Exhibit 4.1
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AMERUS GROUP CO.
AND
Wachovia Bank,
National Association
as Purchase Contract Agent
FORM OF PURCHASE CONTRACT AGREEMENT
Dated as of May __, 2003
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PAGE
RECITALS ................................................................................. 1
ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION ..................... 1
SECTION 1.1 DEFINITIONS .......................................................... 1
SECTION 1.2 COMPLIANCE CERTIFICATES AND OPINIONS ................................. 13
SECTION 1.3 FORM OF DOCUMENTS DELIVERED TO AGENT ................................. 14
SECTION 1.4 ACTS OF HOLDERS; RECORD DATES ........................................ 14
SECTION 1.5 NOTICES .............................................................. 15
SECTION 1.6 NOTICE TO HOLDERS; WAIVER ............................................ 16
SECTION 1.7 EFFECT OF HEADINGS AND TABLE OF CONTENTS ............................. 16
SECTION 1.8 SUCCESSORS AND ASSIGNS ............................................... 17
SECTION 1.9 SEPARABILITY CLAUSE .................................................. 17
SECTION 1.10 BENEFITS OF AGREEMENT ................................................ 17
SECTION 1.11 GOVERNING LAW ........................................................ 17
SECTION 1.12 LEGAL HOLIDAYS ....................................................... 17
SECTION 1.13 COUNTERPARTS ......................................................... 17
SECTION 1.14 INSPECTION OF AGREEMENT .............................................. 18
ARTICLE II CERTIFICATE FORMS ........................................................... 18
SECTION 2.1 FORMS OF CERTIFICATES GENERALLY ...................................... 18
SECTION 2.2 FORM OF AGENT'S CERTIFICATE OF AUTHENTICATION ........................ 19
ARTICLE III THE SECURITIES .............................................................. 19
SECTION 3.1 TITLE AND TERMS; DENOMINATIONS ....................................... 19
SECTION 3.2 RIGHTS AND OBLIGATIONS EVIDENCED BY THE CERTIFICATES ................. 19
SECTION 3.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING ....................... 20
SECTION 3.4 TEMPORARY CERTIFICATES ............................................... 20
SECTION 3.5 REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE .................. 21
SECTION 3.6 BOOK-ENTRY INTERESTS ................................................. 22
SECTION 3.7 NOTICES TO HOLDERS ................................................... 23
SECTION 3.8 APPOINTMENT OF SUCCESSOR CLEARING AGENCY ............................. 23
SECTION 3.9 DEFINITIVE CERTIFICATES .............................................. 23
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SECTION 3.10 MUTILATED, DESTROYED, LOST AND STOLEN CERTIFICATES ................... 23
SECTION 3.11 PERSONS DEEMED OWNERS ................................................ 24
SECTION 3.12 CANCELLATION ......................................................... 25
SECTION 3.13 ESTABLISHMENT OR REESTABLISHMENT OF GROWTH PRIDES .................... 25
SECTION 3.14 ESTABLISHMENT OR REESTABLISHMENT OF INCOME PRIDES .................... 27
SECTION 3.15 TRANSFER OF COLLATERAL UPON OCCURRENCE OF TERMINATION EVENT .......... 29
SECTION 3.16 NO CONSENT TO ASSUMPTION ............................................. 30
ARTICLE IV THE DEBT SECURITIES ......................................................... 30
SECTION 4.1 PAYMENT OF INTEREST; RIGHTS TO INTEREST PRESERVED; INTEREST RATE
RESET; NOTICE ........................................................ 30
SECTION 4.2 NOTICE AND VOTING .................................................... 31
SECTION 4.3 SUBSTITUTION OF A TREASURY PORTFOLIO FOR DEBT SECURITIES ............. 32
SECTION 4.4 CONSENT TO TREATMENT FOR TAX PURPOSES ................................ 33
ARTICLE V THE PURCHASE CONTRACTS ...................................................... 33
SECTION 5.1 PURCHASE OF SHARES OF COMMON STOCK ................................... 33
SECTION 5.2 CONTRACT ADJUSTMENT PAYMENTS ......................................... 35
SECTION 5.3 DEFERRAL OF PAYMENT DATES FOR CONTRACT ADJUSTMENT PAYMENTS ........... 35
SECTION 5.4 PAYMENT OF PURCHASE PRICE ............................................ 37
SECTION 5.5 ISSUANCE OF SHARES OF COMMON STOCK ................................... 40
SECTION 5.6 ADJUSTMENT OF SETTLEMENT RATE ........................................ 41
SECTION 5.7 NOTICE OF ADJUSTMENTS AND CERTAIN OTHER EVENTS ....................... 46
SECTION 5.8 TERMINATION EVENT; NOTICE ............................................ 46
SECTION 5.9 EARLY SETTLEMENT ..................................................... 46
SECTION 5.10 NO FRACTIONAL SHARES ................................................. 48
SECTION 5.11 CHARGES AND TAXES .................................................... 49
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TABLE OF CONTENTS
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ARTICLE VI REMEDIES .................................................................... 49
SECTION 6.1 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE CONTRACT ADJUSTMENT PAYMENTS
AND TO PURCHASE COMMON STOCK ......................................... 49
SECTION 6.2 RESTORATION OF RIGHTS AND REMEDIES ................................... 49
SECTION 6.3 RIGHTS AND REMEDIES CUMULATIVE ....................................... 49
SECTION 6.4 DELAY OR OMISSION NOT WAIVER ......................................... 50
SECTION 6.5 UNDERTAKING FOR COSTS ................................................ 50
SECTION 6.6 WAIVER OF STAY OR EXTENSION LAWS ..................................... 50
ARTICLE VII THE AGENT ................................................................... 50
SECTION 7.1 CERTAIN DUTIES AND RESPONSIBILITIES .................................. 50
SECTION 7.2 NOTICE OF DEFAULT .................................................... 52
SECTION 7.3 CERTAIN RIGHTS OF AGENT .............................................. 52
SECTION 7.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES ............... 53
SECTION 7.5 MAY HOLD SECURITIES .................................................. 53
SECTION 7.6 MONEY HELD IN CUSTODY ................................................ 53
SECTION 7.7 COMPENSATION AND REIMBURSEMENT ....................................... 53
SECTION 7.8 CORPORATE AGENT REQUIRED; ELIGIBILITY ................................ 54
SECTION 7.9 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR .................... 54
SECTION 7.10 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR ............................... 55
SECTION 7.11 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS .......... 56
SECTION 7.12 PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS ............... 56
SECTION 7.13 NO OBLIGATIONS OF AGENT .............................................. 56
SECTION 7.14 TAX COMPLIANCE ....................................................... 56
ARTICLE VIII SUPPLEMENTAL AGREEMENTS ..................................................... 57
SECTION 8.1 SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF HOLDERS ................... 57
SECTION 8.2 SUPPLEMENTAL AGREEMENTS WITH CONSENT OF HOLDERS ...................... 57
SECTION 8.3 EXECUTION OF SUPPLEMENTAL AGREEMENTS ................................. 58
SECTION 8.4 EFFECT OF SUPPLEMENTAL AGREEMENTS .................................... 59
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SECTION 8.5 REFERENCE TO SUPPLEMENTAL AGREEMENTS ................................. 59
ARTICLE IX CONSOLIDATION, MERGER, SALE OR CONVEYANCE ................................... 59
SECTION 9.1 COVENANT NOT TO MERGE, CONSOLIDATE, SELL OR CONVEY PROPERTY EXCEPT
UNDER CERTAIN CONDITIONS ............................................. 59
SECTION 9.2 RIGHTS AND DUTIES OF SUCCESSOR ENTITY ................................ 59
SECTION 9.3 OPINION OF COUNSEL GIVEN TO AGENT .................................... 60
ARTICLE X COVENANTS ................................................................... 60
SECTION 10.1 PERFORMANCE UNDER PURCHASE CONTRACTS ................................. 60
SECTION 10.2 MAINTENANCE OF OFFICE OR AGENCY ...................................... 60
SECTION 10.3 COMPANY TO RESERVE COMMON STOCK ...................................... 61
SECTION 10.4 COVENANTS AS TO COMMON STOCK ......................................... 61
ARTICLE XI TRUST INDENTURE ACT ......................................................... 61
SECTION 11.1 TRUST INDENTURE ACT; APPLICATION ..................................... 61
SECTION 11.2 LISTS OF HOLDERS OF SECURITIES ....................................... 61
SECTION 11.3 REPORTS BY THE AGENT ................................................. 62
SECTION 11.4 PERIODIC REPORTS TO AGENT ............................................ 62
SECTION 11.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT ..................... 62
SECTION 11.6 DEFAULTS; WAIVER ..................................................... 62
SECTION 11.7 AGENT'S KNOWLEDGE OF DEFAULTS ........................................ 63
SECTION 11.8 CONFLICTING INTERESTS ................................................ 63
SECTION 11.9 DIRECTION OF AGENT ................................................... 63
EXHIBIT A
EXHIBIT B
EXHIBIT C
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FORM OF PURCHASE CONTRACT AGREEMENT, dated as of May __, 2003, between
AmerUs Group Co., an Iowa corporation (the "Company"), and Wachovia Bank,
National Association, acting as purchase contract agent and attorney-in-fact for
the Holders of Securities from time to time (in any one or more of such
capacities, the "Agent").
RECITALS
The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the Securities.
All things necessary to make the Purchase Contracts, when the Certificates
are executed by the Company and authenticated, executed on behalf of the Holders
and delivered by the Agent, as provided in this Agreement, the valid obligations
of the Company and the Holders, and to constitute these presents a valid
agreement of the Company, in accordance with its terms, have been done.
WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1 DEFINITIONS.
For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular; and
nouns and pronouns of the masculine gender include the feminine and
neuter genders;
(b) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting
principles in the United States;
(c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision; and
(d) the following terms have the meanings given to them in this Section
1.1(d):
"Act" when used with respect to any Holder, has the meaning specified in
Section 1.4.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act of 1933, as amended, or any successor rule thereunder.
"Agent" means the Person named as the "Agent" in the first paragraph of
this instrument until a successor Agent shall have become such pursuant to the
applicable provisions of this Agreement, and thereafter "Agent" shall mean such
Person.
"Agreement" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more agreements supplemental
hereto entered into pursuant to the applicable provisions hereof.
"Applicable Benchmark Treasury" on a particular determination date shall
mean direct obligations of the United States (which may be obligations traded on
a when-issued basis only) having a maturity comparable to the remaining term to
maturity of the Debt Securities, after giving effect to any extension of the
maturity date of the Debt Securities on the Reset Date as agreed upon by the
Company and the Reset Agent. The yield for the Applicable Benchmark Treasury
will be the bid side yield displayed at 10:00 A.M., New York City time, on the
third Business Day immediately preceding the applicable Reset Date in the
Telerate system (or if the Telerate system is (a) no longer available on the
third Business Day immediately preceding such Reset Date or (b) in the opinion
of the Reset Agent (after consultation with the Company) no longer an
appropriate system from which to obtain such yield, such other nationally
recognized quotation system as, in the opinion of the Reset Agent (after
consultation with the Company), is appropriate). If such yield is not so
displayed, the yield for the Applicable Benchmark Treasury shall be, as
calculated by the Reset Agent, the yield to maturity for the Applicable
Benchmark Treasury, expressed as a bond equivalent on the basis of a year of 365
or 366 days, as applicable, and applied on a daily basis, and computed by taking
the arithmetic mean of the secondary market bid rates, as of 10:30 A.M., New
York City time, on the third Business Day immediately preceding the applicable
Reset Date of three leading United States government securities dealers selected
by the Reset Agent (after consultation with the Company) (which may include the
Reset Agent or an affiliate thereof).
"Applicable Market Value" has the meaning specified in Section 5.1.
"Applicable Ownership Interest" means, with respect to the U.S. Treasury
Securities in a Treasury Portfolio contained in an Income PRIDES, (1) for a
Remarketing Treasury Portfolio, (i) a 1/40, or 2.5%, undivided beneficial
ownership interest in a $1,000 principal or interest amount of a principal or
interest strip in a U.S. Treasury Security included in the Treasury Portfolio
that matures on or prior to ▇▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇) for the originally scheduled
quarterly interest payment date on the Debt Securities that would have occurred
on August 16, 2006 if no remarketing had occurred, an undivided beneficial
ownership interest to be determined by the Reset Agent in a $1,000 principal or
interest amount of a principal or interest strip in a U.S. Treasury Security
maturing on or prior to August 16, 2006, and (iii) if the Reset Date occurs
prior to May 16, 2006, for the originally scheduled quarterly interest payment
date on the Debt Securities that would have occurred on May 16, 2006 if no
remarketing had occurred, an undivided beneficial ownership interest to be
determined by the reset agent, in a $1,000 principal or interest amount of a
principal or interest strip in a U.S. Treasury Security maturing on or prior to
May 16, 2006, or (2) for a Tax Event Treasury Portfolio, (i) a 1/40, or 2.5%,
undivided beneficial ownership interest in a $1,000 principal or interest amount
of a principal or interest strip in a U.S.
2
Treasury Security included in the Treasury Portfolio that matures on or prior
to August 16, 2006, and (ii) for each scheduled interest payment date on the
Debt Securities that occurs after the Tax Event Redemption Date and on or prior
to August 16, 2006, a ______% undivided beneficial ownership interest in a
$1,000 principal or interest amount of a principal or interest strip in a U.S.
