form. In addition, the
Remarketing Dealer may modify the settlement procedures set forth above in order
to facilitate the settlement process.
As long as DTC or its nominee holds a certificate representing the Notes
in the book-entry system of DTC, no certificates for such Notes will be
delivered to any beneficial owner. In addition, under the terms of the Notes and
the Remarketing Agreement, we will agree that (1) we will use our reasonable
best efforts to maintain the Notes in book-entry form with DTC or any successor
thereto, and to appoint a successor depositary to the extent necessary to
maintain the Notes in book-entry form and (2) we will waive any discretionary
right we otherwise have under the Indenture to cause the Notes to be issued in
certificated form.
REMARKETING DEALER
On or prior to the date of original issuance of the Notes, we will enter
into a Remarketing Agreement with the Remarketing Dealer. The Remarketing Dealer
will not receive any fees or reimbursement of expenses from us in connection
with the remarketing, except under certain circumstances. The aggregate amount
paid to us for the purchase of the Notes will include an amount paid by the
Remarketing Dealer for its right to remarket the Notes.
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We will agree to indemnify the Remarketing Dealer against certain
liabilities, including liabilities under the Securities Act, arising out of or
in connection with its duties under the Remarketing Agreement.
If the Remarketing Dealer elects to purchase the Notes, the obligation of
the Remarketing Dealer to purchase the Notes will be subject to several
conditions set forth in the Remarketing Agreement. In addition, upon the
occurrence of certain events after the Remarketing Dealer elects to purchase the
Notes, the Remarketing Dealer will have the right to terminate the Remarketing
Agreement or its obligation to purchase the Notes, or, until 2:00 p.m., New York
City time, on the Business Day immediately preceding the applicable Remarketing
Date, to redetermine the applicable interest rate.
No beneficial owner of the Notes will have any rights or claims under the
Remarketing Agreement, or against us or the Remarketing Dealer, as a result of
the Remarketing Dealer not purchasing the Notes.
The Remarketing Agreement will provide that the Remarketing Dealer may
resign at any time as the Remarketing Dealer, such resignation to be effective
ten Business Days after the delivery to us and the trustee of notice of such
resignation. In such case, we have no obligation to appoint a successor
Remarketing Dealer. After it purchases the Notes, the Remarketing Dealer may
exercise any vote or join in any action that any beneficial owner of Notes may
be entitled to exercise, or take, as if it did not act in any capacity under the
Remarketing Agreement. The Remarketing Dealer, in its individual capacity,
either as principal or agent, may engage in or have an interest in any financial
or other transaction with us, as freely as if it did not act in any capacity
under the Remarketing Agreement.
As long as the Remarketing Agreement is in effect, we will not acquire any
of the Notes prior to the first Remarketing Date, without the prior written
consent of the Remarketing Dealer. On or after the first Remarketing Date or
termination of the Remarketing Agreement prior thereto, we may at any time
purchase any Notes at any price in the open market or otherwise. The Notes so
purchased by us may, at our discretion, be held, resold or surrendered to the
trustee for cancellation.
BOOK-ENTRY ONLY ISSUANCE -- DTC
DTC will act as the initial securities depositary for the Notes. The Notes
will be initially issued as fully registered securities registered in the name
of Cede & Co., DTC's nominee. Fully registered global certificates representing
the aggregate principal amount of the Notes will be issued and will be deposited
with DTC.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended. DTC holds securities that its participants deposit with
DTC. DTC also facilitates the settlement among participants of securities
transactions, such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in participants' accounts, thereby
eliminating the need for physical movement of securities certificates. Direct
participants include securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations. DTC is owned by a number
of its direct participants and by The New York Stock Exchange, Inc., The
American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others such as
securities brokers and dealers, banks and trust companies that clear through or
maintain a custodial relationship with a direct participant, either directly or
indirectly. The rules applicable to DTC and its participants are on file with
the Securities and Exchange Commission.
Purchases of Notes within the DTC system must be made by or through direct
participants, which will receive a credit for the Notes on DTC's records. The
ownership interest of each beneficial owner of Notes is in turn to be recorded
on the direct and indirect participants' records. Beneficial owners will not
receive written confirmation from DTC of their purchases, but beneficial owners
are expected to receive written confirmations providing details of the
transactions, as well as periodic statements of their holdings, from the direct
or indirect participants through which the beneficial owners entered into the
transaction. Transfers of ownership interests in the Notes are to be
accomplished by entries made on the books of participants acting on behalf of
beneficial owners.
