EXHIBIT 4.02
CALCULATION AGENCY AGREEMENT
CALCULATION AGENCY AGREEMENT, dated as of March 3, 2004
(the "Agreement"), between Lehman Brothers Holdings Inc. (the "Company")
and Lehman Brothers Inc., as Calculation Agent.
WHEREAS, the Company has authorized the issuance of up to
$4,000,000 aggregate principal amount of YEELDS(R) 7.5% Yield Enhanced Equity
Linked Debt Securities Due September 3, 2005 (a "YEELD" or a "Security" and, in
the aggregate, "YEELDS" or the "Securities")*;
WHEREAS, the Securities will be issued under an Indenture,
dated as of September 1, 1987, between the Company and Citibank, N.A., as
Trustee (the "Trustee"), as supplemented and amended by supplemental indentures
dated as of November 25, 1987, November 27, 1990, September 13, 1991, October 4,
1993, October 1, 1995, and June 26, 1997, and incorporating Standard Multiple
Series Indenture Provisions dated July 30, 1987, as amended November 16, 1987
(collectively, the "Indenture"); and
WHEREAS, the Company requests the Calculation Agent to perform
certain services described herein in connection with the Securities;
NOW THEREFORE, the Company and the Calculation Agent agree as
follows:
1. Appointment of Agent. The Company hereby appoints Lehman
Brothers Inc. as Calculation Agent and Lehman Brothers Inc. hereby
accepts such appointment as the Company's agent for the purpose of
performing the services hereinafter described upon the terms and
subject to the conditions hereinafter mentioned.
2. Calculations and Information Provided. The Calculation
Agent shall determine (a) the Maturity Payment Amount, (b) the
Settlement Value, (c) the Closing Price of each Settlement Value
Security on the Valuation Date, (d) the Multipliers for each of the
Settlement Value Securities, (e) whether adjustments to the Multipliers
should be made, (f) whether a Market Disruption Event has occurred and
(g) if the Company elects the Stock Settlement Option, the number of
shares of each of the Settlement Value Securities (together with any
cash that may be included in the calculation of the Settlement Value)
equal to the Maturity Payment Amount. The Calculation Agent shall
notify the Trustee of all such determinations and any such adjustment
or if a Market Disruption Event has occurred. Annex A hereto sets forth
the procedures the Calculation Agent will use to determine the
information described in this Section 2.
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* "YEELDS" is a registered trademark of Lehman Brothers Inc.
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3. Calculations. Any calculation or determination by the
Calculation Agent pursuant hereto shall (in the absence of manifest
error) be final and binding. Any calculation made by the Calculation
Agent hereunder shall, at the Trustee's request, be made available at
the Corporate Trust Office.
4. Fees and Expenses. The Calculation Agent shall be entitled
to reasonable compensation for all services rendered by it as agreed to
between the Calculation Agent and the Company.
5. Terms and Conditions. The Calculation Agent accepts its
obligations herein set out upon the terms and conditions hereof,
including the following, to all of which the Company agrees:
(a) in acting under this Agreement, the Calculation Agent is
acting solely as an independent expert of the Company and does not
assume any obligation toward, or any relationship of agency or trust
for or with, any of the holders of the Securities;
(b) unless otherwise specifically provided herein, any order,
certificate, notice, request, direction or other communication from the
Company or the Trustee made or given under any provision of this
Agreement shall be sufficient if signed by any person who the
Calculation Agent reasonably believes to be a duly authorized officer
or attorney-in-fact of the Company or the Trustee, as the case may be;
(c) the Calculation Agent shall be obliged to perform only
such duties as are set out specifically herein and any duties
necessarily incidental thereto;
(d) the Calculation Agent, whether acting for itself or in any
other capacity, may become the owner or pledgee of Securities with the
same rights as it would have had if it were not acting hereunder as
Calculation Agent; and
(e) the Calculation Agent shall incur no liability hereunder
except for loss sustained by reason of its gross negligence or wilful
misconduct.