Treasury Security maturing on or prior to each such interest payment date.
"Applicable Principal Amount" means (i) on any date prior to the Reset
Date, or if there is a Failed Remarketing, on or before August 16, 2006 the
aggregate principal amount of Debt Securities that are components of Income
PRIDES on such date or (ii) on or after the Reset Date, or if there is a Failed
Remarketing on or after August 16, 2006 the aggregate principal amount of the
Debt Securities outstanding on such date.
"Authorized Officer" means the Chairman of the Board, the President, any
Vice President, the Treasurer, any Assistant Treasurer, or any other officer or
agent of the Company duly authorized by the Board of Directors to act in respect
of matters relating to this Agreement.
"Authorized Newspaper" means a newspaper in the English language of
general circulation in the City of New York and generally published each
Business Day. As of the date of this Agreement, the Company anticipates that for
purposes of each Reset Announcement Date, the Authorized Newspaper will be the
Wall Street Journal.
"Bankruptcy Code" means title 11 of the United States Code, or any other
law of the United States that from time to time provides a uniform system of
bankruptcy laws.
"Beneficial Owner" means, with respect to a Book-Entry Interest, a Person
who is the beneficial owner of such Book-Entry Interest as reflected on the
books of the Clearing Agency or on the books of a Person maintaining an account
with such Clearing Agency (directly as a Clearing Agency Participant or as an
indirect participant, in each case in accordance with the rules of such Clearing
Agency).
"Board of Directors" means the board of directors of the Company or a duly
authorized committee of that board.
"Board Resolution" means one or more resolutions of the Board of
Directors, a copy of which has been certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Board of Directors and
to be in full force and effect on the date of such certification and delivered
to the Agent.
"Book-Entry Interest" means a beneficial interest in a Global Certificate,
ownership and transfers of which shall be maintained and made through book
entries by a Clearing Agency as described in Section 3.6.
"Business Day" means any day other than a Saturday, Sunday or any other
day on which banking institutions in ▇▇▇ ▇▇▇▇ ▇▇▇▇ (▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇)
are permitted or required by any applicable law to close.
"Cash Merger" has the meaning specified in Section 5.9(b).
"Cash Merger Early Settlement" has the meaning specified in Section
5.9(b).
3
"Cash Merger Early Settlement Date" has the meaning specified in Section
5.9(b).
"Cash Settlement" has the meaning specified in Section 5.4(a)(i).
"Certificate" means an Income PRIDES Certificate or a Growth PRIDES
Certificate.
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as a depositary for
the Securities and in whose name, or in the name of a nominee of that
organization, shall be registered as a Global Certificate and which shall
undertake to effect book entry transfers and pledges of the Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Price" has the meaning specified in Section 5.1.
"Collateral" has the meaning specified in Section 2.1 of the Pledge
Agreement.
"Collateral Agent" means BNY Midwest Trust Company, as Collateral Agent
under the Pledge Agreement until a successor Collateral Agent shall have become
such pursuant to the applicable provisions of the Pledge Agreement, and
thereafter "Collateral Agent" shall mean the Person who is then the Collateral
Agent thereunder.
"Collateral Substitution" means the substitution of the pledged components
of one type of Security for pledged components of the other type of Security in
connection with establishment or reestablishment of Growth PRIDES or Income
PRIDES, as described in Sections 3.13 and 3.14 hereof.
"Common Stock" means the Common Stock, without par value, of the Company.
"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor shall have become such pursuant to the
applicable provision of this Agreement, and thereafter "Company" shall mean such
successor.
"Company Certificate" means a certificate signed by an Authorized Officer
and delivered to the Agent.
"Contract Adjustment Payments" means the amounts payable by the Company in
respect of each Purchase Contract issued in connection with the Income PRIDES
and the Growth PRIDES, which amounts shall be equal to ____% per annum of the
Stated Amount; computed on the basis of a 360-day year of twelve 30-day months,
plus any Deferred Contract Adjustment Payments accrued pursuant to Section 5.3.
"Corporate Trust Office" means the corporate trust office of the Agent at
which, at any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at ______________.
4
"Coupon Rate" with respect to a Debt Security means the percentage rate
per annum at which such Debt Security will bear interest.
"Current Market Price" has the meaning specified in Section 5.6(a)(8).
"Debt Securities" means the series of debt securities of the Company to be
designated "Senior Notes initially due 2008" issued under the Indenture.
"Default" means a default by the Company in any of its obligations under
this Agreement.
"Deferred Contract Adjustment Payments" has the meaning specified in
Section 5.3.
"Depositary" means, initially, DTC until another Clearing Agency becomes
its successor.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Early Settlement" has the meaning specified in Section 5.9(a).
"Early Settlement Amount" has the meaning specified in Section 5.9(a).
"Early Settlement Date" has the meaning specified in Section 5.9(a).
"Early Settlement Rate" has the meaning specified in Section 5.9(b).
"Exchange Act" means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time, and the rules and
regulations promulgated thereunder.
"Expiration Date" has the meaning specified in Section 1.4.
"Expiration Time" has the meaning specified in Section 5.6(a)(6).
"Failed Remarketing" means an attempted remarketing of the Debt Securities
on the third Business Day immediately prior to August 16, 2008 that does not
occur because a condition precedent to such remarketing is not fulfilled, or if
in spite of using its reasonable efforts, the Remarketing Agent cannot remarket
the Debt Securities of Holders of Income PRIDES at a price not less than 100% of
the aggregate principal amount of such Debt Securities plus accrued and unpaid
interest.
"Global Certificate" means a Certificate that evidences all or part of the
Securities and is registered in the name of a Depositary or a nominee thereof.
5
"Growth PRIDES" means a Security, initially issued in substantially the
form set forth as Exhibit B hereto in a Stated Amount of $25, which represents
(i) a 1/40 undivided beneficial ownership in a Treasury Security having a
principal amount at maturity equal to $1,000, and (ii) the rights and
obligations of the Company and the Holder under one Purchase Contract.
"Growth PRIDES Certificate" means a certificate evidencing the rights and
obligations of a Holder in respect of the number of Growth PRIDES specified on
such certificate.
"Growth PRIDES Register" and "Growth PRIDES Registrar" have the respective
meanings specified in Section 3.5.
"Holder," when used with respect to a Security, means the Person in whose
name the Security evidenced by an Income PRIDES Certificate and/or a Growth
PRIDES Certificate is registered on the Income PRIDES Register and/or the Growth
PRIDES Register, as the case may be.
"Income PRIDES" means a Security, initially issued in substantially the
form set forth as Exhibit A hereto in the Stated Amount of $25, which represents
(i) beneficial ownership by the Holder of either (a) prior to the occurrence of
a Tax Event Redemption (1) one Debt Security in a principal amount of $25, or
(2) on and after the Reset Date, an Applicable Ownership Interest in the
Remarketing Treasury Portfolio, subject to the Pledge of such Debt Security or
Applicable Ownership Interest in the Remarketing Treasury Portfolio by the
Holder pursuant to the Pledge Agreement or (b) upon the occurrence of a Tax
Event Redemption prior to the Purchase Contract Settlement Date, an Applicable
Ownership Interest in a Tax Event Treasury Portfolio, subject to the Pledge of
such Applicable Ownership Interest in the Tax Event Treasury Portfolio by the
Holder pursuant to the Pledge Agreement, and (ii) the rights and obligations of
the Holder under one Purchase Contract.
"Income PRIDES Certificate" means a certificate evidencing the rights and
obligations of a Holder in respect of the number of Income PRIDES specified on
such certificate.
"Income PRIDES Register" and "Income PRIDES Registrar" have the respective
meanings specified in Section 3.5.
"Indenture" means the Indenture, dated as of June 16, 1998, between the
Company and the Indenture Trustee pursuant to which the Debt Securities are to
be issued, as originally executed and delivered and as it may from time to time
be supplemented or amended by one or more indentures supplemental thereto
entered into pursuant to the applicable provisions thereof and shall include the
terms of a particular series of securities established as contemplated by
Section 3.01 thereof.
"Indenture Trustee" means Wachovia Bank, National Association, as trustee
under the Indenture, or any successor thereto.
"Interest Payment Date" means the interest payment dates on the Debt
Securities.
"Issuer Order" or "Issuer Request" means a written order or request signed
in the name of the Company by an Authorized Officer and delivered to the Agent.
6
"NYSE" has the meaning specified in Section 5.1.
"Officer's Certificate" means a certificate signed by an authorized
signatory of the Company establishing the terms of the debt securities of any
series pursuant to the Indenture.
"Opinion of Counsel" means an opinion in writing signed by legal counsel,
who may be an employee of or counsel to the Company or an Affiliate and who
shall be reasonably acceptable to the Agent.
"Outstanding," with respect to any Income PRIDES or Growth PRIDES means,
as of the date of determination, all Income PRIDES or Growth PRIDES evidenced by
Certificates theretofore authenticated, executed and delivered under this
Agreement, except:
(i) If a Termination Event has occurred, (A) Growth PRIDES for which
Treasury Securities have been deposited with the Agent in trust for the Holders
of such Growth PRIDES and (B) Income PRIDES for which Debt Securities or the
appropriate Applicable Ownership Interest in a Treasury Portfolio (or as
contemplated in Section 3.15 hereto with respect to a Holder's interest in the
Treasury Portfolio, cash) has been theretofore deposited with the Agent in trust
for the Holders of such Income PRIDES;
(ii) Income PRIDES and Growth PRIDES evidenced by Certificates theretofore
cancelled by the Agent or delivered to the Agent for cancellation or deemed
cancelled pursuant to the provisions of this Agreement; and
(iii) Income PRIDES and Growth PRIDES evidenced by Certificates in
exchange for or in lieu of which other Certificates have been authenticated,
executed on behalf of the Holder and delivered pursuant to this Agreement, other
than any such Certificate in respect of which there shall have been presented to
the Agent proof satisfactory to it that such Certificate is held by a bona fide
purchaser in whose hands the Income PRIDES or Growth PRIDES evidenced by such
Certificate are valid obligations of the Company;
provided, however, that in determining whether the Holders of the
requisite number of the Income PRIDES or Growth PRIDES have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Income
PRIDES or Growth PRIDES owned by the Company or any Affiliate of the Company
shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Agent shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Income PRIDES or Growth PRIDES which a Responsible Officer of the Agent actually
knows to be so owned shall be so disregarded. Income PRIDES or Growth PRIDES so
owned which have been pledged in good faith may be regarded as Outstanding
Securities if the pledgee establishes to the satisfaction of the Agent the
pledgee's right so to act with respect to such Income PRIDES or Growth PRIDES
and that the pledgee is not the Company or any Affiliate of the Company.
"Payment Date" means each of February 16, May 16, August 16 and
November 16, commencing August 16, 2003.
"Permitted Investments" has the meaning set forth in Article I of the
Pledge Agreement.
7
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company, limited
liability company, trust, unincorporated association or government or any agency
or political subdivision thereof or any other entity of whatever nature.
"Pledge" means the pledge under the Pledge Agreement of the Debt
Securities, the Treasury Securities or the appropriate Applicable Ownership
Interest in a Treasury Portfolio, in each case constituting a part of the
Securities.
"Pledge Agreement" means the Pledge Agreement, dated as of the date
hereof, by and among the Company, the Agent, as purchase contract agent and as
attorney-in-fact for the Holders from time to time of Securities, and the
Collateral Agent, as the collateral agent, the custodial agent and the
securities intermediary.
"Pledged Applicable Ownership Interest in a Treasury Portfolio" has the
meaning specified in Section 2.1 of the Pledge Agreement.
"Pledged Debt Securities" has the meaning specified in Section 2.1 of the
Pledge Agreement.
"Pledged Treasury Securities" has the meaning specified in Section 2.1 of
the Pledge Agreement.
"Predecessor Certificate" means a Predecessor Income PRIDES Certificate or
a Predecessor Growth PRIDES Certificate.
"Predecessor Income PRIDES Certificate" of any particular Income PRIDES
Certificate means every previous Income PRIDES Certificate evidencing all or a
portion of the rights and obligations of the Company and the Holder under the
Income PRIDES evidenced thereby; and, for the purposes of this definition, any
Income PRIDES Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Income PRIDES
Certificate shall be deemed to evidence the same rights and obligations of the
Company and the Holder as the mutilated, destroyed, lost or stolen Income PRIDES
Certificate.
"Predecessor Growth PRIDES Certificate" of any particular Growth PRIDES
Certificate means every previous Growth PRIDES Certificate evidencing all or a
portion of the rights and obligations of the Company and the Holder under the
Growth PRIDES evidenced thereby; and, for the purposes of this definition, any
Growth PRIDES Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Growth PRIDES
Certificate shall be deemed to evidence the same rights and obligations of the
Company and the Holder as the mutilated, destroyed, lost or stolen Growth PRIDES
Certificate.
"Primary Treasury Dealer" means a primary U.S. government securities
dealer in New York City.
"Proceeds" has the meaning set forth in Article I of the Pledge Agreement.