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Beneficial owners will not receive certificates representing their ownership
interests in Notes, except in the event that use of the book-entry system for
the Notes is discontinued.
To facilitate subsequent transfers, all Notes deposited by participants
with DTC are registered in the name of DTC's partnership nominee, Cede & Co. The
deposit of Notes with DTC and their registration in the name of Cede & Co.
effect no change in beneficial ownership. DTC has no knowledge of the actual
beneficial owners of the Notes. DTC's records reflect only the identity of the
direct participants to whose accounts such Notes are credited, which may or may
not be the beneficial owners. The participants will remain responsible for
keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to direct
participants, by direct participants to indirect participants, and by direct and
indirect participants to beneficial owners will be governed by arrangements
among them, subject to any statutory or regulatory requirements as may be in
effect from time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to Notes.
Under its usual procedures, DTC would mail an Omnibus Proxy to us as soon as
possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those direct participants to whose accounts the
Notes are credited on the record date (identified in a listing attached to the
Omnibus Proxy).
Payments on the Notes will be made to Cede & Co., as nominee of DTC. DTC's
practice is to credit direct participants' accounts, upon DTC's receipt of funds
and corresponding detailed information, on the relevant payment date in
accordance with their respective holdings shown on DTC's records. Payments by
participants to beneficial owners will be governed by standing instructions and
customary practices, as is the case with securities held for the account of
customers in bearer form or registered in "street name," and will be the
responsibility of such participant and not our responsibility or the
responsibility of DTC, subject to any statutory or regulatory requirements as
may be in effect from time to time. Payment to Cede & Co. is our responsibility
or the responsibility of the paying agent, disbursement of such payments to
direct participants is the responsibility of Cede & Co., and disbursement of
such payments to the beneficial owners is the responsibility of direct and
indirect participants.
Except as provided herein, a beneficial owner of an interest in a global
Note will not be entitled to receive physical delivery of Notes. Accordingly,
each beneficial owner must rely on the procedures of DTC to exercise any rights
under the Notes. The laws of some jurisdictions require that certain purchasers
of securities take physical delivery of securities in definitive form. Such laws
may impair the ability to transfer beneficial interests in a global Note.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that we believe to be reliable, but neither we
nor any underwriter takes any responsibility for its accuracy. We have no
responsibility for the performance by DTC or its participants of their
respective obligations, including obligations that they have under the rules and
procedures that govern their operations.
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following summary of certain U.S. federal income tax consequences of
the purchase, ownership and disposition of the Notes is based upon the Internal
Revenue Code of 1986, as amended (the "Code"), Treasury regulations, Internal
Revenue Service ("IRS") rulings and pronouncements and administrative and
judicial decisions currently in effect, all of which are subject to change
(possibly with retroactive effect) or possible differing interpretations. This
summary deals only with Notes held as capital assets as defined in the Code and
does not purport to deal with persons in special tax situations, such as
financial institutions, insurance companies, regulated investment companies,
real estate investment trusts, dealers in securities or currencies, persons
holding Notes as a hedge against currency risk or as a position in a "straddle,"
or conversion transaction, or persons whose functional currency is not the U.S.
dollar.
PROSPECTIVE INVESTORS CONSIDERING THE PURCHASE OF THE NOTES SHOULD CONSULT
THEIR OWN TAX ADVISORS CONCERNING THE APPLICATION OF U.S. FEDERAL INCOME
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TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY CONSEQUENCES OF THE
PURCHASE, OWNERSHIP AND DISPOSITION OF THE NOTES ARISING UNDER THE LAWS OF ANY
OTHER TAXING JURISDICTION.
As used herein, the term "U.S. Holder" means a beneficial owner of Notes
that is for U.S. federal income tax purposes (1) a citizen or resident of the
United States, (2) a corporation, partnership or other entity created or
organized in or under the laws of the United States or of any political
subdivision thereof (other than a partnership that is not treated as a U.S.
person under any applicable Treasury regulations), (3) an estate the income of
which is subject to U.S. federal income tax regardless of its source or (4) a
trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more U.S. persons
have the authority to control all substantial decisions of the trust. As used
herein, the term "non-U.S. Holder" means a beneficial owner of a Notes that is
not a U.S. Holder.