6. Resignation; Removal; Successor. (a) The Calculation Agent
may at any time resign by giving written notice to the Company of such
intention on its part, specifying the date on which its desired
resignation shall become effective, subject to the appointment of a
successor Calculation Agent and acceptance of such appointment by such
successor Calculation Agent, as hereinafter provided. The Calculation
Agent hereunder may be removed at any time by the filing with it of an
instrument in writing signed by or on behalf of the Company and
specifying such removal and the date when it shall become effective.
Such resignation or removal shall take effect upon the appointment by
the Company, as hereinafter provided, of a successor Calculation Agent
and the acceptance of such appointment by such successor Calculation
Agent. In the event a successor Calculation Agent has not been
appointed and has not accepted its duties within 90 days of the
Calculation Agent's notice of resignation, the Calculation Agent may
apply to any court of competent jurisdiction for the designation of a
successor Calculation Agent.
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(b) In case at any time the Calculation Agent shall resign, or
shall be removed, or shall become incapable of acting, or shall be
adjudged bankrupt or insolvent, or make an assignment for the benefit
of its creditors or consent to the appointment of a receiver or
custodian of all or any substantial part of its property, or shall
admit in writing its inability to pay or meet its debts as they mature,
or if a receiver or custodian of it or all or any substantial part of
its property shall be appointed, or if any public officer shall have
taken charge or control of the Calculation Agent or of its property or
affairs, for the purpose of rehabilitation, conservation or
liquidation, a successor Calculation Agent shall be appointed by the
Company by an instrument in writing, filed with the successor
Calculation Agent. Upon the appointment as aforesaid of a successor
Calculation Agent and acceptance by the latter of such appointment, the
Calculation Agent so superseded shall cease to be Calculation Agent
hereunder.
(c) Any successor Calculation Agent appointed hereunder shall
execute, acknowledge and deliver to its predecessor, to the Company and
to the Trustee an instrument accepting such appointment hereunder and
agreeing to be bound by the terms hereof, and thereupon such successor
Calculation Agent, without any further act, deed or conveyance, shall
become vested with all the authority, rights, powers, trusts,
immunities, duties and obligations of such predecessor with like effect
as if originally named as Calculation Agent hereunder, and such
predecessor, upon payment of its charges and disbursements then unpaid,
shall thereupon become obligated to transfer, deliver and pay over, and
such successor Calculation Agent shall be entitled to receive, all
moneys, securities and other property on deposit with or held by such
predecessor, as Calculation Agent hereunder.
(d) Any corporation into which the Calculation Agent hereunder
may be merged or converted or any corporation with which the
Calculation Agent may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Calculation
Agent shall be a party, or any corporation to which the Calculation
Agent shall sell or otherwise transfer all or substantially all of the
assets and business of the Calculation Agent shall be the successor
Calculation Agent under this Agreement without the execution or filing
of any paper or any further act on the part of any of the parties
hereto.
7. Certain Definitions. Terms not otherwise defined herein or
in Annex A hereto are used herein as defined in the Indenture or the
Securities.
8. Indemnification. The Company will indemnify the Calculation
Agent against any losses or liability which it may incur or sustain in
connection with its appointment or the exercise of its powers and
duties hereunder except such as may result from the gross negligence or
wilful misconduct of the Calculation Agent or any of its agents or
employees. The Calculation Agent shall incur no liability and shall be
indemnified and held harmless by the Company for or in respect of any
action taken or suffered to be taken in good faith by the Calculation
Agent in reliance upon written instructions from the Company.
