Exhibit 4.1
AMERICAN ELECTRIC POWER COMPANY, INC.
AND
THE BANK OF NEW YORK
AS FORWARD PURCHASE CONTRACT AGENT
FORWARD PURCHASE CONTRACT AGREEMENT
Dated as of June 11, 2002
Table of Contents
Page
ARTICLE I. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION ......................... 1
Section 1.1 Definitions ............................................................ 1
Section 1.2 Compliance Certificates and Opinions ................................... 13
Section 1.3 Form of Documents Delivered to Agent ................................... 14
Section 1.4 Acts of Holders; Record Dates .......................................... 14
Section 1.5 Notices ................................................................ 16
Section 1.6 Notice to Holders; Waiver .............................................. 16
Section 1.7 Effect of Headings and Table of Contents ............................... 17
Section 1.8 Successors and Assigns ................................................. 17
Section 1.9 Separability Clause .................................................... 17
Section 1.10 Benefits of Agreement .................................................. 17
Section 1.11 Governing Law .......................................................... 17
Section 1.12 Legal Holidays ......................................................... 17
Section 1.13 Counterparts ........................................................... 18
Section 1.14 Inspection of Agreement ................................................ 18
ARTICLE II. CERTIFICATE FORMS .............................................................. 18
Section 2.1 Forms of Certificates Generally ........................................ 18
Section 2.2 Form of Agent's Certificate of Authentication .......................... 19
ARTICLE III. THE EQUITY UNITS .............................................................. 20
Section 3.1 Title and Terms; Denominations ......................................... 20
Section 3.2 Rights and Obligations Evidenced by the Certificates ................... 20
Section 3.3 Execution, Authentication, Delivery and Dating ......................... 21
Section 3.4 Temporary Certificates ................................................. 22
Section 3.5 Registration; Registration of Transfer and Exchange .................... 22
Section 3.6 Book-Entry Interests ................................................... 24
Section 3.7 Notices To Holders ..................................................... 24
Section 3.8 Appointment of Successor Clearing Agency ............................... 24
Section 3.9 Definitive Certificates ................................................ 24
Section 3.10 Mutilated, Destroyed, Lost and Stolen Certificates ..................... 25
Section 3.11 Persons Deemed Owners .................................................. 26
Section 3.12 Cancellation ........................................................... 27
Section 3.13 Establishment of Stripped Units ........................................ 27
Section 3.14 Reestablishment of Equity Units ........................................ 28
Section 3.15 Transfer of Collateral Upon Occurrence of Termination Event ............ 30
Section 3.16 No Consent to Assumption ............................................... 30
ARTICLE IV. THE NOTES ...................................................................... 30
Section 4.1 Payment of Interest; Rights to Interest Payments Preserved; Notice ..... 30
Section 4.2 Notice and Voting ...................................................... 31
Section 4.3 Tax Event Redemption ................................................... 32
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Table of Contents
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(continued)
Page
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ARTICLE V. THE FORWARD PURCHASE CONTRACTS; THE REMARKETING .................................. 32
Section 5.1 Purchase of Shares of Common Stock. ...................................... 32
Section 5.2 Contract Adjustment Payments ............................................. 34
Section 5.3 Deferral of Contract Adjustment Payments ................................. 35
Section 5.4 Payment of Purchase Price; Remarketing ................................... 37
Section 5.5 Issuance of Shares of Common Stock ....................................... 42
Section 5.6 Adjustment of Settlement Rate ............................................ 42
Section 5.7 Notice of Adjustments and Certain Other Events ........................... 49
Section 5.8 Termination Event; Notice ................................................ 50
Section 5.9 Early Settlement ......................................................... 50
Section 5.10 Early Settlement Upon Merger ............................................. 52
Section 5.11 Charges and Taxes ........................................................ 53
Section 5.12 No Fractional Shares ..................................................... 54
Section 5.13 Tax Treatment ............................................................ 54
ARTICLE VI. REMEDIES ........................................................................ 54
Section 6.1 Unconditional Right of Holders to Purchase Common Stock .................. 54
Section 6.2 Restoration of Rights and Remedies ....................................... 55
Section 6.3 Rights and Remedies Cumulative ........................................... 55
Section 6.4 Delay or Omission Not Waiver ............................................. 55
Section 6.5 Undertaking For Costs .................................................... 55
Section 6.6 Waiver of Stay or Extension Laws ......................................... 56
ARTICLE VII. THE AGENT ...................................................................... 56
Section 7.1 Certain Duties, Rights and Immunities .................................... 56
Section 7.2 Notice of Default ........................................................ 58
Section 7.3 Certain Rights of Agent .................................................. 58
Section 7.4 Not Responsible For Recitals, Etc. ....................................... 59
Section 7.5 May Hold Equity Units and Stripped Units and Other Dealings .............. 60
Section 7.6 Money Held In Custody .................................................... 60
Section 7.7 Compensation and Reimbursement ........................................... 60
Section 7.8 Corporate Agent Required; Eligibility .................................... 61
Section 7.9 Resignation and Removal; Appointment of Successor ........................ 61
Section 7.10 Acceptance of Appointment By Successor ................................... 62
Section 7.11 Merger, Conversion, Consolidation or Succession to Business .............. 63
Section 7.12 Preservation of Information; Communications to Holders ................... 63
Section 7.13 Failure to Act ........................................................... 63
Section 7.14 No Obligations of Agent .................................................. 64
Section 7.15 Tax Compliance ........................................................... 64
ARTICLE VIII. SUPPLEMENTAL AGREEMENTS ....................................................... 65
Section 8.1 Supplemental Agreements Without Consent of Holders ....................... 65
Section 8.2 Supplemental Agreements With Consent of Holders .......................... 65
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Table of Contents
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(continued)
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Section 8.3 Execution of Supplemental Agreements.....................................67
Section 8.4 Effect of Supplemental Agreements........................................67
Section 8.5 Reference to Supplemental Agreements.....................................67
ARTICLE IX. CONSOLIDATION, MERGER, SALE OR CONVEYANCE..........................................67
Section 9.1 Company May Consolidate, Etc., Only on Certain Terms.....................67
Section 9.2 Successor Substituted....................................................68
ARTICLE X. COVENANTS...........................................................................68
Section 10.1 Performance Under Forward Purchase Contracts.............................68
Section 10.2 Maintenance of Office or Agency..........................................68
Section 10.3 Company to Reserve Common Stock..........................................69
Section 10.4 Covenants as to Common Stock.............................................69
Section 10.5 Statements of Officer of the Company as to Default.......................69
Section 10.6 ERISA....................................................................70
EXHIBITS
Exhibit A Form of Equity Units Certificate
Exhibit B Form of Stripped Units Certificate
Exhibit C Instruction from Forward Purchase Contract Agent to Collateral Agent
Exhibit D Instruction to Forward Purchase Contract Agent
Exhibit E Notice to Settle by Cash
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FORWARD PURCHASE CONTRACT AGREEMENT, dated as of June 11, 2002, between
American Electric Power Company, Inc., a New York corporation (the "Company"),
and The Bank of New York, a New York banking corporation, acting as Forward
Purchase Contract Agent for the Holders of Equity Units and Stripped Units from
time to time (the "Agent").
RECITALS
The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the Equity Units and Stripped Units.
All things necessary to make the Forward Purchase Contracts, when the
Certificates are executed by the Company and authenticated, executed on behalf
of the Holders and delivered by the Agent, as provided in this Agreement, the
valid obligations of the Company, and to constitute this Agreement a valid
agreement of the Company, in accordance with its terms, have been done.
For and in consideration of the premises and the purchase of the Equity
Units by the Holders thereof, the Company and the Agent mutually agree as
follows:
ARTICLE I.
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.1 Definitions.
For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular, and
nouns and pronouns of the masculine gender include the feminine and neuter
genders;
(b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States;
(c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision; and
(d) the following terms have the meanings given to them in this
Section 1.1(d):
"Act" when used with respect to any Holder, has the meaning specified in
Section 1.4.
"Affiliate" has the same meaning as given to that term in Rule 405 under
the Securities Act or any successor rule thereunder.
"Agent" means the Person named as the "Agent" in the first paragraph of
this instrument until a successor Agent shall have become such pursuant to the
applicable provisions of this Agreement, and thereafter "Agent" shall mean such
Person.
"Agent-purchased Treasury Consideration" has the meaning specified in
Section 5.4(d).
"Agreement" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more agreements supplemental
hereto entered into pursuant to the applicable provisions hereof.
"Applicable Market Value" has the meaning specified in Section 5.1(c).
"Applicable Ownership Interest" means, with respect to an Equity Unit and
the U.S. Treasury Securities in the Treasury Portfolio, (A) for the principal
amount of a Note, a 1/20, or 5.0%, undivided beneficial ownership interest in a
$1,000 principal or interest amount of a principal or interest strip in a U.S.
Treasury security included in such Treasury Portfolio which matures on or prior
to the Stock Purchase Date and (B) for the scheduled interest Payment Date on
the Notes that occurs on the Stock Purchase Date, in the case of a successful
remarketing, or for each scheduled interest Payment Date on the Notes that
occurs after the Tax Event Redemption Date and on or before the Stock Purchase
Date, in the case of a Tax Event Redemption, a 0.071875% undivided beneficial
ownership interest in a $1,000 principal or interest amount of a principal or
interest strip in a U.S. Treasury security included in the Treasury Portfolio
that matures on or prior to that interest Payment Date or Dates.
"Applicants" has the meaning specified in Section 7.12(b).
"Bankruptcy Code" means Title 11 of the United States Code, or any other
law of the United States that from time to time provides a uniform system of
bankruptcy laws.
"Beneficial Owner" means, with respect to a Book-Entry Interest, a Person
who is the beneficial owner of such Book-Entry Interest as reflected on the
books of the Clearing Agency or on the books of a Person maintaining an account
with such Clearing Agency (directly as a Clearing Agency Participant or as an
indirect participant, in each case in accordance with the rules of such Clearing
Agency).
"Board of Directors" means either the Board of Directors of the Company or
any other committee of such Board duly authorized to act generally or in any
particular respect for such Board hereunder.
"Board Resolution" means (i) a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification or (ii) a copy of a unanimous written consent of the Board of
Directors.
"Book-Entry Interest" means a beneficial interest in a Global Certificate,
ownership and transfers of which shall be maintained and made through book
entries by a Clearing Agency as described in Section 3.6.
"Business Day" means any day other than a Saturday, Sunday or any other day
on which banking institutions and trust companies in the State of New York or at
a place of payment are authorized or required by law, regulation or executive
order to be closed.
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"Capital Stock" means any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests in
(however designated, whether voting or non-voting) corporate stock or similar
interests in other types of entities.
"Cash Merger" has the meaning specified in Section 5.10(a).
"Cash Settlement" has the meaning specified in Section 5.4(a).
"Certificate" means an Equity Units Certificate or a Stripped Units
Certificate.
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as a depositary for
the Equity Units and Stripped Units and in whose name, or in the name of a
nominee of that organization, shall be registered a Global Certificate and which
shall undertake to effect book-entry transfers and pledges of the Equity Units
and Stripped Units.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time the Clearing Agency
effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Price" has the meaning specified in Section 5.1(c).
"Code" means Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.
"Collateral" has the meaning specified in Section 2.1(a) of the Pledge
Agreement.
"Collateral Agent" means The Bank of New York, as Collateral Agent under
the Pledge Agreement until a successor Collateral Agent shall have become such
pursuant to the applicable provisions of the Pledge Agreement, and thereafter
"Collateral Agent" shall mean the Person who is then the Collateral Agent
thereunder.
"Collateral Substitution" has the meaning specified in Section 3.13(a).
"Common Stock" means the common stock, par value $6.50 per share, of the
Company.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor shall have become such pursuant to the
applicable provisions of this Agreement, and thereafter "Company" shall mean
such successor.
"Constituent Person" has the meaning specified in Section 5.6(b).
"Contract Adjustment Payments" means, in the case of Equity Units and
Stripped Units, the amount payable by the Company in respect of each Forward
Purchase Contract constituting a part of such Equity Units or Stripped Units,
equal to 3.50% per year of the Stated Amount, in each case computed (1) for any
full quarterly period on the basis of a 360-day year of twelve 30-day months,
and (2) for any period shorter than a full quarterly period, on the basis of a
30-day month
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and (3) for periods of less than a month, on the basis of the actual number of
days elapsed per 30-day month, plus any Deferred Contract Adjustment Payments
accrued pursuant to Section 5.3.
"Corporate Trust Office" means the office of the Agent at which, at any
particular time, its corporate trust business shall be principally administered,
which office at the date hereof is located at The Bank of New York, 101 Barclay
Street, New York, New York 10286.
"Coupon Rate" means the percentage rate per annum at which each Note will
bear interest initially.
"Current Market Price" has the meaning specified in Section 5.6(a)(8).
"Custodial Agent" means The Bank of New York, as Custodial Agent under the
Pledge Agreement until a successor Custodial Agent shall have become such
pursuant to the applicable provisions of the Pledge Agreement, and thereafter
"Custodial Agent" shall mean the Person who is then the Custodial Agent
thereunder.
"Deferred Contract Adjustment Payments" has the meaning specified in
Section 5.3.
"Depositary" means, initially, DTC, until another Clearing Agency becomes
its successor, and thereafter "Depositary" shall mean such successor.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Early Settlement" has the meaning specified in Section 5.9(a).
"Early Settlement Amount" has the meaning specified in Section 5.9(a).
"Early Settlement Date" has the meaning specified in Section 5.9(a).
"Early Settlement Rate" has the meaning specified in Section 5.9(b).
"Equity Units" means the collective rights and obligations of a Holder of
an Equity Units Certificate in respect of a Note or the appropriate Treasury
Consideration or Applicable Ownership Interest in the Treasury Portfolio, as the
case may be, subject in each case to the Pledge thereof, and the related Forward
Purchase Contract.
"Equity Units Certificate" means a certificate evidencing the rights and
obligations of a Holder in respect of the number of Equity Units specified on
such certificate, substantially in the form of Exhibit A hereto.
"Equity Units Register" and "Equity Units Registrar" have the respective
meanings specified in Section 3.5(a).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time, and the rules and
regulations promulgated thereunder.
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"Expiration Date" has the meaning specified in Section 1.4(f).
"Expiration Time" has the meaning specified in Section 5.6(a)(6).
"Failed Remarketing" has the meaning specified in Section 5.4(e).
"Fair Market Value" with respect to securities distributed in a Spin-Off
means (a) in the case of any Spin-Off that is effected simultaneously with an
Initial Public Offering of such securities, the Initial Public Offering price of
those securities, and (b) in the case of any other Spin-Off, the average of the
Sale Prices of those securities over the first 10 Trading Days after the
effective date of such Spin-Off.
"Forward Purchase Contract," when used with respect to any Equity Units or
Stripped Units, means the contract forming a part of such Equity Unit or
Stripped Unit and obligating the Company to sell and the Holder of such Equity
Unit or Stripped Unit to purchase Common Stock on the terms and subject to the
conditions set forth in Article Five.
"Forward Purchase Contract Settlement Fund" has the meaning specified in
Section 5.5.
"Global Certificate" means a Certificate that evidences all or part of the
Units and is registered in the name of a Depositary or a nominee thereof.
"Holder" means the Person in whose name the Units evidenced by an Equity
Units Certificate or a Stripped Units Certificate is registered in the Equity
Units Register or the Stripped Units Register, as the case may be.
"Indenture" means the Indenture, dated as of May 1, 2001, between the
Company and the Trustee as supplemented by any officers' certificate or
supplemental indenture.
"Initial Public Offering," with respect to any Spin-Off, means the first
time securities of the same class or type as the securities being distributed in
the Spin-Off are bone fide offered to the public for cash.
"Issuer Order" or "Issuer Request" means a written order or request signed
in the name of the Company by the Chief Executive Officer, the Chief Financial
Officer, the President, any Vice-President, the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary (or other officer performing
similar functions) of the Company and delivered to the Agent.
"Last Failed Remarketing" has the meaning specified in Section 5.4(e)(i).
"Merger Early Settlement" has the meaning specified in Section 5.10.
"Merger Early Settlement Amount" has the meaning specified in Section 5.10.
"Merger Early Settlement Date" has the meaning specified in Section 5.10.
"Non-electing Share" has the meaning specified in Section 5.6(b).
5
"Notes" means the series of senior debt securities of the Company
designated the 5.75% Senior Notes Due August 16, 2007, to be issued under the
Indenture.
"NYSE" has the meaning specified in Section 5.1(c).
"Office of the Agent in The City of New York" means an office where
Certificates may be presented or surrendered for acquisition of shares of Common
Stock, transfer or exchange, Notes may be presented for payment or surrendered
for transfer or exchange, and where notices and demands to or upon the Company
in respect of Units may be served, such office being located initially at 101
Barclay Street, New York, New York 10286.
"Officer's Certificate" means a certificate signed by the Chief Executive
Officer, the Chief Financial Officer, the President, any Vice-President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary (or
other officer performing similar functions) of the Company and delivered to the
Agent.
"Opinion of Counsel" means an opinion in writing signed by legal counsel,
who may be an employee of or counsel to the Company or an Affiliate of the
Company.
"Opt-out Treasury Consideration" has the meaning specified in Section
5.4(g).
"Outstanding Units" means, as of the date of determination, all Equity
Units or Stripped Units evidenced by Certificates theretofore authenticated,
executed and delivered under this Agreement, except:
(i) If a Termination Event has occurred, (A) Stripped Units
and (B) Equity Units for which the related Note or the appropriate
Treasury Consideration or Applicable Ownership Interest in the
Treasury Portfolio, as the case may be, has been theretofore deposited
with the Agent in trust for the Holders of such Equity Units;
(ii) Equity Units and Stripped Units evidenced by Certificates
theretofore cancelled by the Agent or delivered to the Agent for
cancellation or deemed cancelled pursuant to the provisions of this
Agreement; and
(iii) Equity Units and Stripped Units evidenced by Certificates
in exchange for or in lieu of which other Certificates have been
authenticated, executed on behalf of the Holder and delivered pursuant
to this Agreement, other than any such Certificate in respect of which
there shall have been presented to the Agent proof satisfactory to it
that such Certificate is held by a bona fide purchaser in whose hands
the Equity Units or Stripped Units evidenced by such Certificate are
valid obligations of the Company;
provided, that in determining whether the Holders of the requisite number of the
Equity Units or Stripped Units have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Equity Units or Stripped Units
owned by the Company or any Affiliate of the Company shall be disregarded and
deemed not to be outstanding, except that, in determining whether the Agent
shall be protected in relying upon any such request, demand, authorization,
direction,
6
notice, consent or waiver, only Equity Units or Stripped Units which a
Responsible Officer of the Agent actually knows to be so owned shall be so
disregarded. Equity Units or Stripped Units so owned which have been pledged in
good faith may be regarded as Outstanding Units if the pledgee establishes to
the satisfaction of the Agent the pledgee's right so to act with respect to such
Equity Units or Stripped Units and that the pledgee is not the Company or any
Affiliate of the Company.
"Payment Date" means each February 16, May 16, August 16 and November 16,
commencing August 16, 2002.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Plan" means an employee benefit plan that is subject to Title I of ERISA,
a plan, individual retirement account or other arrangement that is subject to
Section 4975 of the Code or any similar law or any entity whose underlying
assets are considered to include "plan assets" of any such plan, account or
arrangement.
"Pledge" means the pledge under the Pledge Agreement of the Notes, the
Treasury Securities or the appropriate Treasury Consideration or Applicable
Ownership Interest in the Treasury Portfolio, in each case constituting a part
of the Equity Units or Stripped Units, property, cash, securities, financial
assets and security entitlements of the Collateral Account (as defined in
Section 1.1 of the Pledge Agreement) and any proceeds of any of the foregoing.
"Pledge Agreement" means the Pledge Agreement, dated as of the date hereof,
by and among the Company, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Agent, on its own behalf and as attorney-in-fact
for the Holders from time to time of the Equity Units and Stripped Units.
"Pledged Applicable Ownership Interest in the Treasury Portfolio" has the
meaning specified in Section 2.1(c) of the Pledge Agreement.
"Pledged Notes" has the meaning specified in Section 2.1(c) of the Pledge
Agreement.
"Pledged Treasury Consideration" has the meaning specified in Section
2.1(c) of the Pledge Agreement.
"Pledged Treasury Securities" has the meaning specified in Section 2.1(c)
of the Pledge Agreement.
"Predecessor Certificate" means a Predecessor Equity Units Certificate or a
Predecessor Stripped Units Certificate.
"Predecessor Equity Units Certificate" of any particular Equity Units
Certificate means every previous Equity Units Certificate evidencing all or a
portion of the rights and obligations of the Company and the Holder under the
Equity Units evidenced thereby; and, for the purposes of this definition, any
Equity Units Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Equity Units
Certificate shall be
7
deemed to evidence the same rights and obligations of the Company and the Holder
as the mutilated, destroyed, lost or stolen Equity Units Certificate.
"Predecessor Stripped Units Certificate" of any particular Stripped Units
Certificate means every previous Stripped Units Certificate evidencing all or a
portion of the rights and obligations of the Company and the Holder under the
Stripped Units evidenced thereby; and, for the purposes of this definition, any
Stripped Units Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Stripped Units
Certificate shall be deemed to evidence the same rights and obligations of the
Company and the Holder as the mutilated, destroyed, lost or stolen Stripped
Units Certificate.
"Purchase Price" has the meaning specified in Section 5.1(a).
"Purchased Shares" has the meaning specified in Section 5.6(a)(6).
"Quotation Agent" means J.P. Morgan Securities Inc. or its successor or any
other primary U.S. government securities dealer in New York City selected by the
Company.
"Record Date" for the distribution payable on any Payment Date means, as to
any Global Certificate, the Business Day next preceding such Payment Date, and
as to any other Certificate, the 15th day preceding such Payment Date.
"Redemption Amount" means, (A) in the case of a Tax Event Redemption
occurring prior to the earlier of a successful remarketing of the Notes or the
Stock Purchase Date, for each Note the product of (i) the Stated Amount of such
Note and (ii) a fraction whose numerator is the applicable Treasury Portfolio
Purchase Price and whose denominator is the aggregate principal amount of Notes
outstanding on the Tax Event Redemption Date, and (B) in the case of a Tax Event
Redemption occurring after the earlier of a successful remarketing of the Notes
or the Stock Purchase Date, for each Note the Stated Amount of the Note.
"Redemption Price" means the redemption price per Note equal to the
Redemption Amount.
"Register" means the Equity Units Register and the Stripped Units Register,
as applicable.
"Registrar" means the Equity Units Registrar and the Stripped Units
Registrar, as applicable.
"Remarketing Agent" means Salomon Smith Barney Inc. or its successor under
the Remarketing Agreement.
"Remarketing Agreement" means the Remarketing Agreement dated June 11, 2002
by and among the Company, the Remarketing Agent and the Agent.
"Remarketing Date" means the third Business Day preceding May 16, 2005.
"Remarketing Fee" has the meaning specified in Section 5.4(d).
8
"Remarketing Period" means the three Business Day period either: (i)
beginning on the Remarketing Date and ending after the two immediately following
Business Days; (ii) immediately preceding June 16, 2005; (iii) immediately
preceding July 16, 2005; or (iv) immediately preceding August 12, 2005.
"Remarketing Value" means
(1) the value at the Remarketing Date or any Subsequent
Remarketing Date, as the case may be, of either (a) U.S.
Treasury securities that will pay, on or prior to the
Payment Date falling on the Stock Purchase Date, an amount
of cash equal to the aggregate interest payment that is
scheduled to be payable on that Payment Date, on (x) the
Notes which are included in Equity Units and are
participating in the remarketing and (y) the Separate Notes
which are to be remarketed pursuant to Section 4.5(d) of the
Pledge Agreement and Section 1.6 of the Supplemental
Indenture, assuming for that purpose that the interest rate
on the Notes is equal to the Coupon Rate, if the remarketing
occurs prior to the fourth Business Day preceding the Stock
Purchase Date, or (b) an amount of cash equal to the
aggregate interest payment that is scheduled to be payable
on that Payment Date, on (x) the Notes which are included in
Equity Units and are participating in the remarketing and
(y) the Separate Notes which are to be remarketed pursuant
to Section 4.5(d) of the Pledge Agreement, assuming for that
purpose that the interest rate on the Notes is equal to the
Coupon Rate, if the remarketing occurs on or after the
fourth Business Day preceding the Stock Purchase Date; and
(2) the value at the Remarketing Date or any Subsequent
Remarketing Date, as the case may be, of either (a) U.S.
Treasury securities that will pay, on or prior to the Stock
Purchase Date, an amount of cash equal to the Stated Amount
of (x) such Notes which are included in Equity Units and are
participating in the remarketing and (y) the Separate Notes
which are to be remarketed pursuant to Section 4.5(d) of the
Pledge Agreement and Section 1.6 of the Supplemental
Indenture, if the remarketing occurs prior to the fourth
Business Day preceding the Stock Purchase Date, or (b) an
amount of cash equal to the Stated Amount of (x) such Notes
which are included in Equity Units and are participating in
the remarketing and (y) the Separate Notes which are to be
remarketed pursuant to Section 4.5(d) of the Pledge
Agreement, if the remarketing occurs on or after the fourth
Business Day preceding the Stock Purchase Date
provided that for purposes of clauses (1) and (2) above, the
Remarketing Value shall be calculated on the assumptions that (x)
the U.S. Treasury securities are highly liquid and mature on or
within 35 days prior to the Stock Purchase Date, as determined in
good faith by the Remarketing Agent in a manner intended to
minimize the cash value of the U.S. Treasury securities, and (y)
the U.S. Treasury securities are valued based on the ask-side
price of the U.S. Treasury securities at a time between 9:00 a.m.
and 11:00 a.m., New York City time, selected by the
9
Remarketing Agent, on the Remarketing Date or any Subsequent
Remarketing Date, as the case may be, as determined on a third-day
settlement basis by reasonable and customary means selected in good
faith by the Remarketing Agent, plus accrued interest to that date.
"Reorganization Event" has the meaning specified in Section 5.6(b).
"Reset Rate" has the meaning specified in Section 5.4(c).
"Responsible Officer" means, when used with respect to the Agent, any
officer within the corporate trust department of the Agent (or any successor of
the Agent), including any Vice-President, any assistant Vice-President, any
assistant secretary, any assistant treasurer, any trust officer, any senior
trust officer or any other officer of the Agent who customarily performs
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of such Person's knowledge of and familiarity with the particular
subject and who, in each of the above cases, shall have direct responsibility
for the administration of this Agreement.
"Sale Price" of the Common Stock or any securities distributed in a
Spin-Off, as the case may be, on any Trading Day means the closing sale price
per share (or if no closing sale price is reported, the average of the bid and
asked prices or, if more than one in either case, the average of the average bid
and the average asked prices) on such Trading Day as reported in composite
transactions for the principal U.S. securities exchange on which the Common
Stock or such securities are traded or, if the Common Stock or such securities
are not listed on a U.S. national or regional securities exchange, as reported
by NASDAQ.
"Securities Act" means the Securities Act of 1933, and any statute
successor thereto, in each case as amended from time to time, and the rules and
regulations promulgated thereunder.
"Securities Intermediary" means The Bank of New York, in its capacity as
securities intermediary under the Pledge Agreement, together with its successors
in such capacity.
"Separate Notes" has the meaning specified in Section 1.1 of the Pledge
Agreement.
"Settlement Date" means any Early Settlement Date or Merger Early
Settlement Date or the Stock Purchase Date.
"Settlement Rate" has the meaning specified in Section 5.1(a).
"Spin-Off" means a dividend or other distribution of shares of Capital
Stock of any class or series, or similar equity interests, of or relating to a
subsidiary or other business unit of the Company.
"Stated Amount" means, with respect to any one Note, Equity Unit or
Stripped Unit, $50.
"Stock Purchase Date" means August 16, 2005.
10
"Stripped Units" means the collective rights and obligations of a holder of
a Stripped Units Certificate in respect of a 1/20 undivided beneficial interest
in a Treasury Security, subject in each case to the Pledge thereof, and the
related Forward Purchase Contract.
"Stripped Units Certificate" means a certificate evidencing the rights and
obligations of a Holder in respect of the number of Stripped Units specified on
such certificate, substantially in the form of Exhibit B hereto.
"Stripped Units Register" and "Stripped Units Registrar" have the
respective meanings specified in Section 3.5(a).
"Subsequent Remarketing Date" means, provided there has been one or more
Failed Remarketings, the date on which the Remarketing Agent has consummated a
remarketing in accordance with Section 5.4 hereof and Section 1.6 of the
Indenture, such date to be no later than the third Business Day immediately
preceding the Stock Purchase Date.