8
"Purchase Contract," when used with respect to any Security, means the
contract forming a part of such Security and obligating the Company (A) to sell
to the Holder of such Security and the Holder of such Security to purchase not
later than the Purchase Contract Settlement Date, for $25 in cash, a number of
newly issued shares of Common Stock equal to the applicable Settlement Rate, and
(B) to pay the Holder Contract Adjustment Payments on the terms and subject to
the conditions set forth in Article Five hereof.
"Purchase Contract Settlement Date" means August 16, 2006.
"Purchase Contract Settlement Fund" has the meaning specified in Section
5.5.
"Purchase Price" has the meaning specified in Section 5.1.
"Purchased Shares" has the meaning specified in Section 5.6(a)(6).
"Quotation Agent" means (i) ▇▇▇▇▇▇▇ ▇▇▇▇▇ Government Securities, Inc. or
its successor, provided, however, that, if the foregoing shall cease to be a
Primary Treasury Dealer, the Company shall substitute therefor another Primary
Treasury Dealer, and (ii) any other Primary Treasury Dealer selected by the
Company.
"Record Date" for the payment of interest, distribution and Contract
Adjustment Payments payable on any Payment Date means, as to any Global
Certificate, 15 Business Days immediately prior to such Payment Date, and as to
any other Certificate, a day selected by the Company which shall be at least one
Business Day but not more than 60 Business Days prior to such Payment Date (and
which shall correspond to the related record date for the Debt Securities).
"Redemption Amount" means for each Debt Security, the product of (i) the
principal amount of such Debt Security and (ii) a fraction whose numerator is
the applicable Treasury Portfolio Purchase Price and whose denominator is the
Applicable Principal Amount.
"Redemption Price" means an amount per Debt Security equal to the
Redemption Amount plus accrued and unpaid interest, if any, to the date of
redemption.
"Reference Price" has the meaning specified in Section 5.1.
"Register" means the Income PRIDES Register and the Growth PRIDES
Register.
"Registrar" means the Income PRIDES Registrar and the Growth PRIDES
Registrar.
"Remarketing Agent" means ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated.
"Remarketing Agreement" means a Remarketing Agreement contemplated by
Section 5.4 by and between the Company, the Remarketing Agent and the Purchase
Contract Agent, including any supplements thereto.
"Remarketing Date(s)" means (i) one or more Business Days selected by the
Company as a date on which the Remarketing Agent shall remarket the Debt
Securities, provided that no more than two such Remarketing Dates shall be
selected by the Company during each of (a) the period from the third Business
Day immediately preceding February 16, 2006 to April 31, 2006, and (b) the
period from June 1, 2006 to August 1, 2006, (ii) unless there has been a
successful remarketing of the Debt Securities prior to such date, the third
Business Day immediately preceding May 16, 2006, and (iii) unless there has been
a successful remarketing of the Debt Securities prior to such date, the third
Business Day immediately preceding August 16, 2006.
9
"Remarketing Fee" means 25 basis points (0.25%) of the aggregate principal
amount of the remarketed Debt Securities if the maturity date of the remarketed
Debt Securities is on or prior to August 16, 2008, or, if the maturity date of
the Debt Securities is extended on the Reset Date, such other amount as agreed
between the Company and the Remarketing Agent.
"Remarketing Treasury Portfolio" means (a) interest or principal strips of
U.S. Treasury Securities that mature on or prior to August 15, 2006, in an
aggregate amount equal to the principal amount of the Debt Securities included
in Income PRIDES; (b) if the Reset Date occurs prior to August 18, 2006 with
respect to the originally scheduled quarterly interest payment date on the Debt
Securities that would have occurred on August 16, 2006, interest or principal
strips of U.S. Treasury Securities that mature on or prior to August 16, 2006 in
an aggregate amount equal to the aggregate interest payment that would be due on
August 16, 2006 on the principal amount of the Debt Securities that would have
been included in Income PRIDES assuming no remarketing, assuming that the
interest rate on the Debt Securities was not reset and assuming that interest on
the Debt Securities accrued from the later of the Reset Date and May 16, 2006
to, but excluding August 16, 2006; and (c) if the Reset Date occurs prior to May
16, 2006, with respect to the originally scheduled quarterly interest payment
date on the Debt Securities that would have occurred on May 16, 2006, interest
or principal strips of U.S. Treasury Securities that mature on or prior to May
16, 2006 in an aggregate amount equal to the aggregate interest payment that
would be due on May 16, 2006 on the principal amount of the Debt Securities that
would have been included in the Income PRIDES assuming no remarketing, assuming
no reset of the interest rate on the Debt Securities and assuming that interest
on the Debt Securities accrued from the Reset Date to, but excluding, May 16,
2006.
"Remarketing Treasury Portfolio Purchase Price" means the lowest aggregate
price quoted by a Primary Treasury Dealer to the Quotation Agent on the third
Business Day immediately preceding the Reset Date for the purchase of the
Remarketing Treasury Portfolio for settlement on the Reset Date.
"Reorganization Event" has the meaning specified in Section 5.6(b).
"Reset Agent" means ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, or
such other Reset Agent as the Company shall select from time to time.
"Reset Announcement Date" means the seventh Business Day immediately
preceding each proposed the Reset Date, which is the date on which the Reset
Spread, and the Applicable Benchmark Treasury will be announced by the Company.
"Reset Date" means the third Business Day immediately following the
Remarketing Date on which the Debt Securities are successfully remarketed. If
the Debt Securities are not successfully remarketed, there shall be no Reset
Date.
"Reset Rate" means the Coupon Rate to be in effect for the Debt Securities
on and after the Reset Date and determined as provided in Section 4.1.
10
"Reset Spread" means an amount determined by the Reset Agent which,
when added to the Applicable Benchmark Treasury in effect on a Remarketing Date,
will produce the rate the Debt Securities should bear in order to have an
approximate market value on the Reset Date of (a) if the Remarketing Date is a
date other than the third Business Day immediately prior to August 16, 2006, (i)
100.25% multiplied by the Remarketing Treasury Portfolio Purchase Price, plus
(ii) the Remarketing Fee, or (b) if the Remarketing Date is the third Business
Day immediately prior to August 16 2006 (i) 100.25% multiplied by the aggregate
principal amount of the Debt Securities plus (ii) the Remarketing Fee; provided
that the Reset Rate shall in no event exceed the maximum permitted by applicable
law.
"Responsible Officer," when used with respect to the Agent, means any
vice president, assistant vice president, trust officers or other officer of the
agent assigned by the agent to the corporate trust administration division of
the agent (or any successor division or department of the agent).
"Security" means an Income PRIDES or a Growth PRIDES.
"Senior Indebtedness" means indebtedness of any kind of the Company
(including the Debt Securities) unless the instrument under which such
indebtedness is incurred expressly provides that it is in parity or subordinate
in right of payment to the Contract Adjustment Payments.
"Settlement Rate" has the meaning specified in Section 5.1.
"Stated Amount" means $25, which is equal to the stated amount of an
Income PRIDES and the stated amount of a Growth PRIDES.
"Tax Event" means the receipt by the Company of an opinion of a nationally
recognized independent tax counsel experienced in such matters to the effect
that, as a result of (a) any amendment to, change in, or announced proposed
change in, the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein affecting taxation,
(b) any amendment to or change in an interpretation or application of any such
laws or regulations by any legislative body, court, governmental agency or
regulatory authority or (c) any interpretation or pronouncement by any such
legislative body, court, governmental agency or regulatory authority that
provides for a position with respect to any such laws or regulations that
differs from the generally accepted position on May 22, 2003, which amendment,
change or proposed change is effective or which interpretation or pronouncement
is announced on or after May 22, 2003, there is more than an insubstantial risk
that interest payable by the Company on the Debt Securities would not be
deductible, in whole or in part, by the Company for United States federal income
tax purposes.
"Tax Event Redemption" means, if a Tax Event shall occur and be
continuing, the redemption of Debt Securities, in whole but not in part, at the
option of the Company on not less than 30 days nor more than 60 days notice.
"Tax Event Redemption Date" means the date on which a Tax Event Redemption
is to occur.
11
"Tax Event Treasury Portfolio" means (a) if the Tax Event Redemption
occurs prior to the Reset Date, or if there is a Failed Remarketing of the Debt
Securities prior to August 16, 2006 (i) interest or principal strips of U.S.
Treasury Securities that mature on or prior to August 15, 2006 in an aggregate
amount equal to the principal amount of Debt Securities included in the Income
PRIDES, and (ii) with respect to each scheduled interest payment date on the
Debt Securities that occurs after the Tax Event Redemption and on or before
August 16, 2006, interest or principal strips of U.S. Treasury Securities which
mature on or prior to that interest payment date in an aggregate amount equal to
the aggregate interest payment that would be due on the aggregate principal
amount of the Debt Securities on that date if the interest rate of the Debt
Securities subject to the Pledge as a part of the Securities was not reset on
the Reset Date; or (b) if the Tax Event Redemption occurs on or after the Reset
Date, or if there is a Failed Remarketing of the Debt Securities, on or after
August 16, 2006 (i) interest or principal strips of U.S. Treasury Securities
that mature on or prior to the maturity date of the Debt Securities in an
aggregate amount equal to the principal amount of Debt Securities outstanding,
and (ii) with respect to each scheduled interest payment date on the Debt
Securities that occurs after the Tax Event Redemption and on or before May 16,
2008 (or if the maturity date of the Debt Securities is extended to a later
date, on or prior to such later maturity date), interest or principal strips of
U.S. Treasury Securities which mature on or prior to that interest payment date
in an aggregate amount equal to the aggregate interest payment that would be due
on the aggregate principal amount of the Debt Securities outstanding on that
date.
"Tax Event Treasury Portfolio Purchase Price" means the lowest aggregate
price quoted by the Primary Treasury Dealer to the Quotation Agent on the third
Business Day immediately preceding the Tax Event Redemption Date for the
purchase of the Tax Event Treasury Portfolio for settlement on the Tax Event
Redemption Date.
"Termination Date" means the date, if any, on which a Termination Event
occurs.
"Termination Event" means the occurrence of any of the following events:
(i) at any time on or prior to the Purchase Contract Settlement Date, a
judgment, decree or court order shall have been entered granting relief under
the Bankruptcy Code, adjudicating the Company to be insolvent, or approving as
properly filed a petition seeking reorganization or liquidation of the Company
or any other similar applicable Federal or State law, and, unless such judgment,
decree or order shall have been entered within 60 days prior to the Purchase
Contract Settlement Date, such decree or order shall have continued undischarged
and unstayed for a period of 60 days; or (ii) at any time on or prior to the
Purchase Contract Settlement Date, a judgment, decree or court order for the
appointment of a receiver or liquidator or trustee or assignee in bankruptcy or
insolvency of the Company or of its property, or for the winding up or
liquidation of its affairs, shall have been entered, and, unless such judgment,
decree or order shall have been entered within 60 days prior to the Purchase
Contract Settlement Date, such judgment, decree or order shall have continued
undischarged and unstayed for a period of 60 days; or (iii) at any time on or
prior to the Purchase Contract Settlement Date the Company shall file a petition
for relief under the Bankruptcy Code, or shall consent to the filing of a
bankruptcy proceeding against it, or shall file a petition or answer or consent
seeking reorganization or liquidation under the Bankruptcy Code or any other
similar applicable Federal or State law, or shall consent to the filing of any
such petition, or shall consent to the appointment of a receiver or liquidator
or trustee or assignee
12
in bankruptcy or insolvency of it or of its property, or shall make an
assignment for the benefit of creditors, or shall admit in writing its inability
to pay its debts generally as they become due.
"Threshold Appreciation Price" has the meaning specified in Section 5.1.
"TIA" means, as of any time, the Trust Indenture Act of 1939, as amended,
or any successor statute, as in effect at such time.
"Trading Day" has the meaning specified in Section 5.1.
"Treasury Portfolio" means, as applicable, the Remarketing Treasury
Portfolio or a Tax Event Treasury Portfolio.
"Treasury Portfolio Purchase Price" means, as applicable, the Remarketing
Treasury Portfolio Purchase Price or the Tax Event Treasury Portfolio Purchase
Price.
"Treasury Security" means a zero-coupon U.S. Treasury security having a
principal amount at maturity equal to $1,000 and maturing on August 15, 2006
(CUSIP No. ________).
"Underwriting Agreement" means the Underwriting Agreement dated May 21,
2002 relating to the Income PRIDES between the Company and ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, as representative of the underwriters named
therein.
"Vice President" means any vice president, whether or not designated by a
number or a word or words added before or after the title "vice president."
SECTION 1.2 COMPLIANCE CERTIFICATES AND OPINIONS.
Except as otherwise expressly provided by this Agreement, upon any
application or request by the Company to the Agent to take any action under any
provision of this Agreement, the Company shall furnish to the Agent a Company
Certificate stating that in the opinion of the Authorized Officer signing such
Company Certificate all conditions precedent, if any, provided for in this
Agreement 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, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Agreement relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Agreement shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
13
(3) a statement that, in the opinion of each such individual, he or
she has made such examination or investigation as is necessary to enable
such individual to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.3 FORM OF DOCUMENTS DELIVERED TO AGENT.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
SECTION 1.4 ACTS OF HOLDERS; RECORD DATES.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent
duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Agent and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Holders signing such instrument or instruments. Proof
of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Agreement and (subject
to Section 7.1) conclusive in favor of the Agent and the Company, if made
in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Agent deems
sufficient.
