EXHIBIT 4.4
U.S. BANCORP
formerly known as
FIRST BANK SYSTEM, INC.
CITIBANK, N.A.
as Trustee,
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
as Bid Agent
and
U.S. BANK TRUST NATIONAL ASSOCIATION
as Authenticating Agent, Conversion Agent,
Paying Agent and Security Registrar
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SUPPLEMENTAL INDENTURE
Dated as of August 6, 2001
to the
INDENTURE
Dated as of October 1, 1991
---------------------------------------------------------------
Relating to
CONTINGENT ZERO-COUPON ACCRETING REDEEMABLE SECURITIES SM
(CONVERTIBLE SENIOR NOTES) DUE 2021
TABLE OF CONTENTS
PAGE
ARTICLE ONE DEFINITIONS....................................................1
SECTION 1.01. Undefined Capitalized Terms................................1
SECTION 1.02. References to Section Numbers..............................2
SECTION 1.03. Defined Capitalized Terms..................................2
SECTION 1.04. Definitions................................................2
ARTICLE TWO CONTINGENT ZERO-COUPON ACCRETING REDEEMABLE
SECURITIES (CONVERTIBLE SENIOR NOTES) DUE 2021.................8
SECTION 2.01. Creation of Series.........................................8
SECTION 2.02. Optional Redemption by the Company.........................9
SECTION 2.03. Repurchase at Option of the Holder
Upon a Fundamental Change...............................11
SECTION 2.04. Purchase of CZARS at the Option of the Holder.............13
SECTION 2.05. Further Conditions for Purchase at the Option
of Holders Upon a Fundamental Change and
Purchase of CZARS at the Option of the Holder...........15
SECTION 2.06. Conversion of CZARS.......................................17
SECTION 2.07. Adjustments to Conversion Rate............................19
SECTION 2.08. Miscellaneous Provisions Relating to Conversion...........21
SECTION 2.09. Optional Conversion to Cash Pay CZARS Upon Tax Event......26
SECTION 2.10. Tax Treatment of CZARS....................................26
SECTION 2.11. Payment of Principal or Interest..........................27
ARTICLE THREE GLOBAL SECURITIES...........................................28
SECTION 3.01. Form......................................................28
SECTION 3.02. Transfer..................................................30
SECTION 3.03. Restricted Securities Legend..............................30
SECTION 3.04. Individual CZARS..........................................31
ARTICLE FOUR [INTENTIONALLY OMITTED].....................................32
ARTICLE FIVE REMEDIES....................................................32
SECTION 5.01. Additional Events of Default..............................32
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment........32
ARTICLE SIX DISCHARGE OF SUPPLEMENTAL INDENTURE.........................33
SECTION 6.01. Discharge of Supplemental Indenture.......................33
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SECTION 6.02. Reinstatement.............................................33
SECTION 6.03. Officers' Certificate, Opinion of Counsel.................34
ARTICLE SEVEN MODIFICATIONS AND AMENDMENTS................................34
SECTION 7.01. With Consent of Holders...................................34
SECTION 7.02. Waiver....................................................34
SECTION 7.03. Without Consent...........................................34
SECTION 7.04. Restrictions..............................................35
SECTION 7.05. Base Indenture............................................35
SECTION 7.06. Evidence of Modifications and Amendments..................35
ARTICLE EIGHT RANKING.....................................................36
SECTION 8.01. Senior in Right of Payment................................36
ARTICLE NINE MISCELLANEOUS...............................................36
SECTION 9.01. TIA Controls.............................................36
SECTION 9.02. Conflict with Indenture..................................36
SECTION 9.03. Governing Law............................................36
SECTION 9.04. Successors...............................................36
SECTION 9.05. Counterparts.............................................36
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SUPPLEMENTAL INDENTURE, dated as of August 6, 2001 (the "Supplemental
Indenture"), by and between U.S. Bancorp (the "Company"), a Delaware
corporation having its principal office at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, formerly known as First Bank System, Inc.
("First Bank"), Citibank, N.A. (the "Trustee"), a national banking
association, organized under the laws of the United States of America having
its corporate trust office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and
U.S. Bank Trust National Association ("U.S. Bank Trust"), a national banking
association, organized under the laws of the United States of America having
its office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, to the
Indenture, dated as of October 1, 1991 (the "Base Indenture"), between the
Company, formerly known as First Bank, and the Trustee.
RECITALS OF THE COMPANY
WHEREAS, the Company has heretofore executed and delivered to the Trustee
the Base Indenture, providing for the issuance from time to time of its
debentures, notes and other evidences of unsecured indebtedness, to be issued
in one or more series as therein provided ("Securities");
WHEREAS, Section 901(7) of the Base Indenture provides that the Company
and the Trustee, at any time and from time to time, may enter into an
indenture which supplements the Base Indenture to establish the terms of
Securities of any series;
WHEREAS, the Company has duly authorized the creation of the issue of
Securities provided for herein and has duly authorized the execution and
delivery of this Supplemental Indenture;
WHEREAS, such Securities are to be known as the Contingent Zero-Coupon
Accreting Redeemable Securities (Convertible Senior Notes) Due 2021 (the
"CZARS");
WHEREAS, all actions necessary to make the CZARS, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Supplemental
Indenture a valid agreement of the Company, in accordance with the terms of
such CZARS and the Indenture, have been taken.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the CZARS by
the Holders thereof, each party agrees for the benefit of the other party and
for the equal and ratable benefit of the Holders of the CZARS, as follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.01. Undefined Capitalized Terms. Capitalized terms used but
not defined in this Supplemental Indenture shall have the meanings ascribed to
them in the Base Indenture.
SECTION 1.02. References to Section Numbers. References in this
Supplemental Indenture to section numbers shall be deemed to be references to
section numbers of this Supplemental Indenture unless otherwise specified.
SECTION 1.03. Defined Capitalized Terms. In the case of capitalized
terms defined in this Supplemental Indenture that are also defined in the Base
Indenture, the meanings ascribed to such terms in this Supplemental Indenture
shall apply with respect to the CZARS.
SECTION 1.04. Definitions. For purposes of this Supplemental
Indenture, the following terms have the meanings ascribed to them as follows:
"Accreted Value" means, at any date of determination, (1) prior to such
time as the CZARS are converted to Cash Pay CZARS, the sum of (x) the Issue
Price of each CZARS and (y) the portion of the excess of the principal amount
of each CZARS over such Issue Price which shall have been amortized by us in
accordance with GAAP through such date, such amount to be so amortized on a
daily basis and compounded semi-annually on each August 6 and February 6 at
the rate of 1.5% per annum from the Issue Date through the date of
determination computed on the basis of a 360-day year of twelve 30-day months
and (2) at or after such time as the notes are converted to Cash Pay CZARS as
provided in Section 2.09, the Restated Principal Amount.
"Base Indenture" has the meaning provided in the preamble.
"Beneficial Owner" shall be determined in accordance with Rule 13d-3
promulgated by the SEC under the Exchange Act.
"Bid Agent" means a bid solicitation agent appointed by the Company to
act in such capacity pursuant to paragraph 5 of the CZARS.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to close.
"Cash Pay CZARS" means the CZARS after they are converted to semiannual
cash pay notes pursuant to Section 2.09.
"Closing Date" means the date of this Supplemental Indenture.
"Common Equity" of any Person means capital stock of such Person that is
generally entitled to (1) vote in the election of directors of such Person or
(2) if such Person is not a corporation, vote or otherwise participate in the
selection of the governing body, partners, managers or others that will
control the management or policies of such person.
"Common Stock" means the Company's Common Stock, par value $0.01 per
share, as it exists on the date hereof and any shares of any class or classes
of the Company's capital stock resulting from any reclassification or
reclassifications thereof and which have no preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution, or winding-up of the Company and which are not
subject to
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redemption by the Company; provided, however, that if at any time there shall
be more than one such resulting class, the shares of each such class issuable
on conversion of the CZARS shall be substantially in the proportion which the
total number of shares of such class resulting from all such reclassifications
bears to the total number of shares of all such classes resulting from all
such reclassifications.
"Company" has the meaning provided in the preamble.
"Company Fundamental Change Purchase Notice" has the meaning provided in
Section 2.03.
"Company Notice" has the meaning provided in Section 2.04(4).
"Company Notice Date" has the meaning provided in Section 2.04(4).
"Continuing Director" means a director who was a member or the Board of
Directors of the Company on the date two years prior to the relevant date.
"Controlled" means, with respect to any entity, ownership or control of
more than 50% of the voting power of such entity.
"Conversion Agent" means the office or agency designated by the Company
where CZARS may be presented for conversion.
"Conversion Date" has the meaning provided in Section 2.06(2).
"Conversion Rate" has the meaning provided in Section 2.06(1).
"CZARS" has the meaning provided in the Recitals.
"Defaulted Interest" has the meaning specified in Section 2.11(3)(b).
"Deposit" has the meaning provided in Section 3.01.
"Distributed Assets or Securities" has the meaning provided in Section
2.07(3).
"Event of Default" has the meaning provided in Section 5.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means the amount which a willing buyer would pay a
willing seller in an arm's length transaction.
"Final Maturity" or "Final Maturity Date" shall be August 6, 2021.
"First Bank" has the meaning provided in the preamble.
"Fundamental Change" shall be deemed to have occurred at such time after
the original issuance of the CZARS as any of the following occurs:
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(a) any Person (including any syndicate or group deemed to be a "person"
under Section 13(d)(3) of the Exchange Act), other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or any
such Subsidiary, files a Schedule TO (or any schedule, form or report under
the Exchange Act) disclosing that such Person has become the direct or
indirect Beneficial Owner of the Company's Common Equity representing more
than 50% of the voting power of the Company's Common Equity;
(b) consummation of any share exchange, consolidation or merger of the
Company pursuant to which the Company's Common Stock will be converted into
cash, securities or other property or any sale, lease or other transfer (in
one transaction or a series of transactions) of all or substantially all of
the Company's consolidated assets (considered together with Subsidiaries) to
any Person (other than one of the Subsidiaries); provided, however, that a
transaction where the holders of all classes of the Company's Common Equity
immediately prior to such transaction own, directly or indirectly, more than
50% of all classes of the Common Equity of the continuing or surviving
corporation or transferee immediately after such event shall not be a
Fundamental Change; or
(c) Continuing Directors cease to constitute at least a majority of the
Board of Directors of the Company;
provided, however, that a Fundamental Change shall not be deemed to have
occurred if either (I) the Sale Price of the Company Common Stock for any five
trading days within the 10 consecutive trading days ending immediately before
the later of the Fundamental Change or the announcement thereof, shall equal
or exceed 105% of the Accreted Value as of such date, divided by the
conversion rate, or (II) at least 50% of the consideration in the transaction
or transactions constituting the Fundamental Change consists of shares of
common stock traded on a national securities exchange or quoted on the NASDAQ
National Market (or which will be so traded or quoted when issued or exchanged
in connection with such Fundamental Change) (such securities being referred to
as "Publicly Traded Securities") and as a result of such transaction or
transactions the notes become convertible solely into such Publicly Traded
Securities (excluding cash payments for fractional shares).
"Fundamental Change Purchase Date" has the meaning provided in Section
2.03(1).
"Fundamental Change Purchase Notice" has the meaning provided in Section
2.03(3).
"Fundamental Change Purchase Price" has the meaning provided in Section
2.03(1).
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time.
"Global Securities" means with respect to the CZARS issued hereunder, a
CZARS which is executed by the Company, authenticated by the Authenticating
Agent or the Trustee and delivered by the Trustee or Authenticating Agent to
the Depositary or pursuant to the Depositary's instruction, all in accordance
with the Indenture, which shall be registered in the
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name of the Depositary or its nominee and which shall represent, and shall be
denominated in an amount equal to the aggregate Principal Amount at Final
Maturity of all of the outstanding CZARS or any portion thereof.
"Indenture" has the meaning provided in the Recitals.
"Interest Payment Date" has the meaning specified in Section 2.09.
"Issue Date" of any CZARS means the date on which the CZARS is originally
issued or deemed issued as set forth on the face of the CZARS.
"Issue Price" of any CZARS means, in connection with the original
issuance of such CZARS, the initial issue price at which the CZARS is issued
as set forth on the face of the CZARS.
"Market Price" as of any date means the average of the Sale Prices of the
Common Stock for the 20 Trading Day period ending on the third Business Day
(if the third Business Day prior to the applicable Purchase Date is a Trading
Day, or if not, then on the last Trading Day prior to such third Business Day)
prior to the applicable determination date, appropriately adjusted to take
into account the occurrence, during the period commencing on the first of such
Trading Days during such 20 Trading Day period and ending on the third
Business Day (if the third Business Day prior to the applicable Purchase Date
is a Trading Day, or if not, then on the last Trading Day prior to such third
Business Day) prior to the applicable determination date, of events specified
in Article 2 hereof with respect to the Company's Common Stock that would
result in an adjustment of the Conversion Rate.
"Option Exercise Date" has the meaning specified in Section 2.09.
"Original Issue Discount" of any CZARS means the difference between the
Principal Amount at Final Maturity and the Issue Price of the CZARS as set
forth on the face of the CZARS.
"Paying Agent" means the office or agency designated by the Company where
CZARS may be presented for payment.
"Person" means any individual, corporation, partnership, joint venture,
joint-stock company, trust, unincorporated organization or government or any
government agency or political subdivision.
"Principal", "Principal Amount" or "principal" of a debt security,
including the CZARS, means the principal of the security, including any
accrued Original Issue Discount on the security. References to "original
Principal Amount at Final Maturity" of a CZARS shall, prior to or after
conversion to Cash Pay CZARS, refer to the Principal Amount at Final Maturity
of such CZARS prior to the time such CZARS is converted to a Cash Pay CZARS as
set forth in Section 2.09.
"Publicly Traded Securities" has the meaning provided in the definition
of Fundamental Change.
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"Purchase Date" has the meaning provided in Section 2.04(1).
"Purchase Notice" has the meaning provided in Section 2.04(1).
"Purchase Price" has the meaning provided in Section 2.04(1).
"Record Date" means, with respect to any dividend, distribution or other
transaction or event in which the holders of Common Stock have the right to
receive any cash, securities or other property or in which the Common Stock
(or other applicable security) is exchanged for or converted into any
combination of cash, securities or other property, the date fixed for
determination of shareholders entitled to receive such cash, securities or
other property (whether such date is fixed by the Board of Directors or by
statute, contract or otherwise).
"Redemption Date" when used with respect to any CZARS to be redeemed,
means the date fixed for such redemption by or pursuant to this Supplemental
Indenture.
"Redemption Price" when used with respect to any CZARS to be redeemed,
means the price at which it is to be redeemed pursuant to this Supplemental
Indenture.
"Regular Record Date" has the meaning specified in Section 2.09.
"Restated Principal Amount" has the meaning specified in Section 2.09.
"Restricted Common Stock Legend" means the legend labeled as such,
substantially in the form set forth in Exhibit B.
"Restricted Securities Legend" has the meaning specified in Section 3.01.
"Sale Price" of the Common Stock on any date means the closing sale price
per share (or, if no closing sale price is reported, the average of the bid
and ask prices or, if more than one in either case, the average of the average
bid and average ask prices) on such date as reported in the composite
transactions for the principal United States securities exchange on which the
Common Stock is traded or, if the Common Stock is not listed on a United
States national or regional securities exchange, as reported by the National
Association of Securities Dealers Automated Quotation System.
If the Common Stock is not listed for trading on a United States national
or regional securities exchange and not reported by the National Association
of Securities Dealers Automated Quotation System on the relevant date, the
Sale Price shall be the last quoted bid price for the Common Stock in the
over-the-counter market on the relevant date as reported by the National
Quotation Bureau or similar organization.
If the Common Stock is not so quoted, the Sale Price shall be the average
of the mid-point of the last bid and ask prices for the Common Stock on the
relevant date from each of at least three nationally recognized independent
investment banking firms selected by the Company for this purpose.
"SEC" means the U.S. Securities and Exchange Commission.
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"Securities Act" means the Securities Act of 1933, as amended.
"Significant Subsidiary" means a Subsidiary that is a "Significant
Subsidiary" as such term is defined in Regulation S-X promulgated by the SEC,
as in effect on the Closing Date.
"Special Record Date" has the meaning specified in Section 2.11.
"Specified Percentage" means 120% reduced by increments of 1/2% on each
anniversary of the Issue Date, until such percentage reaches 110% on the Final
Maturity Date.
"Stated Maturity", when used with respect to any CZARS or any installment
of semiannual or contingent interest thereon, means the date specified in such
CZARS as the fixed date on which an amount equal to the Principal Amount at
Final Maturity of such CZARS or such installment of semiannual or contingent
interest is due and payable.
"Subsidiary" means (i) a corporation or other entity of which a majority
in voting power of the stock or other interests is owned by the Company, by a
Subsidiary of the Company or by the Company and one or more Subsidiaries of
the Company or (ii) a partnership, the sole general partner of which is the
Company or any Subsidiary.
"Supplemental Indenture" has the meaning provided in the Preamble.