"Supplemental Indenture" means a supplemental indenture dated as of June
11, 2002, between the Company and the Trustee to the indenture dated as of May
1, 2001, between the Company and the Trustee.
"Tax Event" means the receipt by the Company of an opinion of nationally
recognized independent tax counsel experienced in such matters, which may be
Simpson Thacher & Bartlett, to the effect that there is more than an
insubstantial risk that interest payable by the Company on the Notes would not
be deductible, in whole or in part, by the Company for United States federal
income tax purposes, as a result of (a) any amendment to, or change (including
any announced proposed change) in, the laws (or any regulations thereunder) of
the United States or any political subdivision or taxing authority thereof or
therein affecting taxation, (b) any amendment to or change in an official
interpretation or application of such laws or regulations by any legislative
body, court, governmental agency or regulatory authority or (c) any
interpretation or pronouncement that provides for a position with respect to
such laws or regulations that differs from the generally accepted position on
June 11, 2002, which amendment, change or proposed change is effective or which
interpretation or pronouncement is announced on or after June 11, 2002.
"Tax Event Redemption" means, if a Tax Event shall occur, the redemption of
the Notes, at the option of the Company, in whole but not in part, on not less
than 30 days' nor more than 60 days' written notice.
"Tax Event Redemption Date" means the date upon which a Tax Event
Redemption is to occur.
"Termination Date" means the date, if any, on which a Termination Event
occurs.
"Termination Event" means the occurrence of any of the following events, at
any time on or prior to the Stock Purchase Date:
(i) the entry by a court having competent jurisdiction of:
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(a) a decree or order for relief in respect of the Company
in an involuntary proceeding under any applicable bankruptcy,
insolvency, reorganization or other similar law or a decree or
order adjudging the Company to be insolvent, or approving a
petition seeking reorganization, arrangement, adjustment or
composition of the Company and such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days; or
(b) a final and non-appealable order appointing a custodian,
receiver, liquidator, assignee, trustee or other similar official
of the Company or of any substantial part of the property of the
Company ordering the winding up or liquidation of the affairs of
the Company; or
(ii) the commencement by the Company of a voluntary proceeding
under any applicable bankruptcy, insolvency, reorganization or other
similar law or of a voluntary proceeding seeking to be adjudicated
insolvent or the consent by the Company to the entry of a decree or
order for relief in an involuntary proceeding under any applicable
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any insolvency proceedings against it, or the filling
by the Company of a petition or answer or consent seeking organization
or relief under any applicable law, or the consent by the Company to
the filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee or
similar official of the or any substantial part of the property of the
Company or the making by the Company of an assignment for the benefit
of creditors, or the taking of corporate action by the Company or any
in furtherance of any such action.
"Threshold Appreciation Price" has the meaning specified in Section
5.1(a)(i).
"TIA" means the Trust Indenture Act of 1939, and any statute successor
thereto, in each case as amended from time to time, and the rules and
regulations promulgated thereunder.
"Trading Day" has the meaning specified in Section 5.1(c).
"Transaction Documents" has the meaning specified in Section 7.1(a).
"Treasury Consideration" means the Agent-purchased Treasury Consideration
or the Opt-out Treasury Consideration.
"Treasury Portfolio" means: (i) if a Tax Event Redemption occurs prior to a
successful remarketing of the Notes or the Stock Purchase Date, a portfolio of
zero-coupon U.S. Treasury Securities consisting of principal or interest strips
of U.S. Treasury Securities that mature on or prior to the Stock Purchase Date
in an aggregate amount equal to the aggregate principal amount of the Notes
included in the Equity Units on the Tax Event Redemption Date and, with respect
to each scheduled interest Payment Date on the Notes that occurs after the Tax
Event Redemption Date and on or before the Stock Purchase Date, interest or
principal strips of U.S. Treasury Securities that mature on or prior to such
Payment Date in an aggregate amount equal to the aggregate interest payment that
would be due on the aggregate principal amount of the Notes
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included in the Equity Units on such Payment Date if the interest rate of the
Notes were not reset on the applicable Remarketing Date, and (ii) solely for
purposes of determining the Treasury Portfolio Purchase Price in the case of a
Tax Event Redemption Date occurring prior to a successful remarketing of the
Notes, a portfolio of zero-coupon U.S. Treasury Securities consisting of
principal or interest strips of U.S. Treasury Securities that mature on or prior
to the Stock Purchase Date in an aggregate amount equal to the aggregate
principal amount of the Notes outstanding on the Tax Event Redemption Date and
with respect to each scheduled interest Payment Date on the Notes outstanding
that occurs after the Tax Event Redemption Date and on or before the Stock
Purchase Date, interest or principal strips of U.S. Treasury Securities that
mature on or prior to such interest Payment Date in an aggregate amount equal to
the aggregate interest payment that would be due on the aggregate principal
amount of the Notes outstanding on the Tax Event Redemption Date.
"Treasury Portfolio Purchase Price" means the lowest aggregate price quoted
by a primary U.S. government securities dealer in New York City to the Quotation
Agent on the third Business Day immediately preceding the Tax Event Redemption
Date for the purchase of the Treasury Portfolio for settlement on the Tax Event
Redemption Date.
"Treasury Security" means a zero-coupon U.S. Treasury security (CUSIP
Number 912803AG8) maturing on August 15, 2005 that will pay $1,000 on such
maturity date.
"Trustee" means The Bank of New York, a New York banking corporation, as
trustee under the Indenture, or any successor thereto.
"Underwriting Agreement" means the Underwriting Agreement relating to the
Equity Units dated June 5, 2002 between the Company and the underwriters named
therein.
"Vice-President" means any vice-president, whether or not designated by a
number or a word or words added before or after the title "vice-president."
Section 1.2 Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Agreement, upon any
application or request by the Company to the Agent to take any action under any
provision of this Agreement, the Company shall furnish to the Agent an Officer's
Certificate stating that all conditions precedent, if any, provided for in this
Agreement relating to the proposed action have been complied with and, if
requested by the Agent, an Opinion of Counsel stating that, in the opinion of
such counsel, all such conditions precedent, if any, have been complied with,
except that in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of this
Agreement relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Agreement (other than the Officer's Certificate
provided for in Section 10.5) shall include:
(a) a statement that the individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
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(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such individual, he or she has
made such examination or investigation as is necessary to enable such
individual to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of such individual, such
condition or covenant has been complied with.
Section 1.3 Form of Documents Delivered to Agent.
(a) In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one
such Person, or that they be so certified or covered by only one document,
but one such Person may certify or give an opinion with respect to some
matters and one or more other such Persons as to other matters, and any
such Person may certify or give an opinion as to such matters in one or
several documents.
(b) Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or
in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate or
Opinion of Counsel may be based, insofar as it relates to factual matters,
upon a certificate or opinion of, or representations by, an officer or
officers of the Company stating that the information with respect to such
factual matters is in the possession of the Company unless such counsel
knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more applications,
requests, consents, certificates, statements, opinions or other instruments
under this Agreement, they may, but need not, be consolidated and form one
instrument.
Section 1.4 Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent
of such Holders duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument
or instruments are delivered to the Agent and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as
the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Agreement and
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(subject to Section 7.1) conclusive in favor of the Agent and the Company,
if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Agent deems
sufficient.
(c) The ownership of Equity Units or Stripped Units shall be proved by
the Equity Units Register or the Stripped Units Register, as the case may
be.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Certificate shall bind every
future Holder of the same Certificate and the Holder of every Certificate
issued upon the registration of transfer thereof or in exchange therefor or
in lieu thereof in respect of anything done, omitted or suffered to be done
by the Agent or the Company in reliance thereon, whether or not notation of
such action is made upon such Certificate.
(e) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Units entitled to give, make or take
any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Agreement to be given, made or
taken by Holders of Equity Units and Stripped Units. If any record date is
set pursuant to this paragraph, the Holders of the Outstanding Units on
such record date, and no other Holders, shall be entitled to take the
relevant action with respect to the Equity Units or the Stripped Units, as
the case may be, whether or not such Holders remain Holders after such
record date; provided that no such action shall be effective hereunder
unless taken on or prior to the applicable Expiration Date by Holders of
the requisite number of Outstanding Units on such record date. Nothing in
this paragraph shall be construed to prevent the Company from setting a new
record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be cancelled and of no
effect), and nothing in this paragraph shall be construed to render
ineffective any action taken by Holders of the requisite number of
Outstanding Units on the date such action is taken. Promptly after any
record date is set pursuant to this paragraph, the Company, at its own
expense, shall cause notice of such record date, the proposed action by
Holders and the applicable Expiration Date to be given to the Agent in
writing and to each Holder of Equity Units and Stripped Units in the manner
set forth in Section 1.6.
(f) With respect to any record date set pursuant to this Section, the
Company may designate any date as the "Expiration Date" and from time to
time may change the Expiration Date to any earlier or later day; provided
that no such change shall be effective unless notice of the proposed new
Expiration Date is given to the Agent in writing, and to each Holder of
Equity Units and Stripped Units in the manner set forth in Section 1.6, on
or prior to the existing Expiration Date. If an Expiration Date is not
designated with respect to any record date set pursuant to this Section,
the Company shall be deemed to have initially designated the 180th day
after such record date as the Expiration Date with respect thereto, subject
to its right to change the Expiration Date as provided in this paragraph.
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Notwithstanding the foregoing, no Expiration Date shall be later than
the 180th day after the applicable record date.
Section 1.5 Notices.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Agreement to
be made upon, given or furnished to, or filed with:
(a) the Agent by any Holder or by the Company shall be sufficient
for every purpose hereunder (unless otherwise herein expressly
provided) if made, given, furnished or filed in writing and personally
delivered, mailed, first-class postage prepaid, telecopied or
delivered by overnight air courier guaranteeing next day delivery, to
the Agent at 101 Barclay Street, New York, New York 10286, telecopy
number: (212) 328-8243, Attention: Corporate Trust Department, or at
any other address furnished in writing by the Agent to the Holders and
the Company; or
(b) the Company by the Agent or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly
provided) if made, given, furnished or filed in writing and personally
delivered, mailed, first-class postage prepaid, telecopied or
delivered by overnight air courier guaranteeing next day delivery, to
the Company at American Electric Power Company, Inc., 1 Riverside
Plaza, Columbus, Ohio 43215, telecopy number: (614) 223-1687,
Attention: General Counsel, or at any other address furnished in
writing to the Agent and the Holders by the Company; or
(c) the Collateral Agent by the Agent, the Company or any Holder
shall be sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if made, given, furnished or filed in
writing and personally delivered, mailed, first-class postage prepaid,
telecopied or delivered by overnight air courier guaranteeing next day
delivery, addressed to the Collateral Agent at 101 Barclay Street, New
York, New York 10286, telecopy number: (212) 328-8243, Attention:
Corporate Trust Department, or at any other address furnished in
writing by the Collateral Agent to the Agent, the Company and the
Holders; or
(d) the Trustee by the Company shall be sufficient for every
purpose hereunder (unless otherwise herein expressly provided) if
made, given, furnished or filed in writing and personally delivered,
mailed, first-class postage prepaid, telecopied or delivered by
overnight air courier guaranteeing next day delivery, addressed to the
Trustee at The Bank of New York, 101 Barclay Street, New York, New
York 10286, telecopy number: (212) 328-8243, Attention: Corporate
Trust Department, or at any other address furnished in writing by the
Trustee to the Company.
Section 1.6 Notice to Holders; Waiver.
(a) Where this Agreement provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise
herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each Holder affected by such event, at its address
as it appears in the applicable Register, not later than the latest
date, and not earlier than the
16
earliest date, prescribed for the giving of such notice. In any case
where notice to Holders is given by mail, neither the failure to mail
such notice nor any defect in any notice so mailed to any particular
Holder shall affect the sufficiency of such notice with respect to
other Holders. Where this Agreement provides for notice in any manner,
such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall
be the equivalent of such notice. Waivers of notice by Holders shall
be filed with the Agent, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such
waiver.
(b) In case by reason of the suspension of regular mail service
or by reason of any other cause it shall be impracticable to give such
notice by mail, then such notification as shall be made with the
approval of the Agent shall constitute a sufficient notification for
every purpose hereunder.
Section 1.7 Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 1.8 Successors and Assigns.
All covenants and agreements in this Agreement by the Company shall
bind its successors and assigns, whether so expressed or not.
Section 1.9 Separability Clause.
In case any provision in this Agreement or in the Equity Units or
Stripped Units shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions hereof and thereof shall
not in any way be affected or impaired thereby.
Section 1.10 Benefits of Agreement.
Nothing in this Agreement or in the Equity Units or Stripped Units,
express or implied, shall give to any Person, other than the parties hereto and
their successors hereunder and, to the extent provided hereby, the Holders, any
benefits or any legal or equitable right, remedy or claim under this Agreement.
The Holders from time to time shall be beneficiaries of this Agreement and shall
be bound by all of the terms and conditions hereof and of the Equity Units and
Stripped Units evidenced by their Certificates by their acceptance of delivery
of such Certificates.
Section 1.11 Governing Law.
This Agreement and the Equity Units and Stripped Units shall be
governed by and construed in accordance with the laws of the State of New York,
without regard to its principles of conflicts of laws.
Section 1.12 Legal Holidays.
17
(a) In any case where any Payment Date shall not be a Business
Day, then (notwithstanding any other provision of this Agreement or
the Equity Units Certificates) payments on the Notes shall not be made
on such date, but such payments shall be made on the next succeeding
Business Day with the same force and effect as if made on such Payment
Date, provided that no interest shall accrue or be payable by the
Company for the period from and after any such Payment Date, except
that if such next succeeding Business Day is in the next succeeding
calendar year, such payment shall be made on the Business Day
immediately preceding the Payment Date with the same force and effect
as if made on such Payment Date.
(b) If any date on which Contract Adjustment Payments are to be
made on the Forward Purchase Contracts is not a Business Day, then
payment of the Contract Adjustment Payments payable on that date will
be made on the next succeeding day which is a Business Day, and no
interest or additional payment will be paid in respect of the delay.
However, if that Business Day is in the next succeeding calendar year,
the payment will be made on the Business Day immediately preceding the
Payment Date with the same force and effect as if made on that Payment
Date.
(c) In any case where the Stock Purchase Date shall not be a
Business Day, then (notwithstanding any other provision of this
Agreement or the Certificates), the Forward Purchase Contracts shall
not be performed on such date, but the Forward Purchase Contracts
shall be performed on the immediately following Business Day with the
same force and effect as if performed on the Stock Purchase Date.
Section 1.13 Counterparts.
This Agreement may be executed in any number of counterparts by the
parties hereto, each of which, when so executed and delivered, shall be deemed
an original, but all such counterparts shall together constitute one and the
same instrument.
Section 1.14 Inspection of Agreement.
A copy of this Agreement shall be available at all reasonable times
during normal business hours at the Corporate Trust Office for inspection by any
Holder.
ARTICLE II.
CERTIFICATE FORMS
Section 2.1 Forms of Certificates Generally.
(a) The Equity Units Certificates (including the form of Forward
Purchase Contract forming part of the Equity Units evidenced thereby)
shall be in substantially the form set forth in Exhibit A hereto, with
such letters, numbers or other marks of identification or designation
and such legends or endorsements printed thereon, as may be required
by the rules of any securities exchange or quotation system on which
the Equity Units are listed or quoted for trading or any depositary
therefor, or as may, consistently herewith, be determined by the
officers of the Company executing such Equity Units Certificates, as
evidenced by their execution of the Equity Units Certificates.
18
(b) The definitive Equity Units Certificates shall be printed or
may be produced in any other manner, all as determined by the officers
of the Company executing such Equity Units Certificates, consistent
with the provisions of this Agreement, as evidenced by their execution
thereof.
(c) The Stripped Units Certificates (including the form of
Forward Purchase Contracts forming part of the Stripped Units
evidenced thereby) shall be in substantially the form set forth in
Exhibit B hereto, with such letters, numbers or other marks of
identification or designation and such legends or endorsements printed
thereon as may be required by the rules of any securities exchange or
quotation system on which the Stripped Units may be listed or quoted
for trading or any depositary therefor, or as may, consistently
herewith, be determined by the officers of the Company executing such
Stripped Units Certificates, as evidenced by their execution of the
Stripped Units Certificates.
(d) The definitive Stripped Units Certificates shall be printed
or may be produced in any other manner, all as determined by the
officers of the Company executing such Stripped Units Certificates,
consistent with the provisions of this Agreement, as evidenced by
their execution thereof.
(e) Every Global Certificate authenticated, executed on behalf of
the Holders and delivered hereunder shall bear a legend in
substantially the following form:
"THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
FORWARD PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED
IN THE NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY
NOT BE EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO
TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME
OF ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE FORWARD PURCHASE CONTRACT AGREEMENT.
Unless this Certificate is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) to the
Company or its agent for registration of transfer, exchange or payment, and any
Certificate issued is registered in the name of Cede & Co., or such other name
as requested by an authorized representative of The Depository Trust Company,
and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein."
Section 2.2 Form of Agent's Certificate of Authentication.
(a) The form of the Agent's certificate of authentication of the
Equity Units shall be in substantially the form set forth on the form
of the Equity Units Certificates.
(b) The form of the Agent's certificate of authentication of the
Stripped Units shall be in substantially the form set forth on the
form of the Stripped Units Certificates.
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ARTICLE III.
THE EQUITY UNITS
Section 3.1 Title and Terms; Denominations.
(a) The aggregate number of Equity Units and Stripped Units, if
any, evidenced by Certificates authenticated, executed on behalf of
the Holders and delivered hereunder is limited to 6,000,000 (6,900,000
if the Underwriters' (as defined in the Underwriting Agreement)
over-allotment option pursuant to the Underwriting Agreement is
exercised in full), except for Certificates authenticated, executed
and delivered upon registration of transfer of, in exchange for, or in
lieu of other Certificates pursuant to Section 3.4, 3.5, 3.10, 3.13,
3.14, 5.9, 5.10 or 8.5.
(b) The Certificates shall be issuable only in registered form
and only in denominations of a single Equity Unit and any integral
multiple thereof.
Section 3.2 Rights and Obligations Evidenced by the Certificates.
(a) Each Equity Units Certificate shall evidence the number of
Equity Units specified therein, with each such Equity Units
Certificate representing the ownership by the Holder thereof of a
beneficial interest in a Note or the appropriate Treasury
Consideration or Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, subject to the Pledge of such Note or
such Treasury Consideration or Applicable Ownership Interest in the
Treasury Portfolio, as the case may be, by such Holder pursuant to the
Pledge Agreement, and the rights and obligations of the Holder thereof
and the Company under one Forward Purchase Contract. The Agent as
attorney-in-fact for, and on behalf of, the Holder of each Equity Unit
shall pledge, pursuant to the Pledge Agreement, the Note or the
appropriate Treasury Consideration or Applicable Ownership Interest in
the Treasury Portfolio, as the case may be, forming a part of such
Equity Units, to the Collateral Agent and grant to the Collateral
Agent a security interest in the right, title, and interest of such
Holder in such Note or such Treasury Consideration or Applicable
Ownership Interest in the Treasury Portfolio, as the case may be, for
the benefit of the Company, to secure the obligation of the Holder
under each Forward Purchase Contract to purchase the Common Stock of
the Company. Prior to the purchase of shares of Common Stock under
each Forward Purchase Contract, such Forward Purchase Contracts shall
not entitle the Holders of Equity Units Certificates to any of the
rights of a holder of shares of Common Stock, including, without
limitation, the right to vote or receive any dividends or other
payments or to consent or to receive notice as stockholders in respect
of the meetings of stockholders or for the election of directors of
the Company or for any other matter, or any other rights whatsoever as
stockholders of the Company.
(b) Each Stripped Units Certificate shall evidence the number of
Stripped Units specified therein, with each such Stripped Units
Certificate representing the ownership by the Holder thereof of a 1/20
undivided beneficial interest in a Treasury Security, subject to the
Pledge of such interest in such Treasury Security by such Holder
pursuant to the Pledge Agreement, and the rights and obligations of
the Holder thereof and the Company under one Forward Purchase
Contract. The Agent as attorney-in-fact for, and on behalf of, the
20
Holder of each Stripped Unit shall pledge, pursuant to the Pledge
Agreement, the Treasury Security, forming a part of such Stripped
Unit, to the Collateral Agent and grant to the Collateral Agent a
security interest in the right, title and interest of such Holder in
such Treasury Security for the benefit of the Company, to secure the
obligation of the Holder under each Forward Purchase Contract to
purchase shares of Common Stock pursuant to this Agreement and the
related Forward Purchase Contract. Prior to the purchase of shares of
Common Stock under each Forward Purchase Contract, such Forward
Purchase Contracts shall not entitle the Holders of Stripped Units
Certificates to any of the rights of a holder of shares of Common
Stock, including, without limitation, the right to vote or receive any
dividends or other payments or to consent or to receive notice as
stockholders in respect of the meetings of stockholders or for the
election of directors of the Company or for any other matter, or any
other rights whatsoever as stockholders of the Company.
Section 3.3 Execution, Authentication, Delivery and Dating.
(a) Subject to the provisions of Sections 3.13 and 3.14, upon the
execution and delivery of this Agreement, and at any time and from
time to time thereafter, the Company may deliver Certificates executed
by the Company to the Agent for authentication, execution on behalf of
the Holders and delivery, together with its Issuer Order for
authentication of such Certificates, and the Agent in accordance with
such Issuer Order shall authenticate, execute on behalf of the Holders
and deliver such Certificates.
(b) The Certificates shall be executed on behalf of the Company
by the Chief Executive Officer, the Chief Financial Officer, the
President, any Vice-President, the Treasurer, any Assistant Treasurer,
the Secretary or any Assistant Secretary (or other officer performing
similar functions) of the Company and delivered to the Agent. The
signature of any of these officers on the Certificates may be manual
or by facsimile.
(c) Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company
shall bind the Company, notwithstanding that such individuals or any
of them have ceased to hold such offices prior to the authentication
and delivery of such Certificates or did not hold such offices at the
date of such Certificates.
(d) No Forward Purchase Contract evidenced by a Certificate shall
be valid until such Certificate has been executed on behalf of the
Holder by the manual signature of an authorized signatory of the
Agent, as such Holder's attorney-in-fact. Such signature by an
authorized signatory of the Agent shall be conclusive evidence that
the Holder of such Certificate has entered into the Forward Purchase
Contracts evidenced by such Certificate.
(e) Each Certificate shall be dated the date of its
authentication.
(f) No Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose unless there
appears on such Certificate a certificate of authentication
substantially in the form provided for herein executed by an
authorized signatory of the Agent by manual signature, and such
certificate upon any Certificate shall
21
be conclusive evidence, and the only evidence, that such Certificate
has been duly authenticated and delivered hereunder.
Section 3.4 Temporary Certificates.
(a) Pending the preparation of definitive Certificates, the
Company shall execute and deliver to the Agent, and the Agent shall
authenticate, execute on behalf of the Holders, and deliver, in lieu
of such definitive Certificates, temporary Certificates which are in
substantially the form set forth in Exhibit A or Exhibit B hereto, as
the case may be, with such letters, numbers or other marks of
identification or designation and such legends or endorsements
printed, lithographed or engraved thereon as may be required by the
rules of any securities exchange on which the Equity Units or Stripped
Units, as the case may be, are listed, or as may, consistent herewith,
be determined by the officers of the Company executing such
Certificates, as evidenced by their execution of the Certificates.
(b) If temporary Certificates are issued, the Company will cause
definitive Certificates to be prepared without unreasonable delay.
After the preparation of definitive Certificates, the temporary
Certificates shall be exchangeable for definitive Certificates upon
surrender of the temporary Certificates at the Corporate Trust Office,
at the expense of the Company and without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Certificates,
the Company shall execute and deliver to the Agent, and the Agent
shall authenticate, execute on behalf of the Holder, and deliver in
exchange therefor, one or more definitive Certificates of like tenor
and denominations and evidencing a like number of Equity Units or
Stripped Units, as the case may be, as the temporary Certificate or
Certificates so surrendered. Until so exchanged, the temporary
Certificates shall in all respects evidence the same benefits and the
same obligations with respect to the Equity Units or Stripped Units,
as the case may be, evidenced thereby as definitive Certificates.
Section 3.5 Registration; Registration of Transfer and Exchange.
(a) The Agent shall keep at the Corporate Trust Office a register
(the "Equity Units Register") in which, subject to such reasonable
regulations as it may prescribe, the Agent shall provide for the
registration of Equity Units Certificates and of transfers of Equity
Units Certificates (the Agent, in such capacity, the "Equity Units
Registrar") and a register (the "Equity Units Register") in which,
subject to such reasonable regulations as it may prescribe, the Agent
shall provide for the registration of the Equity Units Certificates
and transfers of Equity Units Certificates (the Agent, in such
capacity, the "Equity Units Registrar").
(b) Upon surrender for registration of transfer of any
Certificate at the Corporate Trust Office, the Company shall execute
and deliver to the Agent, and the Agent shall authenticate, execute on
behalf of the designated transferee or transferees, and deliver, in
the name of the designated transferee or transferees, one or more new
Certificates of like tenor and denominations, and evidencing a like
number of Equity Units or Stripped Units, as the case may be.
22
(c) At the option of the Holder, Certificates may be exchanged
for other Certificates, of like tenor and denominations and evidencing
a like number of Equity Units or Stripped Units, as the case may be,
upon surrender of the Certificates to be exchanged at the Corporate
Trust Office. Whenever any Certificates are so surrendered for
exchange, the Company shall execute and deliver to the Agent, and the
Agent shall authenticate, execute on behalf of the Holder, and deliver
the Certificates which the Holder making the exchange is entitled to
receive.
(d) All Certificates issued upon any registration of transfer or
exchange of a Certificate shall evidence the ownership of the same
number of Equity Units or Stripped Units, as the case may be, and be
entitled to the same benefits and subject to the same obligations,
under this Agreement as the Equity Units or Stripped Units, as the
case may be, evidenced by the Certificate surrendered upon such
registration of transfer or exchange.
(e) Every Certificate presented or surrendered for registration
of transfer or for exchange shall (if so required by the Agent) be
duly endorsed, or be accompanied by a written instrument of transfer
in form satisfactory to the Company and the Agent duly executed, by
the Holder thereof or its attorney duly authorized in writing.
(f) No service charge shall be made for any registration of
transfer or exchange of a Certificate, but the Company and the Agent
may require payment from the Holder of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Certificates, other
than any exchanges pursuant to Sections 3.4, 3.6, 3.9 and 8.5 not
involving any transfer.
(g) Notwithstanding the foregoing, the Company shall not be
obligated to execute and deliver to the Agent, and the Agent shall not
be obligated to authenticate, execute on behalf of the Holder and
deliver any Certificate presented or surrendered for registration of
transfer or for exchange on or after the Business Day immediately
preceding the earlier of the Stock Purchase Date or the Termination
Date. In lieu of delivery of a new Certificate, upon satisfaction of
the applicable conditions specified above in this Section and receipt
of appropriate registration or transfer instructions from such Holder,
the Agent shall,
(i) if the Stock Purchase Date has occurred, deliver the
shares of Common Stock issuable in respect of the Forward
Purchase Contracts forming a part of the Equity Units or Stripped
Units, as the case may be, evidenced by such Certificate,
(ii) in the case of Equity Units, if a Termination Event
shall have occurred prior to the Stock Purchase Date, transfer
the Notes or the appropriate Treasury Consideration or Applicable
Ownership Interest in the Treasury Portfolio, as applicable,
relating to such Equity Units, or
(iii) in the case of Stripped Units, if a Termination Event
shall have occurred prior to the Stock Purchase Date, transfer
the Treasury Securities relating to such Stripped Units,
23
in each case subject to the applicable conditions and in accordance with the
applicable provisions of Article V.
Section 3.6 Book-Entry Interests.
The Certificates, on original issuance will be issued in the form of
one or more fully registered Global Certificates, to be delivered to the
Depositary or its custodian by, or on behalf of, the Company. Such Global
Certificate shall initially be registered in the applicable Register in the name
of Cede & Co., the nominee of the Depositary, and no Beneficial Owner will
receive a definitive Certificate representing such Beneficial Owner's interest
in such Global Certificate, except as provided in Section 3.9. The Agent shall
enter into an agreement with the Depositary if so requested by the Company.