14
(c) The ownership of Securities shall be proved by the Income PRIDES
Register or the Growth PRIDES Register, as the case may be.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Certificate shall bind every
future Holder of the same Certificate and the Holder of every Certificate
issued upon the registration of transfer thereof or in exchange therefor
or in lieu thereof in respect of anything done, omitted or suffered to be
done by the Agent or the Company in reliance thereon, whether or not
notation of such action is made upon such Certificate.
(e) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to give, make
or take any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Agreement to be
given, made or taken by Holders of Securities. If any record date is set
pursuant to this paragraph, the Holders of the Outstanding Income PRIDES
and the Outstanding Growth PRIDES, as the case may be, on such record
date, and no other Holders, shall be entitled to take the relevant action
with respect to the Income PRIDES or the Growth PRIDES, as the case may
be, whether or not such Holders remain Holders after such record date;
provided that no such action shall be effective hereunder unless taken on
or prior to the applicable Expiration Date by Holders of the requisite
number of Outstanding Securities on such record date. Nothing in this
paragraph shall be construed to prevent the Company from setting a new
record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be cancelled and of no
effect), and nothing in this paragraph shall be construed to render
ineffective any action taken by Holders of the requisite number of
Outstanding Securities on the date such action is taken. Promptly after
any record date is set pursuant to this paragraph, the Company, at its own
expense, shall cause notice of such record date, the proposed action by
Holders and the applicable Expiration Date to be given to the Agent in
writing and to each Holder of Securities in the manner set forth in
Section 1.6.
With respect to any record date set pursuant to this Section, the Company
may designate any date as the "Expiration Date" and from time to time may change
the Expiration Date to any earlier or later day; provided that no such change
shall be effective unless notice of the proposed new Expiration Date is given to
the Agent in writing, and to each Holder of Securities in the manner set forth
in Section 1.6, on or prior to the existing Expiration Date. If an Expiration
Date is not designated with respect to any record date set pursuant to this
Section, the Company shall be deemed to have initially designated the 180th day
after such record date as the Expiration Date with respect thereto, subject to
its right to change the Expiration Date as provided in this paragraph.
Notwithstanding the foregoing, no Expiration Date shall be later than the 180th
day after the applicable record date.
SECTION 1.5 NOTICES.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Agreement to be
made upon, given or furnished to, or filed with,
15
(1) the Agent by any Holder or by the Company shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided)
if made, given, furnished or filed in writing and personally delivered or
mailed, first-class postage prepaid, to the Agent at _________,
__________, Attention: __________, or at any other address previously
furnished in writing by the Agent to the Holders and the Company;
(2) the Company by the Agent or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided)
if made, given, furnished or filed in writing and personally delivered or
mailed, first-class postage prepaid, to the Company at AmerUs Group Co.,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: _________, or at any
other address previously furnished in writing to the Agent by the Company;
(3) ______ the Collateral Agent by the Agent, the Company or any
Holder shall be sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if made, given, furnished or filed in writing
and personally delivered or mailed, first-class postage prepaid, addressed
to the Collateral Agent at __________ at _____________, Attention:
____________, or at any other address previously furnished in writing by
the Collateral Agent to the Agent, the Company and the Holders; or
(4) ______ the Indenture Trustee by the Company shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided)
if made, given, furnished or filed in writing and personally delivered or
mailed, first-class postage prepaid, addressed to the Indenture Trustee at
First Union National Bank, ______________________, Attention:
_________________, or at any other address previously furnished in writing
by the Indenture Trustee to the Company.
SECTION 1.6 NOTICE TO HOLDERS; WAIVER.
Where this Agreement provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at its address as it appears in the applicable Register, not
later than the latest date, and not earlier than the earliest date, prescribed
for the giving of such notice. In any case where notice to Holders is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Agreement provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Agent, but such filing shall not be a condition precedent to the validity of any
action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail, then
such notification as shall be made with the approval of the Agent shall
constitute a sufficient notification for every purpose hereunder.
16
SECTION 1.7 EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 1.8 SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Agreement by the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 1.9 SEPARABILITY CLAUSE.
In case any provision in this Agreement or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions hereof and thereof shall not in any way be affected or
impaired thereby.
SECTION 1.10 BENEFITS OF AGREEMENT.
Nothing in this Agreement or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors hereunder
and, to the extent provided hereby, the Holders, any benefits or any legal or
equitable right, remedy or claim under this Agreement. The Holders from time to
time shall be beneficiaries of this Agreement and shall be bound by all of the
terms and conditions hereof and of the Securities evidenced by their
Certificates by their acceptance of delivery of such Certificates.
SECTION 1.11 GOVERNING LAW.
THIS AGREEMENT AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 1.12 LEGAL HOLIDAYS.
In any case where any Payment Date shall not be a Business Day, then
(notwithstanding any other provision of this Agreement or the Income PRIDES
Certificates or the Growth PRIDES Certificates) payment of the Contract
Adjustment Payments, if any, shall not be made on such date, but such payments
shall be made on the next succeeding Business Day with the same force and effect
as if made on such Payment Date, and no interest shall accrue or be payable by
the Company or any Holder for the period from and after any such Payment Date,
except that, if such next succeeding Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day with the same force and effect as if made on such Payment Date.
In any case where the Purchase Contract Settlement Date shall not be a
Business Day, then (notwithstanding any other provision of this Agreement, the
Income PRIDES Certificates or the Growth PRIDES Certificates), the Purchase
Contracts shall not be performed on such date, but the Purchase Contracts shall
be performed on the immediately following Business Day with the same force and
effect as if performed on the Purchase Contract Settlement Date.
17
SECTION 1.13 COUNTERPARTS.
This Agreement may be executed in any number of counterparts by the
parties hereto on separate counterparts, each of which, when so executed and
delivered, shall be deemed an original, but all such counterparts shall together
constitute one and the same instrument.
SECTION 1.14 INSPECTION OF AGREEMENT.
A copy of this Agreement shall be available at all reasonable times
during normal business hours at the Corporate Trust Office for inspection by any
Holder.
ARTICLE II
CERTIFICATE FORMS
SECTION 2.1 FORMS OF CERTIFICATES GENERALLY.
The Income PRIDES Certificates (including the form of Purchase Contract
forming part of the Income PRIDES evidenced thereby) shall be in substantially
the form set forth in Exhibit A hereto, with such letters, numbers or other
marks of identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Income PRIDES are listed or any depositary
therefor, or as may, consistently herewith, be determined by the officers of the
Company executing such Income PRIDES Certificates, as evidenced by their
execution of the Income PRIDES Certificates.
The definitive Income PRIDES Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing the
Income PRIDES evidenced by such Income PRIDES Certificates, consistent with the
provisions of this Agreement, as evidenced by their execution thereof.
The Growth PRIDES Certificates (including the form of Purchase
Contracts forming part of the Growth PRIDES evidenced thereby) shall be in
substantially the form set forth in Exhibit B hereto, with such letters, numbers
or other marks of identification or designation and such legends or endorsements
printed, lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Growth PRIDES may be listed or any depositary
therefor, or as may, consistently herewith, be determined by the officers of the
Company executing such Growth PRIDES Certificates, as evidenced by their
execution of the Growth PRIDES Certificates.
The definitive Growth PRIDES Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing the
Growth PRIDES evidenced by such Growth PRIDES Certificates, consistent with the
provisions of this Agreement, as evidenced by their execution thereof.
Every Global Certificate authenticated, executed on behalf of the
Holders and delivered hereunder shall bear a legend in substantially the
following form:
18
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
SECTION 2.2 FORM OF AGENT'S CERTIFICATE OF AUTHENTICATION.
The form of the Agent's certificate of authentication of the Income
PRIDES shall be in substantially the form set forth on the form of the Income
PRIDES Certificates set forth as Exhibit A hereto.
The form of the Agent's certificate of authentication of the Growth
PRIDES shall be in substantially the form set forth on the form of the Growth
PRIDES Certificates set forth as Exhibit B hereto.
ARTICLE III
THE SECURITIES
SECTION 3.1 TITLE AND TERMS; DENOMINATIONS.
The aggregate number of Income PRIDES and Growth PRIDES evidenced by
Certificates authenticated, executed on behalf of the Holders and delivered
hereunder is limited to ___________ units (or _________ if the overallotment
option provided for in the Underwriting Agreement is exercised in full) except
for Certificates authenticated, executed and delivered upon registration of
transfer of, in exchange for, or in lieu of, other Certificates pursuant to
Section 3.4, 3.5, 3.10, 3.12, 3.13, 5.9 or 8.5.
The Certificates shall be issuable only in registered form and only in
denominations of a single Income PRIDES or Growth PRIDES and any integral
multiple thereof.
SECTION 3.2 RIGHTS AND OBLIGATIONS EVIDENCED BY THE CERTIFICATES.
Each Income PRIDES Certificate shall evidence the number of Income
PRIDES specified therein, with each such Income PRIDES representing the
ownership by the Holder thereof of a beneficial interest in a Debt Security or
the Applicable Ownership Interest in the appropriate Treasury Portfolio, as the
case may be, subject to the Pledge of such Debt Security or Applicable Ownership
Interest in the appropriate Treasury Portfolio, as the case may be, by such
Holder pursuant to the Pledge Agreement, and the rights and obligations of the
Holder thereof and the Company under one Purchase Contract. The Agent as
attorney-in-fact for, and on behalf of, the Holder of each Income PRIDES shall
pledge, pursuant to the Pledge Agreement, each Debt Security or the Applicable
Ownership Interest in the appropriate Treasury Portfolio, as the case may be,
forming a part of such Income PRIDES, to the Collateral Agent and grant to the
Collateral Agent a security interest in the right, title, and interest of such
Holder in such Debt
19
Security or Applicable Ownership Interest in the appropriate Treasury Portfolio,
as the case may be, for the benefit of the Company, to secure the obligation of
the Holder under one Purchase Contract to purchase the Common Stock of the
Company.
Each Growth PRIDES Certificate shall evidence the number of Growth
PRIDES specified therein, with each such Growth PRIDES representing the
ownership by the Holder thereof of a 1/40, or 2.5%, undivided beneficial
interest in a Treasury Security, subject to the Pledge of such Treasury Security
by such Holder pursuant to the Pledge Agreement, and the rights and obligations
of the Holder thereof and the Company under one Purchase Contract. The Agent as
attorney-in-fact for, and on behalf of, the Holder of each Growth PRIDES shall
pledge, pursuant to the Pledge Agreement, each Treasury Security forming a part
of such Growth PRIDES, to the Collateral Agent and grant to the Collateral Agent
a security interest in the right, title, and interest of such Holder in such
Treasury Security for the benefit of the Company, to secure the obligation of
the Holder under one Purchase Contract to purchase the Common Stock of the
Company.
SECTION 3.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
Subject to the provisions of Sections 3.13 and 3.14 hereof, upon the
execution and delivery of this Agreement, and at any time and from time to time
thereafter, the Company may deliver Certificates executed by the Company to the
Agent for authentication, execution on behalf of the Holders and delivery,
together with its Issuer Order for authentication of such Certificates, and the
Agent in accordance with such Issuer Order shall authenticate, execute on behalf
of the Holders and deliver such Certificates.
The Certificates shall be executed on behalf of the Company by its
Chairman of the Board, its President, one of its Vice Presidents, its Treasurer,
one of its Assistant Treasurers, its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Certificates may be
manual or facsimile.
Certificates bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates.
No Purchase Contract evidenced by a Certificate shall be valid until
such Certificate has been executed on behalf of the Holder by the manual
signature of an authorized signatory of the Agent, as such Holder's
attorney-in-fact. Such signature by an authorized signatory of the Agent shall
be conclusive evidence that the Holder of such Certificate has entered into the
Purchase Contracts evidenced by such Certificate.
Each Certificate shall be dated the date of its authentication.
No Certificate shall be entitled to any benefit under this Agreement or
be valid or obligatory for any purpose unless there appears on such Certificate
a certificate of authentication substantially in the form provided for herein
executed by an authorized signatory of the Agent by manual signature, and such
certificate upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder.
20
SECTION 3.4 TEMPORARY CERTIFICATES.
Pending the preparation of definitive Certificates, the Company shall
execute and deliver to the Agent, and the Agent shall authenticate, execute on
behalf of the Holders, and deliver, in lieu of such definitive Certificates,
temporary Certificates which are in substantially the forms set forth in Exhibit
A and Exhibit B hereto, with such letters, numbers or other marks of
identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Income PRIDES or Growth PRIDES are listed, or
as may, consistently herewith, be determined by the officers of the Company
executing such Certificates, as evidenced by their execution of the
Certificates.
If temporary Certificates are issued, the Company will cause definitive
Certificates to be prepared without unreasonable delay. After the preparation of
definitive Certificates, the temporary Certificates shall be exchangeable for
definitive Certificates upon surrender of the temporary Certificates at the
Corporate Trust Office, at the expense of the Company and without charge to the
Holder. Upon surrender for cancellation of any one or more temporary
Certificates, the Company shall execute and deliver to the Agent, and the Agent
shall authenticate, execute on behalf of the Holder, and deliver in exchange
therefor, one or more definitive Certificates of like tenor and denominations
and evidencing a like number of Income PRIDES or Growth PRIDES, as the case may
be, as the temporary Certificate or Certificates so surrendered. Until so
exchanged, the temporary Certificates shall in all respects evidence the same
benefits and the same obligations with respect to the Income PRIDES or Growth
PRIDES, as the case may be, evidenced thereby as definitive Certificates.