"Tax Event" means that the Company shall have received an opinion from
independent tax counsel experienced in such matters to the effect that, on or
after July 30, 2001, as a result of (a) any amendment to, or change (including
any announced proposed change) in, the laws, rules or regulations thereunder
of the United States or any political subdivision or taxing authority thereof
or therein or (b) any official administrative pronouncement, action or
judicial decision interpreting or applying such laws or regulations, in each
case which amendment or change is enacted, promulgated, issued or announced or
which proposed change, pronouncement, action or decision is issued or
announced on or after July 30, 2001, there is more than an insubstantial risk
that interest (including Original Issue Discount and contingent interest, if
any) payable on the CZARS either (i) would not be deductible on a current
accrual basis or (ii) would not be deductible under any other method, in
either case in whole or in part, by the Company (by reason of deferral,
disallowance, or otherwise) for United States federal income tax purposes.
"Tax Event Date" has the meaning specified in Section 2.09.
"Trading Day" means (x) if the applicable security is listed or admitted
for trading on the New York Stock Exchange, the NASDAQ National Market or
another national security exchange, a day on which the New York Stock
Exchange, the NASDAQ National Market or another national security exchange, as
the case may be, is open for business or (y) if the applicable security is
quoted on the NASDAQ National Market, a day on which trades may be made
thereon or (z) if the applicable security is not so listed, admitted for
trading or quoted, any day other than a Saturday or Sunday or a day on which
banking institutions in the State of New York are authorized or obligated by
law or executive order to close.
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"Trustee" means the person named as such in this Supplemental Indenture
and, subject to the provisions of Article Seven of the Base Indenture, any
successor to that person.
"Uniform Commercial Code" means the New York Uniform Commercial Code as
in effect from time to time.
"U.S. Bank Trust" has the meaning provided in the preamble.
References to interest (including contingent interest) payable in
connection with a Redemption Date, a Fundamental Change Purchase Date, a
Purchase Date or otherwise shall be without duplication.
ARTICLE TWO
CONTINGENT ZERO-COUPON ACCRETING REDEEMABLE SECURITIES
(CONVERTIBLE SENIOR NOTES) DUE 2021
SECTION 2.01. Creation of Series. In accordance with Section 301 of the
Base Indenture, there is hereby created a series of Securities under the Base
Indenture entitled "Contingent Zero-Coupon Accreting Redeemable Securities
(Convertible Senior Notes) Due 2021".
(1) The form of the CZARS, including the form of the certificate of
authentication, is attached hereto as Exhibit A.
(2) Subject to Section 301 of the Base Indenture and applicable law, the
aggregate Principal Amount at Final Maturity of the CZARS which may be
authenticated and delivered under this Supplemental Indenture is limited to
$1,483,179,000 (subject to increase without any further action by up to
$222,476,000 if, and to the extent, the overallotment granted under the
Purchase Agreement between the Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. and U.S.
Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc. dated as of July 30, 2001 is exercised).
(3) The aggregate Principal Amount at Final Maturity of the CZARS shall
be payable on the Final Maturity Date unless earlier repaid or converted in
accordance with this Supplemental Indenture, provided, however, that if the
CZARS are converted to Cash Pay CZARS as provided in Section 2.09, the amount
due on the Final Maturity Date shall be the Restated Principal Amount thereof.
If any of the conditions allowing conversion of CZARS by their Holder set
forth in Section 10 of the CZARS are met on the Final Maturity Date and the
Sale Price of the CZARS on the preceding Trading Day is greater than the
Accreted Value, the Company may make payment of the Principal Amount at Final
Maturity or Restated Principal Amount, as the case may be, and any accrued and
unpaid interest, on the next succeeding Business Day.
(4) The CZARS shall be issued at an Issue Price of $741.65 per $1,000
Principal Amount at Final Maturity. Except as provided for in Sections 2.09
and 2.11 and paragraph 1 of the CZARS, there shall be no periodic payments of
interest on the CZARS. The calculation of the accrual of Original Issue
Discount in the period during which each CZARS remains outstanding shall be on
a semiannual bond equivalent basis using a 360-day year
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composed of twelve 30-day months, and such accrual shall commence on the Issue
Date of the CZARS. In the event of the maturity, conversion, conversion to
Cash Pay CZARS, purchase by the Company at the option of a Holder or
redemption of a CZARS, Original Issue Discount, if any, shall cease to accrue
on such CZARS, under the terms and subject to the conditions of this
Supplemental Indenture.
(5) All amounts payable in connection with the CZARS shall be denominated
and payable in the lawful currency of the United States.
(6) The CZARS shall be payable and may be presented for conversion,
registration of transfer and exchange, without service charge, at the office
of the Company maintained for such purpose in New York, New York, which shall
initially be the office or agency of the Paying Agent. Initially, ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ Inc. shall act as Bid Agent, and U.S. Bank Trust shall act as
Authenticating Agent, Paying Agent, Conversion Agent and Security Registrar.
U.S. Bank Trust hereby affirms the agreements required of it under Section
1003 of the Base Indenture. The Company may appoint and change any Paying
Agent, Conversion Agent, Bid Agent, Security Registrar or co-registrar without
notice, other than notice to the Trustee, except that the Company will
maintain at least one Paying Agent in the State of New York, City of New York,
Borough of Manhattan. Any Paying Agent, Conversion Agent, Bid Agent, Security
Registrar or co-registrar may resign at any time by giving written notice of
such resignation to the Company and the Trustee. References to the Trustee in
Sections 603 through 607 of the Base Indenture shall be deemed to also refer
to any Paying Agent, Conversion Agent, Bid Agent and Security Registrar. The
Company or any of its Subsidiaries or any of their Affiliates may act as
Paying Agent, Conversion Agent, Security Registrar or co-registrar.
SECTION 2.02. Optional Redemption by the Company.
(1) Right to Redeem; Notice to Trustee and Paying Agent. The Company, at
its option, may redeem the CZARS in accordance with the provisions of
paragraphs 6 and 8 of the CZARS. If the Company elects to redeem CZARS
pursuant to paragraph 6 of the CZARS, it shall notify the Trustee and Paying
Agent in writing of the Redemption Date, the Principal Amount at Final
Maturity of CZARS to be redeemed or Restated Principal Amount in the case of
Cash Pay CZARS, the Redemption Price and the amount of interest (including
contingent interest), if any, payable on the Redemption Date. The Company
shall give the notice to the Trustee and Paying Agent provided for in this
Section 2.02(1) at least 30 days but not more than 60 days before the
Redemption Date.
(2) Less Than All Outstanding CZARS to Be Redeemed. If less than all of
the outstanding CZARS are to be redeemed, the Paying Agent shall select the
CZARS to be redeemed in original Principal Amounts at Final Maturity of $1,000
or integral multiples thereof. In the case that the Paying Agent shall select
the CZARS to be redeemed, the Paying Agent may effectuate such selection by
lot, pro rata, or by any other method that the Paying Agent considers fair and
appropriate.
(3) Selection of CZARS to Be Redeemed. If any CZARS selected for partial
redemption is thereafter surrendered for conversion in part before termination
of the conversion right with respect to the portion of the CZARS so selected,
the converted portion of such CZARS
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shall be deemed (so far as may be), solely for purposes of determining the
aggregate original Principal Amount at Final Maturity of CZARS to be redeemed
by the Company, to be the portion selected for redemption. CZARS which have
been converted during a selection of CZARS to be redeemed may be treated by
the Paying Agent as outstanding for the purpose of such selection. Nothing in
this Section 2.02(3) shall affect the right of any Holder to convert any CZARS
pursuant to Sections 2.06, 2.07 and 2.08 before the termination of the
conversion right with respect thereto.
(4) Notice of Redemption. At least 30 days but not more than 60 days
before a Redemption Date, the Company shall mail or cause to be mailed a
notice of redemption by first-class mail to the Trustee, the Paying Agent and
each Holder of CZARS to be redeemed at such Holder's address as it appears on
the CZARS register.
The notice shall identify the CZARS to be redeemed and shall state:
(a) the Redemption Date;
(b) the Redemption Price and, to the extent known at the time of such
notice, the amount of interest (including contingent interest), if any,
payable on the Redemption Date;
(c) the then current Conversion Rate;
(d) the name and address of the Paying Agent and the Conversion Agent;
(e) that CZARS called for redemption must be presented and surrendered to
the Paying Agent to collect the Redemption Price and interest (including
contingent interest), if any;
(f) that the CZARS called for redemption may be converted at any time
before the close of business on the Business Day prior to the Redemption Date;
(g) that Holders who wish to convert CZARS must comply with the
procedures in paragraph 10 of the CZARS;
(h) that, unless the Company defaults in making payment of such
Redemption Price, Original Issue Discount and interest, if any, on the CZARS
called for redemption will cease to accrue on and after the Redemption Date,
and the only remaining right of the Holder will be to receive payment of the
Redemption Price upon presentation and surrender to the Paying Agent of the
CZARS;
(i) if fewer than all the outstanding CZARS are to be redeemed, the
certificate number and the original Principal Amounts at Final Maturity of the
particular CZARS to be redeemed; and
(j) the CUSIP and ISIN number or numbers for the CZARS called for
redemption.
10
At the Company's request, the Paying Agent shall give the notice of
redemption in the Company's name and at the Company's expense.
(5) Effect of Notice of Redemption. Once notice of redemption is mailed,
CZARS called for redemption become due and payable on the Redemption Date and
at the Redemption Price, except for CZARS that are converted in accordance
with the provisions of Sections 2.06, 2.07 and 2.08. Upon presentation and
surrender to the Paying Agent, CZARS called for redemption shall be paid at
the Redemption Price.
(6) Sinking Fund. There shall be no sinking fund provided for the CZARS.
(7) Deposit of Redemption Price. On or before 11:00 a.m. (New York City
time) on the Redemption Date, the Company shall deposit with the Paying Agent
(or, if the Company or an Affiliate of the Company is acting as the Paying
Agent, shall segregate and hold in trust) an amount of money sufficient to pay
the aggregate Redemption Price of, and any accrued and unpaid interest
(including contingent interest) with respect to, all the CZARS to be redeemed
on that date other than the CZARS or portions thereof called for redemption
which on or prior thereto have been delivered by the Company to the Security
Registrar for cancellation or have been converted. The Trustee and the Paying
Agent shall, as promptly as practicable, return to the Company any money not
required for that purpose because of conversion of the CZARS in accordance
with the provisions of Sections 2.06, 2.07 and 2.08. If such money is then
held by the Company or a Subsidiary in trust and is not required for such
purpose, it shall be discharged from such trust.
SECTION 2.03. Repurchase at Option of the Holder Upon a Fundamental
Change.
(1) Repurchase at Option of the Holder Upon a Fundamental Change. If a
Fundamental Change shall occur at any time prior to August 6, 2003, each
Holder of CZARS shall have the right, at such Holder's option, to require the
Company to purchase any or all of such Holder's CZARS on the date that is 35
Business Days after the date of the Fundamental Change (subject to extension
to apply with applicable law, as provided in Section 2.04) (the "Fundamental
Change Purchase Date"). The CZARS shall be repurchased in integral multiples
of $1,000 of original Principal Amount at Final Maturity. The Company shall
purchase such CZARS for cash at a price (the "Fundamental Change Purchase
Price") equal to the Accreted Value of the CZARS on the Fundamental Change
Purchase Date plus accrued and unpaid interest, including contingent interest.
No CZARS may be repurchased at the option of the Holders due to a Fundamental
Change if there has occurred and is continuing an Event of Default (other than
an Event of Default that is cured by the payment of the purchase price of all
such CZARS).
(2) Notice of Fundamental Change. The Company, or at its request (which
must be received by the Paying Agent at least three Business Days (or such
lesser period as agreed to by the Paying Agent) prior to the date the Paying
Agent is requested to give such notice as described below), the Paying Agent
in the name of and at the expense of the Company, shall mail to all Holders of
record of the CZARS a Company Notice of the occurrence of a Fundamental Change
and of the purchase right arising as a result thereof, including the
11
information required by Section 2.04(4) hereof, on or before the 20th day
after the occurrence of such Fundamental Change. The Company shall promptly
furnish to the Paying Agent a copy of such Company Notice.
(3) Exercise of Option. For a CZARS to be so purchased at the option of
the Holder, the Paying Agent must receive such CZARS duly endorsed for
transfer, together with a written notice of purchase (a "Fundamental Change
Purchase Notice") and the form entitled "Option to Elect Purchase Upon a
Fundamental Change" on the reverse thereof duly completed, on or before the
Fundamental Change Purchase Date. The Fundamental Change Purchase Notice shall
state:
(a) if certificated, the certificate numbers of the CZARS which the
Holder shall deliver to be purchased;
(b) the portion of the original Principal Amount at Final Maturity
of the CZARS which the Holder shall deliver to be purchased, which
portion must be $1,000 in original Principal Amount at Final Maturity or
a multiple thereof; and
(c) that such CZARS shall be purchased as of the Fundamental Change
Purchase Date pursuant to the terms and conditions specified in paragraph
7 of the CZARS and in this Supplemental Indenture.
(4) Procedures. The Company shall purchase from a Holder of CZARS,
pursuant to this Section 2.03, a CZARS if the original Principal Amount at
Final Maturity of such CZARS is $1,000 or a multiple of $1,000 if so requested
by such Holder.
Any purchase by the Company contemplated pursuant to the provisions of
this Section 2.03 shall be consummated by the delivery of the consideration to
be received by the Holder (together with accrued and unpaid interest
(including contingent interest), if any) promptly following the later of the
Fundamental Purchase Date and the time of delivery or book-entry transfer of
the CZARS.
Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent the Fundamental Change Purchase Notice contemplated by this
Section 2.03 shall have the right at any time prior to the close of business
on the Business Day prior to the Fundamental Change Purchase Date to withdraw
such Fundamental Change Purchase Notice (in whole or in part) by delivery of a
written notice of withdrawal to the Paying Agent in accordance with Section
2.05(1).
The Paying Agent shall promptly notify the Company of the receipt by it
of any Fundamental Change Purchase Notice or written notice of withdrawal
thereof.
(5) Procedure Upon Purchase. On or before 11:00 a.m. (New York City time)
on the Fundamental Change Purchase Date, the Company shall deposit with the
Paying Agent cash sufficient to pay the aggregate Fundamental Change Purchase
Price of the CZARS to be purchased pursuant to this Section 2.03. Payment of
the Fundamental Change Purchase Price for such CZARS shall be made as soon as
practicable following the later of the Fundamental Change Purchase Date or the
time of book-entry transfer or delivery of such CZARS. If the Paying Agent
12
holds, in accordance with the terms of the Indenture, money sufficient to pay
the Fundamental Change Purchase Price of such CZARS on the Business Day
following the Fundamental Change Purchase Date, then, on and after such date,
such CZARS shall cease to be outstanding and Original Issue Discount and
interest on such CZARS shall cease to accrue, whether or not book-entry
transfer of such CZARS is made or such CZARS is delivered to the Paying Agent,
and all other rights of the Holder shall terminate (other than the right to
receive the Fundamental Change Purchase Price upon delivery or transfer of the
CZARS).
All questions as to the validity, eligibility (including time of receipt)
and acceptance of any CZARS for redemption shall be determined by the Company,
whose determination shall be final and binding.
SECTION 2.04. Purchase of CZARS at the Option of the Holder.
(1) Purchase of CZARS at the Option of the Holder. On each of August 6,
2002, August 6, 2003, August 6, 2004, August 6, 2006, August 6, 2008, August
6, 2011 and August 6, 2016 (each, a "Purchase Date"), at the applicable
purchase price specified in paragraph 7 of the CZARS, plus accrued and unpaid
interest, including contingent interest (each, a "Purchase Price"), a Holder
of CZARS shall have the option to require the Company to purchase any
outstanding CZARS, upon:
(a) delivery to the Trustee or Paying Agent by the Holder of a written
notice of purchase (a "Purchase Notice") at any time from the opening of
business on the date that is 30 Business Days prior to a Purchase Date until
the close of business on such Purchase Date, stating:
(i) if certificated, the certificate numbers of the CZARS which the
Holder shall deliver to be purchased;
(ii) the portion of the Principal Amount at Final Maturity of the
CZARS which the Holder shall deliver to be purchased, which portion must
be $1,000 in Principal Amount at Final Maturity or a multiple thereof;
and
(iii) that such CZARS shall be purchased as of the Purchase Date
pursuant to the terms and conditions specified in paragraph 7 of the
CZARS and in this Supplemental Indenture; and
(b) delivery or book-entry transfer of such CZARS to the Paying Agent
prior to, on or after the Purchase Date (together with all necessary
endorsements) at the offices of the Paying Agent, such delivery or transfer
being a condition to receipt by the Holder of the Purchase Price therefor;
provided, however, that such Purchase Price shall be so paid pursuant to this
Section 2.04 only if the CZARS so delivered or transferred to the Paying Agent
shall conform in all respects to the description thereof in the related
Purchase Notice.
(2) Procedures. The Company shall purchase from a Holder of CZARS,
pursuant to this Section 2.04, CZARS if the original Principal Amount at Final
Maturity of such CZARS is $1,000 or a multiple of $1,000 if so requested by
such Holder.