Unless and until definitive, fully registered Certificates have been issued to
Beneficial Owners pursuant to Section 3.9:
(a) the provisions of this Section 3.6 shall be in full force and
effect;
(b) the Company shall be entitled to deal with the Clearing
Agency for all purposes of this Agreement (including receiving
approvals, votes or consents hereunder) as the Holder of the Equity
Units and Stripped Units and the sole holder of the Global
Certificate(s) and shall have no obligation to the Beneficial Owners;
(c) to the extent that the provisions of this Section 3.6
conflict with any other provisions of this Agreement, the provisions
of this Section 3.6 shall control; and
(d) the rights of the Beneficial Owners shall be exercised only
through the Clearing Agency and shall be limited to those established
by law and agreements between such Beneficial Owners and the Clearing
Agency and/or the Clearing Agency Participants. The Clearing Agency
will make book-entry transfers among Clearing Agency Participants.
Section 3.7 Notices To Holders.
Whenever a notice or other communication to the Holders is required to
be given under this Agreement, the Company or the Company's agent shall give
such notices and communications to the Holders and, with respect to any Equity
Units or Stripped Units registered in the name of a Clearing Agency or the
nominee of a Clearing Agency, the Company or the Company's agent shall, except
as set forth herein, have no obligations to the Beneficial Owners.
Section 3.8 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Equity Units and Stripped Units or
ceases to be eligible as a "clearing agency" under the Exchange Act, the Company
may, in its sole discretion, appoint a successor Clearing Agency with respect to
the Equity Units and Stripped Units.
Section 3.9 Definitive Certificates.
If
24
(i) a Clearing Agency elects to discontinue its services
as securities depositary with respect to the Equity Units and
Stripped Units or ceases to be eligible as a "clearing agency"
under the Exchange Act and a successor Clearing Agency is not
appointed within 90 days after such discontinuance pursuant to
Section 3.8,
(ii) the Company elects to terminate the book-entry system
through the Clearing Agency with respect to the Equity Units and
Stripped Units, or
(iii) there shall have occurred and be continuing a default
by the Company in respect of its obligations under one or more
Forward Purchase Contracts, this Agreement, the Indenture, the
Notes, the Equity Units, the Pledge Agreement or any other
principal agreements or instruments executed in connection with
the offering of Equity Units
then upon surrender of the Global Certificates representing the Book-Entry
Interests with respect to the Equity Units and Stripped Units by the Clearing
Agency, accompanied by registration instructions, the Company shall cause
definitive Certificates to be delivered to Clearing Agency Participants in
accordance with the instructions of the Clearing Agency. The Company and the
Agent shall not be liable for any delay in delivery of such instructions and may
conclusively rely on and shall be protected in relying on such instructions.
Section 3.10 Mutilated, Destroyed, Lost and Stolen Certificates.
(a) If any mutilated Certificate is surrendered to the Agent, the
Company shall execute and deliver to the Agent, and the Agent shall
authenticate, execute on behalf of the Holder, and deliver in exchange
therefor, a new Certificate at the cost of the Holder, evidencing the
same number of Equity Units or Stripped Units, as the case may be, and
bearing a Certificate number not contemporaneously outstanding.
(b) If there shall be delivered to the Company and the Agent (i)
evidence to their satisfaction of the destruction, loss or theft of
any Certificate, and (ii) such security or indemnity at the cost of
the Holder as may be required by them to hold each of them and any
agent of any of them harmless, then, in the absence of notice to the
Company or the Agent that such Certificate has been acquired by a bona
fide purchaser, the Company shall execute and deliver to the Agent,
and the Agent shall authenticate, execute on behalf of the Holder, and
deliver to the Holder, in lieu of any such destroyed, lost or stolen
Certificate, a new Certificate, evidencing the same number of Equity
Units or Stripped Units, as the case may be, and bearing a Certificate
number not contemporaneously outstanding.
(c) Notwithstanding the foregoing, the Company shall not be
obligated to execute and deliver to the Agent, and the Agent shall not
be obligated to authenticate, execute on behalf of the Holder, and
deliver to the Holder, a Certificate on or after the Business Day
immediately preceding the earlier of the Stock Purchase Date or the
Termination Date. In lieu of delivery of a new Certificate, upon
satisfaction of the applicable conditions specified above in this
Section and receipt of appropriate registration or transfer
instructions from such Holder, the Agent shall (i) if the Stock
Purchase Date has occurred,
25
deliver the shares of Common Stock issuable in respect of the Forward
Purchase Contracts forming a part of the Equity Units or Stripped
Units evidenced by such Certificate, or (ii) if a Termination Event
shall have occurred prior to the Stock Purchase Date, transfer the
Notes, the appropriate Treasury Consideration or Applicable Ownership
Interest in the Treasury Portfolio, or the Treasury Securities, as the
case may be, evidenced thereby, in each case subject to the applicable
conditions and in accordance with the applicable provisions of Article
V.
(d) Upon the issuance of any new Certificate under this Section,
the Company and the Agent may require the payment by the Holder of a
sum sufficient to cover any tax or other governmental charge that may
be imposed in relation thereto and any other expenses (including the
fees and expenses of the Agent) connected therewith.
(e) Every new Certificate issued pursuant to this Section in lieu
of any destroyed, lost or stolen Certificate shall constitute an
original contractual obligation of the Company and of the Holder in
respect of the Equity Units or Stripped Units, as the case may be,
evidenced thereby, whether or not the destroyed, lost or stolen
Certificate (and the Equity Units and Stripped Units evidenced
thereby) shall be at any time enforceable by anyone, and shall be
entitled to all the benefits and be subject to all the obligations of
this Agreement equally and proportionately with any and all other
Certificates delivered hereunder.
(f) The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with
respect to the replacement or payment of mutilated, destroyed, lost or
stolen Certificates.
Section 3.11 Persons Deemed Owners.
(a) Prior to due presentment of a Certificate for registration of
transfer, the Company and the Agent, and any agent of the Company or
the Agent, may treat the Person in whose name such Certificate is
registered as the owner of the Equity Units or Stripped Units, as the
case may be, evidenced thereby, for the purpose of receiving interest
payments on the Notes, receiving payment of Contract Adjustment
Payments, performance of the Forward Purchase Contracts and for all
other purposes whatsoever (subject to Section 4.1(a) and 5.2(a)),
whether or not any such payments shall be overdue and notwithstanding
any notice to the contrary, and neither the Company nor the Agent, nor
any agent of the Company or the Agent, shall be affected by notice to
the contrary.
(b) Notwithstanding the foregoing, with respect to any Global
Certificate, nothing herein shall prevent the Company, the Agent or
any agent of the Company or the Agent from giving effect to any
written certification, proxy or other authorization furnished by any
Clearing Agency (or its nominee), as a Holder, with respect to such
Global Certificate or impair, as between such Clearing Agency and
owners of beneficial interests in such Global Certificate, the
operation of customary practices governing the exercise of rights of
such Clearing Agency (or its nominee) as Holder of such Global
Certificate. None of the Company, the Agent, or any agent of the
Company or the Agent will have any responsibility or liability for any
aspect of the records relating to or payments made on
26
account of beneficial ownership interests in a Global Certificate or
maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
Section 3.12 Cancellation.
(a) All Certificates surrendered (i) for delivery of shares of
Common Stock on or after any Settlement Date; (ii) upon the transfer
of Notes, the appropriate Treasury Consideration or Applicable
Ownership Interest in the Treasury Portfolio, or Treasury Securities,
as the case may be, after the occurrence of a Termination Event; or
(iii) upon the registration of a transfer or exchange of Equity Units
or Stripped Units, as the case may be, shall, if surrendered to any
Person other than the Agent, be delivered to the Agent and, if not
already cancelled, shall be promptly cancelled by it. The Company may
at any time deliver to the Agent for cancellation any Certificates
previously authenticated, executed and delivered hereunder which the
Company may have acquired in any manner whatsoever, and all
Certificates so delivered shall, upon Issuer Order, be promptly
cancelled by the Agent. No Certificates shall be authenticated,
executed on behalf of the Holder and delivered in lieu of or in
exchange for any Certificates cancelled as provided in this Section,
except as expressly permitted by this Agreement. All cancelled
Certificates held by the Agent shall be disposed of by the Agent in
accordance with its customary procedures.
(b) If the Company or any Affiliate of the Company shall acquire
any Certificate, such acquisition shall not operate as a cancellation
of such Certificate unless and until such Certificate is cancelled or
delivered to the Agent for cancellation.
Section 3.13 Establishment of Stripped Units.
(a) Unless a successful remarketing or a Tax Event Redemption has
occurred, a Holder may separate the Pledged Notes from the related
Forward Purchase Contracts in respect of the Equity Units held by such
Holder by substituting for such Pledged Notes Treasury Securities that
will pay, on the Stock Purchase Date, an amount equal to the aggregate
principal amount of such Notes (a "Collateral Substitution"), at any
time from and after the date of this Agreement and on or prior to the
tenth Business Day immediately preceding the Stock Purchase Date, by
(i) depositing with the Collateral Agent Treasury Securities having an
aggregate principal amount equal to the aggregate Stated Amount of
such Equity Units, and (ii) transferring the related Equity Units to
the Agent accompanied by a notice to the Agent, substantially in the
form of Exhibit D hereto, stating that the Holder has transferred the
relevant amount of Treasury Securities to the Collateral Agent and
requesting that the Agent instruct the Collateral Agent to release the
Pledged Notes underlying such Equity Units, whereupon the Agent shall
promptly give such instruction to the Collateral Agent, substantially
in the form of Exhibit C hereto. Notwithstanding the foregoing, a
Holder may not separate the Pledged Notes from the related Forward
Purchase Contracts in respect of the Equity Units held by such Holder
during the periods beginning on the fourth Business Day prior to any
Remarketing Period and ending on the third Business Day after the end
of such Remarketing Period. Upon receipt of the Treasury Securities
described in clause (i) above and the instruction described in clause
(ii) above, in accordance with the terms of the Pledge Agreement, the
Collateral Agent will release to the
27
Agent, on behalf of the Holder, such Pledged Notes from the Pledge, free
and clear of the Company's security interest therein, and upon receipt
thereof the Agent shall promptly:
(i) cancel the related Equity Units;
(ii) transfer the Pledged Notes to the Holder; and
(iii) authenticate, execute on behalf of such Holder and deliver
to such Holder a Stripped Units Certificate executed by the Company in
accordance with Section 3.3 evidencing the same number of Forward
Purchase Contracts as were evidenced by the cancelled Equity Units.
(b) Holders who elect to separate the Pledged Notes from the related
Forward Purchase Contract and to substitute Treasury Securities for such
Pledged Notes shall be responsible for any fees or expenses payable to the
Collateral Agent for its services as Collateral Agent in respect of the
substitution, and the Company shall not be responsible for any such fees or
expenses.
(c) Holders may make Collateral Substitutions if Treasury Securities
are being substituted for Pledged Notes, only in integral multiples of 20
Equity Units.
(d) In the event a Holder making a Collateral Substitution pursuant to
this Section 3.13 fails to effect a book-entry transfer of the Equity Units
or fails to deliver an Equity Units Certificate to the Agent after
depositing Treasury Securities with the Collateral Agent, the Pledged Notes
constituting a part of such Equity Units, and any distributions on such
Pledged Notes shall be held in the name of the Agent or its nominee in
trust for the benefit of such Holder, until such Equity Units are so
transferred or the Equity Units Certificate is so delivered, as the case
may be, or, with respect to an Equity Units Certificate, such Holder
provides evidence satisfactory to the Company and the Agent that such
Equity Units Certificate has been destroyed, lost or stolen, together with
any indemnity that may be required by the Agent and the Company.
(e) Except as described in this Section 3.13, for so long as the
Forward Purchase Contract underlying an Equity Unit remains in effect, such
Equity Unit shall not be separable into its constituent parts, and the
rights and obligations of the Holder of such Equity Unit in respect of the
Note or the appropriate Treasury Consideration or Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, and the Forward
Purchase Contract comprising such Equity Unit may be acquired, and may be
transferred and exchanged, only as an Equity Unit.
Section 3.14 Reestablishment of Equity Units.
(a) Unless a successful remarketing or a Tax Event Redemption has
occurred, a Holder of Stripped Units may reestablish Equity Units at any
time from and after the date of this Agreement and on or prior to the tenth
Business Day immediately preceding the Stock Purchase Date, by (i)
depositing with the Collateral Agent the Notes then comprising such number
of Equity Units as is equal to such Stripped Units and (ii) transferring
such Stripped Units to the Agent accompanied by a notice to the Agent,
substantially in the form
28
of Exhibit D hereto, stating that the Holder has transferred the relevant
amount of Notes to the Collateral Agent and requesting that the Agent
instruct the Collateral Agent to release the Pledged Treasury Securities
underlying such Stripped Units, whereupon the Agent shall promptly give
such instruction to the Collateral Agent, substantially in the form of
Exhibit C hereto. Notwithstanding the foregoing, a Holder may not
reestablish Equity Units during the periods beginning on the fourth
Business Day prior to any Remarketing Period and ending on the third
Business Day after the end of such Remarketing Period. Upon receipt of the
Notes described in clause (i) above and the instruction described in clause
(ii) above, in accordance with the terms of the Pledge Agreement, the
Collateral Agent will release to the Agent, on behalf of the Holder, such
Pledged Treasury Securities from the Pledge, free and clear of the
Company's security interest therein, and upon receipt thereof the Agent
shall promptly:
(i) cancel the related Stripped Units;
(ii) transfer the Pledged Treasury Securities to the Holder; and
(iii) authenticate, execute on behalf of such Holder and deliver
an Equity Units Certificate executed by the Company in accordance with
Section 3.3 evidencing the same number of Forward Purchase Contracts
as were evidenced by the cancelled Stripped Units.
(b) Holders of Stripped Units may reestablish Equity Units only in
integral multiples of 20 Stripped Units for 20 Equity Units.
(c) Except as provided in this Section 3.14, for so long as the
Forward Purchase Contract underlying a Stripped Unit remains in effect,
such Stripped Unit shall not be separable into its constituent parts, and
the rights and obligations of the Holder of such Stripped Unit in respect
of the Treasury Security and Forward Purchase Contract comprising such
Stripped Unit may be acquired, and may be transferred and exchanged, only
as a Stripped Unit.
(d) Holders of Stripped Units who reestablish Equity Units shall be
responsible for any fees or expenses payable to the Collateral Agent for
its services as Collateral Agent in respect of the substitution, and the
Company shall not be responsible for any such fees or expenses.
(e) In the event a Holder who reestablishes Equity Units pursuant to
this Section 3.14 fails to effect a book-entry transfer of the Stripped
Units or fails to deliver a Stripped Units Certificate to the Agent after
depositing Pledged Notes with the Collateral Agent, the Treasury Securities
constituting a part of such Stripped Units, and any distributions on such
Treasury Securities shall be held in the name of the Agent or its nominee
in trust for the benefit of such Holder, until such Stripped Units are so
transferred or the Stripped Units Certificate is so delivered, as the case
may be, or, with respect to a Stripped Units Certificate, such Holder
provides evidence satisfactory to the Company and the Agent that such
Stripped Units Certificate has been destroyed, lost or stolen, together
with any indemnity that may be required by the Agent and the Company.
29
Section 3.15 Transfer of Collateral Upon Occurrence of Termination Event.
Upon the occurrence of a Termination Event and the transfer to the Agent by
the Collateral Agent of the Notes, the appropriate Treasury Consideration or
Applicable Ownership Interest in the Treasury Portfolio, or the Treasury
Securities, as the case may be, underlying the Equity Units or the Stripped
Units, as the case may be, pursuant to the terms of the Pledge Agreement, the
Agent shall request transfer instructions with respect to such Notes or the
appropriate Treasury Consideration or Applicable Ownership Interest in the
Treasury Portfolio, or Treasury Securities, as the case may be, from each Holder
by written request mailed to such Holder at its address as it appears in the
Equity Units Register or the Stripped Units Register, as the case may be. Upon
book-entry transfer of the Equity Units or Stripped Units or delivery of an
Equity Units Certificate or Stripped Units Certificate to the Agent with such
transfer instructions, the Agent shall transfer the Notes, the appropriate
Treasury Consideration or Applicable Ownership Interest in the Treasury
Portfolio, or Treasury Securities, as the case may be, underlying such Equity
Units or Stripped Units, as the case may be, to such Holder by book-entry
transfer, or other appropriate procedures, in accordance with such instructions.
In the event a Holder would be entitled to receive less than $1,000 principal
amount at maturity of any Treasury security, the Agent shall dispose of such
Treasury security for cash and deliver such cash to the Holder. In the event a
Holder of Equity Units or Stripped Units fails to effect such transfer or
delivery, the Notes, the appropriate Treasury Consideration or Applicable
Ownership Interest in the Treasury Portfolio or Treasury Securities, as the case
may be, underlying such Equity Units or Stripped Units, as the case may be, and
any distributions thereon, shall be held in the name of the Agent or its nominee
in trust for the benefit of such Holder, until (i) such Equity Units or Stripped
Units are transferred or the Equity Units Certificate or Stripped Units
Certificate is surrendered or such Holder provides satisfactory evidence that
such Equity Units Certificate or Stripped Units Certificate has been destroyed,
lost or stolen, together with any indemnity that may be required by the Agent
and the Company; and (ii) the expiration of the time period specified in the
abandoned property laws of the relevant State.
Section 3.16 No Consent to Assumption.
Each Holder of Equity Units or Stripped Units, as the case may be, by
acceptance thereof, shall be deemed expressly to have withheld any consent to
the assumption under Section 365 of the Bankruptcy Code or otherwise, of the
Forward Purchase Contract by the Company, any receiver, liquidator or person or
entity performing similar functions or its trustee in the event that the Company
becomes the debtor under the Bankruptcy Code or subject to other similar state
or federal law providing for reorganization or liquidation.
ARTICLE IV.
THE NOTES
Section 4.1 Payment of Interest; Rights to Interest Payments Preserved;
Notice.
(a) A payment on any Note, Treasury Consideration or Applicable
Ownership Interest in the Treasury Portfolio, as the case may be, which is
paid on any Payment Date other than a Payment Date with respect to the
Stated Amount due on Treasury Consideration or Applicable Ownership
Interest in the Treasury Portfolio shall, subject to receipt thereof by the
Agent from the Collateral Agent (if the Collateral Agent is the
30
registered owner thereof) as provided by the terms of the Pledge Agreement,
be paid to the Person in whose name the Equity Units Certificate (or one or
more Predecessor Equity Units Certificates) of which such Note or the
appropriate Treasury Consideration or Applicable Ownership Interest in the
Treasury Portfolio, as the case may be, is a part is registered at the
close of business on the Record Date for such Payment Date.
(b) Each Equity Units Certificate evidencing Notes delivered under
this Agreement upon registration of transfer of or in exchange for or in
lieu of any other Equity Units Certificate shall carry the rights to
interest accrued and unpaid which were carried by the Notes and Treasury
Consideration or Applicable Ownership Interest in the Treasury Portfolio,
as the case may be, underlying such other Equity Units Certificate.
(c) In the case of any Equity Units with respect to which Early
Settlement of the underlying Forward Purchase Contract is effected on an
Early Settlement Date, Merger Early Settlement of the underlying Forward
Purchase Contract is effected on a Merger Early Settlement Date, Cash
Settlement is effected on the seventh Business Day immediately preceding
the Stock Purchase Date, or a Collateral Substitution is effected, in each
case on a date that is after any Record Date and on or prior to the next
succeeding Payment Date, payments on the Note or the appropriate Treasury
Consideration or Applicable Ownership Interest in the Treasury Portfolio,
as the case may be, underlying such Equity Units otherwise payable on such
Payment Date shall be payable on such Payment Date notwithstanding such
Early Settlement, Merger Early Settlement, Cash Settlement or Collateral
Substitution, as the case may be, and such payments shall, subject to
receipt thereof by the Agent, be payable to the Person in whose name the
Equity Units Certificate (or one or more Predecessor Equity Units
Certificates) was registered at the close of business on the Record Date.
Except as otherwise expressly provided in the immediately preceding
sentence, in the case of any Equity Units with respect to which Early
Settlement, Merger Early Settlement or Cash Settlement of the underlying
Forward Purchase Contract is effected, or with respect to which a
Collateral Substitution has been effected, payments on the related Notes or
payments on the appropriate Treasury Consideration or Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, that would
otherwise be payable after the applicable Settlement Date or after such
Collateral Substitution, as the case may be, shall not be payable hereunder
to the Holder of such Equity Units; provided, that to the extent that such
Holder continues to hold the Separate Notes that formerly comprised a part
of such Holder's Equity Units, such Holder shall be entitled to receive the
payments on such Separate Notes.
Section 4.2 Notice and Voting.
Under the terms of the Pledge Agreement, the Agent will be entitled to
exercise the voting and any other consensual rights pertaining to the Pledged
Notes but only to the extent instructed by the Holders as described below. Upon
receipt of notice of any meeting at which holders of Notes are entitled to vote
or upon any solicitation of consents, waivers or proxies of holders of Notes,
the Agent shall, as soon as practicable thereafter, mail to the Holders of
Equity Units a notice (a) containing such information as is contained in the
notice or solicitation, (b) stating that each Holder on the record date set by
the Agent therefor (which, to the extent possible, shall be the same date as the
record date for determining the holders of Notes entitled to vote) shall be
entitled to
31
instruct the Agent as to the exercise of the voting rights pertaining to the
Pledged Notes underlying their Equity Units and (c) stating the manner in which
such instructions may be given. Upon the written request of the Holders of
Equity Units on such record date, the Agent shall endeavor insofar as
practicable to vote or cause to be voted, in accordance with the instructions
set forth in such requests, the maximum number of Pledged Notes as to which any
particular voting instructions are received. In the absence of specific
instructions from the Holder of an Equity Unit, the Agent shall abstain from
voting the Pledged Note underlying such Equity Units. The Company hereby agrees,
if applicable, to solicit Holders of Equity Units to timely instruct the Agent
in order to enable the Agent to vote such Pledged Notes.
Section 4.3 Tax Event Redemption.
Upon the occurrence of a Tax Event Redemption prior to the earlier of a
successful remarketing of the Notes or the Stock Purchase Date, the Company may
elect to instruct in writing the Collateral Agent to apply, and upon such
written instruction, the Collateral Agent shall apply, out of the aggregate
Redemption Price for the Notes that are components of Equity Units, an amount
equal to the aggregate Redemption Amount for the Notes that are components of
Equity Units to purchase on behalf of the Holders of Equity Units the Treasury
Portfolio and promptly remit the remaining portion of such aggregate Redemption
Price to the Agent for payment to the Holders of such Equity Units. The Treasury
Portfolio will be substituted for the Pledged Notes, and will be pledged to the
Collateral Agent in accordance with the terms of the Pledge Agreement to secure
the obligation of each Holder of an Equity Units to purchase the Common Stock
under the Forward Purchase Contract constituting a part of such Equity Units.
Following the occurrence of a Tax Event Redemption prior to the earlier of a
successful remarketing of the Notes or the Stock Purchase Date, the Holders of
Equity Units and the Collateral Agent shall have such security interests, rights
and obligations with respect to the Treasury Portfolio as the Holder of Equity
Units and the Collateral Agent had in respect of the Notes, as the case may be,
subject to the Pledge thereof as provided in Articles II, III, IV, V and VI of
the Pledge Agreement, and any reference herein or in the Certificates to the
Note shall be deemed to be a reference to such Treasury Portfolio and any
reference herein or in the Certificates to interest on the Notes shall be deemed
to be a reference to corresponding distributions on the Treasury Portfolio. The
Company may cause to be made in any Equity Units Certificates thereafter to be
issued such change in phraseology and form (but not in substance) as may be
appropriate to reflect the substitution of the Treasury Portfolio for Notes as
collateral.
The Company shall cause notice of any Tax Event Redemption to be mailed, at
least 30 calendar days but not more than 60 calendar days before such Tax Event
Redemption Date, to each Holder of Equity Units including Notes to be redeemed
at its registered address.
Upon the occurrence of a Tax Event Redemption after the earlier of a
successful remarketing of the Notes or the Stock Purchase Date, the Redemption
Price will be payable in cash to the holders of the Notes.
ARTICLE V.
THE FORWARD PURCHASE CONTRACTS; THE REMARKETING
Section 5.1 Purchase of Shares of Common Stock.
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(a) Each Forward Purchase Contract shall, unless an Early Settlement
has occurred in accordance with Section 5.9, or a Merger Early Settlement
has occurred in accordance with Section 5.10, obligate the Holder of the
related Equity Units or Stripped Units, as the case may be, to purchase,
and the Company to sell, on the Stock Purchase Date at a price equal to $50
(the "Purchase Price"), a number of newly issued shares of Common Stock
equal to the Settlement Rate unless, on or prior to the Stock Purchase
Date, there shall have occurred a Termination Event with respect to the
Units of which such Forward Purchase Contract is a part. The "Settlement
Rate" is equal to,
(i) if the Applicable Market Value (as defined below) is
greater than or equal to $49.08 (the "Threshold Appreciation Price"),
1.0187 shares of Common Stock per Forward Purchase Contract,
(ii) if the Applicable Market Value is less than the Threshold
Appreciation Price, but is greater than $40.90, the number of shares of
Common Stock per Forward Purchase Contract equal to $50 divided by the
Applicable Market Value, and
(iii) if the Applicable Market Value is equal to or less than
$40.90, 1.2225 shares of Common Stock per Forward Purchase Contract,
in each case subject to adjustment as provided in Section 5.6 and in each case
rounded upward or downward to the nearest 1/10,000th of a share.
As provided in Section 5.12, no fractional shares of Common Stock will be
issued upon settlement of Forward Purchase Contracts.
Promptly after the calculation of the Settlement Rate and the Applicable
Market Value, the Company shall give the Agent notice thereof. All calculations
and determinations of the Settlement Rate and the Applicable Market Value shall
be made by the Company or its agents based on their good faith calculations, and
the Agent shall have no responsibility with respect thereto.
(b) The "Applicable Market Value" means the average of the Closing
Price per share of Common Stock on each of the 20 consecutive Trading Days
ending on the third Trading Day immediately preceding the Stock Purchase
Date. The "Closing Price" of the Common Stock on any date of determination
means the closing sale price (or, if no closing price is reported, the last
reported sale price) of the Common Stock on the New York Stock Exchange
(the "NYSE") on such date or, if the Common Stock is not listed for trading
on the NYSE on any such date, as reported in the composite transactions for
the principal United States securities exchange on which the Common Stock
is so listed, or if the Common Stock is not so listed on a United States
national or regional securities exchange, as reported by The NASDAQ Stock
Market, or, if the Common Stock is not so reported, the last quoted bid
price for the Common Stock in the over-the-counter market as reported by
the National Quotation Bureau or similar organization, or, if such bid
price is not available, the market value of the Common Stock on such date
as determined by a nationally recognized independent investment banking
firm retained for this purpose by the Company. A "Trading Day" means a day
on which the Common Stock (A) is not
33
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
(c) Each Holder of Equity Units or Stripped Units, as the case may be,
by its acceptance thereof, irrevocably authorizes the Agent to enter into
and perform the related Forward Purchase Contract on its behalf as its
attorney-in-fact (including the execution of Certificates on behalf of such
Holder), agrees to be bound by the terms and provisions thereof, covenants
and agrees to perform its obligations under such Forward Purchase
Contracts, and consents to the provisions hereof, irrevocably authorizes
the Agent as its attorney-in-fact to enter into and perform the Pledge
Agreement on its behalf as its attorney-in-fact, and consents to and agrees
to be bound by the Pledge of the Notes, the appropriate Treasury
Consideration or Applicable Ownership Interest in the Treasury Portfolio,
or the Treasury Securities pursuant to the Pledge Agreement; provided that
upon a Termination Event, the rights of the Holder of such Equity Units or
Stripped Units, as the case may be, under the Forward Purchase Contract may
be enforced without regard to any other rights or obligations. Each Holder
of Equity Units or Stripped Units, as the case may be, by its acceptance
thereof, further covenants and agrees that, to the extent and in the manner
provided in Section 5.4 and the Pledge Agreement, but subject to the terms
thereof, payments in respect of the Notes, the appropriate Treasury
Consideration or Applicable Ownership Interest in the Treasury Portfolio,
or the Treasury Securities, to be paid upon settlement of such Holder's
obligations to purchase Common Stock under the Forward Purchase Contract,
shall be paid on the Stock Purchase Date by the Collateral Agent to the
Company in satisfaction of such Holder's obligations under such Forward
Purchase Contract and such Holder shall acquire no right, title or interest
in such payment.
