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1996 ANNUAL REPORT |
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Notes to Consolidated Financial Statements |
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1996 ANNUAL REPORT |
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Notes to Consolidated Financial Statements |
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5. Long-Term Debt
The Company’s long-term debt at December 31, 1996, consists of $115,000,000 of 6.25% Convertible Subordinated Notes due 2006. The Notes were issued on November 25, 1996, and will mature on November 15, 2006. The Notes are convertible into common stock of the Company at the option of the holders at any time prior to maturity at a conversion price of $34.69 per share, subject to adjustment upon the occurrence of certain events. Interest on the Notes is payable semiannually on May 15 and November 15, commencing with the first payment on May 15, 1997. On or after November 15, 1999, the Notes are redeemable for cash at the option of the Company, with certain restrictions, at 104.375% of principal, declining to 100.625% in 2005. Upon certain changes in control of the Company, if the price of the Company’s common stock is not above certain levels each holder of Notes will have the right to require the Company to repurchase the Notes at the principal amount thereof, together with accrued and unpaid interest to the date of repurchase but after the repayment of any Senior Indebtedness, as defined.
The Company’s long-term debt at December 31, 1995, consisted of $28,750,000 of 6.5% Convertible Subordinated Debentures. The Debentures were issued on June 30, 1993, and were convertible into common stock of the Company at an adjusted conversion price of $12.27 per share. Interest on the Debentures was payable semiannually on June 30 and December 31, commencing with the payment made at December 31, 1993. The Debentures became redeemable for cash at the option of the Company after June 30, 1996. On July 1, 1996, the Company called all of the Debentures for redemption on August 5, 1996, at 104.55% of their face amount. Prior to the redemption date, the holders of all of the outstanding Debentures elected to convert their Debentures into shares of common stock, resulting in the issuance of 2.34 million shares of common stock in August 1996. Upon conversion of the Debentures into common stock, the approximate $27,650,000 net carrying amount of the debt (the face amount less unamortized deferred charges) was transferred to the Company’s appropriate capital accounts during the third quarter of 1996.
Interest expense on both the Notes and Debentures, including amortization of debt issuance costs, totaled $1,731,194 in 1996 and $1,981,639 in 1995.
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