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Any purchase by the Company contemplated pursuant to the provisions of
this Section 2.04 shall be consummated by the delivery of the consideration to
be received by the Holder (together with accrued and unpaid interest
(including contingent interest), if any) promptly following the later of the
Purchase Date and the time of delivery or book-entry transfer of the CZARS.
Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent the Purchase Notice contemplated by this Section 2.04 shall
have the right at any time prior to the close of business on the Business Day
prior to the Purchase Date to withdraw such Purchase Notice (in whole or in
part) by delivery of a written notice of withdrawal to the Paying Agent in
accordance with Section 2.05(1).
The Paying Agent shall promptly notify the Company of the receipt by it
of any Purchase Notice or written notice of withdrawal thereof.
(3) Purchase with Cash. The Purchase Price of CZARS in respect of which a
Purchase Notice pursuant to this Section 2.04(1) has been given shall be paid
by the Company in cash equal to the aggregate Purchase Price of such CZARS.
(4) Notice of Purchase Date or Fundamental Change. The Company shall send
notices (each a "Company Notice") to the Holders (and to beneficial owners as
required by applicable law) at their addresses shown in the CZARS register
maintained by the Security Registrar, and delivered to the Trustee and Paying
Agent, not less than 30 Business Days prior to each Purchase Date (the
"Company Notice Date") or on or before the 20th day after the occurrence of
the Fundamental Change, as the case may be. Each Company Notice shall include
a form of Purchase Notice or Fundamental Change Repurchase Notice to be
completed by a Holder and shall state:
(a) the Purchase Price, excluding accrued and unpaid interest, Conversion
Rate and, to the extent known at the time of such notice, the amount of
interest (including contingent interest), if any, that will be payable with
respect to the CZARS on the Purchase Date;
(b) the name and address of the Paying Agent and the Conversion Agent;
(c) that CZARS as to which a Purchase Notice or Fundamental Change
Purchase Notice has been given may be converted only if the applicable
Purchase Notice has been withdrawn in accordance with the terms of this
Supplemental Indenture;
(d) that CZARS must be surrendered to the Paying Agent to collect payment
of the Purchase Price or Fundamental Change Purchase Price;
(e) that the Purchase Price or Fundamental Change Purchase Price for any
CZARS as to which a Purchase Notice has been given and not withdrawn shall be
paid promptly following the later of the Purchase Date or Fundamental Change
Purchase Date and the time of surrender of such CZARS as described in (d);
(f) the procedures the Holder must follow under Section 2.03 and Section
2.04;
14
(g) briefly, the conversion rights of the CZARS;
(h) that, unless the Company defaults in making payment of such Purchase
Price or Fundamental Change Purchase Price on CZARS covered by any Purchase
Notice or Fundamental Change Purchase Notice, Original Issue Discount and
interest will cease to accrue on and after the Purchase Date or Fundamental
Change Purchase Date; and
(i) the CUSIP or ISIN number of the CZARS.
(j) the procedures for withdrawing a Purchase Notice or Fundamental
Change Purchase Notice.
At the Company's request and at the Company's expense, the Paying Agent
shall give the Company Notice in the Company's name; provided, however, that,
in all cases, the text of the Company Notice shall be prepared by the Company.
(5) Procedure Upon Purchase. On or before 11:00 a.m. (New York City time)
on the Purchase Date, the Company shall deposit with the Paying Agent cash
sufficient to pay the aggregate Purchase Price or Fundamental Change Purchase
Price of, and any accrued and unpaid interest with respect to, the CZARS to be
purchased pursuant to this Section 2.04. Payment of the Purchase Price for
such CZARS shall be made as soon as practicable following the later of the
Purchase Date or the time of book-entry transfer or delivery of such CZARS. If
the Paying Agent holds, in accordance with the terms of the Indenture, money
sufficient to pay the Purchase Price of such CZARS on the Purchase Date, then,
on and after such date, such CZARS shall cease to be outstanding and Original
Issue Discount and interest on such CZARS shall cease to accrue, whether or
not book-entry transfer of such CZARS is made or such CZARS is delivered to
the Paying Agent, and all other rights of the Holder shall terminate (other
than the right to receive the Purchase Price upon delivery or transfer of the
CZARS).
SECTION 2.05. Further Conditions for Purchase at the Option of Holders
Upon a Fundamental Change and Purchase of CZARS at the Option of the Holder.
(1) Effect of Purchase Notice or Fundamental Change Purchase Notice. Upon
receipt by the Company of the Purchase Notice or Fundamental Change Purchase
Notice specified in Section 2.04(1) or Section 2.03(4), as applicable, the
Holder of the CZARS in respect of which such Purchase Notice or Fundamental
Change Purchase Notice, as the case may be, was given shall (unless such
Purchase Notice or Fundamental Change Purchase Notice is withdrawn as
specified in the following two paragraphs) thereafter be entitled to receive
solely the Purchase Price or Fundamental Change Purchase Price with respect to
such CZARS. Such Purchase Price or Fundamental Change Purchase Price shall be
paid to such Holder promptly following the later of (x) the Purchase Date or
the Fundamental Change Purchase Date, as the case may be, with respect to such
CZARS (provided the conditions in Section 2.04(1) or Section 2.03(4), as
applicable, have been satisfied) and (y) the time of delivery or book-entry
transfer of such CZARS to the Paying Agent by the Holder thereof in the manner
required by Section 2.04(1) or Section 2.03(4), as applicable. CZARS in
respect of which a Purchase Notice or Fundamental Change Purchase Notice, as
the case may be, has been given by the Holder thereof may not be converted for
shares of Common Stock on or after the date of the delivery of such
15
Purchase Notice (or Fundamental Change Purchase Notice, as the case may be),
unless such Purchase Notice (or Fundamental Change Purchase Notice, as the
case may be) has first been validly withdrawn as specified in the following
two paragraphs.
A Purchase Notice or Fundamental Change Purchase Notice, as the case may
be, may be withdrawn by means of a written notice of withdrawal delivered to
the office of the Paying Agent at any time prior to the close of business on
the Business Day prior to the Purchase Date or the Fundamental Change Purchase
Date, as the case may be, to which it relates specifying;
(a) if certificated, the certificate number of the CZARS in respect of
which such notice of withdrawal is being submitted;
(b) the original Principal Amount at Final Maturity of the CZARS with
respect to which such notice of withdrawal is being submitted; and
(c) the original Principal Amount at Final Maturity, if any, of such
CZARS which remains subject to the original Purchase Notice or Company
Fundamental Change Notice, as the case may be, and which has been or shall be
delivered for purchase by the Company.
There shall be no purchase of any CZARS pursuant to Section 2.03 or
Section 2.04 or redemption pursuant to Section 2.02 if there has occurred
prior to, on or after, as the case may be, the giving, by the Holders of such
CZARS, of the required Purchase Notice (or Fundamental Change Purchase Notice,
as the case may be) and is continuing an Event of Default (other than a
default that is cured by the payment of the Purchase Price or Fundamental
Change Purchase Price, as the case may be). The Paying Agent shall promptly
return to the respective Holders thereof any CZARS (x) with respect to which a
Purchase Notice or Fundamental Change Purchase Notice, as the case may be, has
been withdrawn in compliance with this Supplemental Indenture, or (y) held by
it during the continuance of an Event of Default (other than a default that is
cured by the payment of the Purchase Price or Fundamental Change Purchase
Price, as the case may be) in which case, upon such return, the Purchase
Notice or Fundamental Change Purchase Notice with respect thereto shall be
deemed to have been withdrawn.
(2) Deposit of Purchase Price or Fundamental Change Purchase Price. On or
before 11:00 a.m. (New York City time) on a Purchase Date or a Fundamental
Change Purchase Date, as the case may be, the Company shall deposit with the
Paying Agent (or, if the Company or an Affiliate of the Company is acting as
the Paying Agent, shall segregate and hold in trust) an amount of cash
sufficient to pay the aggregate Purchase Price or Fundamental Change Purchase
Price, as the case may be, with respect to, all the CZARS or portions thereof
which are to be purchased as of such Purchase Date or Fundamental Change
Purchase Date, as the case may be.
(3) CZARS Purchased in Part. Any CZARS that is to be purchased only in
part shall be surrendered at the office of the Paying Agent (with, if the
Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee
duly executed by, the Holder thereof or such Holder's attorney duly authorized
in writing) and the Company shall execute and the Trustee or the
Authenticating Agent shall authenticate and deliver to the Holder of such
CZARS, without service charge, a new
16
CZARS or CZARS, of any authorized denomination as requested by such Holder in
aggregate Principal Amount at Final Maturity equal to, and in exchange for,
the portion of the principal amount of the CZARS so surrendered which is not
purchased or redeemed.
(4) Covenant to Comply with Securities Laws Upon Purchase of CZARS. In
connection with any offer to purchase CZARS under Sections 2.03 or 2.04
hereof, the Company shall, to the extent applicable, (a) comply with Rules
13e-4 and 14e-1 (and any successor provisions thereto) under the Exchange Act,
if applicable; (b) file the related Schedule TO (or any successor schedule,
form or report) under the Securities Exchange Act of 1934, if applicable; and
(c) otherwise comply with all applicable federal and state securities laws so
as to permit the rights and obligations under Sections 2.03 and 2.04 to be
exercised in the time and in the manner specified in Sections 2.03 and 2.04.
(5) Repayment to the Company. The Trustee and the Paying Agent shall
return to the Company any cash that remains unclaimed as provided in paragraph
15 of the CZARS, together with interest that the Trustee or Paying Agent, as
the case may be, has agreed to pay, if any, held by them for the payment of a
Purchase Price or Fundamental Change Purchase Price, as the case may be;
provided, however, that to the extent that the aggregate amount of cash
deposited by the Company pursuant to Section 2.05(2) exceeds the aggregate
Purchase Price or Fundamental Change Purchase Price, as the case may be, of
the CZARS or portions thereof which the Company is obligated to purchase as of
the Purchase Date or Fundamental Change Purchase Date, as the case may be,
then promptly on and after the Business Day following the Purchase Date or
Fundamental Change Purchase Date, as the case may be, the Trustee and the
Paying Agent shall return any such excess to the Company together with
interest that the Trustee or Paying Agent, as the case may be, has agreed to
pay, if any.
SECTION 2.06. Conversion of CZARS.
(1) Right to Convert. A Holder of a CZARS may convert such CZARS for
Common Stock at any time during which the conditions stated in paragraph 10 of
the CZARS are met. The number of shares of Common Stock issuable upon
conversion of a CZARS per $1,000 of original Principal Amount at Final
Maturity (the "Conversion Rate") shall be that set forth in paragraph 10 in
the CZARS, subject to adjustment as herein set forth.
A Holder may convert a portion of the original Principal Amount at Final
Maturity of a CZARS if the portion is $1,000 or a multiple of $1,000.
Provisions of this Supplemental Indenture that apply to conversion of all of a
CZARS also apply to conversion of a portion of a CZARS.
(2) Conversion Procedures. To convert a CZARS a Holder must satisfy the
requirements in paragraph 10 of the CZARS. The date on which the Holder of
CZARS satisfies all those requirements is the conversion date (the "Conversion
Date"). As soon as practicable, but in no event later than the fifth Business
Day following the Conversion Date the Company shall deliver to the Holder,
through the Conversion Agent, a certificate for the number of full shares of
Common Stock issuable upon the conversion and cash in lieu of any fractional
share determined pursuant to Section 2.06(3). The Person in whose name the
certificate is registered shall be treated as a stockholder of record on and
after the Conversion Date; provided, however,
17
that no surrender of a CZARS on any date when the stock transfer books of the
Company shall be closed shall be effective to constitute the Person or Persons
entitled to receive the shares of Common Stock upon such conversion as the
record holder or holders of such shares of Common Stock on such date, but such
surrender shall be effective to constitute the Person or Persons entitled to
receive such shares of Common Stock as the record holder or holders thereof
for all purposes at the close of business on the next succeeding day on which
such stock transfer books are open; such conversion shall be at the Conversion
Rate in effect on the date that such CZARS shall have been surrendered for
conversion, as if the stock transfer books of the Company had not been closed.
Upon conversion of a CZARS, such Person shall no longer be a Holder of such
CZARS.
No payment or adjustment shall be made for dividends on or other
distributions with respect to any Common Stock except as provided in Section
2.07. On conversion of a CZARS, that portion of accrued Original Issue
Discount (or interest, if the Company has exercised its option pursuant to
Section 2.09) attributable to the period from the Issue Date of the CZARS to
the Conversion Date and (except as provided below) accrued contingent interest
with respect to the converted CZARS shall not be canceled, extinguished or
forfeited, but rather shall be deemed to be paid in full to the Holder thereof
through delivery of the Common Stock (together with the cash payment, if any,
in lieu of fractional shares) in exchange for the CZARS being converted
pursuant to the provisions hereof, and the fair market value of such shares of
Common Stock (together with any such cash payment in lieu of fractional
shares) shall be treated as issued, to the extent thereof, first in exchange
for Original Issue Discount (or interest, if the Company has exercised its
option provided for in Section 2.09) accrued through the Conversion Date and
accrued contingent interest, and the balance, if any, of such fair market
value of such Common Stock (and any such cash payment) shall be treated as
issued in exchange for the Issue Price of the CZARS being converted pursuant
to the provisions hereof.
If a Holder converts more than one CZARS at the same time, the number of
shares of Common Stock issuable upon the conversion shall be based on the
total original Principal Amount at Final Maturity of the CZARS converted.
Upon surrender of a CZARS that is converted in part, the Company shall
execute, and the Trustee or the Authenticating Agent shall authenticate and
deliver to the Holder, a new CZARS in an authorized denomination equal in
Principal Amount at Final Maturity to the unconverted portion of the CZARS
surrendered.
If the last day on which a CZARS may be converted is a legal holiday in a
place where a Conversion Agent is located, the CZARS may be surrendered to
that Conversion Agent on the next succeeding day that it is not a legal
holiday.
(3) Cash Payments in Lieu of Fractional Shares. The Company shall not
issue a fractional share of Common Stock upon conversion of a CZARS. Instead
the Company shall deliver cash for the current market value of the fractional
share. The current market value of a fractional share shall be determined to
the nearest 1/10,000th of a share by multiplying the Sale Price of a full
share of Common Stock on the Trading Day immediately preceding the Conversion
Date by the fractional amount and rounding the product to the nearest whole
cent.
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(4) Taxes on Conversion. If a Holder converts a CZARS, the Company shall
pay any documentary, stamp or similar issue or transfer tax due on the issue
of shares of Common Stock upon the conversion. However, the Holder shall pay
any such tax which is due because the Holder requests the shares to be issued
in a name other than the Holder's name. The Conversion Agent may refuse to
deliver the certificates representing the Common Stock being issued in a name
other than the Holder's name until the Conversion Agent receives a sum
sufficient to pay any tax which shall be due because the shares are to be
issued in a name other than the Holder's name. Nothing herein shall preclude
any tax withholding required by law or regulations.
(5) Covenants of the Company. The Company shall, prior to issuance of any
CZARS hereunder, and from time to time as may be necessary, reserve out of its
authorized but unissued Common Stock a sufficient number of shares of Common
Stock to permit the conversion of the CZARS.
All shares of Common Stock delivered upon conversion of the CZARS shall
be newly issued shares or treasury shares, shall be duly and validly issued
and fully paid and nonassessable and shall be free from preemptive rights and
free of any lien or adverse claim.
The Company shall endeavor promptly to comply with all federal and state
securities laws regulating the order and delivery of shares of Common Stock
upon the conversion of CZARS, if any, and shall cause to have listed or quoted
all such shares of Common Stock on each United States national securities
exchange or over-the-counter or other domestic market on which the Common
Stock is then listed or quoted.
SECTION 2.07. Adjustments to Conversion Rate. The Conversion Rate shall
be adjusted from time to time by the Company as follows:
(1) In case the Company shall (a) pay a dividend, or make a distribution,
in shares of its capital stock, on its Common Stock; (b) subdivide its
outstanding Common Stock into a greater number of shares; (c) combine its
outstanding Common Stock into a smaller number of shares; or (d) reclassify
its Common Stock, the Conversion Rate in effect immediately prior thereto
shall be adjusted so that the holder of any CZARS thereafter surrendered for
conversion shall be entitled to receive the number of shares of Common Stock
of the Company which such holder would have owned or have been entitled to
receive after the happening of any of the events described above had such
CZARS been converted immediately prior to the happening of such event. If any
dividend or distribution of the type described in clause (a) above is not so
paid or made, the Conversion Rate shall again be adjusted to the Conversion
Rate which would then be in effect if such dividend or distribution had not
been declared. An adjustment made pursuant to this Section 2.07(1) shall
become effective immediately after the applicable Record Date in the case of a
dividend and shall become effective immediately after the applicable effective
date in the case of subdivision, combination or reclassification of the
Company's Common Stock.