(d) Upon registration of transfer of a Certificate, the transferee
shall be bound (without the necessity of any other action on the part of
such transferee) under the terms of this Agreement, the Forward Purchase
Contracts underlying such Certificate and the Pledge Agreement, and the
transferor shall be released from the obligations under this Agreement, the
Forward Purchase Contracts underlying the Certificates so transferred and
the Pledge Agreement. The Company covenants and agrees, and each Holder of
a Certificate, by its acceptance thereof, likewise covenants and agrees, to
be bound by the provisions of this paragraph.
Section 5.2 Contract Adjustment Payments.
(a) Contract Adjustment Payments shall accrue on each Forward Purchase
Contract constituting a part of an Equity Unit or Stripped Unit at 3.50%
per year of the Stated Amount of such Equity Unit or Stripped Unit, from
June 11, 2002 through and including the Stock Purchase Date, provided that
no Contract Adjustment Payment shall accrue after an Early Settlement or
Merger Early Settlement. Subject to Section 5.3 herein, the Company shall
pay, on each Payment Date, the Contract Adjustment Payments, if any,
payable in respect of each Forward Purchase Contract to the Person in whose
name a Certificate (or one or more Predecessor Certificates) is registered
at the close of business on the Record Date immediately preceding such
Payment Date in such coin or currency of
34
the United States as at the time of payment shall be legal tender for
payments. The Contract Adjustment Payments, if any, will be payable at the
office in New York, New York, maintained for that purpose or, at the option
of the Company, by check mailed to the address of the Person entitled
thereto at such Person's address as it appears on the Register or by wire
transfer to the account designated to the Agent by a prior written notice
by such Person delivered at least five Business Days prior to the
applicable Payment Date.
(b) Upon the occurrence of a Termination Event, the Company's
obligation to pay Contract Adjustment Payments (including any accrued
Deferred Contract Adjustment Payments), if any, shall cease.
(c) Each Certificate delivered under this Agreement upon registration
of transfer of or in exchange for or in lieu of (including as a result of a
Collateral Substitution or the re-establishment of an Equity Unit) any
other Certificate shall carry the rights to Contract Adjustment Payments,
if any, accrued and unpaid, and to accrue Contract Adjustment Payments, if
any, which were carried by the Forward Purchase Contracts underlying such
other Certificates.
(d) Subject to Sections 5.9 and 5.10, in the case of any Equity Units
or Stripped Units, as the case may be, with respect to which Early
Settlement or Merger Early Settlement of the underlying Forward Purchase
Contract is effected on an Early Settlement Date or a Merger Early
Settlement Date, respectively, or in respect of which Cash Settlement of
the underlying Forward Purchase Contract is effected on the seventh
Business Day immediately preceding the Stock Purchase Date, or with respect
to which a Collateral Substitution or an establishment or re-establishment
of an Equity Units pursuant to Section 3.14 is effected, in each case on a
date that is after any Record Date and on or prior to the next succeeding
Payment Date, Contract Adjustment Payments on the Forward Purchase Contract
underlying such Equity Units or Stripped Units, as the case may be,
otherwise payable on such Payment Date shall be payable on such Payment
Date notwithstanding such Cash Settlement, Early Settlement, Merger Early
Settlement, Collateral Substitution or establishment or re-establishment of
Equity Units, and such Contract Adjustment Payments shall be paid to the
Person in whose name the Certificate evidencing such Equity Units or
Stripped Units (or one or more Predecessor Certificates) is registered at
the close of business on such Record Date. Except as otherwise expressly
provided in the immediately preceding sentence, in the case of any Equity
Units or Stripped Units with respect to which Cash Settlement, Early
Settlement, Merger Early Settlement of the underlying Forward Purchase
Contract is effected on the seventh Business Day immediately preceding the
Stock Purchase Date, an Early Settlement Date or Merger Early Settlement
Date, as the case may be, or with respect to which a Collateral
Substitution or an establishment or re-establishment of an Equity Unit has
been effected, Contract Adjustment Payments, if any, that would otherwise
be payable after the Early Settlement Date, or Merger Early Settlement
Date, Collateral Substitution or such establishment or re-establishment
with respect to such Forward Purchase Contract shall not be payable.
Section 5.3 Deferral of Contract Adjustment Payments.
35
(a) The Company shall have the right, at any time prior to the Stock
Purchase Date, to defer the payment of any or all of the Contract
Adjustment Payments otherwise payable on any Payment Date, but only if the
Company shall give the Holders and the Agent written notice of its election
to defer each such deferred Contract Adjustment Payment (specifying the
amount to be deferred) at least ten Business Days prior to the earlier of
(i) the next succeeding Payment Date or (ii) the date the Company is
required to give notice of the Record Date or Payment Date with respect to
payment of such Contract Adjustment Payments to the NYSE or other
applicable self-regulatory organization or to Holders of the Equity Units
and Stripped Units, but in any event not less than one Business Day prior
to such Record Date. Any Contract Adjustment Payments so deferred shall, to
the extent permitted by law, bear additional Contract Adjustment Payments
thereon at the rate of 5.75% per year (computed on the basis of a 360-day
year of twelve 30-day months), compounding on each succeeding Payment Date,
until paid in full (such deferred installments of Contract Adjustment
Payments, if any, together with the additional Contract Adjustment Payments
accrued thereon, being referred to herein as the "Deferred Contract
Adjustment Payments"). Deferred Contract Adjustment Payments, if any, shall
be due on the next succeeding Payment Date except to the extent that
payment is deferred pursuant to this Section 5.3. No Contract Adjustment
Payments may be deferred to a date that is after the Stock Purchase Date
and no such deferral period may end other than on a Payment Date. If the
Forward Purchase Contracts are terminated upon the occurrence of a
Termination Event, the Holder's right to receive Contract Adjustment
Payments, if any, and Deferred Contract Adjustment Payments, will
terminate. If Deferred Contract Adjustment Payments are deferred until the
Stock Purchase Date, all payments in respect thereof shall be made in cash
on the Stock Purchase Date.
(b) In the event that the Company elects to defer the payment of
Contract Adjustment Payments on the Forward Purchase Contracts until a
Payment Date prior to the Stock Purchase Date, then all Deferred Contract
Adjustment Payments, if any, shall be payable to the registered Holders as
of the close of business on the Record Date immediately preceding such
Payment Date.
(c) In the event the Company exercises its option to defer the payment
of Contract Adjustment Payments then, until the Deferred Contract
Adjustment Payments have been paid, the Company shall not declare or pay
dividends on, make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of the
Company's Common Stock other than:
(i) purchases, redemptions or acquisitions of shares of Common
Stock in connection with any employment contract, benefit plan or
other similar arrangement with or for the benefit of employees,
officers or directors or a stock purchase or dividend reinvestment
plan, or the satisfaction by the Company of its obligations pursuant
to any contract or security outstanding on the date the Company
exercises its right to defer the Contract Adjustment Payments;
(ii) as a result of a reclassification of the Company's Capital
Stock or the exchange or conversion of one class or series of the
Company's Capital Stock for another class or series of the Company's
Capital Stock;
36
(iii) the purchase of fractional interests of the Common Stock
pursuant to the conversion or exchange provisions of such Common Stock
or the security being converted or exchanged;
(iv) dividends or distributions in any series of the Company's
Common Stock (or rights to acquire Common Stock) or repurchases,
acquisitions or redemptions of Common Stock in connection with the
issuance or exchange of the Common Stock (or securities convertible
into or exchangeable for shares of the Company's Common Stock); or
(v) redemptions, exchanges or repurchases of any rights
outstanding under a shareholder rights plan or the declaration or
payment thereunder of a dividend or distribution of or with respect to
rights in the future.
Section 5.4 Payment of Purchase Price; Remarketing.
(a) Unless a Tax Event Redemption, successful remarketing, Termination
Event, Merger Early Settlement or Early Settlement has occurred, each
Holder of an Equity Unit may pay in cash ("Cash Settlement") the Purchase
Price for the shares of Common Stock to be purchased pursuant to a Forward
Purchase Contract if such Holder notifies the Agent by use of a notice in
substantially the form of Exhibit E hereto of its intention to make a Cash
Settlement. Such notice shall be made on or prior to 5:00 p.m., New York
City time, on the tenth Business Day immediately preceding the Stock
Purchase Date. The Agent shall promptly notify the Collateral Agent of the
receipt of such a notice from a Holder intending to make a Cash Settlement.
(i) A Holder of an Equity Unit who has so notified the Agent of
its intention to make a Cash Settlement is required to pay the
Purchase Price to the Collateral Agent prior to 11:00 a.m., New York
City time, on the seventh Business Day immediately preceding the Stock
Purchase Date in lawful money of the United States by certified or
cashiers' check or wire transfer, in each case payable to or upon the
order of the Company. Any cash received by the Collateral Agent will
be paid to the Company on the Stock Purchase Date in settlement of the
Forward Purchase Contract in accordance with the terms of this
Agreement and the Pledge Agreement.
(ii) If a Holder of an Equity Unit fails to notify the Agent of
its intention to make a Cash Settlement in accordance with this
paragraph (a), the Holder shall be deemed to have consented to the
disposition of the Pledged Notes pursuant to the remarketing as
described in paragraph 5.4(b) below. If a Holder of an Equity Unit
does notify the Agent as provided in this paragraph (a) of its
intention to pay the Purchase Price in cash, but fails to make such
payment as required by paragraph (a)(i) above, the Holder shall be
deemed to have consented to the disposition of the Pledged Notes
pursuant to the remarketing as described in paragraph 5.4 (b) below.
(b) The Company has engaged the Remarketing Agent to sell the Notes of
(A) Holders of Equity Units, other than Holders that have elected not to
participate in the
37
remarketing pursuant to the procedures set forth in subsection (g) below,
and (B) holders of Separate Notes that have elected to participate in the
remarketing pursuant to the procedures set forth in Section 4.5(d) of the
Pledge Agreement. On the seventh Business Day prior to the Remarketing
Date, the Agent shall give Holders of Equity Units and holders of Separate
Notes notice of the remarketing (the form of which notice to be provided by
the Company) in a daily newspaper in the English language of general
circulation in The City of New York, which is expected to be The Wall
Street Journal, including the specific U.S. Treasury security or securities
(including the CUSIP number and/or the principal terms of such Treasury
security or securities) described in subsection (g) below, that must be
delivered by Holders of Equity Units that elect not to participate in the
remarketing pursuant to subsection (g) below, no later than 10:00 a.m., New
York City time, on the fourth Business Day preceding the Remarketing Date
or the first day of any Subsequent Remarketing Period, as applicable. The
Agent shall notify, by 10:00 a.m., New York City time, on the third
Business Day preceding the Remarketing Date or the first day of any
subsequent Remarketing Period, as applicable, the Remarketing Agent and the
Collateral Agent of the aggregate number of Notes of Equity Units Holders
to be remarketed. On the third Business Day immediately preceding the
Remarketing Date or the first day of any subsequent Remarketing Period, as
applicable, no later than by 10:00 a.m. New York City time, pursuant to the
terms of the Pledge Agreement, the Custodial Agent will notify the
Remarketing Agent of the aggregate number of Separate Notes to be
remarketed. On the third Business Day immediately preceding the Remarketing
Date or the first day of any subsequent Remarketing Period, as applicable,
the Collateral Agent and the Custodial Agent, pursuant to the terms of the
Pledge Agreement, will deliver for remarketing to the Remarketing Agent all
Notes to be remarketed.
(c) Upon receipt of such notice from the Agent and the Custodial Agent
and such Notes from the Collateral Agent and the Custodial Agent, the
Remarketing Agent will, on the Remarketing Date, use its commercially
reasonable best efforts to (i) establish a rate of interest that, in the
opinion of the Remarketing Agent, will, when applied to the outstanding
Notes, enable the then current aggregate market value of the Notes to have
a value equal to approximately, but not less than, 100.25% of the
Remarketing Value as of the Remarketing Date or as of any Subsequent
Remarketing Date, as the case may be (the "Reset Rate") and (ii) sell such
Notes on such date at a price equal to approximately, but not less than,
100.25% of the Remarketing Value.
(d) If the remarketing occurs prior to the fourth Business Day
preceding the Stock Purchase Date, the Remarketing Agent will use the
proceeds from a successful remarketing to purchase the appropriate U.S.
Treasury securities (the "Agent-purchased Treasury Consideration") with the
CUSIP numbers, if any, selected by the Remarketing Agent, described in
clauses (1) and (2) of the definition of Remarketing Value related to the
Notes of Holders of Equity Units or that were remarketed. On or prior to
the third Business Day following the Remarketing Date or any Subsequent
Remarketing Date the Remarketing Agent shall deliver such Agent-purchased
Treasury Consideration to the Agent, which shall thereupon deliver such
Agent-purchased Treasury Consideration to the Collateral Agent. The
Collateral Agent, for the benefit of the Company, will thereupon apply such
Agent-purchased Treasury Consideration, in accordance with the Pledge
Agreement, to secure such Holders' obligations under the Forward Purchase
Contracts. If the remarketing
38
occurs on or after the fourth Business Day preceding the Stock Purchase
Date, the proceeds of the remarketing will not be used to purchase the
Agent-purchased Treasury Consideration, but such proceeds will be paid to
the Agent in direct settlement of the obligations of the Holders under the
related Forward Purchase Contracts to purchase Common Stock of the Company.
The Remarketing Agent will deduct as a remarketing fee an amount not
exceeding 25 basis points (0.25%) of the total proceeds from the
remarketing (the "Remarketing Fee"). The Remarketing Agent will remit (1)
the remaining portion of the proceeds from the remarketing attributable to
the Separate Notes to the Custodial Agent for the benefit of the holders of
Separate Notes that were remarketed and (2) the remaining portion of the
proceeds, less those proceeds used to purchase the Agent-purchased Treasury
Consideration or to pay the Company in direct settlement of the Holders'
obligations under the Forward Purchase Contracts, to the Agent for payment
to the Holders of the Equity Units that were remarketed, all determined on
a pro rata basis, in each case, on or prior to the third Business Day
following such Remarketing Date or Subsequent Remarketing Date. Holders
whose Notes are so remarketed will not otherwise be responsible for the
payment of any Remarketing Fee in connection therewith.
(e) (i) If, in spite of using its commercially reasonable best
efforts, the Remarketing Agent cannot establish the Reset Rate and remarket
the Notes included in the remarketing at a price equal to approximately,
but not less than, 100.25% of the Remarketing Value, the Remarketing Agent
will again attempt to establish the Reset Rate and remarket the Notes
included in the remarketing at a price equal to approximately, but not less
than, 100.25% of the Remarketing Value on each of the two immediately
following Business Days. If the Remarketing Agent cannot remarket the Notes
included in the remarketing at a price equal to approximately, but not less
than, 100.25% of the Remarketing Value on either of those days, it will
attempt to establish the Reset Rate and remarket the Notes included in the
remarketing at a price equal to approximately, but not less than, 100.25%
of the Remarketing Value on each of the three Business Days immediately
preceding June 16, 2005. If the Remarketing Agent cannot remarket the Notes
included in the remarketing at a price equal to approximately, but not less
than, 100.25% of the Remarketing Value on any of those days, it will
attempt to establish the Reset Rate and remarket the Notes included in the
remarketing at a price equal to approximately, but not less than, 100.25%
of the Remarketing Value on each of the three Business Days immediately
preceding July 16, 2005. If the Remarketing Agent cannot establish the
Reset Rate and remarket the Notes included in the remarketing at a price
equal to approximately, but not less than, 100.25% of the Remarketing Value
either on any of the two Business Days immediately following the
Remarketing Date or on any of the three Business Days immediately preceding
June 16, 2005 or on any of the three Business Days immediately preceding
July 16, 2005, the remarketing in each period will be deemed to have failed
(each, a "Failed Remarketing"). If the Remarketing Agent cannot establish
the Reset Rate and remarket the Notes included in the remarketing at a
price equal to approximately, but not less than, 100.25% of the Remarketing
Value on any of the three Business Days immediately preceding July 16,
2005, the Remarketing Agent will further attempt to establish the Reset
Rate and remarket the Notes included in the remarketing at a price equal to
approximately, but not less than, 100.25% of the Remarketing Value on each
of the three Business Days immediately preceding August 12, 2005. If, in
spite of using its commercially reasonable best efforts, the Remarketing
Agent fails to remarket the Notes
39
underlying the Equity Units at a price equal to approximately, but not less
than, 100.25% of the Remarketing Value in accordance with the terms of the
Pledge Agreement by 4:00 p.m., New York City time, on the third Business
Day immediately preceding the Stock Purchase Date, a "Last Failed
Remarketing" will be deemed to have occurred.
(ii) Within three Business Days following the end of the Last
Failed Remarketing, the Remarketing Agent shall return any Notes delivered
to it to the Collateral Agent and the Custodial Agent, as applicable,
together with written notice from the Remarketing Agent of such Last Failed
Remarketing. The Collateral Agent, for the benefit of the Company, may
exercise its rights as a secured party with respect to such Notes,
including those actions specified in Section 5.4(f) below, and the Holders
of Equity Units, by their acceptance of the Equity Units shall be deemed to
have agreed to such exercise by the Collateral Agent in such case;
provided, that if upon the Last Failed Remarketing, the Collateral Agent
delivers any Notes to the Company in full satisfaction of the Holder's
obligation under the related Forward Purchase Contracts, any accumulated
and unpaid interest on such Notes will become payable by the Company to the
Agent for payment to the Holder of the Equity Units to which such Notes
relate. Such payment will be made by the Company on or prior to 11:00 a.m.,
New York City time, on the Stock Purchase Date in lawful money of the
United States by certified or cashier's check or wire transfer in
immediately available funds payable to or upon the order of the Agent. The
Company will publish notice by means of Bloomberg and Reuters newswires of
any Remarketing Period during which no successful remarketing occurred,
such notice to be published not later than the fourth Business Day
following the end of such Remarketing Period. The Company will also cause a
notice of the Last Failed Remarketing to be published on the fourth
Business Day following the date of the Last Failed Remarketing in a daily
newspaper in the English language of general circulation in The City of New
York, which is expected to be The Wall Street Journal.
(f) With respect to any Notes which constitute part of Equity Units
which are subject to the Last Failed Remarketing, the Collateral Agent for
the benefit of the Company reserves all of its rights as a secured party
with respect thereto and, subject to applicable law and Section 5.4 (j)
below, may, among other things, permit the Company to cause the Notes to be
sold or to retain and cancel such Notes, in either case, in full
satisfaction of the Holders' obligations under the Forward Purchase
Contracts and the Holders of the Equity Units, by their acceptance of the
Equity Units shall be deemed to have agreed to such action by the
Collateral Agent.
(g) A Holder of Equity Units may elect not to participate in the
remarketing and retain the Notes underlying such Equity Units by notifying
the Agent of such election and delivering the specific U.S. Treasury
security or securities (including the CUSIP number and/or the principal
terms of such security or securities) identified by the Agent that
constitute the U.S. Treasury securities described in clauses (1) and (2) of
the definition of Remarketing Value relating to the retained Notes (as if
only such Notes were being remarketed) (the "Opt-out Treasury
Consideration") to the Agent not later than 10:00 a.m. on the fourth
Business Day prior to the Remarketing Date (or, in the case of a Failed
Remarketing, not later than 10:00 a.m. on the fourth Business Day
immediately prior to the subsequent Remarketing Period). Upon receipt
thereof by the Agent, the Agent shall
40
deliver such Opt-out Treasury Consideration to the Collateral Agent, which
will, for the benefit of the Company, thereupon apply such Opt-out Treasury
Consideration to secure such Holder's obligations under the Forward
Purchase Contracts. On the first Business Day immediately preceding the
Remarketing Date (or, in the case of a Failed Remarketing, the subsequent
Remarketing Period), the Collateral Agent, pursuant to the terms of the
Pledge Agreement, will deliver the Pledged Notes of such Holder to the
Agent. Within three Business Days following any Remarketing Period, (A) if
the remarketing was successful, the Agent shall distribute such Notes to
the new holders thereof, and (B) if there was a Failed Remarketing, the
Agent will deliver such Notes to the Collateral Agent, which will, for the
benefit of the Company, thereupon apply such Notes to secure such Holders'
obligations under the Forward Purchase Contracts and return the Opt-out
Treasury Consideration delivered by such Holders to such Holders. A Holder
that does not so deliver the Opt-out Treasury Consideration pursuant to
this clause (g) shall be deemed to have elected to participate in the
remarketing.
(h) Upon the maturity of the Pledged Treasury Securities underlying
the Stripped Units and the Pledged Treasury Consideration or Pledged
Applicable Ownership Interest in the Treasury Portfolio, as the case may
be, underlying the Equity Units, on the Stock Purchase Date, the Collateral
Agent shall remit to the Company an amount equal to the aggregate Purchase
Price applicable to such Units, as payment for the Common Stock issuable
upon settlement thereof without receiving any instructions from the Holders
of such Units. In the event the payments in respect of the Pledged Treasury
Securities, Pledged Treasury Consideration or Pledged Applicable Ownership
Interest in the Treasury Portfolio underlying a Unit are in excess of the
Purchase Price under the Forward Purchase Contract being settled thereby,
the Collateral Agent will distribute such excess to the Agent for the
benefit of the Holder of such Units when received.
(i) Any distribution to Holders of excess funds and interest described
in Section 5.4(c) and (d) above shall be payable at the Office of the Agent
in The City of New York maintained for that purpose or, at the option of
the Holder or the holder of Separate Notes, as applicable, by check mailed
to the address of the Person entitled thereto at such address as it appears
on the relevant Register or by wire transfer to an account specified by the
Holder or the holder of Separate Notes, as applicable.
(j) The obligations of each Holder to pay the Purchase Price are
non-recourse obligations and except to the extent paid by Cash Settlement,
Early Settlement or Merger Early Settlement, are payable solely out of the
proceeds of any Collateral pledged to secure the obligations of the Holder,
and in no event will any Holder be liable for any deficiency between such
proceeds and the Purchase Price.
(k) Notwithstanding anything to the contrary herein, the Company shall
not be obligated to issue any Common Stock in respect of a Forward Purchase
Contract or deliver any certificates therefor to the Holder of the related
Equity Units or Stripped Units, as the case may be, unless the Company
shall have received payment in full for the shares of Common Stock to be
purchased thereunder by such Holder in the manner herein set forth.
41
(l) In the event of a successful remarketing, the interest rate on all
of the outstanding Notes (whether or not included in the remarketing) shall
be adjusted to the Reset Rate.
Section 5.5 Issuance of Shares of Common Stock.
Unless a Termination Event shall have occurred on or prior to the Stock
Purchase Date or an Early Settlement or a Merger Early Settlement shall have
occurred with respect to all of the outstanding Units, on the Stock Purchase
Date, upon its receipt of payment for the shares of Common Stock purchased by
the Holders pursuant to the provisions of this Article and subject to Section
5.4, the Company shall issue and deposit with the Agent, for the benefit of the
Holders of the Outstanding Units, one or more certificates or book-entry
interests representing the newly issued shares of Common Stock registered in the
name of the Agent (or its nominee) as custodian for the Holders (such
certificates or book-entry interests for shares of Common Stock, together with
any dividends or distributions for which a record date and payment date for such
dividend or distribution has occurred after the Stock Purchase Date, being
hereinafter referred to as the "Forward Purchase Contract Settlement Fund") to
which the Holders are entitled hereunder. Subject to the foregoing, upon
surrender of a Certificate to the Agent on or after the Stock Purchase Date,
together with settlement instructions thereon duly completed and executed, the
Holder of such Certificate shall be entitled to receive in exchange therefor a
certificate or book-entry interest representing that number of whole shares of
Common Stock which such Holder is entitled to receive pursuant to the provisions
of this Article V (after taking into account all Equity Units and Stripped Units
then held by such Holder) together with cash in lieu of fractional shares as
provided in Section 5.12 and any dividends or distributions with respect to such
shares constituting part of the Forward Purchase Contract Settlement Fund, but
without any interest thereon, and the Certificate so surrendered shall forthwith
be cancelled. Such shares shall be registered in the name of the Holder or the
Holder's designee as specified in the settlement instructions provided by the
Holder to the Agent. If any shares of Common Stock issued in respect of a
Forward Purchase Contract are to be registered to a Person other than the Person
in whose name the Certificate evidencing such Forward Purchase Contract is
registered, no such registration shall be made unless the Person requesting such
registration has paid any transfer and other taxes required by reason of such
registration in a name other than that of the registered Holder of such
Certificate or has established to the satisfaction of the Company that such tax
either has been paid or is not payable.
Section 5.6 Adjustment of Settlement Rate.
(a) Adjustments for Dividends, Distributions, Stock Splits, Etc.
(l) Stock Dividends. In case the Company shall pay or
make a dividend or other distribution on the Common Stock in
Common Stock, the Settlement Rate or Early Settlement Rate,
as applicable, as in effect at the opening of business on
the day following the date fixed for the determination of
stockholders entitled to receive such dividend or other
distribution shall be increased by dividing such Settlement
Rate or Early Settlement Rate by a fraction of which the
numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date
42
fixed for such determination and the denominator shall be
the sum of such number of shares and the total number of
shares constituting such dividend or other distribution,
such increase to become effective immediately after the
opening of business on the day following the date fixed for
such determination. For the purposes of this paragraph (1),
the number of shares of Common Stock at the time outstanding
shall not include shares held in the treasury of the Company
but shall include any shares issuable in respect of any
scrip certificates issued in lieu of fractions of shares of
Common Stock. The Company will not pay any dividend or make
any distribution on shares of Common Stock held in the
treasury of the Company.
(2) Stock Purchase Rights. In case the Company shall
issue rights, options or warrants to all holders of its
Common Stock (not being available on an equivalent basis to
Holders of the Equity Units and Stripped Units upon
settlement of the Forward Purchase Contracts underlying such
Equity Units and Stripped Units) entitling them to subscribe
for or purchase shares of Common Stock at a price per share
less than the Current Market Price per share of the Common
Stock on the date fixed for the determination of
stockholders entitled to receive such rights, options or
warrants (other than pursuant to a dividend reinvestment,
share purchase or similar plan), the Settlement Rate or
Early Settlement Rate, as applicable, in effect at the
opening of business on the day following the date fixed for
such determination shall be increased by dividing such
Settlement Rate or Early Settlement Rate, as applicable, by
a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding at the close of business
on the date fixed for such determination plus the number of
shares of Common Stock which the aggregate of the offering
price of the total number of shares of Common Stock so
offered for subscription or purchase would purchase at such
Current Market Price and the denominator of which shall be
the number of shares of Common Stock outstanding at the
close of business on the date fixed for such determination
plus the number of shares of Common Stock so offered for
subscription or purchase, such increase to become effective
immediately after the opening of business on the day
following the date fixed for such determination. For the
purposes of this paragraph (2), the number of shares of
Common Stock at any time outstanding shall not include
shares held in the treasury of the Company but shall include
any shares issuable in respect of any scrip certificates
issued in lieu of fractions of shares of Common Stock. The
Company shall not issue any such rights, options or warrants
in respect of shares of Common Stock held in the treasury of
the Company.
(3) Stock Splits; Reverse Splits. In case outstanding
shares of Common Stock shall be subdivided or split into a
greater number of shares of Common Stock, the Settlement
Rate or Early Settlement Rate, as applicable, in effect at
the opening of business on the day following the day upon
which such subdivision or split becomes effective shall be
proportionately increased, and, conversely, in case
outstanding shares of
43
Common Stock shall be combined into a smaller number of
shares of Common Stock, the Settlement Rate or Early
Settlement Rate, as applicable, in effect at the opening of
business on the day following the day upon which such
combination becomes effective shall be proportionately
reduced, such increase or reduction, as the case may be, to
become effective immediately after the opening of business
on the day following the day upon which such subdivision,
split or combination becomes effective.
(4) Debt or Asset Distributions. (i) In case the
Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock evidences of its indebtedness or
assets (including securities, but excluding any rights or
warrants referred to in paragraph (2) of this Section, any
dividend or distribution paid exclusively in cash and any
dividend, shares of capital stock of any class or series, or
similar equity interests, of or relating to a subsidiary or
other business unit in the case of a Spin-Off referred to in
the next paragraph, or distribution referred to in paragraph
(1) of this Section), the Settlement Rate or Early
Settlement Rate, as applicable, shall be adjusted so that
the same shall equal the rate determined by dividing the
Settlement Rate or Early Settlement Rate, as applicable, in
effect immediately prior to the close of business on the
date fixed for the determination of stockholders entitled to
receive such distribution by a fraction, the numerator of
which shall be the Current Market Price per share of the
Common Stock on the date fixed for such determination less
the then fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and
described in a Board Resolution) of the portion of the
assets or evidences of indebtedness so distributed
applicable to one share of Common Stock and the denominator
of which shall be such Current Market Price per share of the
Common Stock, such adjustment to become effective
immediately prior to the opening of business on the day
following the date fixed for the determination of
stockholders entitled to receive such distribution. In any
case in which this paragraph (4) is applicable, paragraph
(2) of this Section shall not be applicable.