The U.S. federal income tax treatment of debt obligations such as the
Notes is not entirely certain. Because the Notes are subject to mandatory tender
on the Remarketing Date, we intend to treat the Notes as maturing on the
Remarketing Date for U.S. federal income tax purposes. Based on such treatment,
interest on the Notes should constitute "qualified stated interest" and
generally should be taxable to a U.S. Holder as ordinary interest income at the
time such payments are accrued or received, in accordance with the U.S. Holder's
regular method of tax accounting. Under the foregoing, if the Notes are issued
to the U.S. Holder at par value or the excess of par value over the issue price
does not exceed a statutory de minimis amount (generally 1/4 of 1% of the Notes'
stated redemption price at the Remarketing Date multiplied by the number of
complete years to the Remarketing Date from their issue date), the Notes will
not be treated as having original issue discount. If the Notes are issued at a
discount greater than the statutory de minimis amount, a Holder will be required
to include original issue discount in income as ordinary interest for U.S.
federal income tax purposes as it accrues under a constant yield method in
advance of receipt of the cash payments attributable to such income, regardless
of the U.S. Holder's regular method of tax accounting.
Under the foregoing treatment, upon the sale, exchange or retirement of a
Note, a U.S. Holder generally will recognize taxable gain or loss equal to the
difference between the amount realized on the sale, exchange or retirement
(other than amounts representing accrued and unpaid interest) and such U.S.
Holder's adjusted tax basis in the Note. A U.S. Holder's adjusted tax basis in a
Note generally will equal such U.S. Holder's initial investment in the Note
increased by any original issue discount included in income and decreased by the
amount of any payments, other than qualified stated interest payments, received
with respect to the Note. Such gain or loss will generally be capital gain or
loss and will be long-term capital gain or loss if the Note has been held by the
U.S. Holder for more than one year on the date of disposition.
There can be no assurance that the IRS will agree with our treatment of
the Notes, and it is possible that the IRS could assert another treatment. For
instance, it is possible that the IRS could seek to treat the Notes as maturing
on their stated maturity date. In the event the Notes were treated as maturing
on their stated maturity date for U.S. federal income tax purposes, the Notes
would be treated as having contingent interest under the Code. In such event,
under Treasury regulations governing debt instruments that provide for
contingent payments, we would be required to construct a projected payment
schedule for the Notes, based upon our current borrowing costs for our
comparable debt instruments, from which an estimated yield on the Notes would be
calculated. A U.S. Holder would be required to include in income original issue
discount in an amount equal to the product of the adjusted issue price of the
Notes at the beginning of each interest accrual period and the estimated yield
of the Notes. In general, for these purposes, a Note's adjusted issue price
would equal the Note's issue price increased by the interest previously accrued
on the Note, and reduced by all payments made on the Note. As a result of such a
calculation, a U.S. Holder might be required to include interest in income in
excess of actual cash payments received for certain taxable years. Also, the
character of any gain or loss, upon the sale or exchange of a Note (including a
sale pursuant to the mandatory tender on the Remarketing Date) by a U.S. Holder,
will likely differ if the Notes were treated as contingent payment obligations.
Any such taxable gain generally would be treated as ordinary income. Any such
taxable loss generally would be ordinary to the extent of previously accrued
original issue discount, and any excess would generally be treated as capital
loss.
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NON-U.S. HOLDERS
A non-U.S. Holder will not be subject to U.S. federal income taxes on
payments of principal, premium (if any) or interest (including original issue
discount, if any) on a Note, unless such non-U.S. Holder is a direct or indirect
10% or greater shareholder of PepsiAmericas, a controlled foreign corporation
related to PepsiAmericas through stock ownership or a bank receiving interest on
an extension of credit made pursuant to a loan agreement entered into in the
ordinary course of its trade or business. To qualify for the exemption from
taxation, a non-U.S. Holder must provide the payor a completed IRS Form W-8 BEN,
Form W-8 EXP (for holders that are foreign governments or certain other types of
foreign organizations), or successor form.