(2) In case the Company shall issue rights or warrants to all holders of
its Common Stock entitling them (for a period expiring within 60 days after
the date fixed for determination of stockholders entitled to receive such
rights or warrants) to subscribe for or
19
purchase Common Stock at a price per share less than the Sale Price per share
of Common Stock at the Record Date for the determination of stockholders
entitled to receive such rights or warrants, the Conversion Rate in effect
immediately prior thereto shall be adjusted so that the same shall equal the
Conversion Rate determined by multiplying the Conversion Rate in effect
immediately prior to the date of the issuance of such rights or warrants by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights or warrants plus the number
of additional shares of Common Stock offered for subscription or purchase, and
of which the denominator shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights or warrants plus the number
of shares which the aggregate offering price of the total number of shares so
offered would purchase at such Sale Price. Such adjustment shall be made
successively whenever any such rights or warrants are issued, and shall become
effective immediately after the opening of business on the day following the
Record Date for the determination of the stockholders entitled to receive such
rights or warrants. To the extent that shares of Common Stock are not
delivered after the expiration of such rights or warrants, the Conversion Rate
shall be readjusted to the Conversion Rate which would then be in effect had
the adjustments made upon the issuance of such rights or warrants been made on
the basis of delivery of only the number of shares of Common Stock actually
delivered. If such rights or warrants are not so issued, the Conversion Rate
shall again be adjusted to be the Conversion Rate which would then be in
effect if such Record Date for the determination of stockholders entitled to
receive such rights or warrants had not been fixed. In determining whether any
rights or warrants entitle the holders to subscribe for or purchase shares of
Common Stock at less than such Sale Price, and in determining the aggregate
offering price of such shares of Common Stock, there shall be taken into
account any consideration received by the Company for such rights or warrants,
the value of such consideration, if other than cash, to be determined by the
Board of Directors.
(3) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock (excluding any distribution in connection with
the liquidation, dissolution or winding up of the Company, whether voluntary
or involuntary) any evidences of its indebtedness or assets or rights or
warrants to subscribe for or purchase any of its securities (excluding those
referred to in Section 2.07(2) hereof) (any of the foregoing hereinafter in
this Section 2.07(3) called the "Distributed Assets or Securities") in an
aggregate amount that, combined together with the aggregate amount of any
other such distributions to all holders of its Common Stock made within the 12
months preceding the date of payment of such distribution, and in respect of
which no adjustment pursuant to this Section 2.07(3) has been made, exceeds
15% of the product of the Market Price on the day preceding the declaration of
such distribution times the number of shares of Common Stock outstanding on
such date, then, the Conversion Rate shall be adjusted so that the same shall
equal the Conversion Rate determined by multiplying the Conversion Rate in
effect immediately prior to the date of such distribution by a fraction of
which the numerator shall be the Market Price per share of the Common Stock on
the Record Date mentioned below, and the denominator shall be the Market Price
per share of the Common Stock on such Record Date less the fair market value
on such Record Date (as determined by the Board of Directors, whose
determination shall be conclusive, and described in a certificate filed with
the Trustee and the Paying Agent) of the Distributed Assets or Securities so
distributed applicable to one share of Common Stock. Such adjustment shall
become effective immediately after the Record Date for the determination of
stockholders entitled to receive such distribution; provided, however, that no
adjustment will be made in respect of any such
20
dividends and distributions that result in the payment of any contingent
interest to the Holders; provided, further, that, if the portion of the
Distributed Assets or Securities so distributed applicable to one share of
Common Stock is (a) equal to or greater than the Sale Price of the Common
Stock on the Record Date or (b) the Sale Price of the Common Stock on the
Record Date is greater than the fair market value of the Distributed Assets or
Securities by less than $1.00, then, in lieu of the foregoing adjustment,
adequate provision shall be made so that each Holder shall have the right to
receive upon conversion, in addition to the shares of Common Stock, the kind
and amount of assets, debt securities, or rights warrants or options the
Holder would have received had such Holder converted such CZARS immediately
prior to such Record Date. In the event that such distribution is not so paid
or made, the Conversion Rate shall again be adjusted to the Conversion Rate
which would then be in effect if such distribution had not been declared.
Notwithstanding the foregoing provisions of Section 2.07(2) or (3), no
adjustment shall be made thereunder for any distribution described therein if
the Company makes proper provision so that each Holder of a CZARS who converts
such CZARS (or any portion thereof) after the Record Date for such
distribution shall be entitled to receive upon such conversion, in addition to
the shares of Common Stock issuable upon such conversion, the amount and kind
of assets or Securities that such Holder would have been entitled to receive
if such Holder had, immediately prior to such Record Date, converted such
CZARS for Common Stock; provided that, with respect to any Distributed
Securities that are convertible, exchangeable or exercisable, the foregoing
provision shall only apply to the extent (and so long as) the Distributed
Securities receivable upon conversion of such CZARS would be convertible,
exchangeable or exercisable, as applicable, without any loss of rights or
privileges for a period of at least 60 days following conversion of such
CZARS.
Upon conversion of the CZARS the Holders shall receive, in addition to
the Common Stock issuable upon such conversion, the rights issued under the
Company's existing stockholder rights plan and any future stockholder rights
plan the Company implements (notwithstanding the occurrence of an event
causing such rights to separate from the Common Stock at or prior to the time
of conversion). No adjustment pursuant to this Section 2.07 shall be made in
connection with such stockholder rights plans.
(4) For purposes of this Section 2.07, 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 shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Common Stock. The Company shall not
pay any dividend or make any distribution on shares of Common Stock held in
the treasury of the Company.
SECTION 2.08. Miscellaneous Provisions Relating to Conversion.
(1) Calculation Methodology. No adjustment in the Conversion Rate need be
made unless the adjustment would require an increase or decrease of at least
1% in the Conversion Rate then in effect provided that any adjustment that
would otherwise be required to be made shall be carried forward and taken into
account in any subsequent adjustment. Except as stated in Section 2.07, the
Conversion Rate will not be adjusted for the issuance of Common Stock or any
securities convertible into or exchangeable for Common Stock or carrying the
right
21
to purchase any of the foregoing. Any adjustments that are made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under Sections 2.06, 2.07 and this Section 2.08 shall be made to
the nearest cent or to the nearest 1/10,000th of a share, as the case may be.
(2) When No Adjustment Required. No adjustment shall be made for rights
to purchase Common Stock pursuant to a Company plan for reinvestment of
dividends or interest. No adjustment shall be made for a change in the par
value or no par value of the Common Stock. No adjustment shall be made for
accrued Original Issue Discount or accrued and unpaid interest (including
contingent interest). To the extent the CZARS become convertible into cash,
assets, property or securities (other than capital stock of the Company), no
adjustment shall be made thereafter as to the cash, assets, property or such
securities. Interest shall not accrue on such cash.
In the event the Company exercises its option pursuant to Section 2.09 of
this Supplemental Indenture to have interest in lieu of Original Issue
Discount accrue on the CZARS following a Tax Event, the Holder will be
entitled on conversion to receive the same number of shares of Common Stock or
other property in respect of each CZARS in a given original Principal Amount
at Final Maturity that such Holder would have received if the Company had not
exercised such option.
(3) Notice of Adjustment. Whenever the Conversion Rate is adjusted, the
Company shall promptly mail to Holders a notice of the adjustment. The Company
shall file with the Trustee and the Conversion Agent such notice. The
certificate shall, absent manifest error, be conclusive evidence that the
adjustment is correct. Neither the Trustee nor any Conversion Agent shall be
under any duty or responsibility with respect to any such certificate except
to exhibit the same to any Holder desiring inspection thereof.
(4) Voluntary Increase. The Company may make such increases in the
Conversion Rate, in addition to those required by Section 2.07, as the Board
of Directors considers to be advisable to avoid or diminish any income tax to
holders of Common Stock or rights to purchase Common Stock resulting from any
dividend or distribution of stock (or rights to acquire stock) or from any
event treated as such for income tax purposes. To the extent permitted by
applicable law, the Company may from time to time increase the Conversion Rate
by any amount for any period of time if the period is at least 20 days, the
increase is irrevocable during the period and the Board of Directors shall
have made a determination that such increase would be in the best interests of
the Company, which determination shall be conclusive. Whenever the Conversion
Rate is so increased, the Company shall mail to Holders and file with the
Trustee and the Conversion Agent a notice of such increase. Neither the
Trustee nor any Conversion Agent shall be under any duty or responsibility
with respect to any such notice except to exhibit the same to any holder
desiring inspection thereof. The Company shall mail the notice at least 15
days before the date the increased Conversion Rate takes affect. The notice
shall state the increased Conversion Rate and the period it shall be in
effect.
22
(5) Notice to Holders Prior to Certain Actions. In case:
(a) the Company shall declare a dividend (or any other distribution) on
its Common Stock that would require an adjustment in the Conversion Rate
pursuant to Section 2.07;
(b) the Company shall authorize the granting to all or substantially all
the Holders of its Common Stock of rights or warrants to subscribe for or
purchase any share of any class or any other rights or warrants;
(c) of any reclassification or reorganization of the Common Stock of the
Company (other than a subdivision or combination of its outstanding Common
Stock, or a change in par value, or from par value to no par value, or from no
par value to par value), or of any consolidation or merger to which the
Company is a party and for which approval of any shareholders of the Company
is required, or of the sale or transfer of all or substantially all of the
assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
(e) the Company shall cause to be filed with the Trustee and to be mailed
to each Holder of CZARS at his address appearing on the CZARS register, as
promptly as possible but in any event at least 15 days prior to the applicable
date hereinafter specified, a notice stating (x) the date on which a record is
to be taken for the purpose of such dividend, distribution or rights or
warrants, or, if a record is not to be taken, the date as of which the holders
of Common Stock of record to be entitled to such dividend, distribution, or
rights or warrants are to be determined or (y) the date on which such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding-up is expected to become effective or occur, and the
date as of which it is expected that holders of Common Stock of record shall
be entitled to exchange their Common Stock for securities or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up. Failure to give such notice, or any
defect therein, shall not affect the legality or validity of such dividend,
distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up.
(6) Effect of Reclassification, Consolidation, Merger or Sale. If any of
the following events occur, namely (a) any reclassification or change of
outstanding shares of Common Stock (other than a change in par value, or from
par value to no par value, or from no par value to par value, or as a result
of a subdivision or combination); (b) any consolidation, merger or combination
of the Company with another corporation as a result of which holders of Common
Stock shall be entitled to receive stock, securities or other property or
assets (including cash) with respect to or in exchange for such Common Stock;
or (c) any sale or conveyance of the properties and assets of the Company as,
or substantially as, an entirety to any other corporation as a result of which
holders of Common Stock shall be entitled to receive stock, securities or
other property or assets (including cash) with respect to or in exchange for
such Common Stock, then the Company or the successor or purchasing
corporation, as the case may be, shall execute with the Trustee a supplemental
indenture, providing that each CZARS shall be
23
convertible into the kind and amount of shares of stock and other securities
or property or assets (including cash) receivable upon such reclassification,
change, consolidation, merger, combination, sale or conveyance by a holder of
a number of shares of Common Stock issuable upon conversion of such CZARS
immediately prior to such reclassification, change, consolidation, merger,
combination, sale or conveyance. Such supplemental indenture shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 2.08(6).
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder of CZARS, at his address appearing on
the CZARS register, within 20 days after execution thereof. Failure to deliver
such notice shall not affect the legality or validity of such supplemental
indenture.
The above provisions of this Section shall similarly apply to successive
reclassifications, changes, consolidations, mergers, combinations, sales and
conveyances.
If this Section 2.08(6) applies to any event or occurrence, Section 2.07
shall not apply.
(7) Responsibility of Trustee. The Trustee and any other Conversion Agent
shall not at any time be under any duty or responsibility to any Holder of
CZARS to either calculate the Conversion Rate or determine whether any facts
exist which may require any adjustment of the Conversion Rate, or with respect
to the nature or extent or calculation of any such adjustment when made, or
with respect to the method employed, or herein or in any supplemental
indenture provided to be employed, in making the same and shall be protected
in relying upon an Officer's Certificate with respect to the same. The Trustee
and any other Conversion 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 upon
the conversion of any CZARS and the Trustee and any other Conversion Agent
make no representations with respect thereto. Subject to the provisions of
Article Seven of the Base Indenture, neither the Trustee nor any Conversion
Agent shall be responsible for any failure of the Company to issue, transfer
or deliver any shares of Common Stock or stock certificates or other
securities or property or cash upon the surrender of any CZARS for the purpose
of conversion or to comply with any of the duties, responsibilities or
covenants of the Company contained in this Section. Without limiting the
generality of the foregoing, neither the Trustee nor any Conversion Agent
shall be under any responsibility to determine the correctness of any
provisions contained in any supplemental indenture entered into pursuant to
Section 2.08(6) relating either to the kind or amount of shares of stock or
securities or property (including cash) receivable by Holders upon the
conversion of their CZARS after any event referred to in such Section 2.08(6)
or to any adjustment to be made with respect thereto, but, subject to the
provisions of Article Seven of the Base Indenture, may accept as conclusive
evidence of the correctness of any such provisions, and shall be protected in
relying upon, the Officer's Certificate (which the Company shall be obligated
to file with the Trustee prior to the execution of any such supplemental
indenture) with respect thereto.
(8) Simultaneous Adjustments. In the event that Section 2.07 requires
adjustments to the Conversion Rate under more than one of Sections 2.07(1),
(2) or (3), and the
24
Record Dates for the distributions giving rise to such adjustments shall occur
on the same date, then such adjustments shall be made by applying, first, the
provisions of Section 2.07(3), second, the provisions of Section 2.07(1), and
third, the provisions of Section 2.07(2).
(9) Successive Adjustment. After an adjustment to the Conversion Rate
under Section 2.07, any subsequent event requiring an adjustment under Section
2.07 shall cause an adjustment to the Conversion Rate as so adjusted.
(10) General Considerations. Whenever successive adjustments to the
Conversion Rate are called for pursuant to Sections 2.07 or 2.08, such
adjustments shall be made to the Market Price as may be necessary or
appropriate to effectuate the intent of Section 2.07 and 2.08 and to avoid
unjust or inequitable results as determined in good faith by the Board of
Directors.
(11) Restriction on Common Stock Issuable Upon Conversion. (a) Shares of
Common Stock to be issued upon conversion of CZARS prior to the effectiveness
of a shelf registration statement shall be physically delivered in
certificated form to the Holders converting such CZARS and the certificate
representing such shares of Common Stock shall bear the Restricted Common
Stock Legend unless removed in accordance with Section 2.08(11)(c).
(b) If (i) shares of Common Stock to be issued upon conversion of a CZARS
prior to the effectiveness of a shelf registration statement are to be
registered in a name other than that of the Holder of such CZARS or (ii)
shares of Common Stock represented by a certificate bearing the Restricted
Common Stock Legend are transferred subsequently by such Holder, then, unless
the shelf registration statement has become effective and such shares are
being transferred pursuant to the shelf registration statement, the Holder
must deliver to the transfer agent for the Common Stock a certificate in
substantially the form of Exhibit C as to compliance with the restrictions on
transfer applicable to such shares of Common Stock and neither the transfer
agent nor the registrar for the Common Stock shall be required to register any
transfer of such Common Stock not so accompanied by a properly completed
certificate.
(c) Except in connection with a shelf registration statement, if
certificates representing shares of Common Stock are issued upon the
registration of transfer, exchange or replacement of any other certificate
representing shares of Common Stock bearing the Restricted Common Stock
Legend, or if a request is made to remove such Restricted Common Stock Legend
from certificates representing shares of Common Stock, the certificates so
issued shall bear the Restricted Common Stock Legend, or the Restricted Common
Stock Legend shall not be removed, as the case may be, unless there is
delivered to the Company such satisfactory evidence, which, in the case of a
transfer made pursuant to Rule 144 under the Securities Act, may include an
opinion of counsel pursuant to the laws in the State of New York, as may be
reasonably required by the Company, that neither the legend nor the
restrictions on transfer set forth therein are required to ensure that
transfers thereof comply with the provisions of Rule 144A, Rule 144 or
Regulation S under the Securities Act and that such shares of Common Stock are
securities that are not "restricted" within the meaning of Rule 144 under the
Securities Act. Upon provision to the Company of such reasonably satisfactory
evidence, the Company shall cause the transfer agent for the Common Stock to
countersign and deliver certificates representing shares of Common Stock that
do not bear the legend.
25
SECTION 2.09. Optional Conversion to Cash Pay CZARS Upon Tax Event. From
and after the date (the "Tax Event Date") of the occurrence of a Tax Event, at
the option of the Company, cash interest in lieu of future Original Issue
Discount shall accrue after the date (which shall be on or after the Tax Event
Date) the Company exercises the option set forth in this Section 2.09 ("the
Option Exercise Date") at the rate of 1.5% per annum. on a restated principal
amount per $1,000 original Principal Amount at Final Maturity (the "Restated
Principal Amount") which shall be equal to the Accreted Value on the Option
Exercise Date, and shall be payable in cash semiannually on August 6 and
February 6 of each year (each an "Interest Payment Date") to holders of record
at the close of business on July 21 and January 21 (each a "Regular Record
Date") immediately preceding such Interest Payment Date. Interest will be
computed on the basis of a 360-day year comprised of twelve 30-day months and
will accrue from the most recent date on which interest has been paid or, if
no interest has been paid, from the Option Exercise Date. Within 30 days of
the occurrence of a Tax Event, the Company shall deliver a written notice of
such Tax Event by facsimile and first-class mail to the Trustee. Within 15
days of the exercise of such option the Company shall deliver a written notice
of the Option Exercise Date by facsimile and first-class mail to the Trustee
and by first class mail to the Holders of the CZARS. From and after the Option
Exercise Date, (i) the Company shall be obligated to pay at Final Maturity or
upon a Redemption Date, Purchase Date or Fundamental Change Purchase Date, in
lieu of the Principal Amount at Final Maturity or Accreted Value, as the case
may be, of a CZARS, the Restated Principal Amount thereof (plus accrued and
unpaid interest, including contingent interest, if any) and (ii) "Issue Price
and accrued Original Issue Discount," "Issue Price plus Original Issue
Discount" or similar words, as used herein, mean Restated Principal Amount
plus accrued and unpaid interest with respect to any CZARS. CZARS
authenticated and delivered after the Option Exercise Date may, and shall if
required by the Trustee, bear a notation in a form approved by the Trustee as
to the conversion of the CZARS to Cash Pay CZARS.