(ii) In the case of a Spin-Off, the Settlement Rate or
Early Settlement Rate, as applicable, in effect immediately before the
close of business on the record date fixed for determination of
stockholders entitled to receive that distribution will be increased by
multiplying the Settlement Rate or Early Settlement Rate, as applicable, by
a fraction, the numerator of which is the Current Market Price per share of
the Common Stock plus the Fair Market Value of the portion of those shares
of Capital Stock or similar equity interests so distributed applicable to
one share of Common Stock and the denominator of which is the Current
Market Price per share of the Common Stock. Any adjustment to the
Settlement Rate or Early Settlement Rate under this paragraph 4(ii) will
occur at the earlier of (1) the tenth Trading Day from, and including, the
effective date of the Spin-Off and (2) the date of the securities being
offered in the Initial Public Offering of the Spin-Off, if that Initial
Public Offering is effected simultaneously with the Spin-Off.
44
(5) Cash Distributions. In case the Company shall, (i)
by dividend or otherwise, distribute to all holders of its
Common Stock cash (excluding any cash that is distributed in
a Reorganization Event to which Section 5.6(b) applies or as
part of a distribution referred to in paragraph (4) of this
Section) in an aggregate amount that, combined together with
(ii) the aggregate amount of any other distributions to all
holders of its Common Stock made exclusively in cash within
the 12 months preceding the date of payment of such
distribution and in respect of which no adjustment pursuant
to this paragraph (5) or paragraph (6) of this Section has
been made and (iii) the aggregate of any cash plus the fair
market value as of the date of the expiration of the tender
or exchange offer referred to below (as determined by the
Board of Directors, whose determination shall be conclusive
and described in a Board Resolution) of consideration
payable in respect of any tender or exchange offer by the
Company or any of its subsidiaries for all or any portion of
the Common Stock concluded within the 12 months preceding
the date of payment of the distribution described in clause
(i) above and in respect of which no adjustment pursuant to
this paragraph (5) or paragraph (6) of this Section has been
made, exceeds 15% of the product of the Current Market Price
per share of the Common Stock on the date for the
determination of holders of shares of Common Stock entitled
to receive such distribution times the number of shares of
Common Stock outstanding on such date, then, and in each
such case, immediately after the close of business on such
date for determination, the Settlement Rate or Early
Settlement Rate, as applicable, shall be increased so that
the same shall equal the rate determined by dividing the
Settlement Rate or Early Settlement Rate, as applicable, in
effect immediately prior to the close of business on the
date fixed for determination of the stockholders entitled to
receive such distribution by a fraction (A) the numerator of
which shall be equal to the Current Market Price per share
of the Common Stock on the date fixed for such determination
less an amount equal to the quotient of (x) the combined
amount distributed or payable in the transactions described
in clauses (i), (ii) and (iii) above and (y) the number of
shares of Common Stock outstanding on such date for
determination and (B) the denominator of which shall be
equal to the Current Market Price per share of the Common
Stock on such date for determination.
(6) Tender Offers. In case (i) a tender or exchange
offer made by the Company or any subsidiary of the Company
for all or any portion of the Common Stock shall expire and
such tender or exchange offer (as amended upon the
expiration thereof) shall require the payment to
stockholders (based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of
Purchased Shares) of an aggregate consideration having a
fair market value (as determined by the Board of Directors,
whose determination shall be conclusive and described in a
Board Resolution) that combined together with (ii) the
aggregate of the cash plus the fair market value (as
determined by the Board of Directors, whose determination
shall be conclusive and described in a Board Resolution), as
45
of the expiration of such tender or exchange offer, of
consideration payable in respect of any other tender or
exchange offer, by the Company or any subsidiary of the
Company for all or any portion of the Common Stock expiring
within the 12 months preceding the expiration of such tender
or exchange offer and in respect of which no adjustment
pursuant to paragraph (5) of this Section or this paragraph
(6) has been made and (iii) the aggregate amount of any
distributions to all holders of the Company's Common Stock
made exclusively in cash within the 12 months preceding the
expiration of such tender or exchange offer and in respect
of which no adjustment pursuant to paragraph (5) of this
Section or this paragraph (6) has been made, exceeds 15% of
the product of the Current Market Price per share of the
Common Stock as of the last time (the "Expiration Time")
tenders could have been made pursuant to such tender or
exchange offer (as it may be amended) times the number of
shares of Common Stock outstanding (including any tendered
shares) at the Expiration Time, then, and in each such case,
immediately prior to the opening of business on the day
after the date of the Expiration Time, the Settlement Rate
or Early Settlement Rate, as applicable, shall be adjusted
so that the same shall equal the rate determined by dividing
the Settlement Rate or Early Settlement Rate, as applicable,
immediately prior to the close of business on the date of
the Expiration Time by a fraction (A) the numerator of which
shall be equal to (x) the product of (I) the Current Market
Price per share of the Common Stock on the date of the
Expiration Time and (II) the number of shares of Common
Stock outstanding (including any tendered shares) at the
Expiration Time less (y) the amount of cash plus the fair
market value (determined as aforesaid) of the aggregate
consideration payable to stockholders based on the
transactions described in clauses (i), (ii) and (iii) above
(assuming in the case of clause (i) the acceptance, up to
any maximum specified in the terms of the tender or exchange
offer, of Purchased Shares), and (B) the denominator of
which shall be equal to the product of (x) the Current
Market Price per share of the Common Stock as of the
Expiration Time and (y) the number of shares of Common Stock
outstanding (including any tendered shares) as of the
Expiration Time less the number of all shares validly
tendered and not withdrawn as of the Expiration Time (the
shares deemed so accepted, up to any such maximum, being
referred to as the "Purchased Shares").
(7) Reclassification. The reclassification of Common
Stock into securities including securities other than Common
Stock (other than any reclassification upon a Reorganization
Event to which Section 5.6(b) applies) shall be deemed to
involve (i) a distribution of such securities other than
Common Stock to all holders of Common Stock (and the
effective date of such reclassification shall be deemed to
be "the date fixed for the determination of stockholders
entitled to receive such distribution" and the "date fixed
for such determination" within the meaning of paragraph (4)
of this Section), and (ii) a subdivision, split or
combination, as the case may be, of the number of shares of
Common Stock outstanding immediately
46
prior to such reclassification into the number of shares of
Common Stock outstanding immediately thereafter (and the
effective date of such reclassification shall be deemed to
be "the day upon which such subdivision or split becomes
effective" or "the day upon which such combination becomes
effective," as the case may be, and "the day upon which such
subdivision, split or combination becomes effective" within
the meaning of paragraph (3) of this Section).
(8) "Current Market Price". The "Current Market Price"
of the Common Stock means (a) on any day the average of the
Sales Prices for the 5 consecutive Trading Days preceding
the earlier of the day preceding the day in question and the
day before the "ex date" with respect to the issuance or
distribution requiring computation, (b) in the case of any
Spin-Off that is effected simultaneously with an Initial
Public Offering of the securities being distributed in the
Spin-Off, the Sale Price of the Common Stock on the Trading
Day on which the Initial Public Offering price of the
securities being distributed in the Spin-Off is determined,
and (c) in the case of any other Spin-Off, the average of
the Sale Prices of the Common Stock over the first 10
Trading Days after the effective date of such Spin-Off. For
purposes of this paragraph, the term "ex date," when used
with respect to any issuance or distribution, shall mean the
first date on which the Common Stock trades regular way on
the relevant exchange or in the relevant market without the
right to receive such issuance or distribution.
(9) Calculation of Adjustments. All adjustments to the
Settlement Rate or Early Settlement Rate, as applicable,
shall be calculated to the nearest 1/10,000th of a share of
Common Stock (or if there is not a nearest 1/10,000th of a
share to the next lower 1/10,000th of a share). No
adjustment in the Settlement Rate or Early Settlement Rate,
as applicable, shall be required unless such adjustment
would require an increase or decrease of at least one
percent therein; provided, that any adjustments which by
reason of this subparagraph are not required to be made
shall be carried forward and taken into account in any
subsequent adjustment. If an adjustment is made to the
Settlement Rate or Early Settlement Rate, as applicable,
pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or
(10) of this Section 5.6(a), an adjustment shall also be
made to the Applicable Market Value solely to determine
which of clauses (i), (ii) or (iii) of the definition of
Settlement Rate or Early Settlement Rate, as applicable, in
Section 5.1(a) will apply on the Stock Purchase Date. Such
adjustment shall be made by multiplying the Applicable
Market Value by a fraction, the numerator of which shall be
the Settlement Rate or Early Settlement Rate, as applicable,
immediately after such adjustment pursuant to paragraph (1),
(2), (3), (4), (5), (6), (7) or (10) of this Section 5.6(a)
and the denominator of which shall be the Settlement Rate or
Early Settlement Rate, as applicable, immediately before
such adjustment; provided, that if such adjustment to the
Settlement Rate or Early Settlement Rate, as applicable, is
required to be made pursuant to the occurrence of any of the
events contemplated by paragraph
47
(1), (2), (3), (4), (5), (7) or (10) of this Section 5.6(a)
during the period taken into consideration for determining
the Applicable Market Value, appropriate and customary
adjustments shall be made to the Settlement Rate or Early
Settlement Rate, as applicable.
(10) Increase of Settlement Rate. The Company may make
such increases in the Settlement Rate or Early Settlement
Rate, as applicable, in addition to those required by this
Section, as it considers to be advisable in order to avoid
or diminish any income tax to any holders of shares of
Common Stock resulting from any dividend or distribution of
stock or issuance of rights or warrants to purchase or
subscribe for stock or from any event treated as such for
income tax purposes or for any other reasons.
(b) Adjustment for Consolidation, Merger or Other Reorganization
Event.
In the event of
(1) any consolidation or merger of the Company with or
into another Person (other than a merger or consolidation in
which the Company is the continuing corporation and in which
the Common Stock outstanding immediately prior to the merger
or consolidation is not exchanged for cash, securities or
other property of the Company or another corporation),
(2) any sale, transfer, lease or conveyance to another
Person of the property of the Company as an entirety or
substantially as an entirety,
(3) any statutory exchange of securities of the Company
with another Person (other than in connection with a merger
or acquisition), or
(4) any liquidation, dissolution or winding up of the
Company other than as a result of or after the occurrence of
a Termination Event (any such event, a "Reorganization
Event"),
each share of Common Stock covered by each Forward Purchase Contract forming a
part of an Equity Unit or Stripped Unit, as the case may be, immediately prior
to such Reorganization Event shall, after such Reorganization Event, be
converted for purposes of the Forward Purchase Contract into the kind and amount
of securities, cash and other property receivable in such Reorganization Event
(without any interest thereon, and without any right to dividends or
distributions thereon which have a record date that is prior to the Stock
Purchase Date) per share of Common Stock by a holder of Common Stock that (i) is
not a Person with which the Company consolidated or into which the Company
merged or which merged into the Company or to which such sale or transfer was
made, as the case may be (any such Person, a "Constituent Person"), or an
Affiliate of a Constituent Person to the extent such Reorganization Event
provides for different treatment of Common Stock held by Affiliates of the
Company and non-Affiliates, and (ii) failed to exercise his rights of election,
if any, as to the kind or amount of securities, cash and other property
receivable upon such Reorganization Event (provided that if the kind or amount
of securities, cash and other property receivable upon such Reorganization Event
is not the same for each share of Common Stock held immediately prior to such
Reorganization Event by other than a
48
Constituent Person or an Affiliate thereof and in respect of which such rights
of election shall not have been exercised ("Non-electing Share"), then for the
purpose of this Section the kind and amount of securities, cash and other
property receivable upon such Reorganization Event by each Non-electing Share
shall be deemed to be the kind and amount so receivable per share by a plurality
of the Non-electing Shares). On the Stock Purchase Date, the Settlement Rate
then in effect will be applied to the value on the Stock Purchase Date of such
securities, cash or other property. In the event of such a Reorganization Event,
the Person formed by such consolidation, merger or exchange or the Person which
acquires the assets of the Company or, in the event of a liquidation or
dissolution of the Company, the Company or a liquidating trust created in
connection therewith, shall execute and deliver to the Agent an agreement
supplemental hereto providing that the Holder of each Outstanding Unit shall
have the rights provided by this Section 5.6. Such supplemental agreement shall
provide for adjustments which, for events subsequent to the effective date of
such supplemental agreement, shall be as nearly equivalent as may be practicable
to the adjustments provided for in this Section. The above provisions of this
Section shall similarly apply to successive Reorganization Events.
Section 5.7 Notice of Adjustments and Certain Other Events.
(a) Whenever the Settlement Rate or Early Settlement Rate, as
applicable, is adjusted as herein provided, the Company shall:
(i) forthwith compute the Settlement Rate or Early Settlement
Rate, as applicable, and the Applicable Market Value in accordance
with Section 5.6 and prepare and transmit to the Agent an Officer's
Certificate setting forth the Settlement Rate and the Applicable
Market Value, the method of calculation thereof in reasonable detail,
and the facts requiring such adjustment and upon which such adjustment
is based; and
(ii) as soon as practicable following the occurrence of an event
that requires an adjustment to the Settlement Rate or Early Settlement
Rate, as applicable, pursuant to Section 5.6 (or if the Company is not
aware of such occurrence, as soon as practicable after becoming so
aware), provide a written notice to the Holders of the Equity Units
and Stripped Units of the occurrence of such event and a statement in
reasonable detail setting forth the method by which the adjustment to
the Settlement Rate or Early Settlement Rate, as applicable, and the
Applicable Market Value was determined and setting forth the adjusted
Settlement Rate or Early Settlement Rate, as applicable, and the
Applicable Market Value.
(b) The Agent shall not at any time be under any duty or
responsibility to any Holder of Equity Units and Stripped Units to
determine whether any facts exist which may require any adjustment of the
Settlement Rate or Early Settlement Rate, as applicable, and the Applicable
Market Value, or with respect to the nature or extent or calculation of any
such adjustment when made, or with respect to the method employed in making
the same. The Agent shall not be accountable with respect to the validity
or value (or the kind or amount) of any shares of Common Stock, or of any
securities or property, which may at any time be issued or delivered with
respect to any Forward Purchase Contract; and the
49
Agent makes no representation with respect thereto. The Agent shall not be
responsible for any failure of the Company to issue, transfer or deliver
any shares of Common Stock pursuant to a Forward Purchase Contract or to
comply with any of the duties, responsibilities or covenants of the Company
contained in this Article.
Section 5.8 Termination Event; Notice.
The Forward Purchase Contracts and all obligations and rights of the
Company and the Holders thereunder, including the rights and obligations of
Holders to purchase Common Stock, shall immediately and automatically terminate,
without the necessity of any notice or action by any Holder, the Agent or the
Company, if, on or prior to the Stock Purchase Date, a Termination Event shall
have occurred. Upon and after the occurrence of a Termination Event, the Equity
Units shall thereafter represent the right to receive the Notes or the
appropriate Treasury Consideration or Applicable Ownership Interest in the
Treasury Portfolio, as the case may be, forming a part of such Equity Units, and
the Stripped Units shall thereafter represent the right to receive the Treasury
Securities forming a part of such Stripped Units, in each case in accordance
with the provisions of Section 4.3 of the Pledge Agreement. Upon the occurrence
of a Termination Event, the Company shall promptly but in no event later than
two Business Days thereafter give written notice to the Agent, the Collateral
Agent and to the Holders, at their addresses as they appear in the applicable
Register.
Section 5.9 Early Settlement.
(a) Subject to and upon compliance with the provisions of this Section
5.9, Forward Purchase Contracts underlying Equity Units or Stripped Units
may, at the option of the Holder thereof, be settled early ("Early
Settlement") at any time not later than 10:00 a.m. on the seventh Business
Day immediately preceding the Stock Purchase Date. In order to exercise the
right to effect Early Settlement with respect to any Forward Purchase
Contracts, the Holder of the Certificate evidencing the related Equity
Units or Stripped Units, as the case may be, shall deliver such Certificate
to the Agent at the Corporate Trust Office duly endorsed for transfer to
the Company or in blank with the form of Election to Settle Early on the
reverse thereof duly completed and accompanied by payment payable to the
Company in immediately available funds in an amount (the "Early Settlement
Amount") equal to (A) the product of (i) the Stated Amount of such Equity
Units or Stripped Units, as the case may be, multiplied by (ii) the number
of Forward Purchase Contracts with respect to which the Holder has elected
to effect Early Settlement, plus (B) if such delivery is made with respect
to any Forward Purchase Contracts during the period from the close of
business on any Record Date next preceding any Payment Date to the opening
of business on such Payment Date, an amount equal to the Contract
Adjustment Payments, if any, payable on such Payment Date with respect to
such Forward Purchase Contracts; provided that no payment shall be required
pursuant to clause (B) of this sentence if the Company shall have elected
to defer the Contract Adjustment Payments that would otherwise be payable
on such Payment Date and further provided that, at that time, if so
required by the United States federal securities laws, a registration
statement is in effect and a prospectus is available covering the shares of
the Common Stock of the Company to be delivered in respect of the Forward
Purchase Contracts being settled. Except as provided in the immediately
preceding sentence and subject to Section 5.2(d), no
50
payment or adjustment shall be made upon Early Settlement of any Forward
Purchase Contract on any Contract Adjustment Payments accrued on such
Forward Purchase Contract or on account of any dividends on the Common
Stock issued upon such Early Settlement. If the foregoing requirements are
first satisfied with respect to Forward Purchase Contracts underlying any
Equity Units or Stripped Units, as the case may be, at or prior to 5:00
p.m., New York City time, on a Business Day, such day shall be the "Early
Settlement Date" with respect to such Equity Units or Stripped Units, as
the case may be, and if such requirements are first satisfied after 5:00
p.m., New York City time, on a Business Day or on a day that is not a
Business Day, the "Early Settlement Date" with respect to such Equity Units
or Stripped Units, as the case may be, shall be the next succeeding
Business Day.
(b) Holders of Equity Units may settle only in units of 20 and
integral multiples of 20. If a successful remarketing or a Tax Event
Redemption has occurred, Holders of Stripped Units may effect Early
Settlement pursuant to this Section 5.9 only in integral multiples of
32,000.
(c) Upon Early Settlement of any Forward Purchase Contract by the
Holder of the related Equity Units or Stripped Units, as the case may be,
the Company shall issue, and the Holder shall be entitled to receive,
1.0187 shares of Common Stock for each Equity Unit or Stripped Unit on
account of such Forward Purchase Contract (the "Early Settlement Rate").
The Early Settlement Rate shall be adjusted in the same manner and at the
same time as the Settlement Rate is adjusted. As promptly as practicable
after Early Settlement of Forward Purchase Contracts in accordance with the
provisions of this Section 5.9, the Company shall issue and shall deliver
to the Agent at the Corporate Trust Office a certificate or certificates or
book entry interest for the full number of shares of Common Stock issuable
upon such Early Settlement together with payment in lieu of any fraction of
a share, as provided in Section 5.12.
(d) No later than the third Business Day after the applicable Early
Settlement Date the Company shall cause (i) the shares of Common Stock
issuable upon Early Settlement of Forward Purchase Contracts to be issued
and delivered, and (ii) the related Pledged Notes or Pledged Treasury
Consideration or Pledged Applicable Ownership Interest in the Treasury
Portfolio, in the case of Equity Units, or the related Pledged Treasury
Securities, in the case of Stripped Units, to be released from the Pledge
by the Collateral Agent and transferred, in each case, to the Agent for
delivery to the Holder thereof or the Holder's designee.
(e) Upon Early Settlement of any Forward Purchase Contracts, and
subject to receipt of shares of Common Stock from the Company and the
Pledged Notes, Pledged Treasury Consideration, Pledged Applicable Ownership
Interest in the Treasury Portfolio, or Pledged Treasury Securities, as the
case may be, from the Collateral Agent, as applicable, the Agent shall, in
accordance with the instructions provided by the Holder thereof on the
applicable form of Election to Settle Early on the reverse of the
Certificate evidencing the related Equity Units or Stripped Units, as the
case may be, (i) transfer to the Holder the Pledged Notes, Pledged Treasury
Consideration, Pledged Applicable Ownership Interest in the Treasury
Portfolio, or Pledged Treasury Securities, as the case
51
may be, forming a part of such Equity Units or Stripped Units, as the case
may be, and (ii) deliver to the Holder a certificate or certificates or
book-entry interest for the full number of shares of Common Stock issuable
upon such Early Settlement together with payment in lieu of any fraction of
a share, as provided in Section 5.12.
(f) In the event that Early Settlement is effected with respect to
Forward Purchase Contracts underlying less than all the Equity Units or
Stripped Units, as the case may be, evidenced by a Certificate, upon such
Early Settlement the Company shall execute and the Agent shall
authenticate, execute on behalf of the Holder thereof and deliver to the
Holder thereof, at the expense of the Company, a Certificate evidencing the
Equity Units or Stripped Units, as the case may be, as to which Early
Settlement was not effected.
Section 5.10 Early Settlement Upon Merger.
(a) In the event of a merger or consolidation of the Company of the
type described in clause (1) of Section 5.6(b) in which the Common Stock
outstanding immediately prior to such merger or consolidation is exchanged
for consideration consisting of at least 30% cash or cash equivalents (any
such event a "Cash Merger"), then the Company (or the successor to the
Company hereunder) shall be required to offer the Holder of each Equity
Unit or Stripped Unit, as the case may be, the right to settle the Forward
Purchase Contract underlying such Equity Units or Stripped Units, as the
case may be, prior to the Stock Purchase Date ("Merger Early Settlement")
as provided herein. On or before the fifth Business Day after the
consummation of a Cash Merger, the Company or, at the request and expense
of the Company, the Agent, shall give all Holders notice of the occurrence
of the Cash Merger and of the right of Merger Early Settlement arising as a
result thereof. The Company shall also deliver a copy of such notice to the
Agent and the Collateral Agent.
Each such notice shall contain:
(i) the date, which shall be not less than 20 nor more than 30
calendar days after the date of such notice, on which the Merger Early
Settlement will be effected (the "Merger Early Settlement Date");
(ii) the date, which shall be on or one Business Day prior to
the Merger Early Settlement Date, by which the Merger Early Settlement
right must be exercised;
(iii) the Settlement Rate in effect as a result of such Cash
Merger and the kind and amount of securities, cash and other property
receivable by the Holder upon settlement of each Forward Purchase
Contract pursuant to Section 5.6(b);
(iv) a statement to the effect that all or a portion of the
Purchase Price payable by the Holder to settle the Forward Purchase
Contract will be offset against the amount of cash so receivable upon
exercise of Merger Early Settlement, as applicable; and
(v) the instructions a Holder must follow to exercise the
Merger Early Settlement right.
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(b) To exercise a Merger Early Settlement right, a Holder
shall deliver to the Agent at the Corporate Trust Office on or before
5:00 p.m., New York City time on the date specified in the notice the
Certificate(s) evidencing the Equity Units or Stripped Units, as the
case may be, with respect to which the Merger Early Settlement right is
being exercised duly endorsed for transfer to the Company or in blank
with the form of Election to Settle Early on the reverse thereof duly
completed and accompanied by payment payable to the Company in
immediately available funds in an amount equal to the Early Settlement
Amount less the amount of cash that otherwise would be deliverable by
the Company or its successor upon settlement of the Forward Purchase
Contract in lieu of Common Stock pursuant to Section 5.4(b) and as
described in the notice to Holders (the "Merger Early Settlement
Amount").
(c) On the Merger Early Settlement Date, the Company shall
deliver or cause to be delivered (i) the net cash, securities and other
property to be received by such exercising Holder, equal to the
Settlement Rate as adjusted pursuant to Section 5.6, in respect of the
number of Forward Purchase Contracts for which such Merger Early
Settlement right was exercised, and (ii) the related Pledged Notes,
Pledged Treasury Consideration or Pledged Applicable Ownership Interest
in the Treasury Portfolio, in the case of Equity Units, or Pledged
Treasury Securities, in the case of Stripped Units, to be released from
the Pledge by the Collateral Agent and transferred, in each case, to
the Agent for delivery to the Holder thereof or its designee. In the
event a Merger Early Settlement right shall be exercised by a Holder in
accordance with the terms hereof, all references herein to the Stock
Purchase Date shall be deemed to refer to such Merger Early Settlement
Date.
(d) Upon Merger Early Settlement of any Forward Purchase
Contracts, and subject to receipt of such net cash, securities or other
property from the Company and the Pledged Notes, Pledged Treasury
Consideration, Pledged Applicable Ownership Interest in the Treasury
Portfolio or Pledged Treasury Securities, as the case may be, from the
Collateral Agent, as applicable, the Agent shall, in accordance with
the instructions provided by the Holder thereof on the applicable form
of Election to Settle Early on the reverse of the Certificate
evidencing the related Equity Units or Stripped Units, as the case may
be, (i) transfer to the Holder the Pledged Notes, Pledged Treasury
Consideration, Pledged Applicable Ownership Interest in the Treasury
Portfolio, or Pledged Treasury Securities, as the case may be, forming
a part of such Equity Units or Stripped Units, as the case may be, and
(ii) deliver to the Holder such net cash, securities or other property
issuable upon such Merger Early Settlement together with payment in
lieu of any fraction of a share, as provided in Section 5.12.
(e) In the event that Merger Early Settlement is effected with
respect to Forward Purchase Contracts underlying less than all the
Equity Units or Stripped Units, as the case may be, evidenced by a
Certificate, upon such Merger Early Settlement the Company (or the
successor to the Company hereunder) shall execute and the Agent shall
authenticate, execute on behalf of the Holder thereof and deliver to
the Holder thereof, at the expense of the Company, a Certificate
evidencing the Equity Units or Stripped Units, as the case may be, as
to which Merger Early Settlement was not effected.
Section 5.11 Charges and Taxes.
53
The Company will pay all stock transfer and similar taxes attributable
to the initial issuance and delivery of the shares of Common Stock pursuant to
the Forward Purchase Contracts; provided, that the Company shall not be required
to pay any such tax or taxes which may be payable in respect of any exchange of
or substitution for a Certificate evidencing Equity Units or Stripped Units or
any issuance of a share of Common Stock in a name other than that of the
registered Holder of a Certificate surrendered in respect of the Equity Units
and Stripped Units evidenced thereby, other than in the name of the Agent, as
custodian for such Holder, and the Company shall not be required to issue or
deliver such share certificates or book-entry interest in Common Stock or
Certificates unless and until the Person or Persons requesting the transfer or
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
Section 5.12 No Fractional Shares.
No fractional shares or scrip representing fractional shares of Common
Stock shall be issued or delivered upon settlement on the Stock Purchase Date or
upon Early Settlement or Merger Early Settlement of any Forward Purchase
Contracts. If Certificates evidencing more than one Forward Purchase Contract
shall be surrendered for settlement at one time by the same Holder, the number
of full shares of Common Stock which shall be delivered upon settlement shall be
computed on the basis of the aggregate number of Forward Purchase Contracts
evidenced by the Certificates so surrendered. Instead of any fractional share of
Common Stock which would otherwise be deliverable upon settlement of any Forward
Purchase Contracts on the applicable Settlement Date or upon Early Settlement or
Merger Early Settlement, the Company, through the Agent, shall make a cash
payment in respect of such fractional share in an amount equal to the value of
such fractional share times the Applicable Market Value. The Company shall
provide the Agent from time to time with sufficient funds to permit the Agent to
make all cash payments required by this Section 5.12 in a timely manner.
Section 5.13 Tax Treatment.
The Company covenants and agrees and each Holder, by purchasing the
Equity Units agrees, (i) to treat a Holder's acquisition of the Equity Units as
the acquisition of the Note and Forward Purchase Contract constituting the
Equity Units, (ii) to treat a Holder's acquisition of the Stripped Units as the
acquisition of the Treasury Security and Forward Purchase Contract constituting
the Stripped Unit, (iii) to treat each Holder as the owner of the related Notes,
Treasury Consideration, Applicable Ownership Interest in the Treasury Portfolio
or Treasury Securities, as the case may be and (iv) to allocate the purchase
price of the Equity Unit between the Note and Forward Purchase Contract as $50
and $0, respectively.
ARTICLE VI.
REMEDIES
Section 6.1 Unconditional Right of Holders to Purchase Common
Stock.