9. Notices. Any notice required to be given hereunder shall be
delivered in person, sent (unless otherwise specified in this
Agreement) by letter, telex or facsimile transmission or communicated
by telephone (confirmed in a writing dispatched within two Business
Days), (a) in the case of the Company, to it at 745 Seventh Avenue, New
York, New York 10019 (facsimile: (646) 758-3204) (telephone: (212)
526-7000), Attention: Treasurer, with a copy to 399 Park Avenue, New
York, New York 10022 (facsimile: (212) 526-0357) (telephone: (212)
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526-7000), Attention: Corporate Secretary, (b) in the case of the
Calculation Agent, to it at 745 Seventh Avenue, New York, New York
10019 (facsimile: (646) 758-4942) (telephone: (212) 526-7000),
Attention: Equity Derivatives Trading and (c) in the case of the
Trustee, to it at 111 Wall Street, 5th Floor, New York, New York 10043
(facsimile: (212) 657-3836) (telephone: (212) 657-7805), Attention:
Corporate Trust Department or, in any case, to any other address or
number of which the party receiving notice shall have notified the
party giving such notice in writing. Any notice hereunder given by
telex, facsimile or letter shall be deemed to be served when in the
ordinary course of transmission or post, as the case may be, it would
be received.
10. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
11. Counterparts. This Agreement may be executed in any number
of counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and
the same agreement.
12. Benefit of Agreement. This Agreement is solely for the
benefit of the parties hereto and their successors and assigns, and no
other person shall acquire or have any rights under or by virtue
hereof.
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IN WITNESS WHEREOF, this Agreement has been entered
into as of the day and year first above written.
LEHMAN BROTHERS HOLDINGS INC.
By: _/s/ Karen Corrigan_______
Name: Karen Corrigan
Title: Vice President
LEHMAN BROTHERS INC.,
as Calculation Agent
By: _/s/ Karen Corrigan_______
Name: Karen Corrigan
Title: Vice President
ANNEX A
1. Settlement Value Securities.
The "Settlement Value Securities" shall mean the securities
included in the calculation of the Settlement Value from time to time and shall
initially be the common stock of Calpine Corporation, unless adjusted for
certain extraordinary corporate events as described herein.
2. Determination of the Maturity Payment Amount.
The Calculation Agent shall determine the amount payable on
the Stated Maturity Date for each $1,000 principal amount of YEELDS (the
"Maturity Payment Amount"). The Maturity Payment Amount shall equal (i) the
lesser of (a) the Alternative Redemption Amount and (b) $1,450 and (ii) any
accrued but unpaid coupon payments through the Stated Maturity Date.
3. Multipliers.
"Multiplier" shall mean, with respect to each Settlement Value
Security, the number of shares or other units (including any fractional share or
other unit expressed as a decimal) of the Settlement Value Security included in
the calculation of the Settlement Value. The initial Multiplier relating to
Calpine Corporation, initially the only Settlement Value Security, shall be 1.0.
The initial Multiplier for any other security which may subsequently become a
Settlement Value Security shall be the number of shares or other units of such
security which are to be included in the calculation of the Settlement Value at
the time the security becomes a Settlement Value Security. The Multiplier with
respect to any Settlement Value Security shall remain constant unless adjusted
for certain extraordinary corporate events as described below.
4. Adjustments to the Multipliers and the Settlement Value Securities.
Adjustments to a Multiplier and the Settlement Value
Securities shall be made in the circumstances described below. For purposes of
these adjustments, except as noted below, ADRs are treated like Settlement Value
Securities if a comparable adjustment to the foreign shares underlying the ADRs
is made pursuant to the terms of the depositary arrangement for the ADRs or if
holders of ADRs are entitled to receive property in respect of the underlying
foreign shares.
o If a Settlement Value Security is subject to a stock split or reverse stock
split, then once the split has become effective, the Multiplier relating to
such Settlement Value Security shall be adjusted. The Multiplier shall be
adjusted to equal the product of the number of shares outstanding of the
Settlement Value Security after the split with respect to each share of
such Settlement Value Security immediately prior to effectiveness of the
split and the prior Multiplier.
o If a Settlement Value Security is subject to an extraordinary stock
dividend or extraordinary stock distribution that is given equally to all
holders of shares, then once the Settlement Value Security is trading
ex-dividend, the Multiplier for such Settlement Value Security shall be
increased by the product of the number of shares of such
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Settlement Value Security issued with respect to one share of such
Settlement Value Security and the prior Multiplier.