SECTION 2.10. Tax Treatment of CZARS. The Company agrees, and by
acceptance of a beneficial ownership interest in the CZARS each beneficial
holder of a CZARS will be deemed to have agreed, for United States federal
income tax purposes, (i) to treat the CZARS as debt instruments that are
subject to Section 1.1275-4(b) of the Treasury Regulations (the "Contingent
Debt Regulations"), and, for purposes of the Contingent Debt Regulations, to
treat the fair market value of any stock beneficially received by a beneficial
holder upon any conversion of the CZARS as a contingent payment and (ii) to be
bound by the Company's determination of the "comparable yield" and "projected
payment schedule," within the meaning of the Contingent Debt Regulations, with
respect to the CZARS. For purposes of the foregoing, the Company's
determination of the "comparable yield" is 7.03% per annum, compounded
semiannually. The projected payment schedule, determined by the Company, is
attached hereto as Exhibit D. A Holder of CZARS may obtain the amount of
Original Issue Discount, Issue Date, yield to maturity, comparable yield and a
copy of the projected payment schedule attached hereto as Exhibit D for the
CZARS by telephoning the Company's Investor Relations Department at (612)
973-2263 or submitting a written request for such information to U.S. Bancorp,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Investment
Relations Department.
26
SECTION 2.11. Payment of Principal or Interest.
(1) Paying Agent To Hold Money in Trust. Prior to 11:00 a.m. (New York
City time) on any applicable payment date, the Company shall deposit with the
Paying Agent (or if an Issuer or a Subsidiary of any Issuer is acting as
Paying Agent, segregate and hold in trust for the benefit of the Persons
entitled thereto) a sum sufficient to pay semiannual or contingent interest,
if any, when due. The Company shall require each Paying Agent (other than the
Trustee) to agree in writing that the Paying Agent shall hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for the
payment of principal or interest on the CZARS and shall notify the Trustee of
any default by the Company in making any such payment. If the Company or a
Subsidiary acts as Paying Agent, it shall segregate the money held by it as
Paying Agent and hold it as a separate trust fund. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee and to
account for any funds disbursed by the Paying Agent. Upon complying with this
Section, the Paying Agent shall have no further liability for the money
delivered to the Trustee.
(2) Holder Lists. The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Holders. If the Trustee is not the Security Registrar, the
Company shall furnish, or cause the Security Registrar to furnish, to the
Trustee, in writing at least five Business Days before each Interest Payment
Date and at such other times as the Trustee may request in writing, a list in
such form and as of such date as the Trustee may reasonably require of the
names and addresses of Holders.
(3) Payment of Interest; Interest Rights Preserved. (a) Semiannual or
contingent interest on any CZARS that is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that CZARS is registered at the close of business on the Regular
Record Date or contingent interest record date, as the case may be, for such
interest at the office or agency of the Company maintained for such purpose.
Each installment of semiannual or contingent interest on any CZARS shall be
paid in same-day funds by transfer to an account maintained by the payee
located inside the United States. In the case of a Global Security, semiannual
or contingent interest payable on any applicable payment date will be paid to
the Depositary, with respect to that portion of such Global Security held for
its account by Cede & Co. for the purpose of permitting such party to credit
the interest received by it in respect of such Global Security to the accounts
of the beneficial owners thereof.
(b) Except as otherwise specified with respect to the CZARS, any
semiannual or contingent interest on any CZARS that is payable, but is not
punctually paid or duly provided for, within 30 days following any applicable
payment date (herein called "Defaulted Interest", which term shall include any
accrued and unpaid interest that has accrued on such defaulted amount in
accordance with paragraph 1 of the CZARS), shall forthwith cease to be payable
to the registered Holder thereof on the relevant Regular Record Date or
contingent interest record date, as the case may be, by virtue of having been
such Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in clause (i) or (ii) below.
(i) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the CZARS are registered at the close of
business on a date for the payment of such Defaulted Interest (the
"Special Record Date"), which shall be fixed
27
in the following manner: The Company shall notify the Trustee and Paying
Agent in writing of the amount of Defaulted Interest proposed to be paid
on each CZARS and the date of the proposed payment (which shall not be
less than 20 days after such notice is received by the Trustee and Paying
Agent), and at the same time the Company shall deposit with the Paying
Agent an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Paying Agent for such deposit on or prior to the date
of the proposed payment, such money when deposited to be held in trust
for the benefit of the Persons entitled to such Defaulted Interest as in
this clause provided. Thereupon the Paying Agent shall fix a Special
Record Date for the payment of such Defaulted Interest which shall be not
more than 15 days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the
Trustee and Paying Agent of the notice of the proposed payment. The
Paying Agent shall promptly notify the Company of such Special Record
Date and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor to be mailed, first-class postage prepaid, to each
Holder of CZARS at his address as it appears on the list of Holders
maintained pursuant to this Supplemental Indenture not less than 10 days
prior to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been
mailed as aforesaid, such Defaulted Interest shall be paid to the Persons
in whose names the CZARS are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the
following clause (ii).
(ii) Alternatively, the Company may make payment of any Defaulted
Interest on the CZARS in any other lawful manner not inconsistent with
the requirements of any CZARS exchange on which such CZARS may be listed,
and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee and Paying Agent of the
proposed payment pursuant to this clause, such manner of payment shall be
deemed practicable by the Paying Agent.
Subject to the foregoing provisions of this Section 2.11 and Section
3.02, each CZARS delivered under this Supplemental Indenture upon registration
of transfer of or in exchange for or in lieu of any other CZARS shall carry
the rights to semiannual or contingent interest accrued and unpaid to, and to
accrue, which were carried by such other CZARS.
ARTICLE THREE
GLOBAL SECURITIES
SECTION 3.01. Form. The CZARS shall initially be issued in the form of
one or more Global Securities, and the Company shall execute and the Trustee
or the Authenticating Agent shall authenticate and deliver such Global
Security or Securities which (1) shall represent, and shall be denominated in
an amount equal to the aggregate Principal Amount at Final Maturity of, the
outstanding CZARS to be represented by such Global Security or Securities, or
such portion thereof as the Company shall specify in writing to the Trustee or
Authenticating Agent, (2) shall be registered in the name of Cede & Co., as
nominee of The Depositary Trust Company (the "Depositary") (and, in the case
of CZARS held in accordance with Regulation S,
28
registered with the Depositary for the accounts of designated agents holding
on behalf of the Euroclear System or Clearstream Banking, societe anonyme),
(3) shall be delivered by the Trustee or the Authentication Agent to the
Depositary or pursuant to the Depositary's instruction and (4) shall bear a
global securities legend substantially to the following effect:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE
INDIVIDUAL CZARS REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH
NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY
and shall bear a restricted securities legend (a "Restricted Securities
Legend") substantially to the following effect:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY
STATE SECURITIES LAWS, AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER"(AS DEFINED IN RULE 144A ADOPTED UNDER THE
SECURITIES ACT) OR (B) IT IS NOT A UNITED STATES PERSON AND IS
ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH REGULATION S ADOPTED UNDER THE SECURITIES ACT; (2) AGREES THAT
IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS
SECURITY RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY
OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY,
EXCEPT (A) TO THE ISSUER OR A SUBSIDIARY THEREOF; (B) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A ADOPTED UNDER THE
SECURITIES ACT (IF AVAILABLE); (C) TO PERSONS OTHER THAN UNITED
STATES PERSONS OUTSIDE THE UNITED STATES IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION
FROM REGISTRATION PROVIDED BY RULE 144 ADOPTED UNDER THE SECURITIES
ACT OR ANOTHER AVAILABLE EXEMPTION UNDER THE SECURITIES ACT NOT
REFERRED TO ABOVE (IF AVAILABLE), OR (E) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT; AND (3) AGREES THAT
IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED
A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND IN CONNECTION
WITH ANY TRANSFER OF THIS SECURITY WITHIN TWO YEARS AFTER THE
ORIGINAL ISSUANCE OF THIS SECURITY, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE TRUSTEE AND THE
29
ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS
MAY BE REQUIRED PURSUANT TO THE INDENTURE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION,"
"UNITED STATES" AND "UNITED STATES PERSON" HAVE THE MEANING GIVEN TO
THEM BY REGULATION S UNDER THE SECURITIES ACT. IN ANY CASE THE
HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY
HEDGING TRANSACTION WITH REGARD TO THIS SECURITY EXCEPT AS PERMITTED
BY THE SECURITIES ACT. ON EACH DAY FROM AND INCLUDING THE DATE OF
ITS PURCHASE OF A NOTE THROUGH AND INCLUDING THE DATE OF ITS
DISPOSITION OF SUCH NOTE, THE HOLDER IS DEEMED TO REPRESENT THAT ITS
ACQUISITION, HOLDING AND DISPOSITION OF SUCH NOTE DOES NOT AND WILL
NOT CONSTITUTE (X) A NON-EXEMPT PROHIBITED TRANSACTION UNDER THE
U.S. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE") OR (Y) A VIOLATION OF ANY LOCAL,
STATE, FEDERAL OR OTHER LAWS THAT ARE SUBSTANTIALLY SIMILAR TO THE
FOREGOING PROVISIONS OF ERISA AND THE CODE.
Interests in the Global Securities shall be issued only in denominations of
$1,000 or integral multiples thereof.
SECTION 3.02. Transfer. Notwithstanding any other provisions herein but
subject to the provisions of Section 3.03 below, unless the terms of a Global
Security expressly permit such Global Security to be exchanged in whole or in
part for individual CZARS, a Global Security may be transferred, in whole but
not in part and in the manner provided in Section 2.08 of the Base Indenture,
only to a nominee of the Depositary for such Global Security, or to the
Depositary, or a successor Depositary for such Global Security selected or
approved by the Company, or to a nominee of such successor Depositary.
SECTION 3.03. Restricted Securities Legend. Except in connection with a
shelf registration statement contemplated by and in accordance with the terms
of the Registration Agreement by and between the Company, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Inc. and U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc., dated as of August 6, 2001, if CZARS
are issued upon the registration of transfer, exchange or replacement of CZARS
bearing a Restricted Securities Legend, or if a request is made to remove such
a Restrictive Securities Legend on CZARS, the CZARS so issued shall bear the
Restricted Securities Legend, or a Restricted Securities Legend shall not be
removed, as the case may be, unless there is delivered to the Company such
satisfactory evidence, which, in the case of a transfer made pursuant to Rule
144 under the Securities Act, may include an opinion of counsel given in
accordance with the laws in the State of New York, as may be reasonably
required by the Company, that neither the legend nor the restrictions on
transfer set forth therein are required to ensure that transfers thereof
comply with the provisions of Rule
30
144A, Rule 144 or Regulation S under the Securities Act and that such CZARS
are not "restricted" within the meaning of Rule 144 under the Securities Act.
Upon provision to the Company of such satisfactory evidence, the Trustee or
Authenticating Agent, at the written direction of the Company, shall
authenticate and deliver CZARS that do not bear the legend.
SECTION 3.04. Individual CZARS. (1) If at any time the Depositary for a
Global Security notifies the Company that it is unwilling or unable to
continue as Depositary for such Global Security or if at any time the
Depositary for the CZARS ceases to be a clearing agency registered under the
Exchange Act or other applicable statute or regulation, the Company shall
appoint a successor Depositary with respect to such Global Security. If a
successor Depositary for such Global Security is not appointed by the Company
within 90 days after the Company receives such notice or becomes aware of such
ineligibility, the Company shall execute, and the Trustee or the
Authenticating Agent, upon receipt of a written request by the Company for the
authentication and delivery of individual CZARS in exchange for such Global
Security, shall authenticate and deliver, individual CZARS in definitive form
in an aggregate principal amount equal to the principal amount of the Global
Security in exchange for such Global Security.
(2) The Company may at any time and in its sole discretion determine that
the CZARS or portion thereof issued or issuable in the form of one or more
Global Securities shall no longer be represented by such Global Security or
Securities. In such event the Company shall execute, and the Trustee or the
Authenticating Agent, upon receipt of a written request by the Company for the
authentication and delivery of individual CZARS in exchange in whole or in
part for such Global Security, shall authenticate and deliver individual CZARS
in definitive form in an aggregate Principal Amount at Final Maturity equal to
the Principal Amount at Final Maturity of such Global Security or Securities
representing such series or portion thereof in exchange for such Global
Security or Securities.
(3) If specified by the Company with respect to CZARS issued or issuable
in the form of a Global Security, the Depositary for such Global Security may
surrender such Global Security in exchange in whole or in part for individual
CZARS in definitive form on such terms as are acceptable to the Company and
such Depositary. Thereupon the Company shall execute, and the Trustee or the
Authenticating Agent shall authenticate and deliver, without service charge,
(a) to each Person specified by such Depositary a new CZARS or CZARS of any
authorized denomination as requested by such Person in an aggregate principal
amount equal to and in exchange for such Person's beneficial interest in the
Global Security; and (b) to such Depositary a new Global Security in an
authorized denomination equal to the difference, if any, between the Principal
Amount at Final Maturity of the surrendered Global Security and the aggregate
Principal Amount at Final Maturity of CZARS delivered to the Holders thereof.
(4) In any exchange provided for in any of the preceding three
paragraphs, the Company shall execute and the Trustee or the Authenticating
Agent shall authenticate and deliver individual CZARS in definitive registered
form in authorized denominations. Upon the exchange of the entire principal
amount of a Global Security for individual CZARS, such Global Security shall
be canceled by the Trustee or the Security Registrar. Except as provided in
the preceding paragraph, CZARS issued in exchange for a Global Security
pursuant to this Section shall be registered in such names and in such
authorized denominations as the Depositary for
31
such Global Security, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee or the Security
Registrar. The Trustee or the Security Registrar shall deliver such CZARS to
the Persons in whose names such CZARS are so registered.
ARTICLE FOUR
[INTENTIONALLY OMITTED]
ARTICLE FIVE
REMEDIES
SECTION 5.01. Additional Events of Default. In addition to the applicable
Events of Default set forth in Section 501 of the Base Indenture, any one of
the following events shall constitute an "Event of Default" hereunder and
thereunder whenever used with respect to the CZARS in this Supplemental
Indenture (whatever the reason for such Event of Default and whether it shall
be voluntary or involuntary or be effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body):
(1) a default by the Company in the payment of the any Principal Amount
at Final Maturity (or, if the CZARS have been converted to Cash Pay CZARS
following the occurrence of a Tax Event, the Restated Principal Amount),
Redemption Price, Purchase Price or Fundamental Change Purchase Price due with
respect to the CZARS;
(2) failure by the Company to pay "additional amounts" (as defined in the
Registration Rights Agreement) or a default by the Company in the payment of
any contingent interest or of interest which becomes payable after the CZARS
have been converted to Cash Pay CZARS following the occurrence of a Tax Event,
which failure or default, in either case, continues for 30 days; or
(3) a default in the performance, or breach, of any covenant or warranty
of the Company in this Supplemental Indenture (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere in this
Section specifically dealt with) and in the CZARS, and continuance of such
default or breach for a period of 60 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the Company
and the Trustee by the Holders of at least 25% in aggregate principal amount
of the CZARS a written notice specifying such default or breach and requiring
it to be remedied and stating that such notice is a "Notice of Default"
hereunder or under the CZARS.
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment. The
portion of principal amount of the CZARS that shall become due and payable
pursuant to any acceleration under Section 502 of the Base Indenture is the
Accreted Value plus accrued and unpaid interest (including contingent
interest) through the date of such acceleration. If an Event of Default
specified in Section 501(6) or (7) of the Base Indenture occurs and is
continuing, the
32
Accreted Value of all of the CZARS plus accrued and unpaid interest (including
contingent interest) to the date of the occurrence of the bankruptcy or
insolvency, shall automatically become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any
Holders.