SECTION 3.5 REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE.
The Agent shall keep at the Corporate Trust Office a register (the
"Income PRIDES Register") in which, subject to such reasonable regulations as it
may prescribe, the Agent shall provide for the registration of Income PRIDES
Certificates and of transfers of Income PRIDES Certificates (the Agent, in such
capacity, the "Income PRIDES Registrar") and a register (the "Growth PRIDES
Register") in which, subject to such reasonable regulations as it may prescribe,
the Agent shall provide for the registration of the Growth PRIDES Certificates
and of transfers of Growth PRIDES Certificates (the Agent, in such capacity, the
"Growth PRIDES Registrar").
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office, the Company shall execute and deliver to the Agent, and
the Agent shall authenticate, execute on behalf of the designated transferee or
transferees, and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of any authorized denominations, like
tenor, and evidencing a like number of Income PRIDES or Growth PRIDES as the
case may be.
At the option of the Holder, Certificates may be exchanged for other
Certificates, of any authorized denominations and evidencing a like number of
Income PRIDES or Growth PRIDES, as the case may be, upon surrender of the
Certificates to be exchanged at the Corporate Trust Office. Whenever any
Certificates are so surrendered for exchange, the Company shall execute and
deliver to the Agent, and the Agent shall authenticate, execute on behalf of the
Holder, and deliver the Certificates which the Holder making the exchange is
entitled to receive.
21
All Certificates issued upon any registration of transfer or exchange
of a Certificate shall evidence the ownership of the same number of Income
PRIDES or Growth PRIDES, as the case may be, and be entitled to the same
benefits and subject to the same obligations, under this Agreement as the Income
PRIDES or Growth PRIDES, as the case may be, evidenced by the Certificate
surrendered upon such registration of transfer or exchange.
Every Certificate presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Agent) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Agent, duly executed by the Holder thereof
or its attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of a Certificate, but the Company and the Agent may require payment
from the Holder of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Certificates, other than any exchanges pursuant to Sections 3.6 and
8.5 not involving any transfer.
Notwithstanding the foregoing, the Company will not be obligated to
execute and deliver to the Agent, and the Agent will not be obligated to
authenticate, execute on behalf of the Holder and deliver any Certificate
presented or surrendered for registration of transfer or for exchange on or
after the Business Day immediately preceding the Purchase Contract Settlement
Date or on or after the Termination Date. In lieu of delivery of a new
Certificate, upon satisfaction of the applicable conditions specified above in
this Section and receipt of appropriate registration or transfer instructions
from such Holder, the Agent shall (i) if the Purchase Contract Settlement Date
has occurred, deliver the shares of Common Stock issuable in respect of the
Purchase Contracts forming a part of the Securities evidenced by such
Certificate, (ii) in the case of Income PRIDES, if a Termination Event shall
have occurred prior to the Purchase Contract Settlement Date, transfer the
aggregate principal amount of the Debt Securities or the aggregate Stated Amount
of the appropriate Treasury Portfolio, as applicable, evidenced thereby, or
(iii) in the case of Growth PRIDES, if a Termination Event shall have occurred
prior to the Purchase Contract Settlement Date, transfer the Treasury Securities
evidenced thereby, in each case subject to the applicable conditions and in
accordance with the applicable provisions of Article V hereof.
SECTION 3.6 BOOK-ENTRY INTERESTS.
The Certificates, on original issuance, will be issued in the form of
one or more fully registered Global Certificates, to be delivered to the
Depositary or a nominee or custodian thereof by, or on behalf of, the Company.
Such Global Certificates shall initially be registered on the books and records
of the Company in the name of Cede & Co., the nominee of the Depositary, and no
Beneficial Owner will receive a definitive Certificate representing such
Beneficial Owner's interest in such Global Certificate, except as provided in
Section 3.9. The Agent shall enter into an agreement with the Depositary if so
requested by the Company. Unless and until definitive, fully registered
Certificates have been issued to Beneficial Owners pursuant to Section 3.9:
(a) the provisions of this Section 3.6 shall be in full force
and effect;
22
(b) the Company shall be entitled to deal with the Clearing
Agency for all purposes of this Agreement (including the payment of
Contract Adjustment Payments, if any, and receiving approvals, votes or
consents hereunder) as the Holder of the Securities and the sole holder
of the Global Certificate(s) and shall have no obligation to the
Beneficial Owners;
(c) to the extent that the provisions of this Section 3.6
conflict with any other provisions of this Agreement, the provisions of
this Section 3.6 shall control; and
(d) the rights of the Beneficial Owners shall be exercised
only through the Clearing Agency and shall be limited to those
established by law and agreements between such Beneficial Owners and
the Clearing Agency and/or the Clearing Agency Participants. The
Clearing Agency will make book entry transfers among Clearing Agency
Participants and receive and transmit payments of Contract Adjustment
Payments to such Clearing Agency Participants.
SECTION 3.7 NOTICES TO HOLDERS.
Whenever a notice or other communication to the Holders is required to
be given under this Agreement, the Company or the Company's agent shall give
such notices and communications to the Holders and, with respect to any
Certificates registered in the name of a Clearing Agency or the nominee of a
Clearing Agency, the Company or the Company's agent shall, except as set forth
herein, have no obligations to the Beneficial Owners.
SECTION 3.8 APPOINTMENT OF SUCCESSOR CLEARING AGENCY.
If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Securities, the Company may, in its sole
discretion, appoint a successor Clearing Agency with respect to the Securities.
SECTION 3.9 DEFINITIVE CERTIFICATES.
If (i) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Securities and a successor Clearing
Agency is not appointed within 90 days after such discontinuance pursuant to
Section 3.8, or (ii) the Company elects to terminate the book-entry system
through the Clearing Agency with respect to the Securities, then upon surrender
of the Global Certificates representing the Book-Entry Interests with respect to
the Securities by the Clearing Agency, accompanied by registration instructions,
the Company shall cause definitive Certificates to be delivered to Beneficial
Owners in accordance with the instructions of the Clearing Agency. The Company
shall not be liable for any delay in delivery of such instructions and may
conclusively rely on and shall be protected in relying on, such instructions.
SECTION 3.10 MUTILATED, DESTROYED, LOST AND STOLEN CERTIFICATES.
If any mutilated Certificate is surrendered to the Agent, the Company
shall execute and deliver to the Agent, and the Agent shall authenticate,
execute on behalf of the Holder, and deliver in exchange therefor, a new
Certificate at the cost of the Holder, evidencing the same
23
number of Income PRIDES or Growth PRIDES, as the case may be, and bearing a
Certificate number not contemporaneously outstanding.
If there shall be delivered to the Company and the Agent (i) evidence
to their satisfaction of the destruction, loss or theft of any Certificate, and
(ii) such security or indemnity at the cost of the Holder as may be required by
them to hold each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Agent that such Certificate has been
acquired by a bona fide purchaser, the Company shall execute and deliver to the
Agent, and the Agent shall authenticate, execute on behalf of the Holder, and
deliver to the Holder, in lieu of any such destroyed, lost or stolen
Certificate, a new Certificate, evidencing the same number of Income PRIDES or
Growth PRIDES, as the case may be, and bearing a Certificate number not
contemporaneously outstanding.
Notwithstanding the foregoing, the Company will not be obligated to
execute and deliver to the Agent, and the Agent will not be obligated to
authenticate, execute on behalf of the Holder and deliver any Certificate on or
after the Business Day immediately preceding the Purchase Contract Settlement
Date or on or after the Termination Date. In addition, in lieu of delivery of a
new Certificate, upon satisfaction of the applicable conditions specified above
in this Section and receipt of appropriate registration or transfer instructions
from such Holder, the Agent may (i) if the Purchase Contract Settlement Date has
occurred, deliver the shares of Common Stock issuable in respect of the Purchase
Contracts forming a part of the Securities evidenced by such Certificate, or
(ii) if a Termination Event shall have occurred, transfer the Debt Securities,
the Applicable Ownership Interest in the appropriate Treasury Portfolio or the
Treasury Securities, as the case may be, forming a part of the Securities
represented by such Certificate to such Holder, in each case subject to the
applicable conditions and in accordance with the applicable provisions of
Article Five hereof.
Upon the issuance of any new Certificate under this Section, the
Company and the Agent may require payment from the Holder of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Agent)
connected therewith.
Every new Certificate issued pursuant to this Section in lieu of any
destroyed, lost or stolen Certificate shall constitute an original additional
contractual obligation of the Company and of the Holder in respect of the
Security evidenced thereby, whether or not the destroyed, lost or stolen
Certificate (and the Securities evidenced thereby) shall be at any time
enforceable by anyone, and shall be entitled to all the benefits and be subject
to all the obligations of this Agreement equally and proportionately with any
and all other Certificates delivered hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Certificates.
SECTION 3.11 PERSONS DEEMED OWNERS.
Prior to due presentment of a Certificate for registration of transfer,
the Company and the Agent, and any agent of the Company or the Agent, may treat
the Person in whose name such
24
Certificate is registered on the Income PRIDES Register or the Growth PRIDES
Register, as applicable, as the owner of the Income PRIDES or Growth PRIDES
evidenced thereby, for the purpose of receiving interest on the Debt Securities
or distributions on the maturing quarterly interest strips of the appropriate
Treasury Portfolio, as applicable, receiving payments of Contract Adjustment
Payments, performance of the Purchase Contracts and for all other purposes
whatsoever, whether or not any interest on the Debt Securities or the Contract
Adjustment Payments payable in respect of the Purchase Contracts constituting a
part of the Income PRIDES or Growth PRIDES evidenced thereby shall be overdue
and notwithstanding any notice to the contrary, and neither the Company nor the
Agent, nor any agent of the Company or the Agent, shall be affected by notice to
the contrary.
Notwithstanding the foregoing, with respect to any Global Certificate,
nothing herein shall prevent the Company, the Agent or any agent of the Company
or the Agent, from treating the Clearing Agency as the sole Holder of such
Global Certificate or from giving effect to any written certification, proxy or
other authorization furnished by any Clearing Agency (or its nominee), as a
Holder, with respect to such Global Certificate or impair, as between such
Clearing Agency and owners of beneficial interests in such Global Certificate,
the operation of customary practices governing the exercise of rights of such
Clearing Agency (or its nominee) as Holder of such Global Certificate.
SECTION 3.12 CANCELLATION.
All Certificates surrendered for delivery of shares of Common Stock on
or after the Purchase Contract Settlement Date, upon the transfer of Debt
Securities, the Applicable Ownership Interest in the appropriate Treasury
Portfolio or Treasury Securities, as the case may be, after the occurrence of a
Termination Event or pursuant to an Early Settlement or Cash Merger Early
Settlement, or upon the registration of a transfer or exchange of a Security, or
a Collateral Substitution or the re-establishment of an Income PRIDES shall, if
surrendered to any Person other than the Agent, be delivered to the Agent and,
if not already cancelled, shall be promptly cancelled by it. The Company may at
any time deliver to the Agent for cancellation any Certificates previously
authenticated, executed and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Certificates so delivered shall, upon
Issuer Order, be promptly cancelled by the Agent. No Certificates shall be
authenticated, executed on behalf of the Holder and delivered in lieu of or in
exchange for any Certificates cancelled as provided in this Section, except as
expressly permitted by this Agreement. All cancelled Certificates held by the
Agent shall upon written request be returned to the Company.
If the Company or any Affiliate of the Company shall acquire any
Certificate, such acquisition shall not operate as a cancellation of such
Certificate unless and until such Certificate is delivered to the Agent
cancelled or for cancellation.
SECTION 3.13 ESTABLISHMENT OR REESTABLISHMENT OF GROWTH PRIDES.
A Holder of an Income PRIDES may, at any time on or prior to the fifth
Business Day immediately preceding the Purchase Contract Settlement Date, create
or recreate a Growth PRIDES and separate the Debt Security or the Applicable
Ownership Interest in the appropriate Treasury Portfolio, as applicable, from
the related Purchase Contract in respect of such Income
25
PRIDES by substituting a Treasury Security for the Debt Security, or the
Applicable Ownership Interest in the appropriate Treasury Portfolio, that form a
part of such Income PRIDES in accordance with this Section 3.13; provided,
however, that if a successful remarketing of the Debt Securities has occurred on
a Remarketing Date or a Tax Event Redemption has occurred, Holders of such
Income PRIDES may make such Collateral Substitutions at any time on or prior to
the second Business Day immediately preceding the Purchase Contract Settlement
Date. Holders may make Collateral Substitutions and establish Growth PRIDES (i)
only in integral multiples of 40 Income PRIDES if only Debt Securities are being
substituted by Treasury Securities, or (ii) only in integral multiples of
Income PRIDES (or such other number of Income PRIDES as may be determined by
the Reset Agent upon a successful remarketing of Debt Securities if the Reset
Date is not an Interest Payment Date) if the Applicable Ownership Interests in
the appropriate Treasury Portfolio are being substituted by Treasury Securities.