o If the issuer of a Settlement Value Security, or if a Settlement Value
Security is an ADR, the foreign issuer of the underlying foreign share, is
being liquidated or dissolved or is subject to a proceeding under any
applicable bankruptcy, insolvency or other similar law, such Settlement
Value Security shall continue to be included in the calculation of the
Settlement Value so long as the primary exchange, quotation system or
market is reporting a market price for the Settlement Value Security. If a
market price, including a price on a bulletin board service, is no longer
available for a Settlement Value Security, then the value of the Settlement
Value Security shall equal zero for so long as no market price is
available, and no attempt shall be made to find a replacement stock or
increase the Settlement Value to compensate for the deletion of such
Settlement Value Security.
o If the issuer of a Settlement Value Security, or if a Settlement Value
Security is an ADR, the foreign issuer of the underlying foreign share, has
been subject to a merger or consolidation and is not the surviving entity
and holders of the Settlement Value Security are entitled to receive cash,
securities, other property or a combination thereof in exchange for the
Settlement Value Security, then the following shall be included as
Settlement Property:
o To the extent cash is received, the Settlement Property shall include
an amount of cash equal to the product of (1) the cash consideration
per share of Settlement Value Security, (2) the Multiplier for the
Settlement Value Security and (3) the number of Securities
outstanding, each determined as of the time the holders of the
Settlement Value Security are entitled to receive the cash
consideration (the "M&A Cash Component"), plus accrued interest. If
the cash received is denominated in a foreign currency, such cash
shall then be converted into U.S. dollars using the Official W.M.
Reuters Spot Closing Rate at 11:00 a.m., New York City time. If there
are several quotes for the Official W.M. Reuters Spot Closing Rate at
that time, the first quoted rate starting at 11:00 a.m. shall be the
rate used. If there is no such Official W.M. Reuters Spot Closing Rate
for a country's currency at 11:00 a.m., New York City time, the
foreign currency-denominated cash shall be converted into U.S. dollars
using the last available U.S. dollar cross-rate quote before 11:00
a.m., New York City time. Interest shall accrue beginning the first
London Business Day after the day that holders of the Settlement Value
Security receive the cash consideration until the Stated Maturity Date
(the "M&A Cash Component Interest Accrual Period"). Interest shall
accrue on the M&A Cash Component at a rate equal to the London
Interbank Offered Rate ("LIBOR")with a term corresponding to the
M&A Cash Component Interest Accrual Period.
o To the extent that equity securities that are traded or listed on an
exchange, quotation system or market are received, once the exchange
for the new securities has become effective, the former Settlement
Value Security shall be removed from the calculation of the Settlement
Value and the Settlement Property will include a number of shares of
the new security per outstanding Security equal to the Multiplier for
the new security as a new Settlement Value Security. The Multiplier
for the new Settlement Value Security shall equal the product of the
last value of
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the Multiplier of the original Settlement Value Security and the
number of securities of the new Settlement Value Security exchanged
with respect to one share of the original Settlement Value Security.
o To the extent that equity securities that are not traded or listed on
an exchange, quotation system or market or non-equity securities or
other property (other than cash) is received, the Calculation Agent
shall determine the "Fair Market Value" of the securities or other
property received per share of Settlement Value Security based on the
Average Execution Price. The Settlement Property shall include an
amount of cash equal to the product of (1) the Fair Market Value per
share of Settlement Value Security, (2) the Multiplier for the
Settlement Value Security and (3) the number of Securities outstanding
(the "M&A Sale Component"). The Multiplier and the number of
Securities outstanding will be determined as of the time holders of
the Settlement Value Security are entitled to receive the securities
or other property. The Settlement Value shall also include accrued
interest on the M&A Sale Component. Interest shall accrue beginning
the first London Business Day after the day that an affiliate of
Holdings sells the securities or other property used to hedge
Holdings' obligations under the Securities until the Stated Maturity
Date (the "M&A Sale Component Interest Accrual Period"). Interest
shall accrue at a rate equal to LIBOR with a term corresponding to the
M&A Sale Component Interest Accrual Period.