ARTICLE SIX
DISCHARGE OF SUPPLEMENTAL INDENTURE
SECTION 6.01. Discharge of Supplemental Indenture. When (1) the
Company shall deliver to the Security Registrar for cancellation all CZARS
theretofore authenticated (other than any CZARS which have been destroyed,
lost or stolen and in lieu of or in substitution for which other CZARS shall
have been authenticated and delivered) and not theretofore canceled, or (2)
all the CZARS not theretofore canceled or delivered to the Security Registrar
for cancellation shall have become due and payable on the Purchase Date,
Fundamental Change Purchase Date, Final Maturity Date or Redemption Date, as
applicable, and the Company shall deposit with the Trustee cash or shares of
Common Stock, as applicable, sufficient to pay all amounts owing in respect of
all CZARS (other than any CZARS which shall have been mutilated, destroyed,
lost or stolen and in lieu of or in substitution for which other CZARS shall
have been authenticated and delivered) not theretofore canceled or delivered
to the Security Registrar for cancellation, including the Accreted Value and
interest (including contingent interest, if any) accrued and unpaid to such
Final Maturity Date, Purchase Date, Fundamental Change Purchase Date or
Redemption Date, as the case may be, and if in either case the Company shall
also pay or cause to be paid all other sums payable hereunder by the Company,
then the Indenture with respect to the CZARS shall cease to be of further
effect (except as to (i) remaining rights of registration of transfer,
substitution and exchange and conversion of CZARS; (ii) rights hereunder of
Holders to receive payments of the amounts then due, including interest
(including contingent interest, if any) with respect to the CZARS and the
other rights, duties and obligations of Holders, as beneficiaries hereof with
respect to the amounts, if any, so deposited with the Trustee; and (iii) the
rights, obligations and immunities of the Trustee, Authenticating Agent,
Paying Agent, Conversion Agent, Security Registrar and Bid Agent hereunder and
under the Indenture with respect to the CZARS), and the Trustee, on demand of
the Company accompanied by an Officers' Certificate and an opinion of Counsel
as required by Section 6.03 and at the cost and expense of the Company, shall
execute proper instruments acknowledging satisfaction of and discharging the
Indenture with respect to the CZARS; the Company, however, hereby agrees to
reimburse the Trustee, Authenticating Agent, Paying Agent, Conversion Agent,
Security Registrar and Bid Agent for any costs or expenses thereafter
reasonably and properly incurred by the Trustee and to compensate the Trustee,
Authenticating Agent, Paying Agent, Conversion Agent, Security Registrar and
Bid Agent for any services thereafter reasonably and properly rendered by the
Trustee, Authenticating Agent, Paying Agent, Conversion Agent, Security
Registrar and Bid Agent in connection with the Indenture with respect to the
CZARS or the CZARS. Section 401 of the Base Indenture is replaced in its
entirety by this Section 6.01.
SECTION 6.02. Reinstatement. If the Trustee or the Paying Agent is unable
to apply any money in accordance with Section 402 of the Base Indenture by
reason of any order or judgment of any court of governmental authority
enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under the Indenture with respect to the CZARS and
33
the CZARS shall be revived and reinstated as though no deposit had occurred
pursuant to Section 6.01 until such time as the Trustee or the Paying Agent is
permitted to apply all such money in accordance with Section 402 of the Base
Indenture; provided, however, that if the Company makes any payment of
Accreted Value or interest (including contingent interest), if any, of any
CZARS following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such CZARS to receive such payment
from the money held by the Trustee or Paying Agent.
SECTION 6.03. Officers' Certificate, Opinion of Counsel. Upon any
application or demand by the Company to the Trustee to take any action under
Section 6.01, the Company shall furnish to the Trustee an Officers'
Certificate stating that all conditions precedent, if any, provided for in the
Indenture relating to the proposed action have been complied with, and an
Opinion of Counsel stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.
Each certificate or Opinion of Counsel provided for in this Supplemental
Indenture and delivered to the Trustee with respect to compliance with a
condition or covenant pursuant to the previous paragraph shall include: (1) a
statement that the Person making such certificate or opinion has read such
covenant or condition; (2) a brief statement as to the nature and scope of the
examination or investigation upon which the statement or opinion contained in
such certificate or opinion is based; (3) a statement that, in the opinion of
such Person, he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and (4) a statement as to whether or not,
in the opinion of such Person, such condition or covenant has been complied
with.
ARTICLE SEVEN
MODIFICATIONS AND AMENDMENTS
SECTION 7.01. With Consent of Holders. Modifications and amendments of
the Indenture and the CZARS may be made by the Company and the Trustee with
the consent of the Holders of at least a majority in aggregate principal
amount of the outstanding CZARS.
SECTION 7.02. Waiver. The Holders of a majority in principal amount at
maturity of the outstanding CZARS may waive any past default under the
Indenture or the CZARS, except a default in the payment of principal or
interest and of the covenants and provisions of the Indenture or this
Supplemental Indenture which cannot be amended without the consent of the
Holder of each outstanding CZARS as provided in Section 7.04.
SECTION 7.03. Without Consent. The Company and the Trustee may, without
the consent of the Holders of the CZARS, modify the Indenture or the CZARS to
cure errors, resolve inconsistent provisions or make other provisions;
provided that such modifications do not adversely affect the interests of any
Holder of a CZARS in any material respect. Section 9.01 of the Base Indenture
shall be applicable.
34
SECTION 7.04. Restrictions. Notwithstanding the foregoing, the Company
and the Trustee may not, without the consent of each holder of CZARS affected
thereby, modify or amend the Indenture or the CZARS to:
(1) extend the stated maturity of any CZARS, reduce the Principal Amount
at Final Maturity, Restated Principal Amount, Issue Price, Purchase Price,
Fundamental Change Purchase Price, Redemption Price or amount of cash paid in
lieu of shares of Common Stock, extend the stated maturity;
(2) except as stated in the Indenture, make any change in the manner or
rate of accrual in connection with Original Issue Discount, make any change in
the manner of calculation of, or that adversely affects the right to receive,
contingent interest, reduce the rate of interest referred to in paragraph 1 of
the CZARS, reduce the rate of interest referred to in Section 2.09 upon the
occurrence of a Tax Event, or extend the time for payment of contingent
interest or interest, if any, on any CZARS;
(3) reduce the aforesaid percentage of CZARS the Holders of which are
required to consent to any modification of the Indenture, without the consent
of the Holders of all of the CZARS then outstanding;
(4) make any change that adversely affects the right to convert any
CZARS;
(5) make any CZARS payable in money or securities other than stated in
the CZARS;
(6) make any change that adversely affects the right of any Holder to
require the Company to purchase a CZARS;
(7) impair the right to institute suit for the enforcement of any payment
with respect to, or conversion of, the CZARS; or
(8) modify any of the provisions of this Article 7 or Section 1001 of the
Base Indenture except to increase any required percentage of aggregate
principal amount at maturity required under this Article 7.
SECTION 7.05. Base Indenture. Except for the last two paragraphs thereof,
Section 902 of the Base Indenture is replaced by Sections 7.01 and 7.04 with
respect to the application of the Base Indenture to the CZARS and with respect
to this Supplemental Indenture. Sections 1007 and 1008 of the Base Indenture
do not apply to the CZARS
SECTION 7.06. Evidence of Modifications and Amendments. All modifications
and amendments to the Indenture shall be made by supplemental indenture.
35
ARTICLE EIGHT
RANKING
SECTION 8.01. Senior in Right of Payment. The CZARS shall be direct
senior obligations of the Company and shall rank equally in right of payment
with all other unsecured senior indebtedness of the Company.
ARTICLE NINE
MISCELLANEOUS
SECTION 9.01. TIA Controls. If any provision hereof limits, qualifies or
conflicts with the duties imposed by Section 310 through 317 of the TIA, the
imposed duties shall control.
SECTION 9.02. Conflict with Indenture. To the extent not expressly
amended or modified by this Supplemental Indenture, the Base Indenture shall
remain in full force and effect. If any provision of this Supplemental
Indenture relating to the CZARS is inconsistent with any provision of the Base
Indenture, the provision of this Supplemental Indenture shall control with
regard to the CZARS.
SECTION 9.03. Governing Law. This Supplemental Indenture and the CZARS
shall be governed by and construed in accordance with the laws of the State of
New York. The Company submits to the jurisdiction of the courts of the State
of New York sitting in the Borough of Manhattan, City of New York, and of the
United States District Court for the Southern District of New York, in any
action or proceeding to enforce any of its obligations under the Indenture or
with regard to the CZARS, and agrees not to seek a transfer of any such action
or proceeding on the basis of inconvenience of the forum or otherwise (but the
Company shall not be prevented from removing any such action or proceeding
from a state court to the United States District Court for the Southern
District of New York). The Company agrees that process in any such action or
proceeding may be served upon it by registered mail or in any other manner
permitted by the rules of the court in which the action or proceeding is
brought.
SECTION 9.04. Successors. All agreements of the Company in the Indenture
and the CZARS shall bind its successors. All agreements of each of the
Trustee, Authenticating Agent, Paying Agent, Conversion Agent, Security
Registrar and Bid Agent in the Indenture shall bind its successors.
SECTION 9.05. Counterparts. This instrument may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
36
IN WITNESS WHEREOF, the parties to this Supplemental Indenture have
caused it to be duly executed as of the day and year first above written.
U.S. BANCORP
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
CITIBANK, N.A., as Trustee
By: /s/ ▇. ▇▇▇▇▇▇▇▇
---------------------
Name: ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Authenticating Agent, Conversion Agent,
Paying Agent and Security Registrar
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
37
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC., as Bid Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Title: Managing Director
38
EXHIBIT A
[FORM OF FACE OF GLOBAL SECURITY]
FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE CODE, THIS
SECURITY IS ISSUED WITH AN INDETERMINATE AMOUNT OF ORIGINAL ISSUE DISCOUNT FOR
UNITED STATES FEDERAL INCOME TAX PURPOSES. THE ISSUE DATE IS AUGUST 6, 2001,
AND THE YIELD TO MATURITY FOR PURPOSES OF ACCRUING ORIGINAL ISSUE DISCOUNT IS
1.5% PER ANNUM.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL CZARS
REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
PURSUANT TO SECTION 2.10 OF THE SUPPLEMENTAL INDENTURE, THE COMPANY AGREES,
AND BY ACCEPTANCE OF A BENEFICIAL OWNERSHIP INTEREST IN THE SECURITY, EACH
BENEFICIAL HOLDER OF THE SECURITIES WILL BE DEEMED TO HAVE AGREED, FOR UNITED
STATES FEDERAL INCOME TAX PURPOSES, (i) TO TREAT THE SECURITIES AS
INDEBTEDNESS THAT IS SUBJECT TO ▇▇▇▇▇▇▇ ▇.▇▇▇▇-▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ TREASURY
REGULATIONS (THE "CONTINGENT DEBT REGULATIONS"), AND, FOR PURPOSES OF THE
CONTINGENT DEBT REGULATIONS, TO TREAT THE FAIR MARKET VALUE OF COMMON STOCK
RECEIVED BY A BENEFICIAL HOLDER UPON ANY CONVERSION OF THE CZARS AS A
CONTINGENT PAYMENT AND (ii) TO BE BOUND BY THE COMPANY'S DETERMINATION OF THE
"COMPARABLE YIELD" AND "PROJECTED PAYMENT SCHEDULE," WITHIN THE MEANING OF THE
CONTINGENT DEBT REGULATIONS, WITH RESPECT TO THE CZARS. THE COMPANY'S
DETERMINATION OF THE "COMPARABLE YIELD" IS 7.03% PER ANNUM, COMPOUNDED
SEMIANNUALLY. THE PROJECTED PAYMENT SCHEDULE, DETERMINED BY THE COMPANY, IS
ATTACHED TO THE SUPPLEMENTAL INDENTURE AS EXHIBIT D. YOU MAY OBTAIN THE AMOUNT
OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE, YIELD TO MATURITY, COMPARABLE YIELD
AND PROJECTED PAYMENT SCHEDULE FOR THE SECURITY BY
TELEPHONING U.S. BANCORP'S INVESTOR RELATIONS DEPARTMENT AT (▇▇▇) ▇▇▇-▇▇▇▇ OR
SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO: U.S. BANCORP, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ATTENTION: INVESTOR RELATIONS
DEPARTMENT.
A-2
U.S. BANCORP
CONTINGENT ZERO-COUPON ACCRETING REDEEMABLE SECURITIES
(CONVERTIBLE SENIOR NOTES) DUE 2021
("CZARS")
No.______________________ Original Issue Discount: $258.35
Issue Date: August 6, 2001 (for each $1,000 Principal Amount
Issue Price: $741.65 at Final Maturity)
(for each $1,000 Principal
Amount at Final Maturity)
CUSIP: __________________________
U.S. Bancorp, a Delaware corporation, promises to pay to _________ or
registered assigns, on August 6, 2021 the Principal Amount of _________
Dollars ($_________). If the CZARS are converted to Cash Pay CZARS as provided
on the other side of this CZARS, the amount due on August 6, 2021 shall be the
Restated Principal Amount thereof.
This CZARS shall not bear periodic interest except as specified on the
other side of this instrument. Original Issue Discount shall accrue as
specified on the other side of this CZARS. This CZARS is convertible as
specified on the other side of this CZARS.
Additional provisions of this CZARS are set forth on the other side of
this CZARS.
A-3
IN WITNESS WHEREOF, U.S. Bancorp has caused this instrument to be duly
executed under its corporate seal.
U.S. BANCORP
By:
--------------------------------
Name:
Title:
Attest:
By:
--------------------------------
Name:
Title:
[SEAL]
Dated: ____________, 2001
AUTHENTICATING AGENT'S
CERTIFICATE OF AUTHENTICATION
This is one of the CZARS
described in the within-
mentioned Indenture.
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Authenticating Agent
By:
------------------------------
Authorized Signatory
A-4
[FORM OF REVERSE SIDE OF GLOBAL SECURITY]
U.S. BANCORP
CONTINGENT ZERO-COUPON ACCRETING REDEEMABLE SECURITIES
(CONVERTIBLE SENIOR NOTES) DUE 2021
1. INTEREST
This CZARS shall not bear periodic interest, except as specified in this
paragraph and in paragraphs 5 and 11 hereof. If the Principal hereof or any
portion of such Principal is not paid when due (whether upon acceleration
pursuant to Section 5.02 of the Supplemental Indenture, upon the date set for
payment of the Redemption Price pursuant to paragraph 6 hereof, upon the date
set for payment of a Purchase Price or Fundamental Change Purchase Price
pursuant to paragraph 7 hereof or upon the Final Maturity of this CZARS) or if
interest (including contingent interest, if any) due hereon or any portion of
such interest is not paid when due in accordance with paragraph 5 or 11
hereof, then in each such case the overdue amount shall bear interest at the
rate of 1.5% per annum, compounded semiannually (to the extent that the
payment of such interest shall be legally enforceable), which interest shall
accrue from the date such overdue amount was due to the date payment of such
amount, including interest thereon, has been made or duly provided for. All
such interest shall be payable on demand. The accrual of such interest on
overdue amounts shall be in lieu of, and not in addition to, any continued
accrual of Original Issue Discount.
The Original Issue Discount (the difference between the Principal Amount
at Final Maturity and the Issue Price of the CZARS) in the period during which
a CZARS remains outstanding, shall accrue at 1.5% per annum, on a semiannual
bond equivalent basis using a 360-day year composed of twelve 30-day months,
commencing on the Issue Date of this CZARS.
2. METHOD OF PAYMENT
Subject to the terms and conditions of the Supplemental Indenture, the
Company shall make payments in respect of the CZARS to the Persons who are
registered Holders of CZARS at the close of business on the Business Day
preceding the Redemption Date, Final Maturity or on a Purchase Date or
Fundamental Change Purchase Date, as the case may be. Holders must surrender
CZARS to a Paying Agent to collect such payments in respect of the CZARS. The
Company shall pay cash amounts in money of the United States that at the time
of payment is legal tender for payment of public and private debts. However,
the Company may make such cash payments by check payable in such money.
3. AUTHENTICATING AGENT, PAYING AGENT, CONVERSION AGENT, BID AGENT AND
SECURITY REGISTRAR
Initially, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. shall act as Bid Agent, and U.S.
Bank Trust National Association shall act as Authenticating Agent, Paying
Agent, Conversion Agent and Security Registrar. The Company may appoint and
change any Paying Agent, Conversion Agent, Bid Agent, Security Registrar or
co-registrar without notice, other than notice to the Trustee,
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except that the Company will maintain at least one Paying Agent in the State
of New York, City of New York, Borough of Manhattan, which shall initially be
an office or agency of the Paying Agent. References to the Trustee in Sections
603 through 607 of the Base Indenture shall be deemed to also refer to any
Paying Agent, Conversion Agent, Bid Agent and Security Registrar. The Company
or any of its Subsidiaries or any of their Affiliates may act as Paying Agent,
Conversion Agent, Security Registrar or co-registrar.
4. INDENTURE
The Company issued the CZARS under the Indenture (the "Base Indenture"),
dated as of October 1, 1991 as supplemented by the Supplemental Indenture,
dated as of August 6, 2001 (the "Supplemental Indenture", and, together with
the Base Indenture, the "Indenture"), between U.S. Bancorp, as successor to
First Bank System, Inc., and Citibank, N.A. Capitalized terms used herein and
not defined herein have the meanings ascribed thereto in the Indenture.
Reference is hereby made to the Indenture for a statement of the
respective rights thereunder of the Company, the Trustee and the Holders of
the CZARS and the terms upon which the CZARS are to be authenticated and
delivered. The terms, conditions and provisions of the CZARS are those stated
in the Indenture, those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended, and those set forth in the CZARS.