(a) The Holder of any Equity Units or Stripped Units, as the
case may be shall have the right, which is absolute and unconditional,
subject to the right of the Company to defer payment thereof pursuant
to Section 5.3, and to the forfeiture of any Deferred Contract
54
Adjustment Payments upon Cash Settlement pursuant to Section 5.2(d),
upon Early Settlement pursuant to Section 5.9(a), upon Merger Early
Settlement pursuant to Section 5.10 or upon the occurrence of a
Termination Event, to receive payment of each installment of the
Contract Adjustment Payments, if any, with respect to the Purchase
Contract constituting a part of such Equity Units or Stripped Units, as
the case may be, on the respective Payment Date for such Equity Units
or Stripped Units, as the case may be, and
(b) Subject to Section 5.6, the Holder of any Units shall have
the right, which is absolute and unconditional, to purchase Common
Stock pursuant to the Forward Purchase Contract constituting a part of
such Units and to institute suit for the enforcement of any such right
to purchase Common Stock, and such right shall not be impaired without
the consent of such Holder.
Section 6.2 Restoration of Rights and Remedies.
If any Holder has instituted any proceeding to enforce any right or
remedy under this Agreement and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to such Holder, then
and in every such case, subject to any determination in such proceeding, the
Company and such Holder shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of such Holder
shall continue as though no such proceeding had been instituted.
Section 6.3 Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Certificates in Section 3.10(f), no
right or remedy herein conferred upon or reserved to the Holders is intended to
be exclusive of any other right or remedy, and every right and remedy shall, to
the extent permitted by law, be cumulative and in addition to every other right
and remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
Section 6.4 Delay or Omission Not Waiver.
No delay or omission of any Holder to exercise any right or remedy upon
a default shall impair any such right or remedy or constitute a waiver of any
such right. Every right and remedy given by this Article or by law to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by such Holders.
Section 6.5 Undertaking For Costs.
All parties to this Agreement agree, and each Holder of Equity Units or
Stripped Units, as the case may be, by its acceptance of such Equity Units or
Stripped Units, as the case may be, shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Agreement, or in any suit against the Agent for any
action taken, suffered or omitted by it as Agent, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable
55
costs, including reasonable attorneys' fees and expenses, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; provided that the provisions of
this Section shall not apply to any suit instituted by the Company, to any suit
instituted by the Agent, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% of the Outstanding Units, or to
any suit instituted by any Holder for the enforcement of distributions on any
Notes or any Forward Purchase Contract on or after the respective Payment Date
therefor in respect of any Equity Units or Stripped Units, as the case may be,
held by such Holder, or for enforcement of the right to purchase shares of
Common Stock under the Forward Purchase Contract constituting part of any Equity
Units or Stripped Units, as the case may be, held by such Holder.
Section 6.6 Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants in or the
performance of this Agreement; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, but will suffer and permit the execution of every power of the Agent and
the Holders as though no such law had been enacted.
ARTICLE VII.
THE AGENT
Section 7.1 Certain Duties, Rights and Immunities.
(a) The Agent shall act as agent and attorney-in-fact for the
Holders of the Equity Units and Stripped Units hereunder with such
powers as are specifically vested in the Agent by the terms of this
Agreement, the Pledge Agreement, the Remarketing Agreement, the Notes,
the Equity Units and Stripped Units, and any documents evidencing them
or related thereto (the "Transaction Documents"), together with such
other powers as are reasonably incidental thereto. The Agent:
(1) shall have no duties or responsibilities
except those expressly set forth in the Transaction
Documents and no implied covenants or obligations shall
be inferred from any Transaction Documents against the
Agent, nor shall the Agent be bound by the provisions
of any agreement by any party hereto beyond the
specific terms hereof;
(2) shall be entitled to conclusively rely upon
(x) any certificate, order, judgment, opinion, notice
or other communication (including, without limitation,
any thereof by telephone or facsimile) reasonably
believed by it to be genuine and correct and to have
been signed or sent by or on behalf of the proper
Person or Persons (without being required to determine
the correctness of any fact stated therein), (y) the
truth of the statements and the correctness of the
opinions expressed therein and (z) advice and
statements of legal counsel and other experts selected
by the
56
Agent;
(3) shall in all cases be fully protected in acting,
or in refraining from acting, hereunder or under any
Transaction Documents in accordance with instructions given by
the Company or the Holders in accordance herewith or with the
Transaction Documents;
(4) shall not be responsible for any recitals
contained in any Transaction Document, or in any certificate
or other document referred to or provided for in, or received
by it under, any Transaction Document or the Equity Units or
Stripped Units, or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of any Transaction
Document (other than as against the Agent) or the Equity Units
or Stripped Units or any other document referred to or
provided for herein or therein or for any failure by the
Company, any Holder or any other Person (except the Agent) to
perform any of its obligations hereunder or thereunder or for
the perfection, priority or, except as expressly required
hereby, existence, validity, perfection or maintenance of any
security interest created under the Pledge Agreement, or for
the use or application by the Company of the proceeds in
respect of the Forward Purchase Contracts;
(5) shall not be required to initiate or conduct any
litigation or collection proceedings hereunder;
(6) shall not be responsible for any action taken or
omitted to be taken by it hereunder or under the Transaction
Documents or any other document or instrument referred to or
provided for herein or therein or in connection herewith or
therewith, except for its own negligence, bad faith or willful
misconduct; and
(7) shall not be required to advise any party as to
selling or retaining, or taking or refraining from taking any
action with respect to, the Equity Units or Stripped Units or
other rights under any Transaction Document.
(b) No provision of any Transaction Document shall be construed to
relieve the Agent from liability for its own negligent action, its own negligent
failure to act, its own bad faith, or its own willful misconduct, except that:
(1) this paragraph (b) shall not be construed to limit the
effect of paragraph (a) of this Section;
(2) the Agent shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Agent was grossly negligent in ascertaining the pertinent
facts; and
(3) in no event shall the Agent be required to expend or risk
its own funds or otherwise incur any financial liability in the
performance of any of
57
its duties hereunder.
(c) In no event shall the Agent or its officers, employees or
agents be liable for any special, indirect, individual, punitive or
consequential loss or damages, lost profits or loss of business,
arising in connection with any Transaction Document, whether or not the
likelihood of such loss or damage was known to the Agent, and
regardless of the form of action.
(d) Whether or not therein expressly so provided, every
provision of every Transaction Document relating to the conduct or
affecting the liability of or affording protection to the Agent shall
be subject to the provisions of this Section.
(e) The Agent is authorized to execute and deliver the Pledge
Agreement and the Remarketing Agreement and any supplement thereto in
its capacity as Agent. The Agent shall be entitled to all of the
rights, privileges, immunities and indemnities contained in this
Agreement with respect to any duties of the Agent under, or actions
taken, omitted to be taken or suffered by the Agent pursuant to the
Pledge Agreement.
(f) The Agent shall have no liability whatsoever for the
action or inaction of any Clearing Agency or any book-entry system
thereof. In no event shall any Clearing Agency or any book-entry system
thereof be deemed an agent or subcustodian of the Agent.
(g) The Agent shall not be responsible or liable for any
failure or delay in the performance of its obligations under any
Transaction Document arising out of or caused, directly or indirectly,
by circumstances beyond its reasonable control, including, without
limitation, acts of God; acts of terrorism; earthquakes; fires; floods;
wars; civil or military disturbances; sabotage; epidemics; riots;
interruptions, loss or malfunctions of utilities, computer (hardware or
software) or communications service; accidents; labor disputes; acts of
civil or military authority; governmental actions; or inability to
obtain labor, material, equipment or transportation.
Section 7.2 Notice of Default.
Within 30 days after the occurrence of any default by the Company of
its obligations hereunder or under one or more Forward Purchase Contracts of
which a Responsible Officer of the Agent has actual knowledge, the Agent shall
transmit by mail to the Company and the Holders of Equity Units and Stripped
Units, as their names and addresses appear in the Register, notice of such
default hereunder, unless such default shall have been cured or waived.
Section 7.3 Certain Rights of Agent.
Subject to the provisions of Section 7.1:
(a) the Agent may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
58
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by an Officer's Certificate, Issuer
Order or Issuer Request, and any resolution of the Board of Directors
of the Company may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Agreement the Agent
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Agent (unless
other evidence be herein specifically prescribed) may, in the absence
of bad faith on its part, rely upon an Officer's Certificate of the
Company;
(d) the Agent may consult with counsel of its selection and
the advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(e) the Agent shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Agent, in its discretion, may make
reasonable further inquiry or investigation into such facts or matters
related to the execution, delivery and performance of the Forward
Purchase Contracts as it may see fit, and, if the Agent shall determine
to make such further inquiry or investigation, it shall be given a
reasonable opportunity to examine the books, records and premises of
the Company, personally or by agent or attorney;
(f) the Agent may execute any of the powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or an Affiliate of the Agent and the Agent shall not be
responsible for any misconduct or negligence on the part of any agent
or attorney or an Affiliate appointed with due care by it hereunder;
(g) the rights, privileges, protections, immunities and
benefits given to the Agent, including, but not limited to, its right
to be indemnified, are extended to, and shall be enforceable by, the
Agent in each of its capacities hereunder, and to each custodian and
other person employed to act hereunder;
(h) the Agent shall not be charged with knowledge of any
default by the Company hereunder unless a Responsible Officer of the
Agent shall have received at the Corporate Trust Office of the Agent
written notice of such default; and
(i) the permissive right of the Agent to do things enumerated
in this Agreement shall not be construed as a duty.
Section 7.4 Not Responsible For Recitals, Etc.
The recitals contained herein, in any other Transaction Documents and
in the Certificates shall be taken as the statements of the Company and the
Agent assumes no responsibility for their accuracy. The Agent makes no
representations as to the validity or sufficiency of either this Agreement or
any other Transaction Documents. The Agent shall not be accountable for the use
or
59
application by the Company of the proceeds in respect of the Equity Units or
Stripped Units or the Forward Purchase Contracts and shall not be responsible
for the perfection, priority or maintenance of any security interests created or
intended to be created under the Pledge Agreement.
Section 7.5 May Hold Equity Units and Stripped Units and Other
Dealings.
Any Registrar or any other agent of the Company, or the Agent and its
Affiliates, in their individual or any other capacity, may become the owner or
pledgee of Equity Units or Stripped Units, as the case may be, and may otherwise
deal with the Company, the Collateral Agent or any other Person with the same
rights it would have if it were not Registrar or such other agent, or the Agent.
The Agent and its Affiliates may (without having to account therefor to the
Company or any Holder of Equity Units or Stripped Units or holder of Separate
Notes) accept deposits from, lend money to, make other investments in and
generally engage in any kind of banking, trust or other business with the
Company, any Holder of Equity Units or Stripped Units and any holder of Separate
Notes (and any of their respective subsidiaries or Affiliates) as if it were not
acting as the Agent and the Agent and its Affiliates may accept fees and other
consideration from the Company, any Holder of Equity Units or Stripped Units or
any holder of Separate Notes without having to account for the same to any such
Person.
Section 7.6 Money Held In Custody.
Money held by the Agent in custody hereunder need not be segregated
from the Agent's other funds except to the extent required by law or provided
herein. The Agent shall be under no obligation to invest or pay interest on any
money received by it hereunder except as otherwise agreed in writing with the
Company.
Section 7.7 Compensation and Reimbursement.
The Company agrees:
(a) to pay to the Agent from time to time compensation for all
services rendered by it hereunder or under the Transaction Documents as
shall be agreed in writing between the Company and the Agent;
(b) to reimburse the Agent upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Agent in
accordance with any provision of this Agreement or the other
Transaction Documents (including the reasonable compensation and the
reasonable expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable
to its negligence, willful misconduct or bad faith; and
(c) to indemnify the Agent for, and to hold it harmless
against, any loss, liability or reasonable out-of-pocket expense
incurred without gross negligence, willful misconduct or bad faith on
its part, arising out of or in connection with the acceptance or
administration of its duties under the other Transaction Documents,
including the costs and expenses (including reasonable fees and
expenses of counsel) of defending itself against any claim, whether
asserted by the Company, a Holder or any other Person, or liability in
connection
60
with the exercise or performance of any of its powers or duties under
the Transaction Documents. The Agent shall promptly notify the Company
of any third party claim which may give rise to the indemnity hereunder
and give the Company the opportunity to participate in the defense of
such claim with counsel reasonably satisfactory to the indemnified
party, and no such claim shall be settled without the written consent
of the Company, which consent shall not be unreasonably withheld,
provided that any failure to give any such notice shall not affect the
obligation of the Company under this Section. The provisions of this
Section 7.7 shall survive the termination of any and all Transaction
Documents, the satisfaction or discharge of the Equity Units or
Stripped Units and/ or the Separate Notes or the resignation or removal
of the Agent.
Section 7.8 Corporate Agent Required; Eligibility.
There shall at all times be an Agent hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having (or being a member of a bank
holding company having) a combined capital and surplus of at least $500,000,000,
subject to supervision or examination by federal or state authority and having
(or being a member of a bank holding company having) a Corporate Trust Office in
the Borough of Manhattan, the City of New York, if there be such a corporation,
qualified and eligible under this Article and willing to act on reasonable
terms. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Agent shall cease to be eligible in accordance with the provisions
of this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 7.9 Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Agent and no appointment
of a successor Agent pursuant to this Article shall become effective
until the acceptance of appointment by the successor Agent in
accordance with the applicable requirements of Section 7.10.
(b) The Agent may resign at any time by giving written notice
thereof to the Company 60 days prior to the effective date of such
resignation. If the instrument of acceptance by a successor Agent
required by Section 7.10 shall not have been delivered to the Agent
within 30 days after the giving of such notice of resignation, the
resigning Agent may petition, at the expense of the Company, any court
of competent jurisdiction for the appointment of a successor Agent.
(c) The Agent may be removed at any time by Act of the Holders
of a majority in number of the Outstanding Units upon delivery of a
written notice to the Agent and the Company. If the instrument of
acceptance by a successor Agent required by Section 7.10 shall not have
been delivered to the Agent within 30 days after the giving of such
notice of removal, the Agent to be removed may petition, at the expense
of the Company, any court of competent jurisdiction for the appointment
of a successor Agent.
61
(d) If at any time:
(1) the Agent has a "conflicting interest"
(as defined in Section 310(b) of the TIA) and fails
to eliminate the conflicting interest or resign
pursuant to Section 310(b) of the TIA upon written
request therefor by the Company or by any Holder who
has been a bona fide Holder of a Unit for at least
six months, as if this Agreement were an indenture
qualified under the TIA, as if the Equity Units or
Stripped Units were in default and as if such default
had not been cured or waived within the applicable
period under Section 310(b) of the TIA; or
(2) the Agent shall cease to be eligible
under Section 7.8 and shall fail to resign after
written request therefor by the Company or by any
such Holder; or
(3) the Agent shall become incapable of
acting or shall be adjudged a bankrupt or insolvent
or a receiver of the Agent or of its property shall
be appointed or any public officer shall take charge
or control of the Agent or of its property or affairs
for the purpose of rehabilitation, conservation or
liquidation;
then, in any such case, (x) the Company by a Board Resolution may remove the
Agent, or (y) any Holder who has been a bona fide Holder of Equity Units or
Stripped Equity Units for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Agent and the appointment of a successor Agent.
(e) If the Agent shall resign, be removed or become incapable
of acting, or if a vacancy shall occur in the office of Agent for any
cause, the Company, by a Board Resolution, shall promptly appoint a
successor Agent and shall comply with the applicable requirements of
Section 7.10. If no successor Agent shall have been so appointed by the
Company and accepted appointment in the manner required by Section
7.10, any Holder who has been a bona fide Holder of Equity Units or
Stripped Equity Units for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Agent.
(f) The Company shall give, or shall cause such successor
Agent to give, notice of each resignation and each removal of the Agent
and each appointment of a successor Agent by mailing written notice of
such event by first-class mail, postage prepaid, to all Holders as
their names and addresses appear in the applicable Register. Each
notice shall include the name of the successor Agent and the address of
its Corporate Trust Office.
Section 7.10 Acceptance of Appointment By Successor.
(a) In case of the appointment hereunder of a successor Agent,
every such successor Agent so appointed shall execute, acknowledge and
deliver to the Company and to the retiring Agent an instrument
accepting such appointment, and thereupon the resignation or removal of
the retiring Agent shall become effective and such successor Agent,
without any further act, deed or conveyance, shall become vested with
all the rights,
62
powers, agencies, trusts and duties of the retiring Agent; but, on the
request of the Company or the successor Agent, such retiring Agent
shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Agent all the rights, powers, agencies,
trusts and duties of the retiring Agent and duly assign, transfer and
deliver to such successor Agent all property and money held by such
retiring Agent hereunder.
(b) Upon request of any such successor Agent, the Company
shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Agent all such rights,
powers, agencies, trusts and duties referred to in paragraph (a) of
this Section.
(c) No successor Agent shall accept its appointment unless at
the time of such acceptance such successor Agent shall be qualified and
eligible under this Article.
Section 7.11 Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Agent may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Agent shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Agent, shall be the successor of the Agent hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Certificates shall have been
authenticated and executed on behalf of the Holders, but not delivered, by the
Agent then in office, any successor by merger, conversion or consolidation to
such Agent shall adopt such authentication and execution and deliver the
Certificates so authenticated and executed with the same effect as if such
successor Agent had itself authenticated and executed such Equity Units and
Stripped Units.
Section 7.12 Preservation of Information; Communications to Holders.
(a) The Agent shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders received by
the Agent in its capacity as Registrar.
(b) If three or more Holders (herein referred to as
"Applicants") apply in writing to the Agent, and furnish to the Agent
reasonable proof that each such applicant has owned Equity Units or
Stripped Units, as the case may be, for a period of at least six months
preceding the date of such application, and such application states
that the Applicants desire to communicate with other Holders with
respect to their rights under this Agreement or under the Equity Units
or Stripped Units, as the case may be, and is accompanied by a copy of
the form of proxy or other communication which such Applicants propose
to transmit, then the Agent shall mail to all the Holders copies of the
form of proxy or other communication which is specified in such
request, with reasonable promptness after a tender to the Agent of the
materials to be mailed and of payment, or provision, in the absence of
bad faith, satisfactory to the Agent for the payment, of the reasonable
expenses of such mailing.
Section 7.13 Failure to Act.
63
In the event of any ambiguity in the provisions of any Transaction
Document or any dispute between or conflicting claims by or among the parties
hereto or any other Person, the Agent shall be entitled, after prompt notice to
the Company and the Holders of Equity Units and Stripped Units, at its sole
option, to refuse to comply with any and all such claims, demands or
instructions so long as such dispute or conflict shall continue, and the Agent
shall not be or become liable in any way to any of the parties hereto for its
failure or refusal to comply with such conflicting claims, demands or
instructions. The Agent shall be entitled to refuse to act until either (i) such
conflicting or adverse claims or demands shall have been finally determined by a
court of competent jurisdiction or settled by agreement between the conflicting
parties as evidenced in a writing, reasonably satisfactory to the Agent, or (ii)
the Agent shall have received security or an indemnity reasonably satisfactory
to the Agent sufficient to save the Agent harmless from and against any and all
loss, liability or reasonable out-of-pocket expense which the Agent may incur by
reason of its acting without bad faith, willful misconduct or gross negligence.
The Agent may in addition elect to commence an interpleader action or seek other
judicial relief or orders as the Agent may deem necessary. Notwithstanding
anything contained herein to the contrary, the Agent shall not be required to
take any action that is in its opinion contrary to law or to the terms of any
Transaction Document, or which would in its opinion subject it or any of its
officers, employees or directors to liability.
Section 7.14 No Obligations of Agent.
Except to the extent otherwise provided in this Agreement, the Agent
assumes no obligation and shall not be subject to any liability under this
Agreement, the Pledge Agreement or any Forward Purchase Contract in respect of
the obligations of the Holder of any Equity Units or Stripped Units thereunder.
The Company agrees, and each Holder of a Certificate, by such Holder's
acceptance thereof, shall be deemed to have agreed, that the Agent's execution
of the Certificates on behalf of the Holders shall be solely as agent and
attorney-in-fact for the Holders, and that the Agent shall have no obligation to
perform such Forward Purchase Contracts on behalf of the Holders, except to the
extent expressly provided in Article V. Anything contained in this Agreement to
the contrary notwithstanding, in no event shall the Agent or its officers,
employees or agents be liable for indirect, special, punitive, or consequential
loss or damage of any kind whatsoever, including, but not limited to, lost
profits, whether or not the likelihood of such loss or damage was known to the
Agent and regardless of the form of action.
Section 7.15 Tax Compliance.
(a) The Agent, on its own behalf and on behalf of the Company,
will comply with all applicable certification, information reporting
and withholding (including "backup" withholding) requirements imposed
on it as a paying agent by applicable tax laws, regulations or
administrative practice with respect to any payments made with respect
to the Equity Units and Stripped Units. Such compliance shall include,
without limitation, the preparation and timely filing of required
returns and the timely payment of all amounts required to be withheld
to the appropriate taxing authority or its designated agent.
(b)The Agent shall comply with any reasonable written
direction timely received from the Company with respect to the
application of such requirements to particular
64
payments to Holders or in other particular circumstances, and may for
purposes of this Agreement rely on any such direction in accordance
with Section 7.1(a)(2).
(c) The Agent shall maintain all appropriate records
documenting compliance with such requirements, and shall make such
records available, on written request, to the Company or its authorized
representative within a reasonable period of time after receipt of such
request.
ARTICLE VIII.
SUPPLEMENTAL AGREEMENTS
Section 8.1 Supplemental Agreements Without Consent of Holders.
Without the consent of any Holders, the Company and the Agent, at any
time and from time to time, may enter into one or more agreements supplemental
hereto, in form satisfactory to the Company and the Agent, for any of the
following purposes:
(a) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the covenants of
the Company herein and in the Certificates; or
(b) to add to the covenants of the Company for the benefit of
the Holders, or to surrender any right or power herein conferred upon
the Company; or
(c) to evidence and provide for the acceptance of appointment
hereunder by a successor Agent; or
(d) to make provision with respect to the rights of Holders
pursuant to the requirements of Section 5.6(b) or 5.10; or
(e) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other provisions
herein, or to make any other provisions with respect to such matters or
questions arising under this Agreement, provided such action shall not
adversely affect the interests of the Holders; or
(f) to permit the substitution by Holders of designated
Company debt instruments for the Pledged Notes as Collateral under this
Agreement.
Section 8.2 Supplemental Agreements With Consent of Holders.
(a) With the consent of the Holders of not less than a
majority of the outstanding Forward Purchase Contracts voting together
as one class, by Act of said Holders delivered to the Company and the
Agent, the Company, when authorized by a Board Resolution, and the
Agent may enter into an agreement or agreements supplemental hereto, in
form satisfactory to the Company and the Agent, for the purpose of
modifying in any manner the terms of the Forward Purchase Contracts, or
the provisions of this Agreement or the rights of the Holders in
respect of the Equity Units and Stripped Units; provided, that, except
as
65
contemplated herein, no such supplemental agreement shall, without the
consent of the Holder of each Outstanding Unit affected thereby:
(1) change any Payment Date;
(2) change the amount or the type of Collateral
required to be Pledged to secure a Holder's Obligations under
the Forward Purchase Contract unless not adverse to Holders,
impair the right of the Holder of any Forward Purchase
Contract to receive distributions on the related Collateral
(except as provided in Section 8.1(f) and except for the
rights of Holders of Equity Units to substitute the Treasury
Securities for the Pledged Notes, Pledged Treasury
Consideration or Pledged Applicable Ownership Interest in the
Treasury Portfolio, or the rights of holders of Stripped Units
to substitute Notes or appropriate Treasury Consideration or
Applicable Ownership Interest in the Treasury Portfolio for
the Pledged Treasury Securities) or otherwise adversely affect
the Holder's rights in or to such Collateral;
(3) reduce any Contract Adjustment Payments, if any,
or any Deferred Contract Adjustment Payment, or change any
place where, or the coin or currency in which, any Contract
Adjustment Payment is payable;
(4) impair the right to institute suit for the
enforcement of any Forward Purchase Contract, any Contract
Adjustment Payment, if any, or any Deferred Contract
Adjustment Payment, if any;
(5) impair the right to institute suit for the
enforcement of any Forward Purchase Contract;
(6) reduce the number of shares of Common Stock to be
purchased pursuant to any Forward Purchase Contract, increase
the price to purchase shares of Common Stock upon settlement
of any Forward Purchase Contract, change the Stock Purchase
Date or otherwise materially adversely affect the Holder's
rights under any Forward Purchase Contract; or
(7) reduce the percentage of the outstanding Forward
Purchase Contracts the consent of whose Holders is required
for any such supplemental agreement;
provided, that if any amendment or proposal referred to above would adversely
affect only the Equity Units or the Stripped Units, then only the affected class
of Holder as of the record date for the Holders entitled to vote thereon will be
entitled to vote on such amendment or proposal, and such amendment or proposal
shall not be effective except with the consent of Holders of not less than a
majority or 100% of such class, as the case may be; provided further, however,
that no agreement, whether with or without the consent of Holders shall affect
Section 3.16.
66
(b) It shall not be necessary for any Act of Holders under
this Section to approve the particular form of any proposed
supplemental agreement, but it shall be sufficient if such Act shall
approve the substance thereof.
Section 8.3 Execution of Supplemental Agreements.
In executing, or accepting the additional agencies created by, any
supplemental agreement permitted by this Article or the modifications thereby of
the agencies created by this Agreement, the Agent shall be provided and (subject
to Section 7.1) shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of such supplemental agreement is authorized or
permitted by this Agreement. The Agent may, but shall not be obligated to, enter
into any such supplemental agreement which affects the Agent's own rights,
duties or immunities under this Agreement or otherwise.
Section 8.4 Effect of Supplemental Agreements.
Upon the execution of any supplemental agreement under this Article,
this Agreement shall be modified in accordance therewith, and such supplemental
agreement shall form a part of this Agreement for all purposes; and every Holder
of Certificates theretofore or thereafter authenticated, executed on behalf of
the Holders and delivered hereunder shall be bound thereby.
Section 8.5 Reference to Supplemental Agreements.
Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any supplemental agreement pursuant to this
Article may, and shall if required by the Agent, bear a notation in form
approved by the Agent as to any matter provided for in such supplemental
agreement. If the Company shall so determine, new Certificates so modified as to
conform, in the opinion of the Agent and the Company, to any such supplemental
agreement may be prepared and executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Agent in exchange for
outstanding Certificates.
ARTICLE IX.
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 9.1 Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, unless:
(a) the Person formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance, transfer
or lease the properties and assets of the Company substantially as an
entirety shall be a corporation, partnership, limited liability company
or trust, shall be organized and validly existing under the laws of the
United States of America, any State thereof or the District of Columbia
and shall expressly assume every covenant of this Agreement, the
Forward Purchase Contracts, the Notes, the Remarketing Agreement and
the Pledge Agreement on the part of the Company to be performed or
observed by one or more supplemental agreements in form reasonably
67
satisfactory to the Agent and the Collateral Agent, executed and
delivered to the Agent and the Collateral Agent by such Person;
(b) immediately after giving effect to such transaction, no
default under this Agreement, the Forward Purchase Contracts, the
Remarketing Agreement or the Pledge Agreement shall have happened and
be continuing; and
(c) the Company has delivered to the Agent an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and such
supplemental agreement(s) comply with this Section 9.1 and that all
conditions precedent herein provided for relating to such transaction
have been complied with.
This Section 9.1 shall not apply to any merger or consolidation in which the
Company is the surviving corporation.
Section 9.2 Successor Substituted.
(a) Upon any consolidation with or merger of the Company into
any other Person, or any conveyance, transfer or lease of the
properties and assets of the Company substantially as an entirety in
accordance with Section 9.1, the successor Person formed by such
consolidation or into which the Company is merged or to which such
conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company
under this Agreement with the same effect as if such successor Person
had been named as the Company herein, and thereafter, except in the
case of a lease, the predecessor Person shall be relieved of all
obligations and covenants under this Agreement, the Forward Purchase
Contracts, the Notes, the Units, the Remarketing Agreement and the
Pledge Agreement.
(b) In case of any such consolidation, merger, sale,
assignment, transfer, lease or conveyance such change in phraseology
and form (but not in substance) may be made in the Certificates
evidencing Units thereafter to be issued as may be appropriate.
ARTICLE X.
COVENANTS
Section 10.1 Performance Under Forward Purchase Contracts.