o If all of the shares of a Settlement Value Security of an issuer are
converted into or exchanged for the same or a different number of shares of
any class or classes of common stock other than such Settlement Value
Security, whether by capital reorganization, recapitalization or
reclassification or otherwise, then, once the conversion has become
effective, the former Settlement Value Security shall be removed from the
calculation of the Settlement Value and the Settlement Property will
include a number of shares of the new common stock per outstanding Security
equal to the Multiplier for the new common stock as a new Settlement Value
Security. The Multiplier for each new Settlement Value Security shall equal
the product of the last value of the Multiplier of the original Settlement
Value Security and the number of shares of the new Settlement Value
Security issued with respect to one share of the original Settlement Value
Security.
o If the issuer of a Settlement Value Security, or if a Settlement Value
Security is an ADR, the issuer of the underlying foreign share, issues to
all of its shareholders common stock or another equity security that is
traded or listed on an exchange, quotation system or market of an issuer
other than itself, then the Settlement Property shall include a number of
shares of the new common stock per outstanding Security equal to the
Multiplier for the new common stock or other equity security as a new
Settlement Value Security. The Multiplier for the new Settlement Value
Security shall equal the product of the last value of the Multiplier with
respect to the original Settlement Value Security and the number of shares
of the new Settlement Value Security with respect to one share of the
original Settlement Value Security.
o If an ADR is no longer listed or admitted to trading on a United States
securities exchange registered under the Securities Exchange Act of 1934 or
is no longer a security quoted on The Nasdaq Stock Market, then the ADR
shall be removed from the calculation of the Settlement Value, the foreign
share underlying the ADR shall be deemed to be a new common stock and the
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Settlement Property shall include a number of shares of new common stock
per outstanding Security equal to the Multiplier for the new common stock
as a new Settlement Value Security. The initial Multiplier for that new
Settlement Value Security shall equal the product of the last value of the
Multiplier with respect to the original ADR and the number of underlying
foreign shares represented by a single such ADR.
o If a Settlement Value Security is subject to an extraordinary dividend or
an extraordinary distribution, including upon liquidation or dissolution,
of cash, equity securities that are not traded or listed on an exchange,
quotation system or market, non-equity securities or other property of any
kind which is received equally by all holders of such Settlement Value
Security, then the Settlement Property shall include the following:
o To the extent cash is entitled to be received, the Settlement Property
shall include on each day after the time that the Settlement Value
Security trades ex-dividend until the date the cash consideration is
entitled to be received, the present value of the cash to be received
per share of Settlement Value Security multiplied by the Multiplier
for the Settlement Value Security on such day and by the number of
Securities outstanding on such day, discounted at a rate equal to
LIBOR, with a term beginning that day and ending on the date that the
cash is entitled to be received (the "PV Extraordinary Cash
Component"). When the cash consideration is received, the PV
Extraordinary Cash Component shall be deleted from the Settlement
Value and the Settlement Property shall include an amount of cash
equal to the product of (1) the cash consideration per share of
Settlement Value Security, (2) the Multiplier for the Settlement Value
Security and (3) the number of Securities outstanding, each determined
as of the time the holders of the Settlement Value Security are
entitled to receive the cash consideration (the "Extraordinary Cash
Component"), plus accrued interest. If the cash consideration received
or entitled to be received is denominated in a foreign currency, such
cash or the present value of such cash, as the case may be, shall be
converted into U.S. dollars using the Official W.M. Reuters Spot
Closing Rate at 11:00 a.m., New York City time. If there are several
quotes for the Official W.M. Reuters Spot Closing Rate at that time,
the first quoted rate starting at 11:00 a.m. shall be the rate used.
