CALCULATION AGENCY AGREEMENT
CALCULATION AGENCY AGREEMENT, dated as of November 25, 2003
(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
$4,600,000 aggregate principal amount of YEELDS(R) 6% Yield Enhanced Equity
Linked Debt Securities Due May 25, 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, and the value
of any fractional shares thereof, 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.
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
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* "YEELDS" is a registered trademark of Lehman Brothers Inc.
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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)
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(telephone: (212) 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: ___________________________
Name:
Title:
LEHMAN BROTHERS INC.,
as Calculation Agent
By: __________________________
Name:
Title:
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 LSI Logic 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) $1,460 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 LSI
Logic 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
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last value of 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
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deemed to be a new common stock and the 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
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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 "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 $9.3428.
"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,
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prior to the Close of Trading on the 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 November 25, 2003.
"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
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that Settlement Value Security are traded 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 November 20, 2003, 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.
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"Settlement Value Securities" shall have the meaning set forth
in Section 1 of this Annex A.
"Stated Maturity Date" shall mean May 25, 2005 (or if May 25,
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 May 20, 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.