To create 40 Growth PRIDES (if a Tax Event Redemption has not occurred and the
Debt Securities remain a component of the Income PRIDES), or Growth
PRIDES (or such other number of Growth PRIDES as may be determined by the Reset
Agent upon a successful remarketing of Debt Securities if the Reset Date is not
an Interest Payment Date) (if a Tax Event Redemption has occurred or the
Remarketing Treasury Portfolio has replaced the Debt Securities as a component
of the Income PRIDES as a result of a successful remarketing of such Debt
Securities), the Income PRIDES Holder shall
(a) if a Treasury Portfolio has not replaced any Debt
Securities as a component of Income PRIDES as a result of a successful
remarketing of the Debt Securities or a Tax Event Redemption, deposit
with the Collateral Agent a Treasury Security having a principal amount
at maturity of $1,000; or
(b) if a Treasury Portfolio has replaced the Debt Securities
as a component of Income PRIDES as a result of a successful remarketing
of the Debt Securities or a Tax Event Redemption, on or prior to the
second Business Day immediately preceding the Purchase Contract
Settlement Date, deposit with the Collateral Agent Treasury Securities
having an aggregate principal amount at maturity of $ ; and
(c) in each case, transfer and surrender the related 40 Income
PRIDES, or, in the event a Treasury Portfolio is a component of Income
PRIDES, Income PRIDES (or such other number of Income PRIDES as
may be determined by the Reset Agent upon a successful remarketing of
Debt Securities if the Reset Date is not an Interest Payment Date), to
the Agent accompanied by a notice to the Agent, substantially in the
form of Exhibit B to the Pledge Agreement, stating that the Holder has
transferred the relevant types and amounts of Treasury Securities to
the Collateral Agent and requesting that the Agent instruct the
Collateral Agent to release the applicable Debt Securities or the
Applicable Ownership Interest in the appropriate Treasury Portfolio, as
the case may be, underlying such Income PRIDES, whereupon the Agent
shall promptly give such instruction to the Collateral Agent,
substantially in the form of Exhibit A to the Pledge Agreement.
Upon receipt of the Treasury Securities described in clause (a) or (b)
above and the instructions described in clause (c) above, in accordance with the
terms of the Pledge Agreement, the Collateral Agent will release from the
Pledge, to the Agent, on behalf of the Holder, Debt Securities or the Applicable
Ownership Interest in the appropriate Treasury Portfolio, as the case may be,
that had been components of such Income PRIDES, free and clear of the Company's
security interest therein, and upon receipt thereof the Agent shall promptly:
(i) cancel the related Income PRIDES surrendered and transferred;
26
(ii) transfer the Debt Securities or the Applicable Ownership Interest
in the appropriate Treasury Portfolio, as the case may be, that had been
components of such Income PRIDES to the Holder; and
(iii) authenticate, execute on behalf of such Holder and deliver a
Growth PRIDES Certificate executed by the Company in accordance with Section 3.3
evidencing the same number of Purchase Contracts as were evidenced by the
cancelled Income PRIDES.
Holders who elect to separate the Debt Securities or the Applicable
Ownership Interest in the appropriate Treasury Portfolio, as the case may be,
from the related Purchase Contracts and to substitute Treasury Securities for
such Debt Securities or the Applicable Ownership Interest in the appropriate
Treasury Portfolio, as the case may be, shall be responsible for any fees or
expenses payable to the Collateral Agent for its services as Collateral Agent in
respect of the substitution, and the Company shall not be responsible for any
such fees or expenses.
In the event a Holder making a Collateral Substitution pursuant to this
Section 3.13 fails to effect a book-entry transfer of the Income PRIDES or fails
to deliver an Income PRIDES Certificate to the Agent after depositing the
appropriate Treasury Securities with the Collateral Agent, the Debt Securities
or the Applicable Ownership Interest in the appropriate Treasury Portfolio, as
the case may be, constituting a part of such Income PRIDES, and any interest on
such Debt Securities or distributions with respect to the Applicable Ownership
Interest in the appropriate Treasury Portfolio, as the case may be, shall be
held in the name of the Agent or its nominee in trust for the benefit of such
Holder, until such Income PRIDES is so transferred or the Income PRIDES
Certificate is so delivered, as the case may be, or, until such Holder provides
evidence satisfactory to the Company and the Agent that such Income PRIDES
Certificate has been destroyed, lost or stolen, together with any indemnity that
may be required by the Agent and the Company.
Except as described in this Section 3.13, for so long as the Purchase
Contract underlying an Income PRIDES remains in effect, such Income PRIDES shall
not be separable into its constituent parts, and the rights and obligations of
the Holder in respect of the Debt Securities or the Applicable Ownership
Interest in the appropriate Treasury Portfolio, as the case may be, and Purchase
Contract comprising such Income PRIDES may be acquired, and may be transferred
and exchanged, only as an entire Income PRIDES.
SECTION 3.14 ESTABLISHMENT OR REESTABLISHMENT OF INCOME PRIDES.
A Holder of a Growth PRIDES may, at any time on or prior to the fifth
Business Day immediately preceding the Purchase Contract Settlement Date, create
or recreate an Income PRIDES by depositing with the Collateral Agent a Debt
Security or the Applicable Ownership Interest in the appropriate Treasury
Portfolio, as the case may be, having an aggregate principal amount equal to the
aggregate principal amount at maturity of, and in substitution for all, but not
less than all, of the Treasury Securities comprising part of the Growth PRIDES
in accordance with this Section 3.14; provided, however, that if a Treasury
Portfolio has replaced the Debt Securities as a component of Income PRIDES as a
result of a successful remarketing of the Debt Securities or a Tax Event
Redemption, such Collateral Substitutions may be made at any time on or prior to
the second Business Day immediately preceding the Purchase Contract Settlement
27
Date. Holders of Growth PRIDES may make such Collateral Substitutions and
establish Income PRIDES (i) only in integral multiples of 40 Growth PRIDES if
Treasury Securities are being replaced by only Debt Securities, or (ii) only in
integral multiples of Growth PRIDES (or such other number of Growth PRIDES
as may be determined by the Reset Agent upon a successful remarketing of Debt
Securities if the Reset Date is not an Interest Payment Date) if any Treasury
Security is being replaced by the Applicable Ownership Interest in the
appropriate Treasury Portfolio. To create 40 Income PRIDES (if a Tax Event
Redemption has not occurred and the Debt Securities remain components of Income
PRIDES), or Income PRIDES (or such other number of Income PRIDES as may
be determined by the Reset Agent upon a successful remarketing of Debt
Securities if the Reset Date is not an Interest Payment Date) (if a Tax Event
Redemption has occurred or the Remarketing Treasury Portfolio has replaced the
Debt Securities as a result of a successful remarketing of such Debt
Securities), the Growth PRIDES Holder shall
(a) if a Treasury Portfolio has not replaced the Debt Securities as a
component of Income PRIDES as a result of a successful remarketing of the Debt
Securities on a Remarketing Date or a Tax Event Redemption, on or prior to the
fifth Business Day immediately preceding the Purchase Contract Settlement Date,
deposit with the Collateral Agent $1,000 in aggregate principal amount of Debt
Securities; or
(b) if a Treasury Portfolio has replaced the Debt Securities as a
component of Income PRIDES as a result of a successful remarketing of the Debt
Securities or a Tax Event Redemption, on or prior to the second Business Day
immediately preceding the Purchase Contract Settlement Date, deposit with the
Collateral Agent the Applicable Ownership Interest in the Treasury Portfolio for
each Income PRIDES (or such other number of Income PRIDES as may be
determined by the Reset Agent upon a successful remarketing of Debt Securities
if the Reset Date is not an Interest Payment Date) being created by the Holder,
and having an aggregate principal amount of $ ; and
(c) in each case, transfer and surrender the related 40 Growth PRIDES,
or in the event the Treasury Portfolio is a component of Income PRIDES,
Income PRIDES (or such other number of Income PRIDES as may be determined by the
Reset Agent upon a successful remarketing of Debt Securities if the Reset Date
is not an Interest Payment Date), to the Agent accompanied by a notice to the
Agent, substantially in the form of Exhibit B to the Pledge Agreement, stating
that the Holder has transferred the relevant amount of Debt Securities or the
Applicable Ownership Interest in the appropriate Treasury Portfolio, as the case
may be, to the Collateral Agent and requesting that the Agent instruct the
Collateral Agent to release the Treasury Securities underlying such Growth
PRIDES, whereupon the Agent shall promptly give such instruction to the
Collateral Agent, substantially in the form of Exhibit A to the Pledge
Agreement.
Upon receipt of the Debt Securities or the Applicable Ownership
Interest in the appropriate Treasury Portfolio, as the case may be, described in
clause (a) or (b) above and the instructions described in clause (c) above, in
accordance with the terms of the Pledge Agreement, the Collateral Agent will
effect the release of the Treasury Securities having a corresponding aggregate
principal amount from the Pledge to the Agent free and clear of the Company's
security interest therein, and upon receipt thereof the Agent shall promptly:
(i) cancel the related Growth PRIDES surrendered and transferred;
(ii) transfer the Treasury Securities that had been components of such
Growth PRIDES to the Holder; and
28
(iii) authenticate, execute on behalf of such Holder and deliver an
Income PRIDES Certificate executed by the Company in accordance with Section 3.3
evidencing the same number of Purchase Contracts as were evidenced by the
cancelled Growth PRIDES.
Holders who elect to separate Treasury Securities from the related
Purchase Contract and to substitute Debt Securities or the Applicable Ownership
Interest in the appropriate Treasury Portfolio, as the case may be, for such
Treasury Securities shall be responsible for any fees or expenses payable to the
Collateral Agent for its services as Collateral Agent in respect of the
substitution, and the Company shall not be responsible for any such fees or
expenses.
In the event a Holder making a Collateral Substitution pursuant to this
Section 3.14 fails to effect a book-entry transfer of the Growth PRIDES or fails
to deliver a Growth PRIDES Certificate to the Agent after depositing the Debt
Securities or Applicable Ownership Interest in the appropriate Treasury
Portfolio with the Collateral Agent, the Treasury Securities constituting a part
of such Growth PRIDES Certificate, and any interest on such Treasury Securities,
shall be held in the name of the Agent or its nominee in trust for the benefit
of such Holder, until such Growth PRIDES is so transferred or the Growth PRIDES
is so delivered, or until such Holder provides evidence satisfactory to the
Company and the Agent that such Growth PRIDES has been destroyed, lost or
stolen, together with any indemnity that may be required by the Agent and the
Company.
Except as provided in this Section 3.14, for so long as the Purchase
Contract underlying a Growth PRIDES remains in effect, such Growth PRIDES shall
not be separable into its constituent parts and the rights and obligations of
the Holder of such Growth PRIDES in respect of the Treasury Security and
Purchase Contract comprising such Growth PRIDES may be acquired, and may be
transferred and exchanged only as an entire Growth PRIDES.
SECTION 3.15 TRANSFER OF COLLATERAL UPON OCCURRENCE OF TERMINATION EVENT.
Upon the occurrence of a Termination Event and the transfer to the
Agent of the Debt Securities, the Applicable Ownership Interest in the
appropriate Treasury Portfolio or the Treasury Securities, as the case may be,
underlying the Income PRIDES and the Growth PRIDES pursuant to the terms of the
Pledge Agreement, the Agent shall request transfer instructions with respect to
such Debt Securities or the Applicable Ownership Interest in the appropriate
Treasury Portfolio or Treasury Securities, as the case may be, from each Holder
by written request mailed to such Holder at its address as it appears in the
Income PRIDES Register or the Growth PRIDES Register, as the case may be. Upon
book-entry transfer of an Income PRIDES Certificate or Growth PRIDES Certificate
or delivery of an Income PRIDES Certificate or Growth PRIDES Certificate to the
Agent with such transfer instructions, the Agent shall transfer the Debt
Securities, the Applicable Ownership Interest in the appropriate Treasury
Portfolio or Treasury Securities, as the case may be, underlying such Income
PRIDES or Growth PRIDES, as the case may be, to such Holder by book-entry
transfer, or other appropriate procedures, in accordance with such instructions.
In the event a Holder of Income PRIDES or Growth PRIDES fails to effect such
transfer or delivery, the Debt Securities, the Applicable Ownership Interest in
the appropriate Treasury Portfolio or Treasury Securities, as the case may be,
underlying such Income PRIDES or Growth PRIDES, as the case may be, and any
interest
29
thereon, shall be held in the name of the Agent or its nominee in trust for the
benefit of such Holder, until such Income PRIDES or Growth PRIDES are
transferred or the Income PRIDES Certificate or Growth PRIDES Certificate is
surrendered or such Holder provides satisfactory evidence that such Income
PRIDES Certificate or Growth PRIDES Certificate has been destroyed, lost or
stolen, together with any indemnity that may be required by the Agent and the
Company. In the case of a Treasury Portfolio or any Treasury Securities, the
Agent may dispose of the subject securities for cash and pay the applicable
portion of such cash to the Holders in lieu of such Holders' Applicable
Ownership Interest in such Treasury Portfolio, or any Treasury Securities, where
such Holder would otherwise have been entitled to receive less than $1,000 of
any such security.
SECTION 3.16 NO CONSENT TO ASSUMPTION.