If there is no such Official W.M. Reuters Spot Closing Rate for a
country's currency at 11:00 a.m., New York City time, the foreign
currency-denominated cash shall be converted into U.S. dollars using
the last available U.S. dollar cross-rate quote before 11:00 a.m., New
York City time. Interest shall accrue on the Extraordinary Cash
Component beginning the first London Business Day after the day that
holders of the Settlement Value Security are entitled to receive the
Extraordinary Cash Component until the Stated Maturity Date (the
"Extraordinary Cash Component Interest Accrual Period"). Interest
shall accrue at a rate equal to LIBOR with a term corresponding to the
Extraordinary Cash Component Interest Accrual Period.
o To the extent that equity securities that are not traded or listed on
an exchange, quotation system or market or non-equity securities or
other property (other than cash) is received, the Calculation Agent
shall determine the Fair Market Value of the securities or other
property received per share of Settlement Value Security based on the
Average Execution Price and the Settlement Property shall include an
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amount of cash equal to the product of (1) the Fair Market Value per
share of Settlement Value Security , (2) the Multiplier for the
Settlement Value Security and (3) the number of Securities outstanding
(the "Extraordinary Sale Component"). The Multiplier and the number of
Securities outstanding will be determined as of the time the holders
of the Settlement Value Security are entitled to receive the
securities or other property. The Settlement Property shall also
include accrued interest on the Extraordinary Sale Component. Interest
shall accrue beginning the first London Business Day after the day
that an affiliate of Holdings sells the securities or other property
used to hedge Holdings' obligations under the Securities until the
Stated Maturity Date (the "Extraordinary Sale Component Interest
Accrual Period"). Interest shall accrue at a rate equal to LIBOR with
a term corresponding to the Extraordinary Sale Component Interest
Accrual Period.
o If similar corporate events occur with respect to the issuer of an equity
security other than a Settlement Value Security, adjustments similar to the
above will be made for that equity security. In addition, if any other
corporate events occur with respect to the issuer of a Settlement Value
Security, adjustments will be made to reflect the economic substance of
such events.
The payment of an ordinary cash dividend by an issuer of a Settlement Value
Security, or if a Settlement Value Security is an ADR, by a foreign issuer of
the underlying foreign share, from current income or retained earnings shall not
result in an adjustment to the Multiplier.
No adjustments of any Multiplier of a Settlement Value Security shall be
required unless the adjustment would result in a change of at least .1% (.001)
in the Multiplier then in effect. Adjustments which result in a change of less
than .1% (.001) shall be carried forward and included in the next adjustment, if
any. The Multiplier resulting from any of the adjustments specified above shall
be rounded at the Calculation Agent's discretion.
5. Definitions.
Set forth below are the terms used in the Agreement and in
this Annex A.
"ADR" shall mean American Depositary Receipt.
"Alternative Redemption Amount" shall mean, per YEELD, the
product of (a) $1,000 and (b) the Settlement Value divided by $5.4675.
"AMEX" shall mean the American Stock Exchange LLC.
"Average Execution Price" shall mean, for a security or other
property, the average execution price that an affiliate of the Company receives
or pays for such security or property, as the case may be, to hedge the
Company's obligations under the Securities.
"Business Day", notwithstanding any provision in the
Indenture, shall mean any day that is not a Saturday, a Sunday or a day on which
the NYSE, Nasdaq or AMEX is not open for trading or banking institutions or
trust companies in the City of New York are authorized or obligated by law or
executive order to close.
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"Calculation Agent" shall mean the person that has entered
into an agreement with the Company providing for, among other things, the
determination of the Maturity Payment Amount, which term shall, unless the
context otherwise requires, include its successors and assigns. The initial
Calculation Agent shall be Lehman Brothers Inc.
"Close of Trading" shall mean, in respect of any primary
exchange or quotation system, the scheduled weekday closing time on a day on
which the primary exchange or quotation system is scheduled to be open for
trading for its respective regular trading session, without regard to after
hours or any other trading outside of the regular trading session hours.
"Closing Price" shall mean, for each Settlement Value
Security, as determined by the Calculation Agent based on information reasonably
available to it:
(i) If the Settlement Value Security is listed on a United
States national securities exchange or quotation system or is a
security quoted on Nasdaq, the last reported sale price per share at
the Close of Trading, regular way, on such day, on the primary
securities exchange registered under the Securities Exchange Act of
1934 on which such Settlement Value Security is listed or admitted to
trading or on Nasdaq, as the case may be.