Any gain or income realized by non-U.S. Holders upon the sale, exchange,
retirement or other disposition of Notes generally will not be subject to U.S.
federal income tax unless (i) such gain or income is effectively connected with
the conduct of a trade or business in the United States of the non-U.S. Holder
or (ii) in the case of a non-U.S. Holder who is an individual, such individual
is present in the United States for 183 days or more in the taxable year of such
sale, exchange, retirement or other disposition, and certain other conditions
are met.
Notes beneficially owned by an individual who at the time of death is not
a U.S. citizen or resident will not be subject to the U.S. federal estate tax as
a result of such individual's death, provided that such individual does not
actually or constructively own 10% or more of the total combined voting power of
all classes of stock of PepsiAmericas entitled to vote and provided that the
interest payments with respect to such Notes would not have been, if received at
the time of such individual's death, effectively connected with the conduct of a
U.S. trade or business by such individual.
BACKUP WITHHOLDING
Backup withholding of U.S. federal income tax at a rate of 31% may apply
to payments made in respect of the Notes to registered owners who are not
"exempt recipients" and who fail to provide certain identifying information
(such as the registered owner's taxpayer identification number) in the required
manner. Generally, individuals are not exempt recipients, whereas corporations
and certain other entities generally are exempt recipients. Payments made in
respect of the Notes to a U.S. Holder must be reported to the IRS, unless the
U.S. Holder is an exempt recipient or establishes an exemption. Compliance with
the identification procedures described in the preceding section would establish
an exemption from backup withholding for non-U.S. Holders.
Upon the sale of Notes to or through a broker, the broker must withhold
31% of the entire purchase price, unless either (i) the broker determines that
the seller is a corporation or other exempt recipient or (ii) the seller
provides, in the required manner, certain identifying information and, in the
case of a non-U.S. Holder, certifies that such seller is a non-U.S. Holder and
certain other conditions are met. Such a sale must also be reported by the
broker to the IRS, unless either (i) the broker determines that the seller is an
exempt recipient or (ii) the seller certifies its non-U.S. status and certain
other conditions are met. Certification of the registered owner's non-U.S.
status would normally be made on an IRS form under penalties of perjury.
Any amounts withheld under the backup withholding rules from a payment to
a beneficial owner would be allowed as a refund or a credit against such
beneficial owner's U.S. federal income tax, provided the required information is
furnished to the IRS.
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UNDERWRITING
Subject to the terms and conditions stated in the distribution agreement
dated June 23, 2000 and a terms agreement dated March 7, 2001, among us and the
underwriters named below, we have agreed to sell to each of the underwriters,
and each of the underwriters has severally agreed to purchase, the principal
amount of Notes set forth opposite the name of such underwriter:
PRINCIPAL AMOUNT
UNDERWRITER OF NOTES
Banc of America Securities LLC............................ $ 52,500,000
Salomon Smith Barney Inc.................................. 52,500,000
Banc One Capital Markets, Inc............................. 22,500,000
Chase Securities Inc...................................... 22,500,000
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Total............................................... $150,000,000
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The distribution agreement and terms agreement provide that the
obligations of the several underwriters to purchase the Notes included in this
offering are subject to approval of a number of legal matters by counsel and to
some other conditions.
The underwriters are obligated to purchase all of the Notes if they
purchase any of the Notes. The underwriters propose to offer the Notes directly
to the public at the public offering price set forth on the cover page of this
pricing supplement and to certain dealers at the public offering price less a
concession not in excess of 0.200% of the principal amount of the Notes. The
underwriters may allow, and such dealers may reallow, a discount not in excess
of 0.150% of the principal amount of the Notes on sales to certain other
dealers. After the initial offering of the Notes to the public, the public
offering price and such concessions may be changed by the underwriters.
We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act.
We estimate that our total expenses of this offering will be $100,000.
The Remarketing Dealer will pay to us additional consideration for the
right to repurchase the Notes at 100% of their aggregate principal amount on
the first Remarketing Date.
If the Remarketing Dealer purchases the Notes on the first Remarketing
Date and subsequently offers the Notes for resale, the resale of the Notes may
have to be registered with the Securities and Exchange Commission under the
Securities Act of 1933, as amended. If the resale of the Notes has to be
registered, we have agreed to pay the expenses incident to such a registration.
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