Each Holder of a Security, by acceptance thereof, will be deemed
expressly to have withheld any consent to the assumption under Section 365 of
the Bankruptcy Code or otherwise, of the Purchase Contract by the Company, its
trustee in bankruptcy, receiver, liquidator or a person or entity performing
similar functions, in the event that the Company becomes a debtor under the
Bankruptcy Code or subject to other similar State or Federal law providing for
reorganization or liquidation.
ARTICLE IV
THE DEBT SECURITIES
SECTION 4.1 PAYMENT OF INTEREST; RIGHTS TO INTEREST PRESERVED; INTEREST RATE
RESET; NOTICE.
A payment of interest on the Debt Securities or distribution with
respect to the Applicable Ownership Interest in the appropriate Treasury
Portfolio, as the case may be, which is paid on any Payment Date shall, subject
to receipt thereof by the Agent from the Collateral Agent as provided by the
terms of the Pledge Agreement, be paid to the Person in whose name the Income
PRIDES Certificate (or one or more Predecessor Income PRIDES Certificates) of
which such Debt Securities or the Applicable Ownership Interest in the
appropriate Treasury Portfolio, as the case may be, are a part is registered at
the close of business on the Record Date for such Payment Date.
Each Income PRIDES Certificate evidencing Debt Securities delivered
under this Agreement upon registration of transfer of or in exchange for or in
lieu of any other Income PRIDES Certificate shall carry the rights to payment of
interest accrued and unpaid, and to accrue interest, which are carried by the
Debt Securities underlying such other Income PRIDES Certificate.
In the case of any Income PRIDES with respect to which Cash Settlement
of the underlying Purchase Contract is effected on the Business Day immediately
preceding the Purchase Contract Settlement Date pursuant to prior notice, or
with respect to which Early Settlement of the underlying Purchase Contract is
effected on an Early Settlement Date, Cash Merger Early Settlement of the
underlying Purchase Contract is effected on the Cash Merger
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Early Settlement Date, or with respect to which a Collateral Substitution is
effected, in each case on a date that is after any Record Date and on or prior
to the next succeeding Payment Date, interest on the Debt Securities or
distributions with respect to the Applicable Ownership Interest in the
appropriate Treasury Portfolio, as the case may be, underlying such Income
PRIDES otherwise payable on such Payment Date shall be payable on such Payment
Date notwithstanding such Cash Settlement, Early Settlement, Cash Merger Early
Settlement or Collateral Substitution, and such interest or distributions shall,
subject to receipt thereof by the Agent, be payable to the Person in whose name
the Income PRIDES Certificate (or one or more Predecessor Income PRIDES
Certificates) was registered at the close of business on the Record Date. Except
as otherwise expressly provided in the immediately preceding sentence, in the
case of any Income PRIDES with respect to which Cash Settlement, Early
Settlement or Cash Merger Early Settlement of the underlying Purchase Contract
is effected on the Business Day immediately preceding the applicable Purchase
Contract Settlement Date, an Early Settlement Date or a Cash Merger Early
Settlement Date, as the case may be, or with respect to which a Collateral
Substitution has been effected, payment of interest on the related Debt
Securities or distributions with respect to the Applicable Ownership Interest in
the appropriate Treasury Portfolio, as the case may be, that would otherwise be
payable after the Purchase Contract Settlement Date, Early Settlement Date or
Cash Merger Early Settlement Date shall not be payable hereunder to the Holder
of such Income PRIDES; provided, however, that to the extent that such Holder
continues to hold the separated Debt Security that formerly comprised a part of
such Holder's Income PRIDES, such Holder shall be entitled to receive the
payment of interest on such separated Debt Security.
The Coupon Rate shall be reset to the Reset Rate on the Reset Date. The
Reset Rate shall equal the sum of (i) the Reset Spread and (ii) the yield on the
Applicable Benchmark Treasury in effect on the third Business Day immediately
preceding the Reset Date and shall be determined by the Reset Agent provided,
that in no event shall the Reset Rate exceed the maximum rate permitted by
applicable law. On each Reset Announcement Date, the Reset Spread, the
Applicable Benchmark Treasury to be used to determine the Reset Rate and any
change in the scheduled Interest Payment Dates and extension of the maturity
date will be announced by the Company. In addition, on any Reset Announcement
Date relating to an Initial Reset Date occurring prior to February 16, 2006, the
percentage undivided beneficial ownership interest determined by the Reset Agent
for purposes of clause (1)(iii) of the definition of "Applicable Ownership
Interest" will be announced by the Company. On the Business Day immediately
following the Reset Announcement Date, the Company will cause a notice of the
Reset Spread, Applicable Benchmark Treasury and, if applicable, percentage
undivided beneficial ownership interest in the to be published in an Authorized
Newspaper. In the event of a Failed Remarketing, the Company Rate will not be
reset and the interest rate on the Debt Securities shall remain the initial
Coupon Rate.
Not later than 7 calendar days nor more than 15 calendar days prior to
each Reset Announcement Date and the Purchase Contract Settlement Date, if the
Purchase Contract Settlement Date is not also a Reset Date, the Company will
request that the Depositary (or any successor Clearing Agency or its nominee)
notify by first-class mail, postage prepaid, the Beneficial Owners or Clearing
Agency Participants holding Income PRIDES or Growth PRIDES, of each Reset
Announcement Date and any procedures to be followed by such Holders of
Securities, who intend to settle their obligation under the Purchase Contract
with separate cash on the Purchase Contract Settlement Date.
31
SECTION 4.2 NOTICE AND VOTING.
Under and subject to the terms of the Pledge Agreement, the Agent will
be entitled to exercise the voting and any other consensual rights pertaining to
the Pledged Debt Securities but only to the extent instructed by the Holders as
described below. Upon receipt of notice of any meeting at which holders of Debt
Securities are entitled to vote or upon any solicitation of consents, waivers or
proxies of holders of Debt Securities, the Agent shall, as soon as practicable
thereafter, mail to the Holders of Income PRIDES a notice (a) containing such
information as is contained in the notice or solicitation, (b) stating that each
Income PRIDES Holder on the record date set by the Agent therefor (which, to the
extent possible, shall be the same date as the record date for determining the
holders of Debt Securities entitled to vote) shall be entitled to instruct the
Agent as to the exercise of the voting rights pertaining to the Debt Securities
constituting a part of such Holder's Income PRIDES and (c) stating the manner in
which such instructions may be given. Upon the written request of the Holders of
Income PRIDES on such record date, the Agent shall endeavor insofar as
practicable to vote or cause to be voted, in accordance with the instructions
set forth in such requests, the maximum number of Debt Securities as to which
any particular voting instructions are received. In the absence of specific
instructions from the Holder of an Income PRIDES, the Agent shall abstain from
voting the Debt Security constituting a part of such Holder's Income PRIDES. The
Company hereby agrees, if applicable, to solicit Holders of Income PRIDES to
timely instruct the Agent in order to enable the Agent to vote such Debt
Securities.
SECTION 4.3 SUBSTITUTION OF A TREASURY PORTFOLIO FOR DEBT SECURITIES.
(a) Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Redemption Price payable on the Tax Event
Redemption Date with respect to the Applicable Principal Amount of Debt
Securities shall be delivered to the Collateral Agent in exchange for the
Pledged Debt Securities. Pursuant to the terms of the Pledge Agreement, the
Collateral Agent will apply an amount equal to the Redemption Amount of such
Redemption Price to purchase on behalf of the Holders of Income PRIDES the Tax
Event Treasury Portfolio and promptly remit the remaining portion of such
Redemption Price to the Agent for payment to the Holders of such Income PRIDES.
The Tax Event Treasury Portfolio will be substituted for the outstanding Pledged
Debt Securities, and will be held by the Collateral Agent in accordance with the
terms of the Pledge Agreement to secure the obligation of each Holder of an
Income PRIDES to purchase the Common Stock of the Company on the Purchase
Contract Settlement Date under the Purchase Contract constituting a part of such
Income PRIDES. Following the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the Holders of Income PRIDES and the
Collateral Agent shall have such security interests, rights and obligations with
respect to the Tax Event Treasury Portfolio as the Holder of Income PRIDES and
the Collateral Agent had in respect of the Debt Securities subject to the Pledge
thereof as provided in Articles II, III, IV, V and VI of the Pledge Agreement,
and any reference herein to the Debt Securities shall be deemed to be reference
to such Tax Event Treasury Portfolio. The Company may cause to be made in any
Income PRIDES Certificates thereafter to be issued such change in phraseology
and form (but not in substance) as may be appropriate to reflect the
substitution of the Tax Event Treasury Portfolio for Debt Securities as
collateral.
32
(b) Unless the Debt Securities have been called for a Tax Event
Redemption, the Company shall cause all Debt Securities subject to the Pledge as
a part of the Income PRIDES, and any other Debt Securities held by holders that
have elected to have their Debt Securities included in such remarketing to be
remarketed on one or more remarketings pursuant to the Remarketing Agreement;
provided that no further remarketings shall be requested upon and after a
successful remarketing of the Pledged Debt Securities. Upon the successful
remarketing of the Pledged Debt Securities on a Remarketing Date, the proceeds
of such remarketing (after deducting any Remarketing Fee) shall be delivered to
the Collateral Agent in exchange for the Pledged Debt Securities. Pursuant to
the terms of the Pledge Agreement, the Collateral Agent will apply an amount
equal to the Remarketing Treasury Portfolio Purchase Price to purchase on behalf
of the Holders of Income PRIDES the Remarketing Treasury Portfolio and promptly
remit the remaining portion of such proceeds to the Agent for payment to the
Holders of such Income PRIDES. The Remarketing Treasury Portfolio will be
substituted for the outstanding Pledged Debt Securities, and will be held by the
Collateral Agent in accordance with the terms of the Pledge Agreement to secure
the obligation of each Holder of an Income PRIDES to purchase the Common Stock
of the Company on the Purchase Contract Settlement Date under the Purchase
Contract constituting a part of such Income PRIDES. Following the successful
remarketing of the Pledged Debt Securities on a Remarketing Date, the Holders of
Income PRIDES and the Collateral Agent shall have such security interests,
rights and obligations with respect to the Remarketing Treasury Portfolio as the
Holder of Income PRIDES and the Collateral Agent had in respect of the Debt
Securities subject to the Pledge thereof as provided in Articles II, III, IV, V
and VI of the Pledge Agreement, and any reference herein to the Debt Securities
shall be deemed to be reference to such Remarketing Treasury Portfolio. The
Company may cause to be made in any Income PRIDES Certificates thereafter to be
issued such change in phraseology and form (but not in substance) as may be
appropriate to reflect the substitution of the Remarketing Treasury Portfolio
for Debt Securities as collateral.
SECTION 4.4 CONSENT TO TREATMENT FOR TAX PURPOSES.
Each Holder of an Income PRIDES or a Growth PRIDES, by its acceptance
thereof, covenants and agrees to treat itself as the owner, for United States
federal, state and local income and franchise tax purposes, of (i) the related
Debt Securities or the appropriate Applicable Ownership Interest in the Treasury
Portfolio, in the case of the Income PRIDES, or (ii) the Treasury Securities, in
the case of the Growth PRIDES. Each Holder of an Income PRIDES, by its
acceptance thereof, further covenants and agrees to treat the Debt Securities as
indebtedness of the Company for United States federal, state and local income
and franchise tax purposes.
ARTICLE V
THE PURCHASE CONTRACTS
SECTION 5.1 PURCHASE OF SHARES OF COMMON STOCK.
Each Purchase Contract shall, unless a Termination Event or an Early
Settlement or Cash Merger Early Settlement in accordance with Section 5.9 hereof
has occurred, obligate the Holder of the related Security to purchase, and the
Company to sell, on the Purchase Contract Settlement Date, for $25 in cash (the
"Purchase Price"), a number of newly issued shares of Common Stock equal to the
applicable Settlement Rate. The "Settlement Rate" is equal to (a) if the
Applicable
33
Market Value (as defined below) is equal to or greater than $33.80 (the
"Threshold Appreciation Price"), a number of shares per Purchase Contract equal
to the product of (i) the Stated Amount divided by the Reference Price
multiplied by (ii) one minus a fraction, the numerator of which is $7.80 and the
denominator of which is the Applicable Market Value, (b) if the Applicable
Market Value is less than the Threshold Appreciation Price, but is greater than
$26.00 (the "Reference Price"), the number of shares of Common Stock per
Purchase Contract equal to $25 divided by the Applicable Market Value and (c) if
the Applicable Market Value is less than or equal to the Reference Price, 0.9615
shares of Common Stock per Purchase Contract, in each case subject to adjustment
as provided in Section 5.6 (and in each case rounded upward or downward to the
nearest 1/10,000th of a share). As provided in Section 5.10, no fractional
shares of Common Stock will be issued upon settlement of Purchase Contracts.