(ii) If the Settlement Value Security is listed or quoted on a
non-United States securities exchange, quotation system (other than a
bulletin board) or market, the last reported sale price at the Close of
Trading, regular way, on such day, on the primary exchange, quotation
system or market on which such Settlement Value Security is listed or
admitted to trading, as the case may be. The Closing Price per share
shall then be converted into U.S. dollars using the Official W.M.
Reuters Spot Closing Rate at 11:00 a.m., New York City time. If there
are several quotes for the Official W.M. Reuters Spot Closing Rate at
that time, the first quoted rate starting at 11:00 a.m. shall be the
rate used. If there is no such Official W.M. Reuters Spot Closing Rate
for a country's currency at 11:00 a.m., New York City time, the Closing
Price shall be converted into U.S. dollars using the last available
U.S. dollar cross-rate quote before 11:00 a.m., New York City time.
(iii) If the Settlement Value Security is not listed on a
national securities exchange or quotation system or is not a Nasdaq
security, and is listed or traded on a bulletin board, the Average
Execution Price per share of the Settlement Value Security. If such
Settlement Value Security is listed or traded on a non-United States
bulletin board, the Closing Price will then be converted into U.S.
dollars using the Official W.M. Reuters Spot Closing Rate at 11:00
a.m., New York City time. If there are several quotes for the Official
W.M. Reuters Spot Closing Rate at that time, the first quoted rate
starting at 11:00 a.m. shall be the rate used. If there is no such
Official W.M. Reuters Spot Closing Rate for a country's currency at
11:00 a.m., New York City time, the Closing Price shall be converted
into U.S. dollars using the last available U.S. dollar cross-rate quote
before 11:00 a.m., New York City time.
"Company" shall have the meaning set forth in the preamble to
this Agreement.
"Ending Multiplier" shall mean, for each Settlement Value
Security, the initial Multiplier for such Settlement Value Security adjusted
from time to time for the occurrence, prior to the Close of Trading on the
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Valuation Date, of any of the extraordinary corporate transactions described in
Section 4 of this Annex A.
"Indenture" shall have the meaning set forth in the preamble
to this Agreement.
"Issue Date" shall mean March 3, 2004.
"LIBOR" shall mean London Interbank Offered Rate.
"London Business Day" shall mean any day in the United Kingdom
that is not a Saturday, a Sunday or a day on which the London Stock Exchange is
not open for trading or banking institutions or trust companies in the City of
London are authorized or obligated by law or parliamentary order to close.
"Market Disruption Event", with respect to a Settlement Value
Security, shall mean any of the following events has occurred on any day as
determined by the Calculation Agent:
(i) A material suspension of or limitation imposed on trading
relating to such Settlement Value Security by the Relevant Exchange, at
any time during the one-hour period that ends at the Close of Trading
on such day, whether by reason of movements in price exceeding limits
permitted by that primary exchange or quotation system or otherwise.
Limitations on trading during significant market fluctuations imposed
pursuant to NYSE Rule 80B or any applicable rule or regulation enacted
or promulgated by the NYSE, any other exchange, quotation system or
market, any other self regulatory organization or the Securities and
Exchange Commission of similar scope or as a replacement for Rule 80B
may be considered material.
(ii) A material suspension of or limitation imposed on trading
in futures or options contracts relating to such Settlement Value
Security by the primary exchange or quotation system on which those
futures or options contracts are traded, at any time during the
one-hour period that ends at the Close of Trading on such day, whether
by reason of movements in price exceeding limits permitted by that
primary exchange or quotation system or otherwise.
(iii) Any event, other than an early closure, that disrupts or
impairs the ability of market participants in general to effect
transactions in, or obtain market values for, that Settlement Value
Security on the primary U.S. exchange or quotation system on which that
Settlement Value Security is traded, or in the case of a Settlement
Value Security not listed or quoted in the United States, on the
primary exchange, quotation system or market for such Settlement Value
Security, at any time during the one hour period that ends at the Close
of Trading on such day.