The Company covenants and agrees for the benefit of the Holders from
time to time of the Equity Units and Stripped Units that it will duly and
punctually perform its obligations under the Forward Purchase Contracts in
accordance with the terms of the Forward Purchase Contracts and this Agreement.
In the case of Early Settlement pursuant to Section 5.9, if the United States
federal securities laws so require, the Company will use commercially reasonable
efforts to (i) have in effect a registration statement covering the shares of
Common Stock to be delivered in respect of the Forward Purchase Contracts being
settled and (ii) provide a prospectus in connection therewith, in each case that
may be used in connection with such Early Settlement.
Section 10.2 Maintenance of Office or Agency.
68
(a) The Company will maintain in the Borough of Manhattan, The
City of New York an office or agency where Certificates may be
presented or surrendered for payment of Contract Adjustment Payments,
acquisition of shares of Common Stock upon settlement of the Forward
Purchase Contracts on any Settlement Date and for transfer of
Collateral upon occurrence of a Termination Event, where Certificates
may be surrendered for registration of transfer or exchange, for a
Collateral Substitution or reestablishment of Equity Units and where
notices and demands to or upon the Company in respect of the Equity
Units and Stripped Units and this Agreement may be served. The Company
will give prompt written notice to the Agent of the location, and any
change in the location, of such office or agency. If at any time the
Company shall fail to maintain any such required office or agency or
shall fail to furnish the Agent with the address thereof, such
presentations, surrenders, notices and demands may be made or served at
the Corporate Trust Office, Office of the Agent in The City of New
York, and the Company hereby appoints the Agent as its agent to receive
all such presentations, surrenders, notices and demands.
(b) The Company may also from time to time designate one or
more other offices or agencies where Certificates may be presented or
surrendered for any or all such purposes and may from time to time
rescind such designations; provided, that no such designation or
rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in the Borough of Manhattan, The City of
New York for such purposes. The Company will give prompt written notice
to the Agent of any such designation or rescission and of any change in
the location of any such other office or agency. The Company hereby
designates as the place of payment for the Equity Units and Stripped
Units the Office of the Agent in The City of New York and appoints the
Agent at the Office of the Agent in The City of New York as paying
agent in such city.
Section 10.3 Company to Reserve Common Stock.
The Company shall at all times prior to the Stock Purchase Date reserve
and keep available, free from preemptive rights, out of its authorized but
unissued Common Stock the full number of shares of Common Stock issuable against
tender of payment in respect of all Forward Purchase Contracts constituting a
part of the Equity Units and Stripped Units evidenced by outstanding
Certificates.
Section 10.4 Covenants as to Common Stock.
The Company covenants that all shares of Common Stock which may be
issued against tender of payment in respect of any Forward Purchase Contract
constituting a part of the Outstanding Units will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable.
Section 10.5 Statements of Officer of the Company as to Default.
The Company will deliver to the Agent, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, an Officer's
Certificate, stating whether or not to the best knowledge of the signer thereof
the Company is in default in the performance and observance
69
of any of the terms, provisions and conditions hereof, and if the Company shall
be in default, specifying all such defaults and the nature and status thereof of
which such officer may have knowledge.
Section 10.6 ERISA.
Each Holder from time to time of the Equity Units or Stripped Units
which is a Plan hereby represents that its acquisition of the Equity Units or
Stripped Units and the holding of the same satisfies the applicable fiduciary
requirements of ERISA and that it is entitled to exemption relief from the
prohibited transaction provisions of ERISA and the Code in accordance with one
or more prohibited transaction exemptions or otherwise will not result in a
nonexempt prohibited transaction.
[SIGNATURE PAGES FOLLOW]
70
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
AMERICAN ELECTRIC POWER COMPANY, INC.
By: ______________________________
Name:
Title:
71
THE BANK OF NEW YORK,
as Forward Purchase Contract Agent
By: ____________________________________
Name:
Title:
72
EXHIBIT A
FORM OF EQUITY UNITS CERTIFICATE
[FOR INCLUSION IN GLOBAL CERTIFICATES ONLY -- THIS CERTIFICATE IS A GLOBAL
CERTIFICATE WITHIN THE MEANING OF THE FORWARD PURCHASE CONTRACT AGREEMENT (AS
HEREINAFTER DEFINED) AND IS REGISTERED IN THE NAME OF THE CLEARING AGENCY OR A
NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART
MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR
A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE FORWARD
PURCHASE CONTRACT AGREEMENT.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company (55 Water Street, New York, New York) to the Company or
its agent for registration of transfer, exchange or payment, and any Certificate
issued is registered in the name of Cede & Co., or such other name as requested
by an authorized representative of The Depository Trust Company, and any payment
hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner hereof, Cede &
Co., has an interest herein.]
(Form of Face of Equity Units Certificate)
No. ______________ CUSIP No. ____________
Number of Equity Units____________
This Equity Units Certificate certifies that [For inclusion in Global
Certificates only -- Cede & Co.] is the registered Holder of the number of
Equity Units set forth above [For inclusion in Global Certificates only - or
such other number of Equity Units reflected in the Schedule of Increases or
Decreases in Global Certificates attached hereto]. Each Equity Unit represents
(i) either (a) beneficial ownership by the Holder of one 5.75% Senior Note Due
August 16, 2007 (the "Note") of American Electric Power Company, Inc., a New
York corporation (the "Company") having a principal amount of $50, subject to
the Pledge of such Note by such Holder pursuant to the Pledge Agreement, or (b)
if the Note has been remarketed by the Remarketing Agent (or if the Holder has
elected not to have the Note remarketed by delivering the Opt-out Treasury
Consideration specified by the Remarketing Agent), the Agent-purchased Treasury
Consideration, subject to the Pledge of such Treasury Consideration by such
Holder pursuant to the Pledge Agreement, or (c) if a Tax Event Redemption has
occurred, the Applicable Ownership Interest in the Treasury Portfolio subject to
the Pledge of such Applicable Ownership Interest in the Treasury Portfolio
pursuant to the Pledge Agreement, and (ii) the rights and obligations of the
Holder under one Forward Purchase Contract with the Company. All capitalized
terms used herein which are defined in the Forward Purchase Contract Agreement
have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Note, the appropriate Treasury
Consideration or the Applicable Ownership Interest in the Treasury Portfolio, as
the case may be, constituting part of
A-1
each Equity Unit evidenced hereby has been pledged to the Collateral Agent, for
the benefit of the Company, to secure the obligations of the Holder under the
Forward Purchase Contract comprising a part of such Equity Unit.
The Pledge Agreement provides that all payments in respect of the Pledged
Notes, Pledged Treasury Consideration or Pledged Applicable Ownership Interest
in the Treasury Portfolio received by the Collateral Agent shall be paid by the
Collateral Agent by wire transfer in same day funds (i) in the case of (A)
quarterly cash distributions on Equity Units which include Pledged Notes,
Pledged Treasury Consideration or Pledged Applicable Ownership Interest in the
Treasury Portfolio and (B) any payments in respect of the Notes, Treasury
Consideration or Applicable Ownership Interest in the Treasury Portfolio, as the
case may be, that have been released from the Pledge pursuant to the Pledge
Agreement, to the Agent to the account designated by the Agent, no later than
10:00 a.m., New York City time, on the Business Day such payment is received by
the Collateral Agent (provided that in the event such payment is received by the
Collateral Agent on a day that is not a Business Day or after 9:00 a.m., New
York City time, on a Business Day, then such payment shall be made no later than
9:30 a.m., New York City time, on the next succeeding Business Day) and (ii) in
the case of payments in respect of any Pledged Notes, Pledged Treasury
Consideration or Pledged Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, to be paid upon settlement of such Holder's
obligations to purchase Common Stock under the Forward Purchase Contract, to the
Company on the Stock Purchase Date (as defined herein) in accordance with the
terms of the Pledge Agreement, in full satisfaction of the respective
obligations of the Holders of the Equity Units of which such Pledged Notes,
Pledged Treasury Consideration or Pledged Applicable Ownership Interest in the
Treasury Portfolio, as the case may be, are a part under the Forward Purchase
Contracts forming a part of such Equity Units. Quarterly distributions on Equity
Units which include Pledged Notes, Pledged Treasury Consideration or Pledged
Applicable Ownership Interest in the Treasury Portfolio, as the case may be,
which are payable quarterly in arrears on February 16, May 16, August 16 and
November 16, each year, commencing August 16, 2002 (a "Payment Date"), shall,
subject to receipt thereof by the Agent from the Collateral Agent (if the
Collateral Agent is the registered owner thereof), be paid by the Agent to the
Person in whose name this Equity Units Certificate (or a Predecessor Equity
Units Certificate) is registered at the close of business on the Record Date for
such Payment Date.
Each Forward Purchase Contract evidenced hereby obligates the Holder of
this Equity Units Certificate to purchase, and the Company to sell, on August
16, 2005 (the "Stock Purchase Date"), at a price equal to $50 (the "Stated
Amount"), a number of newly issued shares of common stock, $6.50 par value per
share ("Common Stock"), of the Company, equal to the Settlement Rate unless on
or prior to the Stock Purchase Date there shall have occurred a Termination
Event or a Cash Settlement, Early Settlement or Merger Early Settlement with
respect to the Equity Units of which such Forward Purchase Contract is a part,
all as provided in the Forward Purchase Contract Agreement and more fully
described on the reverse hereof. The Purchase Price (as defined herein) for the
shares of Common Stock purchased pursuant to each Forward Purchase Contract
evidenced hereby, if not paid earlier, shall be paid on the Stock Purchase Date
by application of payments received in respect of the Pledged Notes, Pledged
Treasury Consideration or Pledged Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, pledged to secure the obligations of the Holder
under such Forward Purchase Contract in accordance with the terms of the Pledge
Agreement.
A-2
Payments on the Notes, the appropriate Treasury Consideration or the
Applicable Ownership Interest in the Treasury Portfolio, as the case may be,
will be payable at the Office of the Agent in The City of New York or, at the
option of the Company, by check mailed to the address of the Person entitled
thereto as such address appears on the Equity Units Register or by wire transfer
to an account specified by such Person at least five Business Days prior to the
applicable Payment Date.
The Company shall pay on each Payment Date in respect of each Forward
Purchase Contract forming part of an Equity Unit evidenced hereby an amount (the
"Contract Adjustment Payment") equal to 3.50% per year of the Stated Amount,
computed on the basis of a 360-day year of twelve 30-day months, subject to
deferral at the option of the Company as provided in the Forward Purchase
Contract Agreement and more fully described on the reverse hereof (provided that
if any date on which a Contract Adjustment Payment is to be made on the Forward
Purchase Contracts is not a Business Day, then payment of such Contract
Adjustment Payment payable on such date will be made on the next succeeding day
which is a Business Day, and no interest or payment will be paid in respect of
such delay, except that if such next succeeding Business Day is in the next
succeeding calendar year, then such payment will be made on the immediately
preceding Business Day). Such Contract Adjustment Payments shall be payable to
the Person in whose name this Equity Units Certificate (or a Predecessor Equity
Units Certificate) is registered at the close of business on the Record Date for
such Payment Date.
Contract Adjustment Payments will be payable at the Office of the Agent in
The City of New York or, at the option of the Company, by check mailed to the
address of the Person entitled thereto as such address appears on the Equity
Units Register or by wire transfer to the account designated to the Agent by a
prior written notice by such Person delivered at least five Business Days prior
to the applicable Payment Date. Reference is hereby made to the further
provisions set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Agent by manual signature, this Equity Units Certificate shall not be entitled
to any benefit under the Pledge Agreement or the Forward Purchase Contract
Agreement or be valid or obligatory for any purpose.
A-3
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
AMERICAN ELECTRIC POWER COMPANY, INC.
By: _________________________________
Name:
Title:
A-4
HOLDER SPECIFIED ABOVE (as to obligations of such
Holder under the Forward Purchase Contracts
evidenced hereby)
By: THE BANK OF NEW YORK, not individually but
solely as Attorney-in-Fact of such Holder
By: _____________________________________________
Authorized Signatory
A-5
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Equity Units Certificates referred to in the
within-mentioned Forward Purchase Contract Agreement.
THE BANK OF NEW YORK,
as Forward Purchase Contract Agent
Dated: June 11, 2002 By: _________________________________
Authorized Signatory
A-6
(Form of Reverse of Equity Units Certificate)
Each Forward Purchase Contract evidenced hereby is governed by a Forward
Purchase Contract Agreement, dated as of June 11, 2002 (as may be supplemented
from time to time, the "Forward Purchase Contract Agreement"), between the
Company and The Bank of New York, as Forward Purchase Contract Agent (including
its successors thereunder, herein called the "Agent"), to which Forward Purchase
Contract Agreement and supplemental agreements thereto reference is hereby made
for a description of the respective rights, limitations of rights, obligations,
duties and immunities thereunder of the Agent, the Company, and the Holders and
of the terms upon which the Equity Units Certificates are, and are to be,
executed and delivered.
Each Forward Purchase Contract evidenced hereby obligates the Holder of
this Equity Units Certificate to purchase, and the Company to sell, on the Stock
Purchase Date at a price equal to $50 (the "Purchase Price"), a number of shares
of Common Stock of the Company equal to the Settlement Rate, unless, on or prior
to the Stock Purchase Date, there shall have occurred a Termination Event or an
Early Settlement, Merger Early Settlement or Cash Settlement with respect to the
Units of which such Forward Purchase Contract is a part. The "Settlement Rate"
is equal to (a) if the Applicable Market Value (as defined below) is greater
than or equal to $49.08 (the "Threshold Appreciation Price"), 1.0187 shares of
Common Stock per Forward Purchase Contract, (b) if the Applicable Market Value
is less than the Threshold Appreciation Price but is greater than $40.90, the
number of shares of Common Stock per Forward Purchase Contract equal to the
Stated Amount of the related Equity Units divided by the Applicable Market Value
and (c) if the Applicable Market Value is less than or equal to $40.90, 1.2225
shares of Common Stock per Forward Purchase Contract, in each case subject to
adjustment as provided in the Forward Purchase Contract Agreement. No fractional
shares of Common Stock will be issued upon settlement of Forward Purchase
Contracts, as provided in the Forward Purchase Contract Agreement.
The "Applicable Market Value" means the average of the Closing Price per
share of Common Stock on each of the 20 consecutive Trading Days ending on the
third Trading Day immediately preceding the Stock Purchase Date.
The "Closing Price" of the Common Stock on any date of determination means
the closing sale price (or, if no closing price is reported, the last reported
sale price) of the Common Stock on the New York Stock Exchange (the "NYSE") on
such date or, if the Common Stock is not listed for trading on the NYSE on any
such date, as reported in the composite transactions for the principal United
States securities exchange on which the Common Stock is so listed, or if the
Common Stock is not so listed on a United States national or regional securities
exchange, as reported by The NASDAQ Stock Market, or, if the Common Stock is not
so reported, the last quoted bid price for the Common Stock in the
over-the-counter market as reported by the National Quotation Bureau or similar
organization, or, if such bid price is not available, the market value of the
Common Stock on such date as determined by a nationally recognized independent
investment banking firm retained for this purpose by the Company.
A "Trading Day" means a day on which the Common Stock (A) is not suspended
from trading on any national or regional securities exchange or association or
over-the-counter market at the close of business and (B) has traded at least
once on the national or regional securities
A-7
exchange or association or over-the-counter market that is the primary market
for the trading of the Common Stock.
Each Forward Purchase Contract evidenced hereby may be settled prior to the
Stock Purchase Date through Early Settlement or Merger Early Settlement, and may
be settled on the Stock Purchase Date through Cash Settlement, all in accordance
with the terms of the Forward Purchase Contract Agreement.
In accordance with the terms of the Forward Purchase Contract Agreement,
the Holder of this Equity Units Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Forward Purchase Contract
evidenced hereby (i) by effecting a Cash Settlement, Early Settlement or Merger
Early Settlement, (ii) by application of payments received in respect of the
Pledged Treasury Consideration acquired from the proceeds of a remarketing of
the related Pledged Notes underlying the Equity Units represented by this Equity
Units Certificate, (iii) if the Holder has elected not to participate in the
remarketing, by application of payments received in respect of the Pledged
Treasury Consideration deposited by such Holder in respect of such Forward
Purchase Contract, or (iv) if a Tax Event Redemption has occurred prior to the
successful remarketing of the Notes, by application of payments received in
respect of the Pledged Applicable Ownership Interest in the Treasury Portfolio
purchased by the Collateral Agent on behalf of the Holder of this Equity Units
Certificate. If, as provided in the Forward Purchase Contract Agreement, upon
the occurrence of the Last Failed Remarketing, the Collateral Agent, for the
benefit of the Company, exercises its rights as a secured creditor with respect
to the Pledged Notes related to this Equity Units Certificate, any accrued and
unpaid interest on such Pledged Notes will become payable by the Company to the
Holder of this Equity Units Certificate in the manner provided for in the
Forward Purchase Contract Agreement.
The Company shall not be obligated to issue any shares of Common Stock in
respect of a Forward Purchase Contract or deliver any certificates or book-entry
interest therefor to the Holder unless it shall have received payment in full of
the aggregate Purchase Price for the shares of Common Stock to be purchased
thereunder in the manner herein set forth.
Under the terms of the Pledge Agreement, the Agent will be entitled to
exercise the voting and any other consensual rights pertaining to the Pledged
Notes, but only to the extent instructed by the Holders as described below. Upon
receipt of notice of any meeting at which holders of Notes are entitled to vote
or upon the solicitation of consents, waivers or proxies of holders of Notes,
the Agent shall, as soon as practicable thereafter, mail to the Holders of
Equity Units a notice (a) containing such information as is contained in the
notice or solicitation, (b) stating that each such Holder on the record date set
by the Agent therefor (which, to the extent possible, shall be the same date as
the record date for determining the holders of Notes entitled to vote) shall be
entitled to instruct the Agent as to the exercise of the voting rights
pertaining to the Pledged Notes constituting a part of such Holder's Equity
Units and (c) stating the manner in which such instructions may be given. Upon
the written request of the Holders of Equity Units on such record date, the
Agent shall endeavor insofar as practicable to vote or cause to be voted, in
accordance with the instructions set forth in such requests, the maximum number
of Pledged Notes as to which any particular voting instructions are received. In
the absence of specific instructions from the Holder of an Equity Unit, the
Agent shall abstain from voting the Pledged Note evidenced by such Equity Units.
A-8
The Equity Units Certificates are issuable only in registered form and only
in denominations of a single Equity Unit and any integral multiple thereof. The
transfer of any Equity Units Certificate will be registered and Equity Units
Certificates may be exchanged as provided in the Forward Purchase Contract
Agreement. The Equity Units Registrar may require a Holder, among other things,
to furnish appropriate endorsements and transfer documents permitted by the
Forward Purchase Contract Agreement. No service charge shall be required for any
such registration of transfer or exchange, but the Company and the Agent may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. The Holder of an Equity Units may
substitute for the Pledged Notes securing its obligations under the related
Forward Purchase Contract Treasury Securities in accordance with the terms of
the Forward Purchase Contract Agreement and the Pledge Agreement. From and after
such Collateral Substitution, the Units for which such Pledged Treasury
Securities secure the Holder's obligation under the Forward Purchase Contract
shall be referred to as a "Stripped Unit." A Holder that elects to substitute a
Treasury Security for Pledged Notes thereby creating Stripped Units, shall be
responsible for any fees or expenses payable in connection therewith. Except as
provided in the Forward Purchase Contract Agreement, for so long as the Forward
Purchase Contract underlying an Equity Unit remains in effect, such Equity Unit
shall not be separable into its constituent parts, and the rights and
obligations of the Holder of such Equity Unit in respect of the Pledged Note and
Forward Purchase Contract constituting such Equity Unit may be transferred and
exchanged only as an Equity Unit.
A Holder of Stripped Units may reestablish Equity Units by delivering to
the Collateral Agent Notes in exchange for the release of the Pledged Treasury
Securities in accordance with the terms of the Forward Purchase Contract
Agreement and the Pledge Agreement.
Subject to the next succeeding paragraph, the Company shall pay on each
Payment Date, the Contract Adjustment Payments, if any, payable in respect of
each Forward Purchase Contract to the Person in whose name the Equity Units
Certificate evidencing such Forward Purchase Contract is registered at the close
of business on the Record Date for such Payment Date. Contract Adjustment
Payments, if any, will be payable at the office of the Agent in the City of New
York or, at the option of the Company, by check mailed to the address of the
Person entitled thereto at such address as it appears on the Equity Units
Register or by wire transfer to the account designated by such Person in writing
at least five Business Days prior to the applicable Payment Date.
The Company shall have the right, at any time prior to the Stock Purchase
Date, to defer the payment of any or all of the Contract Adjustment Payments
otherwise payable on any Payment Date, but only if the Company shall give the
Holders and the Agent written notice of its election to defer Contract
Adjustment Payments as provided in the Forward Purchase Contract Agreement. Any
Contract Adjustment Payments so deferred shall, to the extent permitted by law,
bear additional Contract Adjustment Payments thereon at the rate of 5.75% per
year (computed on the basis of a 360-day year of twelve 30-day months),
compounding on each succeeding Payment Date, until paid in full (such deferred
installments of Contract Adjustment Payments, if any, together with the
additional Contract Adjustment Payments, if any, accrued thereon, are referred
to herein as the "Deferred Contract Adjustment Payments"). Deferred Contract
Adjustment Payments, if any, shall be due on the next succeeding Payment Date
except to the extent that payment is deferred pursuant to the Forward Purchase
Contract Agreement. No Contract Adjustment Payments may be deferred to a date
that is after the Stock Purchase Date and no such
A-9
deferral period may end other than on a Payment Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Forward Purchase Contracts until a Payment Date prior
to the Stock Purchase Date, then all Deferred Contract Adjustment Payments, if
any, shall be payable to the registered Holders as of the close of business on
the Record Date immediately preceding such Payment Date.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, then, until the Deferred Contract Adjustment
Payments have been paid, the Company shall not declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its Common Stock other than (i)
purchases, redemptions or acquisitions of shares of Common Stock in connection
with any employment contract, benefit plan or other similar arrangement with or
for the benefit of employees, officers or directors or a stock purchase or
dividend reinvestment plan, or the satisfaction by the Company of its
obligations pursuant to any contract or security outstanding on the date the
Company exercises its rights to defer the Contract Adjustment Payments; (ii) as
a result of a reclassification of the Company's Capital Stock or the exchange or
conversion of one class or series of for another class or series of the
Company's Capital Stock; (iii) the purchase of fractional interests in shares of
any series of the Company's Common Stock pursuant to the conversion or exchange
provisions of such Common Stock or the security being converted or exchanged;
(iv) dividends or distributions in any series of the Company's Common Stock (or
rights to acquire Common Stock) or repurchases, acquisitions or redemptions of
Common Stock in connection with the issuance or exchange of any series of Common
Stock (or securities convertible into or exchangeable for shares of the
Company's Common Stock); or (v) redemptions, exchanges or repurchases of any
rights outstanding under a shareholder rights plan or the declaration or payment
thereunder of a dividend or distribution of or with respect to rights in the
future.
The Forward Purchase Contracts and all obligations and rights of the
Company and the Holders thereunder, including, without limitation, the rights
and obligations of the Holders to receive and the obligation of the Company to
pay Contract Adjustment Payments, if any, or any Deferred Contract Adjustment
Payments, and the rights of the Holders to purchase Common Stock, shall
immediately and automatically terminate, without the necessity of any notice or
action by any Holder, the Agent or the Company, if, on or prior to the Stock
Purchase Date, a Termination Event shall have occurred. Upon the occurrence of a
Termination Event, the Company shall promptly but in no event later than two
Business Days thereafter give written notice to the Agent, the Collateral Agent
and to the Holders, at their addresses as they appear in the Equity Units
Register. Upon and after the occurrence of a Termination Event, the Collateral
Agent shall release the Pledged Notes, Pledged Treasury Consideration or Pledged
Applicable Ownership Interest in the Treasury Portfolio, as the case may be,
from the Pledge in accordance with the provisions of the Pledge Agreement.
Upon registration of transfer of this Equity Units Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Forward Purchase Contract Agreement), by the terms of the Forward Purchase
Contract Agreement and the Forward Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the Forward Purchase
Contracts evidenced
A-10
by this Equity Units Certificate. The Company covenants and agrees, and the
Holder, by its acceptance hereof, likewise covenants and agrees, to be bound by
the provisions of this paragraph.
The Holder of this Equity Units Certificate, by its acceptance hereof,
authorizes the Agent to enter into and perform the related Forward Purchase
Contracts forming part of the Equity Units evidenced hereby on its behalf as its
attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Forward Purchase Contracts by the Company or its trustee in
the event that the Company becomes the subject of a case under the Bankruptcy
Code, agrees to be bound by the terms and provisions of the Forward Purchase
Contracts, covenants and agrees to perform such Holder's obligations under such
Forward Purchase Contracts, consents to the provisions of the Forward Purchase
Contract Agreement, irrevocably authorizes the Agent to enter into and perform
the Pledge Agreement on such Holder's behalf as attorney-in-fact, and consents
to and agrees to be bound by the Pledge of the Notes or the appropriate Treasury
Consideration or Applicable Ownership Interest in the Treasury Portfolio, as the
case may be, underlying this Equity Units Certificate pursuant to the Pledge
Agreement, provided, that upon a Termination Event, the rights of the Holder of
such Units under the Forward Purchase Contract may be enforced without regard to
any other rights or obligations. The Holder further covenants and agrees, that,
to the extent and in the manner provided in the Forward Purchase Contract
Agreement and the Pledge Agreement, but subject to the terms thereof, payments
in respect of the Pledged Notes, Pledged Treasury Consideration or Pledged
Applicable Ownership Interest in the Treasury Portfolio, as the case may be, to
be paid upon settlement of such Holder's obligations to purchase Common Stock
under the Forward Purchase Contract, shall be paid on the Stock Purchase Date by
the Collateral Agent to the Company in satisfaction of such Holder's obligations
under such Forward Purchase Contract and such Holder shall acquire no right,
title or interest in such payments.
The Company and each Holder of an Equity Unit, and each Beneficial Owner
thereof, by its acceptance thereof or of its interest therein, further agrees to
treat (i) the purchase of Equity Units as the purchase of a unit consisting of
the Forward Purchase Contract and the Note and to allocate the purchase price of
the Equity Unit between the Note and the Forward Purchase Contract as $50 and
$0, respectively, and (ii) the holder as the owner of the applicable interest in
the Collateral Account, including the related Notes, Treasury Consideration or
Applicable Ownership Interest in the Treasury Portfolio, as the case may be.
Subject to certain exceptions, the provisions of the Forward Purchase
Contract Agreement may be amended with the consent of the Holders of a majority
of the Forward Purchase Contracts.
The Forward Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to its principles of conflicts of laws.
The Company, the Agent and any agent of the Company or the Agent may treat
the Person in whose name this Equity Units Certificate is registered as the
owner of the Equity Units evidenced hereby for the purpose of receiving
quarterly payments on the Notes, the Treasury Consideration or the Applicable
Ownership Interest in the Treasury Portfolio, as the case may be, receiving
payments of Contract Adjustment Payments, if any, and any Deferred Contract
Adjustment Payments, performance of the Forward Purchase Contracts and for all
other purposes
A-11
whatsoever (subject to the Record Date provisions hereof), whether or not any
payments in respect thereof be overdue and notwithstanding any notice to the
contrary, and neither the Company, the Agent, nor any such agent shall be
affected by notice to the contrary.
The Forward Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Forward Purchase Contract Agreement is available for
inspection by any Holder at the Corporate Trust Office.
A-12
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - Custodian
(cust) (minor)
Under Uniform Gifts to Minors Act
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
Additional abbreviations may also be used though not in the above list.
A-13
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
(Please insert Social Security or Taxpayer I.D. or other Identifying
Number of Assignee)
(Please Print or Type Name and Address Including Postal Zip Code
of Assignee)
the within Equity Units Certificate and all rights thereunder, hereby
irrevocably constituting and appointing ___________________________ attorney to
transfer said Equity Units Certificate on the books of American Electric Power
Company, Inc. with full power of substitution in the premises.
Dated: _________________________
Signature: _____________________________
NOTICE: The signature to this assignment must correspond with the name as
it appears upon the face of the within Equity Units Certificate in every
particular, without alteration or enlargement or any change whatsoever.
Signature Guarantee: ___________________________.
A-14
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate or book-entry interest
for shares of Common Stock deliverable upon settlement on or after the Stock
Purchase Date of the Forward Purchase Contracts underlying the number of Equity
Units evidenced by this Equity Units Certificate be registered in the name of,
and delivered, together with a check in payment for any fractional share, to the
undersigned at the address indicated below unless a different name and address
have been indicated below. If shares are to be registered in the name of a
Person other than the undersigned, the undersigned will pay any transfer tax
payable incident thereto.