The CZARS are general unsecured obligations of the Company limited to
$1,483,179,000 aggregate Principal Amount at Final Maturity (subject to
increase without any further action by up to $222,476,000 if, and to the
extent that, the overallotment granted under the Purchase Agreement between
the Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. and U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
dated as of July 30, 2001 is exercised).
5. CONTINGENT INTEREST
Subject to the accrual and record date provisions specified in this
paragraph 5, the Company shall pay contingent interest to the Holders during
any six-month period (a "Contingent Interest Period") from August 6 to
February 5 and from February 6 to August 5, commencing with the Contingent
Interest Period, beginning August 6, 2003, if the average of the CZARS Prices
for the Applicable Five-Trading-Day Period with respect to such Contingent
Interest Period equals 120% or more of the Accreted Value on the trading day
immediately preceding the first day of the relevant Contingent Interest
Period.
The amount of contingent interest payable per $1,000 original Principal
Amount at Final Maturity hereof in respect of any Contingent Interest Period
shall equal the greater of (x) Cash Dividends paid by the Company per share of
Common Stock during that Contingent Interest Period multiplied by the number
of shares of Common Stock into which $1,000 original Principal Amount at Final
Maturity hereof is convertible pursuant to paragraph 10 hereof as of the
accrual date for such contingent interest or (y) 0.1757% of the CZARS Accreted
Value.
Contingent interest, if any, will accrue and be payable to Holders as of
the record date for the related Cash Dividend or, if no Cash Dividend is paid
by the Company during any quarter within a Contingent Interest Period, to
Holders as of the 15th day preceding the last day of the relevant Contingent
Interest Period. Such payments shall be paid on the payment date of
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the related Cash Dividend or, if no Cash Dividend is paid by the Company
during any quarter within a Contingent Interest Period, on the last day of the
relevant Contingent Interest Period. Pursuant to the foregoing provisions, in
any Contingent Interest Period, in which contingent interest is payable, the
Company shall: (a) upon the first payment date for a Cash Dividend falling
within such Contingent Interest Period pay the Cash Dividend paid by the
Company per share of Common Stock upon such date multiplied by the number of
shares of Common Stock into which $1,000 original Principal Amount at Final
Maturity thereof is convertible pursuant to paragraph 10 hereof as of such
date; (b) upon any subsequent payment date for a Cash Dividend falling within
such Contingent Interest Period, or if no other subsequent payment date for a
Cash Dividend falls within such Contingent Interest Period, on the last day of
such period, pay the greater of (x) the subsequent Cash Dividend paid by the
Company per share of Common Stock upon such date multiplied by the number of
shares of Common Stock into which $1,000 original Principal Amount at Final
Maturity thereof is convertible pursuant to paragraph 10 hereof as of such
date or (y) 0.1757% of the CZARS Accreted Value minus the amounts previously
paid in respect of such CZARS pursuant to clause (a) during such Contingent
Interest Period and (c) if no payment date for a Cash Dividend falls within
such Contingent Interest Period, on the last date of such period, pay 0.1757%
of the CZARS Accreted Value. Original Issue Discount will continue to accrue
at 1.5% per annum whether or not contingent interest is paid.
"Applicable Five-Trading-Day Period" means, with respect to any
Contingent Interest Period, the five trading days ending on the second trading
day immediately preceding the first day of such Contingent Interest Period;
provided, however, if the Company shall have declared a Cash Dividend on its
Common Stock that is payable during such Contingent Interest Period but for
which the record date for determining stockholders entitled thereto precedes
the first day of such Contingent Interest Period, then "Applicable
Five-Trading-Day Period" means, with respect to such Contingent Interest
Period, the five trading days ending on the second trading day immediately
preceding such record date.
"Cash Dividends" means all cash dividends on the Company's Common Stock
(whether regular, periodic, extraordinary, special, nonrecurring or otherwise)
as declared by the Company's Board of Directors.
"CZARS Price" means, as of any date of determination, the average of the
secondary market bid quotations per $1,000 original Principal Amount at Final
Maturity obtained by the Bid Agent for $10 million original Principal Amount
at Final Maturity of CZARS at approximately 4:00 p.m. (New York City time) on
such determination date from three recognized securities dealers in the City
of New York (none of which shall be an Affiliate of the Company) selected by
the Company; provided, however, if (a) at least three such bids are not
obtained by the Bid Agent or (b) in the Company's reasonable judgment, the bid
quotations are not indicative of the secondary market value of the CZARS as of
such determination date, then the CZARS Price for such determination date
shall equal (i) the Conversion Rate in effect as of such determination date
multiplied by (ii) the average Sale Price for the five trading days ending on
such determination date, appropriately adjusted to take into account the
occurrence, during the period commencing on the first of such trading days
during such five trading day period and ending on such determination date, of
any event described in Section 2.07(1), 2.07(2) or 2.07(3) (subject to the
conditions set forth in Sections 2.08(1) and 2.08(2)) of the Supplemental
Indenture.
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Upon determination that Holders will be entitled to receive contingent
interest which may become payable during a Contingent Interest Period, on or
prior to the first day of such Contingent Interest Period, the Company shall
issue a press release and publish such information on its web site at
▇▇▇.▇▇▇▇▇▇.▇▇▇ (or any successor thereto).
6. REDEMPTION AT THE OPTION OF THE COMPANY
No sinking fund is provided for the CZARS. Prior to August 6, 2003, the
CZARS will not be redeemable at the Company's option. Beginning on August 6,
2003, the Company, at its option, may redeem the CZARS for cash at any time as
a whole, or from time to time in part, at a Redemption Price equal (except as
provided in the penultimate paragraph of this Section 6) to the Accreted
Value, plus accrued and unpaid contingent interest, if any.
The table below shows what the Accreted Value of a note would be on
August 6, 2003 and at specified dates thereafter prior to maturity and at
maturity on August 6, 2021. The Accreted Value, in dollars, of a note of
$1,000 principal amount at maturity redeemed between such dates would include
an additional amount reflecting the increase in Accreted Value since the next
preceding date in the table calculated in accordance with Section 1.
Redemption Price
Redemption Date Issue Price(1) Accrued OID at 1.5%(2) (1+2)
--------------- -------------- ---------------------- ----------------
August 6, 2003 ... 741.65 22.50 764.15
August 6, 2004 ... 741.65 34.01 775.66
August 6, 2005 ... 741.65 45.68 787.33
August 6, 2006 ... 741.65 57.54 799.19
August 6, 2007 ... 741.65 69.57 811.22
August 6, 2008 ... 741.65 81.79 823.44
August 6, 2009 ... 741.65 94.18 835.83
August 6, 2010 ... 741.65 106.77 848.42
August 6, 2011 ... 741.65 119.54 861.19
August 6, 2012 ... 741.65 132.51 874.16
August 6, 2013 ... 741.65 145.67 887.32
August 6, 2014 ... 741.65 159.03 900.68
August 6, 2015 ... 741.65 172.59 914.24
August 6, 2016 ... 741.65 186.36 928.01
August 6, 2017 ... 741.65 200.33 941.98
August 6, 2018 ... 741.65 214.51 956.16
August 6, 2019 ... 741.65 228.91 970.56
August 6, 2020 ... 741.65 243.52 985.17
August 6, 2021 ... 741.65 258.35 1000.00
If the CZARS are converted to Cash Pay CZARS following the
occurrence of a Tax Event, the Redemption Price will be equal to the Restated
Principal Amount plus accrued and unpaid interest from the date of such
conversion through the Redemption Date.
With respect to all CZARS or portions thereof to be redeemed
as of a Redemption Date, the Holders of such CZARS (or portions thereof) shall
be entitled, without duplication, to receive accrued and unpaid contingent
interest, if any, with respect thereto, which contingent interest shall be
paid in cash on the Redemption Date.
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7. PURCHASE BY THE COMPANY AT THE OPTION OF THE HOLDER; PURCHASE AT THE OPTION
OF THE HOLDER UPON A FUNDAMENTAL CHANGE
(a) Subject to the terms and conditions of the Indenture, a Holder of
CZARS shall have the option to require the Company to purchase the CZARS held
by such Holder on the following Purchase Dates and, except as provided in
clause (b) below, at the following Purchase Prices per $1,000 Principal Amount
at Final Maturity, upon delivery of a Purchase Notice containing the
information set forth in the Indenture, from the opening of business on the
date that is 30 Business Days prior to such Purchase Date until the close of
business on the Business Day prior to such Purchase Date and upon delivery of
the CZARS to the Paying Agent by the Holder as set forth in the Indenture.
Such Purchase Prices shall be paid in cash.
Purchase Date Purchase Price1
------------- --------------
August 6, 2002 $752.82
August 6, 2003 764.15
August 6, 2004 775.66
August 6, 2006 799.19
August 6, 2008 823.44
August 6, 2011 861.19
August 6, 2016 928.01
---------------
1 In each case, plus accrued and unpaid interest, if any.
CZARS in denominations larger than $1,000 of Principal Amount at Final
Maturity may be purchased in part, but only in multiples of $1,000 of
Principal Amount at Final Maturity.
(b) If prior to a Purchase Date this CZARS has been converted to a
semiannual coupon note following the occurrence of a Tax Event, the Purchase
Price will be equal to the Restated Principal Amount plus accrued and unpaid
interest from the date of conversion to the Purchase Date.
(c) If a Fundamental Change shall occur at any time prior to August 6,
2003, each Holder of CZARS shall have the right, at such Holder's option and
subject to the terms and conditions of the Indenture, to require the Company
to purchase such Holder's CZARS on the Business Day that is 35 days (subject
to extension to comply with applicable law) after the date of the Fundamental
Change for a Fundamental Change Purchase Price equal to the sum of the
Accreted Value of the CZARS on the Fundamental Change Purchase Date plus
accrued and unpaid interest, including contingent interest, which sum shall be
paid in cash. CZARS in denominations larger than $1,000 of Principal Amount at
Final Maturity may be redeemed in part in connection with a Fundamental
Change, but only in multiples of $1,000 of Principal Amount at Final Maturity.
As part of the Fundamental Change Purchase Price payable with respect to
all CZARS or portions thereof to be redeemed as of a Fundamental Change
Purchase Date, the Holders of such CZARS (or portions thereof) shall be
entitled to receive accrued and unpaid contingent interest, if any, with
respect thereto, which contingent interest shall be paid in cash on the
Fundamental Change Purchase Date.
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(d) The Purchase Price or Fundamental Change Purchase Price, as the case
may be, shall be paid in cash promptly following the later of the Purchase
Date or the Fundamental Change Purchase Date, as the case may be, and the time
of delivery of such CZARS to the Paying Agent pursuant to the Indenture.
(e) Holders have the right to withdraw any Purchase Notice or Fundamental
Change Purchase Notice, as the case may be, by delivery to the Paying Agent of
a written notice of withdrawal in accordance with the provisions of the
Indenture.
(f) If cash sufficient to pay a Fundamental Change Purchase Price or cash
sufficient to pay a Purchase Price, as the case may be, of all CZARS or
portions thereof to be purchased as of the Purchase Date or the Fundamental
Change Purchase Date, as the case may be, is deposited with the Paying Agent
on the Purchase Date or the Fundamental Change Purchase Date, as the case may
be, Original Issue Discount and interest (including contingent interest), if
any, ceases to accrue on such CZARS (or portions thereof) on and after such
date, and the Holder thereof shall have no other rights as such (other than
the right to receive the Purchase Price or Fundamental Change Purchase Price,
as the case may be, upon surrender or such CZARS).
8. NOTICE OF REDEMPTION AT THE OPTION OF THE COMPANY
Notice of redemption at the option of the Company shall be mailed at
least 30 days but not more than 60 days before the Redemption Date to each
Holder of CZARS to be redeemed at the Holder's registered address. If money
sufficient to pay the Redemption Price of all CZARS (or portions thereof) to
be redeemed on the Redemption Date is deposited with the Paying Agent prior to
or on the Redemption Date, on and after such date Original Issue Discount and
interest (including contingent interest), if any, shall cease to accrue on
such CZARS or portions thereof. CZARS in denominations larger than $1,000
original Principal Amount at Final Maturity may be redeemed in part but only
in multiples of $1,000 original Principal Amount at Final Maturity.
9. RANKING
The CZARS shall be direct senior obligations of the Company and shall
rank equally in right of payment with all other unsecured senior indebtedness
of the Company.
10. CONVERSION
Subject to the next two succeeding sentences and the procedures set forth
in the Indenture, a Holder of a CZARS may convert CZARS for Common Stock of
the Company at any time on or before the close of business on August 6, 2021
if at least one of the following conditions is satisfied on the Conversion
Date:
(a) the average of the Sale Prices for the Common Stock for the 20
Trading Days immediately prior to the Conversion Date equals or exceeds the
applicable Specified Percentage of the Accreted Value on the Conversion Date,
divided by the Conversion Rate;
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(b) the credit ratings assigned to the CZARS by any two of ▇▇▇▇▇'▇
Investors Service, Inc., Standard & Poor's Ratings Services or Fitch IBCA Duff
& ▇▇▇▇▇▇ are below ▇▇▇ ▇, ▇▇▇ and BBB+, respectively;
(c) the CZARS no longer are assigned credit ratings by any two of ▇▇▇▇▇'▇
Investors Services, Inc., Standard & Poor's Ratings Services for Fitch IBCA
Duff & ▇▇▇▇▇▇;
(d) the CZARS have been called for redemption by the Company, at any time
prior to the close of business on the Redemption Date;
(e) the Company becomes a party to a consolidation, merger or binding
share exchange pursuant to which the Common Stock would be converted into cash
or property (other than securities), in which case a Holder may surrender
CZARS for conversion at any time from and after the date which is 15 days
prior to the anticipated effective date for the transaction until 15 days
after the actual effective date of such transaction; or
(f) the Company elects to (i) distribute to all Holders of Common Stock
assets, debt, securities or rights to purchase securities of the Company,
which distribution has a per share value as determined by the Company's Board
of Directors exceeding 15% of the Sale Price of the Common Stock on the day
preceding the declaration date for such distribution or (ii) distribute to all
Holders of Common Stock rights entitling them to purchase, for a period
expiring within 60 days after the date of such distribution, Common Stock at
less than the Sale Price at the time of such distribution. In the case of the
foregoing clauses (i) and (ii), the Company must notify the Holders of CZARS
at least 20 days prior to the Ex-Dividend Date for such distribution. Once the
Company has given such notice, Holders may surrender their CZARS for
conversion at any time thereafter until the earlier of the close of business
on the Business Day prior to the Ex-Dividend Date or the Company's
announcement that such distribution will not take place.
A CZARS in respect of which a Holder has delivered a notice of exercise
of the option to require the Company to purchase such CZARS or to purchase
such CZARS in the event of a Fundamental Change may be converted only if the
notice of exercise is withdrawn in accordance with the terms of the Indenture.
The initial Conversion Rate is 24.1430 shares of Common Stock per $1,000
original Principal Amount at Final Maturity, subject to adjustment in certain
events described in the Indenture. The Company shall deliver cash or a check
in lieu of any fractional share of Common Stock.
In the event the Company exercises its option pursuant to Section 2.09 of
the Indenture to have interest in lieu of Original Issue Discount accrue on
the CZARS following a Tax Event, the Holder will be entitled on conversion to
receive the same number of shares of Common Stock or other property that such
Holder would have received if the Company had not exercised such option.
If the Company exercises such option or is required to pay contingent
interest, CZARS surrendered for conversion during the period from the close of
business on any Regular Record Date next preceding any Interest Payment Date
to the opening of business of such
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Interest Payment Date (to be redeemed on a date within this period or on such
Interest Payment Date) must be accompanied by payment of an amount equal to
the contingent interest or interest thereon that the registered Holder is to
receive. Except where CZARS surrendered for conversion must be accompanied by
payment as described above, no contingent interest or interest on converted
CZARS will be payable by the Company on any Interest Payment Date subsequent
to the date of conversion.
To convert this CZARS a Holder must (1) complete and manually sign the
conversion notice on the back of this CZARS (or complete and manually sign a
facsimile of such notice) and deliver such notice to the Conversion Agent at
the office maintained by the Conversion Agent for such purpose, (2) surrender
this CZARS to the Conversion Agent, (3) furnish appropriate endorsements and
transfer documents if required by the Conversion Agent, the Company or the
Trustee and (4) pay any transfer or similar tax, if required.
A Holder may convert a portion of this CZARS only if the original
Principal Amount at Final Maturity of such portion is $1,000 or a multiple of
$1,000. No payment or adjustment shall be made for dividends on the Common
Stock except as provided in the Indenture. On conversion of this CZARS, that
portion of accrued Original Issue Discount (or, interest, if the Company has
exercised its option provided for in paragraph 11 hereof) attributable to the
period from the Issue Date (or, if the Company has exercised the option
referred to in paragraph 11 hereof, the later of (x) the date of such exercise
and (y) the date on which interest was last paid) to the Conversion Date and
(except as provided below) accrued contingent interest with respect to the
converted portion of this CZARS shall not be canceled, extinguished or
forfeited, but rather shall be deemed to be paid in full to the Holder thereof
through the delivery of the Common Stock (together with any cash payment in
lieu of fractional shares) in exchange for the portion of this CZARS being
converted pursuant to the terms hereof; and the fair market value of such
shares of Common Stock (together with any such cash payment in lieu of
fractional shares) shall be treated as issued, to the extent thereof, first in
exchange for Original Issue Discount (or interest, if the Company has
exercised its option provided for in paragraph 11 hereof) accrued through the
Conversion Date and accrued contingent interest, and the balance, if any, of
such fair market value of such Common Stock (and any such cash payment) shall
be treated as issued in exchange for the Issue Price of the Security being
converted pursuant to the provisions hereof.