(iv) Any event, other than an early closure, that disrupts or
impairs the ability of market participants in general to effect
transactions in, or obtain market values for, the futures or options
contracts relating to such Settlement Value Security on the primary
exchange or quotation system on which those futures or options
contracts are traded at any time during the one hour period that ends
at the Close of Trading on such day.
(v) The closure of the primary exchange or quotation system on
which that Settlement Value Security is traded or on which futures or
options contracts relating to that Settlement Value Security are traded
8
prior to its scheduled closing time unless the earlier closing time is
announced by the primary exchange or quotation system at least one hour
prior to the earlier of (i) the actual closing time for the regular
trading session on the primary exchange or quotation system and (ii)
the submission deadline for orders to be entered into the primary
exchange or quotation system for execution at the Close of Trading on
such day.
(vi) The Company, or any of its affiliates, is unable, after
using commercially reasonable efforts to unwind or dispose of, or
realize, recover or remit the proceeds of, any transactions or assets
it deems necessary to hedge the equity price risk of entering into and
performing its obligations with respect to the Securities.
"Maturity Payment Amount" shall have the meaning set forth in
Section 2 of this Annex A.
"Multiplier" shall have the meaning set forth in Section 3 of
this Annex A.
"Nasdaq" shall mean The Nasdaq Stock Market, Inc.
"NYSE" shall mean The New York Stock Exchange, Inc.
"Official W.M. Reuters Spot Closing Rate" shall mean the
closing spot rate published on Reuters page "WMRA" relevant for a Settlement
Value Security.
"Prospectus Supplement" shall mean the prospectus supplement,
dated February 27, 2004, issued by the Company relating to the Securities.
"Relevant Exchange" shall mean for each Settlement Value
Security, the primary United States national securities exchange, quotation
system, including any bulletin board service, or market on which such Settlement
Value Security is traded, or in case such Settlement Value Security is not
listed or quoted in the United States, the primary exchange, quotation system or
market for such Settlement Value Security.
"Scheduled Trading Day" shall mean any day on which each
Relevant Exchange is scheduled to be open for trading for its respective regular
trading session.
"Security" and "Securities" shall have the meaning set forth
in the preamble to this Agreement.
"Settlement Property" shall mean the property described in
Section 4 of this Annex A.
"Settlement Value" shall mean the sum of (a) the products of
the Closing Prices and the applicable Ending Multipliers for each Settlement
Value Security on the Valuation Date and (b) any cash included in the Settlement
Value on the Valuation Date; provided, that if a Market Disruption Event occurs
on the Valuation Date, the Settlement Value will be determined based on (i) with
respect to Settlement Value Securities that have not been subject to a Market
Disruption Event, the Closing Price of each such Settlement Value Security on
the postponed Valuation Date, and (ii) with respect to Settlement Value
Securities that have been subject to a Market Disruption Event, the Average
Execution Price on the postponed Valuation Date.
9
"Settlement Value Securities" shall have the meaning set forth
in Section 1 of this Annex A.
"Stated Maturity Date" shall mean September 3, 2005 (or if
September 3, 2005 is not a Business Day, on the next succeeding Business Day);
provided, that if a Market Disruption Event occurs on the Valuation Date, the
Stated Maturity Date shall be the third Business Day following the date the
Settlement Value is determined.
"Stock Settlement Option" shall mean the Company's option,
exercisable in its sole discretion with not less than 15 days' notice to the
Trustee and the registered holders of the Securities, to pay the Maturity
Payment Amount in shares of the Settlement Value Securities, rather than in
cash, as described in the Prospectus Supplement.
"Trustee" shall have the meaning set forth in the preamble to
this Agreement.
"Valuation Date" shall mean August 31, 2005; provided, that if
such date is not a Scheduled Trading Day, the Valuation Date shall mean the next
succeeding Scheduled Trading Day; provided further, that if a Market Disruption
Event occurs on such date, the Valuation Date will be the next succeeding
Scheduled Trading Day on which no Market Disruption Event occurs.
"YEELD" and "YEELDS" shall have the meaning set forth in the
preamble to this Agreement.