Dated: ______________________ Signature: _____________________________
Signature Guarantee: ___________________
(if assigned to another person)
If shares are to be registered in REGISTERED HOLDER
the name of and delivered to a Person
other than the Holder, please (i) Please print name and address of
print such Person's name and address Registered Holder:
and (ii) provide a guarantee of
your signature:
Name Name
Address Address
Social Security or other Taxpayer
Identification Number, if any
A-15
ELECTION TO SETTLE EARLY
The undersigned Holder of this Equity Units Certificate hereby irrevocably
exercises the option to effect Early Settlement in accordance with the terms of
the Forward Purchase Contract Agreement with respect to the Forward Purchase
Contracts underlying the number of Equity Units evidenced by this Equity Units
Certificate specified below. The option to effect Early Settlement may be
exercised only with respect to Forward Purchase Contracts underlying Equity
Units with an aggregate Stated Amount equal to $1,000 or an integral multiple
thereof. The undersigned Holder directs that a certificate or book-entry
interest for shares of Common Stock deliverable upon such Early Settlement be
registered in the name of, and delivered, together with a check in payment for
any fractional share and any Equity Units Certificate representing any Equity
Units evidenced hereby as to which Early Settlement of the related Forward
Purchase Contracts is not effected, to the undersigned at the address indicated
below unless a different name and address have been indicated below. The Pledged
Notes, Pledged Treasury Consideration or Pledged Applicable Ownership Interest
in the Treasury Portfolio, as the case may be, deliverable upon such Early
Settlement will be transferred in accordance with the transfer instructions set
forth below. If shares are to be registered in the name of a Person other than
the undersigned, the undersigned will pay any transfer tax payable incident
thereto.
Dated: ____________________ Signature: _____________________________
Signature Guarantee: ___________________
Number of Units evidenced hereby as to which Early Settlement of the
related Forward Purchase Contracts is being elected:
If shares of Common Stock are REGISTERED HOLDER
to be registered in the name of
and delivered to and Pledged Notes, Please print name and address of
Pledged Treasury Consideration or Registered Holder:
Pledged Applicable Ownership Interest
in the Treasury Portfolio, as the case
may be, are to be transferred to a Person
other than the Holder, please print such
Person's name and address:
Name Name
Address Address
Social Security or other Taxpayer
Identification Number, if any
Transfer instructions for Pledged Notes, Pledged Treasury Consideration or
the Pledged Applicable Ownership Interest in the Treasury Portfolio, as the case
may be, transferable upon Early Settlement or a Termination Event:
A-16
(TO BE ATTACHED TO GLOBAL CERTIFICATES)
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have been made:
Stated Amount of
the Global
Amount of Decrease in Certificate
Decrease in Stated Increase in Stated Following Such Signature of
Amount of the Amount of the Decrease or Authorized
Date Global Certificate Global Certificate Increase Signatory
A-17
EXHIBIT B
FORM OF STRIPPED UNITS CERTIFICATE
[FOR INCLUSION IN GLOBAL CERTIFICATES ONLY -- THIS CERTIFICATE IS A GLOBAL
CERTIFICATE WITHIN THE MEANING OF THE FORWARD PURCHASE CONTRACT AGREEMENT (AS
HEREINAFTER DEFINED) AND IS REGISTERED IN THE NAME OF A CLEARING AGENCY OR A
NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART
MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR
A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE FORWARD
PURCHASE CONTRACT AGREEMENT.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company (55 Water Street, New York, New York) to the Company or
its agent for registration of transfer, exchange or payment, and any Certificate
issued is registered in the name of Cede & Co., or such other name as requested
by an authorized representative of The Depository Trust Company, and any payment
hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner hereof, Cede &
Co., has an interest herein.]
(Form of Face of Stripped Units Certificate)
No. CUSIP No. ____________
Number of Stripped Units
This Stripped Units Certificate certifies that [For inclusion in Global
Certificates only -- Cede & Co.] is the registered Holder of the number of
Stripped Units set forth above [For inclusion in Global Certificates only - or
such other number of Stripped Units reflected in the Schedule of Increases or
Decreases in Global Certificate attached hereto]. Each Stripped Unit represents
(i) a 1/20 undivided beneficial ownership interest in a Treasury Security,
subject to the Pledge of such interest in such Treasury Security by such Holder
pursuant to the Pledge Agreement, and (ii) the rights and obligations of the
Holder under one Forward Purchase Contract with American Electric Power Company,
Inc., a New York corporation (the "Company"). All capitalized terms used herein
which are defined in the Forward Purchase Contract Agreement have the meaning
set forth therein.
Pursuant to the Pledge Agreement, the Treasury Security constituting part
of each Stripped Unit evidenced hereby has been pledged to the Collateral Agent,
for the benefit of the Company, to secure the obligations of the Holder under
the Forward Purchase Contract comprising a part of such Stripped Units.
Each Forward Purchase Contract evidenced hereby obligates the Holder of
this Stripped Units Certificate to purchase, and the Company to sell, on the
Stock Purchase Date, at a price equal to $50 (the "Stated Amount"), a number of
shares of common stock, $6.50 par value per share
B-1
("Common Stock"), of the Company, equal to the Settlement Rate, unless on or
prior to the Stock Purchase Date there shall have occurred a Termination Event
or an Early Settlement, Merger Early Settlement or Cash Settlement with respect
to the Stripped Units of which such Forward Purchase Contract is a part, all as
provided in the Forward Purchase Contract Agreement and more fully described on
the reverse hereof. The Purchase Price (as defined herein) for the shares of
Common Stock purchased pursuant to each Forward Purchase Contract evidenced
hereby, if not paid earlier, shall be paid on the Stock Purchase Date by
application of payments received in respect of the Pledged Treasury Securities
pledged to secure the obligations under such Forward Purchase Contract in
accordance with the terms of the Pledge Agreement.
The Company shall pay on each Payment Date in respect of each Forward
Purchase Contract forming part of a Stripped Units evidenced hereby an amount
(the "Contract Adjustment Payments") equal to 3.50% per year of the Stated
Amount, computed on the basis of a 360-day year of twelve 30-day months, subject
to deferral at the option of the Company as provided in the Forward Purchase
Contract Agreement and more fully described on the reverse hereof (provided that
if any date on which Contract Adjustment Payments are to be made on the Forward
Purchase Contracts is not a Business Day, then payment of the Contract
Adjustment Payments payable on that date will be made on the next succeeding day
which is a Business Day, and no interest or payment will be paid in respect of
the delay, except that if such next succeeding Business Day is in the next
succeeding calendar year, such payment will be made on the immediately preceding
Business Day). Such Contract Adjustment Payments shall be payable to the Person
in whose name this Stripped Units Certificate (or a Predecessor Stripped Units
Certificate) is registered at the close of business on the Record Date for such
Payment Date.
Contract Adjustment Payments, if any, will be payable at the Office of the
Agent in the City of New York or, at the option of the Company, by check mailed
to the address of the Person entitled thereto at such address as it appears on
the Stripped Units Register or by wire transfer to the account designated by
such Person in writing at least five Business Days prior to the applicable
Payment Date.
Reference is hereby made to the further provisions set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as
if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Agent by manual signature, this Stripped Units Certificate shall not be entitled
to any benefit under the Pledge Agreement or the Forward Purchase Contract
Agreement or be valid or obligatory for any purpose.
B-2
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
AMERICAN ELECTRIC POWER COMPANY, INC.
By: ____________________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to obligations of such
Holder under the Forward Purchase Contracts)
By: THE BANK OF NEW YORK, not individually but
solely as Attorney-in-Fact of such Holder
By: ____________________________________
Authorized Signatory
B-3
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Stripped Units referred to in the within-mentioned
Forward Purchase Contract Agreement.
THE BANK OF NEW YORK,
as Forward Purchase Contract Agent
Dated: June 11, 2002 By:_______________________________________
Authorized Signatory
B-4
(Reverse of Stripped Units Certificate)
Each Forward Purchase Contract evidenced hereby is governed by a Forward
Purchase Contract Agreement, dated as of June 11, 2002 (as may be supplemented
from time to time, the "Forward Purchase Contract Agreement"), between the
Company and The Bank of New York, as Forward Purchase Contract Agent (including
its successors thereunder, herein called the "Agent"), to which Forward Purchase
Contract Agreement and supplemental agreements thereto reference is hereby made
for a description of the respective rights, limitations of rights, obligations,
duties and immunities thereunder of the Agent, the Company and the Holders and
of the terms upon which the Stripped Units Certificates are, and are to be,
executed and delivered.
Each Forward Purchase Contract evidenced hereby obligates the Holder of
this Stripped Units Certificate to purchase, and the Company to sell, on the
Stock Purchase Date at a price equal to $50 (the "Purchase Price"), a number of
shares of Common Stock of the Company equal to the Settlement Rate, unless, on
or prior to the Stock Purchase Date, there shall have occurred a Termination
Event or an Early Settlement or Merger Early Settlement with respect to the
Stripped Units of which such Forward Purchase Contract is a part. The
"Settlement Rate" is equal to (a) if the Applicable Market Value (as defined
below) is greater than or equal to $49.08 (the "Threshold Appreciation Price"),
1.0187 shares of Common Stock per Forward Purchase Contract, (b) if the
Applicable Market Value is less than the Threshold Appreciation Price but is
greater than $40.90, the number of shares of Common Stock per Forward Purchase
Contract equal to the Stated Amount of the related Stripped Units divided by the
Applicable Market Value and (c) if the Applicable Market Value is less than or
equal $40.90, 1.2225 shares of Common Stock per Forward Purchase Contract, in
each case subject to adjustment as provided in the Forward Purchase Contract
Agreement. No fractional shares of Common Stock will be issued upon settlement
of Forward Purchase Contracts, as provided in the Forward Purchase Contract
Agreement.
The "Applicable Market Value" means the average of the Closing Price per
share of Common Stock on each of the 20 consecutive Trading Days ending on the
third Trading Day immediately preceding the Stock Purchase Date.
The "Closing Price" of the Common Stock on any date of determination means
the closing sale price (or, if no closing price is reported, the last reported
sale price) of the Common Stock on the New York Stock Exchange (the "NYSE") on
such date or, if the Common Stock is not listed for trading on the NYSE on any
such date, as reported in the composite transactions for the principal United
States securities exchange on which the Common Stock is so listed, or if the
Common Stock is not so listed on a United States national or regional securities
exchange, as reported by The NASDAQ Stock Market, or, if the Common Stock is not
so reported, the last quoted bid price for the Common Stock in the
over-the-counter market as reported by the National Quotation Bureau or similar
organization, or, if such bid price is not available, the market value of the
Common Stock on such date as determined by a nationally recognized independent
investment banking firm retained for this purpose by the Company.
A "Trading Day" means a day on which the Common Stock (A) is not suspended
from trading on any national or regional securities exchange or association or
over-the-counter market at the close of business and (B) has traded at least
once on the national or regional securities
B-5
exchange or association or over-the-counter market that is the primary market
for the trading of the Common Stock.
Each Forward Purchase Contract evidenced hereby may be settled prior to the
Stock Purchase Date through Early Settlement or Merger Early Settlement, and may
be settled on the Stock Purchase Date through Cash Settlement, all in accordance
with the terms of the Forward Purchase Contract Agreement.
In accordance with the terms of the Forward Purchase Contract Agreement,
the Holder of this Stripped Units Certificate shall pay the Purchase Price for
the shares of Common Stock purchased pursuant to each Forward Purchase Contract
evidenced hereby (i) by effecting an Early Settlement, Merger Early Settlement
or Cash Settlement or (ii) by application of payments received in respect of the
Pledged Treasury Securities underlying the Stripped Units represented by this
Stripped Units Certificate.
The Company shall not be obligated to issue any shares of Common Stock in
respect of a Forward Purchase Contract or deliver any certificates or book-entry
interest therefor to the Holder unless it shall have received payment in full of
the aggregate Purchase Price for the shares of Common Stock to be purchased
thereunder in the manner herein set forth.
The Stripped Units Certificates are issuable only in registered form and
only in denominations of a single Stripped Units and any integral multiple
thereof. The transfer of any Stripped Units Certificate will be registered and
Stripped Units Certificates may be exchanged as provided in the Forward Purchase
Contract Agreement. The Stripped Units Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents
permitted by the Forward Purchase Contract Agreement. No service charge shall be
required for any such registration of transfer or exchange, but the Company and
the Agent may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. The Holder of a Stripped
Unit may substitute for the Pledged Treasury Securities securing its obligations
under the related Forward Purchase Contract Notes in accordance with the terms
of the Forward Purchase Contract Agreement and the Pledge Agreement. From and
after such substitution, the Units for which such Pledged Notes secure the
Holder's obligation under the Forward Purchase Contract shall be referred to as
an "Equity Unit." A Holder that elects to substitute Notes for Pledged Treasury
Securities, thereby reestablishing Equity Units, shall be responsible for any
fees or expenses payable in connection therewith. Except as provided in the
Forward Purchase Contract Agreement, for so long as the Forward Purchase
Contract underlying a Stripped Unit remains in effect, such Stripped Units shall
not be separable into its constituent parts, and the rights and obligations of
the Holder of such Stripped Units in respect of the Pledged Treasury Security
and the Forward Purchase Contract constituting such Stripped Units may be
transferred and exchanged only as a Stripped Unit.
Subject to the next succeeding paragraph, the Company shall pay on each
Payment Date, the Contract Adjustment Payments, if any, payable in respect of
each Forward Purchase Contract to the Person in whose name the Stripped Units
Certificate evidencing such Forward Purchase Contract is registered at the close
of business on the Record Date for such Payment Date. Contract Adjustment
Payments, if any, will be payable at the Office of the Agent in the City of New
York or, at the option of the Company, by check mailed to the address of the
Person entitled thereto at
B-6
such address as it appears on the Stripped Units Register or by wire transfer to
the account designated by such Person in writing at least five Business Days
prior to the applicable Payment Date.
The Company shall have the right, at any time prior to the Stock Purchase
Date, to defer the payment of any or all of the Contract Adjustment Payments
otherwise payable on any Payment Date, but only if the Company shall give the
Holders and the Agent written notice of its election to defer Contract
Adjustment Payments as provided in the Forward Purchase Contract Agreement. Any
Contract Adjustment Payments so deferred shall, to the extent permitted by law,
bear additional Contract Adjustment Payments thereon at the rate of 5.75% per
year (computed on the basis of a 360-day year of twelve 30-day months),
compounding on each succeeding Payment Date, until paid in full (such deferred
installments of Contract Adjustment Payments, if any, together with the
additional Contract Adjustment Payments, if any, accrued thereon, are referred
to herein as the "Deferred Contract Adjustment Payments"). Deferred Contract
Adjustment Payments, if any, shall be due on the next succeeding Payment Date
except to the extent that payment is deferred pursuant to the Forward Purchase
Contract Agreement. No Contract Adjustment Payments may be deferred to a date
that is after the Stock Purchase Date and no such deferral period may end other
than on a Payment Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Forward Purchase Contracts until a Payment Date prior
to the Stock Purchase Date, then all Deferred Contract Adjustment Payments, if
any, shall be payable to the registered Holders as of the close of business on
the Record Date immediately preceding such Payment Date.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, then, until the Deferred Contract Adjustment
Payments have been paid, the Company shall not declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its Common Stock other than (i)
purchases, redemptions or acquisitions of shares of Common Stock in connection
with any employment contract, benefit plan or other similar arrangement with or
for the benefit of employees, officers or directors or a stock purchase or
dividend reinvestment plan, or the satisfaction by the Company of its
obligations pursuant to any contract or security outstanding on the date the
Company exercises its rights to defer the Contract Adjustment Payments; (ii) as
a result of a reclassification of the Company's Capital Stock or the exchange or
conversion of one class or series of the Company's Capital Stock for another
class or series of the Company's Capital Stock; (iii) the purchase of fractional
interests in shares of any series of the Company's Common Stock pursuant to the
conversion or exchange provisions of such Common Stock or the security being
converted or exchanged; (iv) dividends or distributions in any series of the
Company's Common Stock (or rights to acquire Common Stock) or repurchases,
acquisitions or redemptions of Common Stock in connection with the issuance or
exchange of any series of Common Stock (or securities convertible into or
exchangeable for shares of the Company's Common Stock; or (v) redemptions,
exchanges or repurchases of any rights outstanding under a shareholder rights
plan or the declaration or payment thereunder of a dividend or distribution of
or with respect to rights in the future.
The Forward Purchase Contracts and all obligations and rights of the
Company and the Holders thereunder, including, without limitation, the rights
and obligations of Holders to receive
B-7
and the obligation of the Company to pay Contract Adjustment Payments, if any,
or any Deferred Contract Adjustment Payments, and the rights and obligations of
Holders to purchase Common Stock, shall immediately and automatically terminate,
without the necessity of any notice or action by any Holder, the Agent or the
Company, if, on or prior to the Stock Purchase Date, a Termination Event shall
have occurred. Upon the occurrence of a Termination Event, the Company shall
promptly but in no event later than two Business Days thereafter give written
notice to the Agent, the Collateral Agent and to the Holders, at their addresses
as they appear in the Stripped Units Register. Upon and after the occurrence of
a Termination Event, the Collateral Agent shall release the Pledged Treasury
Securities from the Pledge in accordance with the provisions of the Pledge
Agreement.
Upon registration of transfer of this Stripped Units Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Forward Purchase Contract Agreement), by the terms of the Forward Purchase
Contract Agreement and the Forward Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the Forward Purchase
Contracts evidenced by this Stripped Units Certificate. The Company covenants
and agrees, and the Holder, by its acceptance hereof, likewise covenants and
agrees, to be bound by the provisions of this paragraph.
The Holder of this Stripped Units Certificate, by its acceptance hereof,
authorizes the Agent to enter into and perform the related Forward Purchase
Contracts forming part of the Stripped Units evidenced hereby on its behalf as
its attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Forward Purchase Contracts by the Company or its trustee in
the event that the Company becomes the subject of a case under the Bankruptcy
Code, agrees to be bound by the terms and provisions of the Forward Purchase
Contracts, covenants and agrees to perform such Holder's obligations under such
Forward Purchase Contracts, consents to the provisions of the Forward Purchase
Contract Agreement, irrevocably authorizes the Agent to enter into and perform
the Pledge Agreement on such Holder's behalf as attorney-in-fact, and consents
to and agrees to be bound by the Pledge of the Treasury Securities underlying
this Stripped Units Certificate pursuant to the Pledge Agreement, provided, that
upon a Termination Event, the rights of the Holder of such Units under the
Forward Purchase Contract may be enforced without regard to any other rights or
obligations. The Holder further covenants and agrees, that, to the extent and in
the manner provided in the Forward Purchase Contract Agreement and the Pledge
Agreement, but subject to the terms thereof, payments in respect of the Pledged
Treasury Securities, to be paid upon settlement of such Holder's obligations to
purchase Common Stock under the Forward Purchase Contract, shall be paid on the
Stock Purchase Date by the Collateral Agent to the Company in satisfaction of
such Holder's obligations under such Forward Purchase Contract and such Holder
shall acquire no right, title or interest in such payments.
The Company and each Holder of any Stripped Units, and each Beneficial
Owner thereof, by its acceptance thereof or of its interest therein, further
agrees to treat (i) the formation of Stripped Units as the purchase of a unit
consisting of the Purchase Contract and the Treasury Securities and (ii) the
holder as the owner of the applicable interest in the Collateral Account,
including the Treasury Securities.
B-8
Subject to certain exceptions, the provisions of the Forward Purchase
Contract Agreement may be amended with the consent of the Holders of a majority
of the Forward Purchase Contracts.
The Forward Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to its principles of conflicts of laws.
The Company, the Agent and any agent of the Company or the Agent may treat
the Person in whose name this Stripped Units Certificate is registered as the
owner of the Stripped Units evidenced hereby for the purpose of receiving any
Contract Adjustment Payments and any Deferred Contract Adjustment Payments,
performance of the Forward Purchase Contracts and for all other purposes
whatsoever (subject to the Record Date provisions hereof), whether or not any
payments in respect thereof be overdue and notwithstanding any notice to the
contrary, and neither the Company, the Agent, nor any such agent shall be
affected by notice to the contrary.
The Forward Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Forward Purchase Contract Agreement is available for
inspection by any Holder at the Corporate Trust Office.
B-9
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - Custodian
(cust) (minor)
Under Uniform Gifts to Minors Act
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and
not as tenants in common
Additional abbreviations may also be used though not in the above list.
B-10
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
(Please insert Social Security or Taxpayer I.D. or other Identifying Number
of Assignee)
(Please Print or Type Name and Address Including Postal Zip Code of
Assignee)
the within Stripped Units Certificate and all rights thereunder, hereby
irrevocably constituting and appointing ____________________________ attorney to
transfer said Stripped Units Certificate on the books of American Electric Power
Company, Inc. with full power of substitution in the premises.
Dated: ______________________ Signature: ___________________________
NOTICE: The signature to this assignment must correspond
with the name as it appears upon the face of the within
Stripped Units Certificate in every particular, without
alteration or enlargement or any change whatsoever.
Signature Guarantee: ________________________________________________
B-11
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate or book-entry interest
for shares of Common Stock deliverable upon settlement on or after the Stock
Purchase Date of the Forward Purchase Contracts underlying the number of
Stripped Units evidenced by this Stripped Units Certificate be registered in the
name of, and delivered, together with a check in payment for any fractional
share, to the undersigned at the address indicated below unless a different name
and address have been indicated below. If shares are to be registered in the
name of a Person other than the undersigned, the undersigned will pay any
transfer tax payable incident thereto.
Dated: ___________________ Signature: _____________________________________
Signature Guarantee: ___________________________
(if assigned to another person)
If shares are to be registered in the REGISTERED HOLDER
name of and delivered to a Person other
than the Holder, please (i) print such Please print name and address of
Person's name and address and (ii) Registered Holder:
provide a guarantee of your signature:
Name Name
Address Address
Social Security or other Taxpayer
Identification Number, if any
B-12
ELECTION TO SETTLE EARLY
The undersigned Holder of this Stripped Units Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Forward Purchase Contract Agreement with respect to the Forward
Purchase Contracts underlying the number of Stripped Units evidenced by this
Stripped Units Certificate specified below. The option to effect Early
Settlement may be exercised only with respect to Forward Purchase Contracts
underlying Stripped Units with an aggregate Stated Amount equal to $1,000 or an
integral multiple thereof. The undersigned Holder directs that a certificate or
book-entry interest for shares of Common Stock deliverable upon such Early
Settlement be registered in the name of, and delivered, together with a check in
payment for any fractional share and any Stripped Units Certificate representing
any Stripped Units evidenced hereby as to which Early Settlement of the related
Forward Purchase Contracts is not effected, to the undersigned at the address
indicated below unless a different name and address have been indicated below.
Pledged Treasury Securities deliverable upon such Early Settlement will be
transferred in accordance with the transfer instructions set forth below. If
shares are to be registered in the name of a Person other than the undersigned,
the undersigned will pay any transfer tax payable incident thereto.
Dated: ____________________ Signature: ____________________________________
Signature Guarantee: _________________________
Number of Stripped Units evidenced hereby as to which Early Settlement of
the related Forward Purchase Contracts is being elected:
If shares of Common Stock are to be REGISTERED HOLDER
registered in the name of and delivered to
and Pledged Treasury Securities are to be Please print name and address of
transferred to a Person other than the Registered Holder:
Holder, please print such Person's name
and address:
Name Name
Address Address
Social Security or other Taxpayer
Identification Number, if any
Transfer instructions for Pledged Treasury Securities transferable upon
Early Settlement or a Termination Event:
B-13
(TO BE ATTACHED TO GLOBAL CERTIFICATES)
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have been
made:
Stated Amount of
the Global
Amount of Amount of Certificate
Decrease in Stated Increase in Stated Following Such Signature of
Amount of the Amount of the Decrease or Authorized
Date Global Certificate Global Certificate Increase Signatory
B-14
EXHIBIT C
INSTRUCTION FROM FORWARD PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: Corporate Trust Department
Re: Equity Units of American Electric Power Company, Inc. (the "Company")
We hereby notify you in accordance with Section [4.1] [4.2] of the Pledge
Agreement, dated as of June 11, 2002, (the "Pledge Agreement") among the
Company, you, as Collateral Agent, Custodial Agent and Securities Intermediary
and us, as Forward Purchase Contract Agent and as attorney-in-fact for the
holders of [Equity Units] [Stripped Units] from time to time, that the Holder of
Equity Units and Stripped Units listed below (the "Holder") has elected to
substitute [$_____ aggregate principal amount of Treasury Securities (CUSIP No.
_____________)] [$_______ aggregate principal amount of Notes] in exchange for
the related [Pledged Notes] [Pledged Treasury Securities] held by you in
accordance with the Pledge Agreement and has delivered to us a notice stating
that the Holder has Transferred [Treasury Securities] [Notes] to you, as
Collateral Agent. We hereby instruct you, upon receipt of such [Pledged Treasury
Securities] [Pledged Notes], and upon the payment by such Holder of any
applicable fees, to release the [Notes] [Treasury Securities] related to such
[Equity Units] [Stripped Units] to us in accordance with the Holder's
instructions. Capitalized terms used herein but not defined shall have the
meaning set forth in the Pledge Agreement.
Date: _____________________
THE BANK OF NEW YORK,
as Forward Purchase Contract Agent
By: ________________________________
Name:
Title:
C-1
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Notes] for the [Pledged Notes] [Pledged Treasury
Securities]:
Name:
Social Security or other Taxpayer
Identification Number, if any:
Address:
C-2
EXHIBIT D
INSTRUCTION TO FORWARD PURCHASE CONTRACT AGENT
The Bank of New York,
as Forward Purchase Contract Agent
101 Barclay Street
New York, New York 10286
Attention: Corporate Trust Department
Telecopy:
Re: Equity Units of American Electric Power Company, Inc. (the "Company")
The undersigned Holder hereby notifies you that it has delivered to The
Bank of New York, as Collateral Agent, Custodial Agent and Securities
Intermediary [$_______ aggregate principal amount of Treasury Securities (CUSIP
No. ______________)] [$_______ aggregate principal amount of Notes] in exchange
for the related [Pledged Notes] [Pledged Treasury Securities] held by the
Collateral Agent, in accordance with Section [4.1] [4.2] of the Pledge
Agreement, dated June 11, 2002 (the "Pledge Agreement"), among you, the Company
and the Collateral Agent. The undersigned Holder has paid the Collateral Agent
all applicable fees relating to such exchange. The undersigned Holder hereby
instructs you to instruct the Collateral Agent to release to you on behalf of
the undersigned Holder the [Pledged Notes] [Pledged Treasury Securities] related
to such [Equity Units] [Stripped Units]. Capitalized terms used herein but not
defined shall have the meaning set forth in the Pledge Agreement.
Date: ___________________ Signature:____________________________
Signature Guarantee:__________________
Please print name and address of Registered Holder:
Name:
Social Security or other Taxpayer Identification Number, if any:
Address:
D-1
EXHIBIT E
NOTICE TO SETTLE BY CASH
The Bank of New York,
as Forward Purchase Contract Agent
101 Barclay Street
New York, New York 10286
Attention: Corporate Trust Department
Telecopy: (212) 328-8243
Re: Equity Units of American Electric Power Company, Inc. (the "Company")
The undersigned Holder hereby irrevocably notifies you in accordance with
Section 5.4 of the Forward Purchase Contract Agreement dated as of June 11, 2002
among the Company and yourselves, as Forward Purchase Contract Agent and as
Attorney-in-Fact for the Holders of the Forward Purchase Contracts, that such
Holder has elected to pay to the Collateral Agent, on or prior to 11:00 a.m. New
York City time, on the seventh Business Day immediately preceding the Stock
Purchase Date, (in lawful money of the United States by [certified or cashiers
check or] wire transfer, in each case in immediately available funds),
$_________ as the Purchase Price for the shares of Common Stock issuable to such
Holder by the Company under the related Forward Purchase Contract on the Stock
Purchase Date. The undersigned Holder hereby instructs you to notify promptly
the Collateral Agent of the undersigned Holder's election to make such cash
settlement with respect to the Forward Purchase Contracts related to such
Holder's Equity Units.
Dated:______________ _________________________________________
Signature
Signature Guarantee:_______________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Please print name and address of Registered Holder:
Social Security or other Taxpayer Identification Number, if any:
E-1