Quest Diagnostics 2000 Annual Report Download - page 91

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands unless otherwise indicated)
F-21
indebtedness of the Company under the Credit Agreement. Interest is payable on June 15 and December 15. The Notes
will be redeemable, in whole or in part, at the option of the Company at any time on or after December 15, 2001, at
specified redemption prices. The Notes are guaranteed, fully, jointly and severally, and unconditionally, on a senior
subordinated basis by substantially all of the Company’s wholly-owned, domestic subsidiaries. In order to complete the
Receivables Financing, an amendment to the Indenture was required. The Company obtained the required consents from
the noteholders to approve the amendments, effective as of July 21, 2000.
The Credit Agreement and the Indenture contain various customary affirmative and negative covenants,
including, in the case of the Credit Agreement, the maintenance of certain financial ratios and tests. The Credit
Agreement prohibits the Company from paying dividends on its common stock and restricts the Company’s ability to,
among other things, incur additional indebtedness and repurchase shares of its common stock. The Indenture restricts the
Company’s ability to pay cash dividends on all classes of stock based, primarily, on a percentage of the Company’s
earnings, as defined in the Indenture. Additionally, the Company will be required to offer to purchase the Notes and
repay amounts borrowed under the Credit Agreement upon a change of control, as defined, and in the event of certain
asset sales.
Long-term debt, including capital leases, maturing in each of the years subsequent to December 31, 2001 is as
follows:
Year ending December 31,
2002 $ 7,337
2003 32,434
2004 6,666
2005 6,706
2006 and thereafter 707,562
Total long-term debt $ 760,705
13. PREFERRED STOCK AND COMMON STOCKHOLDERS’ EQUITY
Series Preferred Stock
Quest Diagnostics is authorized to issue up to 10 million shares of Series Preferred Stock, par value $1.00 per
share. The Company’s Board of Directors has the authority to issue such shares without stockholder approval and to
determine the designations, preferences, rights, and restrictions of such shares. Of the authorized shares, 600,000 shares
have been designated Series A Preferred Stock and 1,000 shares have been designated Voting Cumulative Preferred
Stock. No shares have been issued, other than the Voting Cumulative Preferred Stock.
Voting Cumulative Preferred Stock
At December 31, 2000 and 1999, 1,000 shares of Voting Cumulative Preferred Stock, which have a $1.0 million
aggregate liquidation preference, were issued and outstanding. Dividends are at an annual rate of 11.75% and are
payable quarterly. The Voting Cumulative Preferred Stock is generally entitled to one vote per share, voting together as
one class with the Company’s common stock. Whenever dividends on the Voting Cumulative Preferred Stock are in
arrears, no dividends or redemptions or purchases of shares may be made with respect to any stock ranking junior as to
dividends or liquidation to the Voting Cumulative Preferred Stock until all such amounts have been paid. The Voting
Cumulative Preferred Stock is not convertible into shares of any other class or series of stock of the Company and will be
redeemable in whole or in part, at the option of the Company at any time on or after December 31, 2002, at specified
redemption prices. On January 1, 2022, the Company must redeem all of the then outstanding shares of the Voting
Cumulative Preferred Stock at a redemption price equal to the liquidation preference plus any unpaid dividends. The
Voting Cumulative Preferred Stock ranks senior to the Quest Diagnostics common stock and the Series A Preferred
Stock.