11. TAX EVENT
(a) From and after the Tax Event Date, at the option of the Company, cash
interest in lieu of future Original Issue Discount shall accrue after the
Option Exercise Date at the rate of 1.5% per annum on the Restated Principal
Amount which shall be equal to the Accreted Value on the Option Exercise Date
and shall be payable in cash semiannually on each Interest Payment Date to
holders of record at the close of business on the Regular Record Date
immediately preceding such Interest Payment Date. Interest will be computed on
the basis of a 360-day year comprised of twelve 30-day months and will accrue
from the most recent date on which interest has been paid or, if no interest
has been paid, from the Option Exercise Date. Within 30 days of the occurrence
of a Tax Event, the Company shall deliver a written notice of such Tax Event
by facsimile and first-class mail to the Trustee and within 15 days of their
exercise of such option the Company shall deliver a written notice of the
Option Exercise Date
A-12
by facsimile and first-class mail to the Trustee and by first class mail to
the Holders of the CZARS. From and after the Option Exercise Date, the Company
shall be obligated to pay at Final Maturity or upon a Redemption Date,
Purchase Date or Fundamental Change Purchase Date the Restated Principal
Amount thereof plus accrued and unpaid interest (including contingent
interest).
(b) Interest on any CZARS that is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the person in
whose name that CZARS is registered at the close of business on the Regular
Record Date for such interest at the office or agency of the Company
maintained for such purpose. Each installment of interest on any CZARS shall
be paid in same-day funds by transfer to an account maintained by the payee
located inside the United States.
12. DEFAULTED INTEREST
Except as otherwise specified with respect to the CZARS, any Defaulted
Interest on any CZARS shall forthwith cease to be payable to the registered
Holder thereof on the relevant Regular Record Date or accrual date, as the
case may be, by virtue of having been such Holder, and such Defaulted Interest
may be paid by the Company as provided for in Section 2.11(3)(b) of the
Supplemental Indenture.
13. DENOMINATIONS; TRANSFER; EXCHANGE
The CZARS are in registered form, without coupons, in denominations of
$1,000 of original Principal Amount at Final Maturity and multiplies of
$1,000. A Holder may transfer or convert CZARS in accordance with the
Indenture. The Security Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes
and fees required by law or permitted by the Indenture. The Security Registrar
need not transfer or exchange any CZARS selected for redemption (except, in
the case of a CZARS to be redeemed in part, the portion of the CZARS not to be
redeemed) or any CZARS in respect of which a Purchase Notice or Fundamental
Change Purchase Notice has been given and not withdrawn (except, in the case
of a CZARS to be purchased in part, the portion of the CZARS not to be
purchased) or any CZARS for a period of 15 days before any selection of CZARS
to be redeemed.
14. PERSONS DEEMED OWNERS
The registered Holder of this CZARS may be treated as the owner of this
CZARS for all purposes.
15. UNCLAIMED MONEY OR PROPERTY
The Trustee and the Paying Agent shall return to the Company upon written
request any money or property held by them for the payment of any amount with
respect to the CZARS that remains unclaimed for two years, provided, however,
that the Trustee or such Paying Agent, before being required to make any such
return, shall at the expense of the Company cause to be published once in a
newspaper of general circulation in the City of New York or mail to each such
Holder notice that such money or property remains unclaimed and
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that, after a date specified therein, which shall not be less than 30 days
from the date of such publication or mailing, any unclaimed money or property
then remaining shall be returned to the Company. After return to the Company,
Holders entitled to the money or property must look to the Company for payment
as general creditors unless an applicable abandoned property law designates
another Person.
16. AMENDMENT; WAIVER
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the CZARS may be amended with the written consent of the Holders
of at least a majority in aggregate principal amount of the CZARS at the time
outstanding and (ii) certain defaults or noncompliance with certain
provisions, may be waived with the written consent of the Holders of a
majority in aggregate principal amount of the CZARS at the time outstanding.
Subject to certain exceptions set forth in the Indenture, without the consent
of any Holder, the Company and the Trustee may amend the Indenture or the
CZARS in certain respects.
17. DEFAULTS AND REMEDIES
If an Event of Default occurs and is continuing, the Trustee, or the
Holders of at least 25% in aggregate principal amount of the CZARS at the time
outstanding, may declare the Accreted Value and any accrued and unpaid
interest, of all the CZARS to be due and payable immediately. Certain events
of bankruptcy or insolvency are Events of Default which shall result in the
CZARS being declared due and payable immediately upon the occurrence of such
Events of Default.
Holders may not enforce the Indenture or the CZARS except as provided in
the Indenture. The Trustee may refuse to enforce the Indenture or the CZARS
unless it receives reasonable indemnity or security. Subject to certain
limitations, conditions and exceptions, Holders of a majority in aggregate
original Principal Amount at Final Maturity of the CZARS at the time
outstanding may direct the Trustee in its exercise of any trust or power,
including the annulment of a declaration of acceleration. The Trustee may
withhold from Holders notice of any continuing default (except a default in
payment of certain amounts as specified in the Indenture) if it determines that
withholding notice is in their interests.
18. TRUSTEE AND AGENT DEALINGS WITH THE COMPANY
The Trustee, Paying Agent, Conversion Agent, Bid Agent and Security
Registrar under the Indenture, each in its individual or any other capacity,
may become the owner or pledgee of CZARS and may otherwise deal with and
collect obligations owed to it by the Company or its Affiliates and may
otherwise deal with the Company or its Affiliates with the same rights it
would have if it were not Trustee, Paying Agent, Conversion Agent, Bid Agent
or Security Registrar.
19. NO RECOURSE AGAINST OTHERS
A director, officer or employee, as such, of the Company or any
subsidiary of the Company or any stockholder as such, of the Company shall not
have any liability for any obligations of the Company under the CZARS or the
Indenture or for any claim based on, in
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respect of or by reason of such obligations or their creation. By accepting a
CZARS, each Holder waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the CZARS.
20. AUTHENTICATION
This CZARS shall not be valid until an authorized officer of the Trustee
or Authenticating Agent manually signs the Certificate of Authentication on
the other side of this CZARS.
21. ABBREVIATIONS
Customary abbreviations may be used in the name of a Holder or an
assignee, such as TEN COM (=tenants in common), TENANT (=tenants by the
entireties), JT TEN (=joint tenants with right of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
22. GOVERNING LAW
The CZARS shall be governed by and construed in accordance with the laws
of the State of New York.
The Company shall furnish to any Holder upon written request and without
charge a copy of the indenture which has in it the text of this CZARS in
larger type. Requests may be made to:
U.S. Bancorp
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Legal Department
A-15
FORM OF CONVERSION NOTICE
To: U.S. Bancorp
The undersigned registered holder of this CZARS hereby exercises the
option to convert this CZARS, or portion hereof (which is $1,000 original
Principal Amount at Final Maturity or a multiple thereof) designated below,
for shares of Common Stock of U.S. Bancorp in accordance with the terms of the
Indenture referred to in the CZARS, and directs that the shares, if any,
issuable and deliverable upon such conversion, together with any check for
cash deliverable upon such conversion, and any CZARS representing any
unconverted principal amount hereof, be issued and delivered to the registered
holder hereof unless a different name has been indicated below. If shares or
any portion of this CZARS not converted are to be issued in the name of a
Person other than the undersigned, the undersigned shall pay all transfer
taxes payable with respect thereto. The undersigned may withdraw this notice
in accordance with Section 2.05(1) of the Supplemental Indenture.
Dated:
-----------------------------
-----------------------------
Signature(s)
Fill in for registration of shares if
to be delivered, and CZARS if to
be issued other than to and in the
name of registered holder:
----------------------------------- Principal Amount at Final Maturity
(Name) to be purchased (if less than all):
----------------------------------- $_,000
(Street Address)
----------------------------------- Social Security or Other Taxpayer
(City, state and zip code) Number
Please print name and address
A-16
FORM OF FUNDAMENTAL CHANGE PURCHASE NOTICE
To: U.S. Bancorp
The undersigned registered holder of this CZARS hereby acknowledges
receipt of a notice from U.S. Bancorp (the "Company") as to the occurrence of
a Fundamental Change with respect to the Company and requests and instructs
the Company to repurchase this CZARS, or the portion hereof (which is $1,000
original Principal Amount at Final Maturity or a multiple thereof) designated
below, in accordance with the terms of the Supplemental Indenture referred to
in the CZARS and directs that the check in payment for this CZARS or the
portion thereof and any CZARS representing any unrepurchased principal amount
hereof, be issued and delivered to the registered holder hereof unless a
different name has been indicated below. If any portion of this CZARS not
repurchased is to be issued in the name of a Person other than the
undersigned, the undersigned shall pay all transfer taxes payable with respect
thereto.
Dated:
----------------------
Signature(s)
Fill in for registration of shares if to be delivered, and CZARS if to be
issued other than to and in the name of registered holder:
------------------------------
(Name)
------------------------------
(Street Address)
------------------------------
(City, state and zip code)
Please print name and address
Principal Amount at Final Maturity
to be purchased (if less than all):
$_,000
Social Security or Other Taxpayer
Number
A-17
ASSIGNMENT FORM
For value received _________ hereby sell(s), assign(s) and transfer(s)
unto _________ (Please insert social security or other Taxpayer Identification
Number of assignee) the within CZARS, and hereby irrevocably constitutes and
appoints _________ attorney to transfer the said CZARS on the books of the
Company, with full power of substitution in the premises.
Dated:
---------------------------------
Signature(s)
Signature(s) must be guaranteed by
a commercial bank or trust
company or a member firm of a
major stock exchange if shares of
Common Stock are to be issued, or
CZARS to be delivered, other than
to or in the name of the registered
holder.
----------------------------------
Signature Guarantee
NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of the CZARS in every particular without
alteration or enlargement or any change whatever.
A-18
EXHIBIT B
FORM OF RESTRICTED COMMON STOCK LEGEND
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS, AND
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS
A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A ADOPTED UNDER THE
SECURITIES ACT) OR (B) IT IS NOT A UNITED STATES PERSON AND IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S ADOPTED
UNDER THE SECURITIES ACT; (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER
THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THE
SECURITY EVIDENCED HEREBY, EXCEPT (A) TO THE ISSUER OR A SUBSIDIARY THEREOF;
(B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A ADOPTED
UNDER THE SECURITIES ACT (IF AVAILABLE); (C) TO PERSONS OTHER THAN UNITED
STATES PERSONS OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION S UNDER
THE SECURITIES ACT; (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED
BY RULE 144 ADOPTED UNDER THE SECURITIES ACT OR ANOTHER AVAILABLE EXEMPTION
UNDER THE SECURITIES ACT (IF AVAILABLE), OR (E) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT; AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND IN CONNECTION WITH ANY TRANSFER OF
THIS SECURITY WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY,
THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER
SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS MAY BE REQUIRED
PURSUANT TO THE INDENTURE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT
TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "UNITED STATES PERSON" HAVE THE MEANING
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. IN ANY CASE THE HOLDER
HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION
WITH REGARD TO THIS SECURITY EXCEPT AS PERMITTED BY THE SECURITIES ACT. ON
EACH DAY FROM AND INCLUDING THE DATE OF ITS ACQUISITION OF COMMON STOCK
THROUGH AND INCLUDING THE DATE OF ITS DISPOSITION OF SUCH COMMON STOCK, THE
HOLDER IS DEEMED TO REPRESENT THAT ITS ACQUISITION, HOLDING AND DISPOSITION OF
SUCH COMMON STOCK DOES NOT AND WILL NOT CONSTITUTE (X) A NON-EXEMPT PROHIBITED
TRANSACTION UNDER THE U.S. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986,
AS AMENDED (THE "CODE") OR (Y) A VIOLATION OF ANY LOCAL, STATE, FEDERAL OR
OTHER LAWS
THAT ARE SUBSTANTIALLY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA AND
THE CODE.
EXHIBIT C
FORM OF TRANSFER CERTIFICATE FOR TRANSFER
OF RESTRICTED COMMON STOCK
(Transfers pursuant to Section 2.08(11)(b) of the Supplemental Indenture)
[NAME AND ADDRESS OF COMMON STOCK TRANSFER AGENT]
Re: U.S. Bancorp Contingent Zero-Coupon Accreting Redeemable
SecuritiesSM (Convertible Senior Notes) (the "CZARS") Due 2021
Reference is hereby made to the Supplemental Indenture, dated as of
August 6, 2001, to the Indenture, dated as of October 1, 1991, between U.S.
Bancorp (the "Company"), a Delaware corporation, as successor to First Bank
System, Inc., and Citibank, N.A., as Trustee. Capitalized terms used but not
defined herein shall have the meanings given them in the Indenture.
This letter relates to _________ shares of Common Stock represented by
the accompanying certificate(s) that were issued upon conversion of CZARS and
which are held in the name of [name of transferor] (the "Transferor") to
effect the transfer of such Common Stock.
In connection with the transfer of such shares of Common Stock, the
undersigned confirms that such shares of Common Stock are being transferred:
CHECK ONE BOX BELOW
(1) /_/ to the Company; or
(2) /_/ pursuant to and in compliance with Regulation S under the
Securities Act of 1933 in off-shore transactions to non-U.S.
Persons; or
(3) /_/ pursuant to an exemption from registration under the Securities
Act of 1933 provided by Rule 144 thereunder.
Unless one of the boxes is checked, the transfer agent will refuse to
register any of the Common Stock evidenced by this certificate in the name of
any person other than the registered holder thereof; provided, however, that
if box (2) or (3) is checked, the transfer agent may require, prior to
registering any such transfer of the Common Stock such certifications and
other information, and if box (3) is checked such legal opinions, as the
Company has reasonably requested in writing, by delivery to the transfer agent
of a standing letter of instruction, to confirm that such transfer is being
made pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933.
[Name of Transferor],
By
--------------------
Name:
Title:
Dated:
EXHIBIT D
PROJECTED PAYMENT SCHEDULE*
--------------------------
Semi-Annual Period Ending Projected Payment Per CZARS
October 16, 2001 0
January 16, 2002 0
April 16, 2002 0
July 16, 2002 0
October 16, 2002 0
January 16, 2003 0
April 16, 2003 0
July 16, 2003 0
October 16, 2003 0
January 16, 2004 0
April 16, 2004 0
July 16, 2004 0
October 16, 2004 0
January 16, 2005 0
April 16, 2005 0
July 16, 2005 0
October 16, 2005 0
January 16, 2006 0
April 16,2006 0
July 16, 2006 0
October 16, 2006 0
January 16, 2007 0
April 16, 2007 0
July 16, 2007 0
October 16, 2007 0
January 16, 2008 0
April 16, 2008 0
July 16, 2008 0
October 16, 2008 0
January 16, 2009 0
April 16, 2009 4.53
July 16, 2009 4.53
October 16, 2009 4.53
January 16, 2010 4.53
April 16, 2010 4.53
July 16, 2010 4.53
October 16, 2010 4.53
January 16, 2011 4.53
April 16, 2011 4.53
Semi-Annual Period Ending Projected Payment Per CZARS
July 16, 2011 4.53
October 16, 2011 4.53
January 16, 2012 4.53
April 16, 2012 4.53
July 16, 2012 4.53
October 16, 2012 4.53
January 16, 2013 4.53
April 16, 2013 4.53
July 16, 2013 4.53
October 16, 2013 4.53
January 16, 2014 4.53
April 16, 2014 4.53
July 16, 2014 4.53
October 16, 2014 4.53
January 16, 2015 4.53
April 16, 2015 4.53
July 16, 2015 4.53
October 16, 2015 4.53
January 16, 2016 4.53
April 16, 2016 4.53
July 16, 2016 4.53
October 16, 2016 4.53
January 16, 2017 4.53
April 16, 2017 4.53
July 16, 2017 4.53
October 16, 2017 4.53
January 16, 2018 4.53
April 16, 2018 4.53
July 16, 2018 4.53
October 16, 2018 4.53
January 16, 2019 4.53
April 16, 2019 4.53
July 16, 2019 4.53
October 16, 2019 4.53
January 16, 2020 4.53
April 16,2020 4.53
July 16, 2020 4.53
October 16,2020 4.53
January 16, 2021 4.53
April 16, 2021 4.53
July 16, 2021 4.53
August 6, 2021 2,599.78
D-2
* The comparable yield and the schedule of projected payments are not
determined for any purpose other than for the determination of interest
accruals and adjustment thereof in respect of the CZARS for United States
federal income tax purposes. The comparable yield and the schedule of
projected payments do not constitute a projection or representation regarding
the future stock price or the amounts payable on the CZARS.
D-3