The "Applicable Market Value" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date or, in the event of a Cash Merger, ending on the third Business Day
immediately preceding the consummation of the Cash Merger. The "Closing Price"
of the Common Stock on any date of determination means the closing sale price
(or, if no closing price is reported, the last reported sale price) of the
Common Stock on the New York Stock Exchange (the "NYSE") on such date or, if the
Common Stock is not listed for trading on the NYSE on any such date, as reported
in the Acomposite transactions for the principal United States national or
regional securities exchange on which the Common Stock is so listed. If the
Common Stock is not so listed on a United States national or regional securities
exchange, the Closing Price means the last sale price of the Common Stock as
reported by the NASDAQ Stock Market, or if the Common Stock is not so reported,
the last quoted bid price for the Common Stock in the over-the-counter market as
reported by the National Quotation Bureau or similar organization. If such bid
price is not available, the Closing Price means market value of the Common Stock
on such date as determined by a nationally recognized independent investment
banking firm retained by the Company for this purpose. A "Trading Day" means a
day on which the Common Stock (A) is not suspended from trading on any national
or regional securities exchange or association or over-the-counter market at the
close of business and (B) has traded at least once on the national or regional
securities exchange or association or over-the-counter market that is the
primary market for the trading of the Common Stock.
Each Holder of an Income PRIDES or a Growth PRIDES, by its acceptance
thereof, irrevocably authorizes the Agent to enter into and perform the related
Purchase Contract on its behalf as its attorney-in-fact (including the execution
of Certificates on behalf of such Holder), agrees to be bound by the terms and
provisions thereof, covenants and agrees to perform its obligations under such
Purchase Contracts, and consents to the provisions hereof, irrevocably
authorizes the Agent to enter into and perform the Pledge Agreement on its
behalf as its attorney-in-fact, and consents to and agrees to be bound by the
Pledge of the Debt Securities, the Treasury Portfolios or the Treasury
Securities, as the case may be, pursuant to the Pledge Agreement. Each Holder of
an Income PRIDES or a Growth PRIDES, by its acceptance thereof, further
covenants and agrees, that, to the extent and in the manner provided in Section
5.4 and the Pledge Agreement, but subject to the terms thereof, payments in
respect of the principal of and interest on Debt Securities or the Proceeds of
the Treasury Securities or the Applicable Ownership Interest in any Treasury
Portfolio on the Purchase Contract Settlement Date shall be
34
paid by the Collateral Agent to the Company in satisfaction of such Holder's
obligations under such Purchase Contract and such Holder shall acquire no right,
title or interest in such payments.
Upon registration of transfer of a Certificate, the transferee shall be
bound (without the necessity of any other action on the part of such transferee,
except as may be required by the Agent pursuant hereto), under the terms of this
Agreement, the Purchase Contracts underlying such Certificate and the Pledge
Agreement; and the transferor shall be released from the obligations under this
Agreement, the Purchase Contracts underlying the Certificates so transferred and
the Pledge Agreement. The Company covenants and agrees, and each Holder of a
Certificate, by its acceptance thereof, likewise covenants and agrees, to be
bound by the provisions of this paragraph.
SECTION 5.2 CONTRACT ADJUSTMENT PAYMENTS.
Subject to Section 5.3 herein, the Company shall pay, on each Payment
Date, the Contract Adjustment Payments payable in respect of each
Purchase Contract to the Person in whose name a Certificate (or one or more
Predecessor Certificates) is registered on the Register at the close of business
on the Record Date next preceding such Payment Date. The Contract Adjustment
Payments will be payable at the Corporate Trust Office or, at the option of the
Company, by check mailed to the address of the Person entitled thereto at such
Person's address as it appears on the Income PRIDES Register or Growth PRIDES
Register or by wire transfer to an account appropriately designated in writing
by the Person entitled to payment.
Upon the occurrence of a Termination Event, the Company's obligation to
pay Contract Adjustment Payments (including any accrued or Deferred Contract
Adjustment Payments) shall cease.
Each Certificate delivered under this Agreement upon registration of
transfer of or in exchange for or in lieu of any other Certificate (including as
a result of a Collateral Substitution or the re-establishment of an Income
PRIDES) shall carry the rights to Contract Adjustment Payments accrued and
unpaid, and to accrue Contract Adjustment Payments, which were carried by the
Purchase Contracts which were represented by such other Certificates.
Subject to Section 5.9, in the case of any Security with respect to
which Early Settlement or Cash Merger Early Settlement of the underlying
Purchase Contract is effected on an Early Settlement Date or Cash Merger Early
Settlement Date that is after any Record Date and on or prior to the next
succeeding Payment Date, Contract Adjustment Payments, if any, otherwise payable
on such Payment Date shall be payable on such Payment Date notwithstanding such
Early Settlement, and such Contract Adjustment Payments shall, subject to
receipt thereof by the Agent, be payable to the Person in whose name the
Certificate evidencing such Security (or one or more Predecessor Certificates)
was registered at the close of business on such Record Date. Except as otherwise
expressly provided in the immediately preceding sentence, in the case of any
Security with respect to which Early Settlement or Cash Merger Early Settlement
of the underlying Purchase Contract is effected on an Early Settlement Date or
Cash Merger Early Settlement, Contract Adjustment Payments that would otherwise
be payable after the Early
35
Settlement Date or Cash Merger Early Settlement Date with respect to such
Purchase Contract shall not be payable.
The Company's obligations with respect to Contract Adjustment Payments
(including any accrued or Deferred Contract Adjustment Payments), will be
subordinated and junior in right of payment to the Company's obligations under
any Senior Indebtedness. Upon any payment or distribution of the Company's
assets to its creditors upon any dissolution, winding up, liquidation or
reorganization, whether voluntary or involuntary, or in bankruptcy, insolvency,
receivership or other similar proceedings, the holders of all Senior
Indebtedness shall first be entitled to receive payment in full of all amounts
due or to become due thereon, or payment of such amounts shall have been
provided for, before the holders of the Securities shall be entitled to receive
any Contract Adjustment Payments.
No payment of Contract Adjustment Payments may be made if (i) any
payment default on any Senior Indebtedness has occurred and is continuing beyond
any applicable grace period; or (ii) any default other than a payment default
with respect to Senior Indebtedness occurs and is continuing that permits the
acceleration of the maturity thereof and the Agent receives a written notice of
such default from the Company or the holders of such Senior Indebtedness.
SECTION 5.3 DEFERRAL OF PAYMENT DATES FOR CONTRACT ADJUSTMENT PAYMENTS.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments otherwise payable on any Payment Date, but only if the
Company shall give the Holders and the Agent written notice of its election to
defer such payment (specifying the amount to be deferred) at least ten Business
Days prior to the earlier of (i) the next succeeding Payment Date or (ii) the
date the Company is required to give notice of the Record Date or Payment Date
with respect to payment of such Contract Adjustment Payments to the NYSE or
other applicable self-regulatory organization or to Holders of the Securities,
but in any event not less than one Business Day prior to such Record Date. In
connection with any Contract Adjustment Payments so deferred, additional
Contract Adjustment Payments on the amounts so deferred will accrue at the rate
of 6.25% per annum (computed on the basis of a 360 day year of twelve 30 day
months), compounding on each succeeding Payment Date, until paid in full (such
deferred installments of Contract Adjustment Payments, if any, together with the
accrued additional Contract Adjustment Payments accrued thereon, being referred
to herein as the "Deferred Contract Adjustment Payments"). Deferred Contract
Adjustment Payments, if any, shall be due on the next succeeding Payment Date
except to the extent that payment is deferred pursuant to this Section 5.3 or
unless Early Settlement or Cash Merger Early Settlement has occurred. No
Contract Adjustment Payments may be deferred to a date that is after the
Purchase Contract Settlement Date. If the Purchase Contracts are terminated upon
the occurrence of a Termination Event or as a result of an Early Settlement or
Cash Merger Early Settlement, the Holder's right to receive Contract Adjustment
Payments and Deferred Contract Adjustment Payments will terminate.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until the Purchase Contract
Settlement Date, each Holder will receive on the Purchase Contract Settlement
Date, in lieu of a cash payment, a number of
36
shares of Common Stock (in addition to a number of shares of Common Stock equal
to the Settlement Rate) equal to (x) the aggregate amount of Deferred Contract
Adjustment Payments payable to such Holder divided by (y) the Applicable Market
Value.
No fractional shares of Common Stock will be issued by the Company with
respect to the payment of Deferred Contract Adjustment Payments on the Purchase
Contract Settlement Date. In lieu of fractional shares otherwise issuable with
respect to such payment of Deferred Contract Adjustment Payments, the Holder
will be entitled to receive an amount in cash as provided in Section 5.10.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, then, until the Deferred Contract Adjustment
Payments have been paid, neither the Company nor any of its subsidiaries shall
declare or pay dividends on, make distributions with respect to, or redeem,
purchase or acquire, or make a liquidation payment with respect to, any of the
Company's capital stock or make guarantee payments with respect to any of the
Company's capital stock the foregoing (other than (i) redemptions, purchases or
acquisitions of capital stock of the Company in connection with the satisfaction
by the Company in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of employees, officers, directors or
agents or a stock purchase or dividend reinvestment plan, or the satisfaction by
the Company of its obligations pursuant to any contract or security outstanding
on the date of such event requiring the Company to redeem, purchase or acquire
its capital stock, (ii) as a result of a reclassification of the Company's
capital stock or the exchange or conversion of all or a portion of one class or
series of the Company's capital stock for another class or series of the
Company's capital stock, (iii) the purchase of fractional interests in shares of
the Company's capital stock pursuant to the conversion or exchange provisions of
the Company's capital stock or the security being converted or exchanged, (iv)
dividends or distributions in capital stock of the Company (or rights to acquire
capital stock of the Company), or repurchases, redemptions or acquisitions of
capital stock in connection with the issuance or exchange of capital stock of
the Company (or securities convertible into or exchangeable for shares of the
Company's capital stock) or (v) redemptions, exchanges or repurchases of any
rights outstanding under a shareholder rights plan of the Company or payment
thereunder of a dividend or distribution of or with respect to rights in the
future.
SECTION 5.4 PAYMENT OF PURCHASE PRICE.
(a) (i) Unless a Treasury Portfolio has replaced the Debt Securities as
a component of the Income PRIDES or a Holder settles the underlying Purchase
Contract through the early delivery of cash to the Agent in the manner described
in Section 5.9, each Holder of an Income PRIDES must notify the Agent of its
intention to pay in cash ("Cash Settlement") the Purchase Price for the shares
of Common Stock to be purchased pursuant to the Purchase Contract on a Purchase
Contract Settlement Date by presenting and surrendering to the Agent the Income
PRIDES Certificate with a notice in substantially the form of Exhibit C hereto
completed and executed. Such presentation, surrender and notice shall be made on
or prior to 5:00 p.m., New York City time, on the fifth Business Day immediately
preceding the Purchase Contract Settlement Date. The Agent shall promptly notify
the Collateral Agent of the receipt of such a notice from a Holder intending to
make a Cash Settlement.
37
(ii) A Holder of an Income PRIDES who has so notified the Agent of its
intention to make a Cash Settlement is required to pay the Purchase Price to the
Collateral Agent prior to 11:00 a.m., New York City time, on the Business Day
immediately preceding the Purchase Contract Settlement Date in lawful money of
the United States by certified or cashiers' check or wire transfer, in each case
in immediately available funds payable to or upon the order of the Company. Any
cash received by the Collateral Agent will be invested promptly by the
Collateral Agent in Permitted Investments and paid to the Company on the
Purchase Contract Settlement Date in settlement of the Purchase Contract in
accordance with the terms of this Agreement and the Pledge Agreement. Any funds
received by the Collateral Agent in respect of the investment earnings from the
investment in such Permitted Investments, will be distributed to the Agent when
received for payment to the Holder.
(iii) If a Holder of an Income PRIDES fails to notify the Agent of its
intention to make a Cash Settlement in accordance with paragraph (a)(i) above,
such failure shall constitute a default under the Purchase Contract and the
Holder shall be deemed to have consented to the disposition of the Pledged Debt
Securities pursuant to the remarketing as described in paragraph (b) below. If a
Holder of an Income PRIDES does notify the Agent as provided in paragraph (a)(i)
above of its intention to pay the Purchase Price in cash, but fails to make such
payment as required by paragraph (a)(ii) above, such failure shall also
constitute a default; however, the Debt Securities of such a Holder will not be
remarketed but instead the Collateral Agent, for the benefit of the Company,
will exercise its rights as a secured party with respect to such Debt
Securities, including those rights specified in paragraph (c) below.
(b) In order to dispose of the Debt Securities of Income PRIDES Holders
who have not notified the Agent of their intention to effect a Cash Settlement
with respect to the Purchase Contract Settlement Date as provided in paragraph
(a)(i) above, the Company shall engage the Remarketing Agent pursuant to the
Remarketing Agreement to sell such Debt Securities. In order to facilitate the
remarketing, the Agent shall notify the Remarketing Agent, by 10:00 a.m., New
York City time, on the fourth Business Day immediately preceding the Purchase
Contract Settlement Date, of the aggregate number of Debt Securities to be
remarketed. Concurrently, the Collateral Agent, pursuant to the terms of the
Pledge Agreement, will present for remarketing such Debt Securities to the
Remarketing Agent. Upon receipt of such notice from the Agent and such Debt
Securities from the Collateral Agent, the Remarketing Agent will, on the third
Business Day immediately preceding the Purchase Contract Settlement Date, use
their reasonable efforts to remarket such Debt Securities on such date at a
price of approximately 100.25% (but not less than 100%) of the aggregate
principal amount of such Debt Securities, plus accrued and unpaid interest
(including deferred interest), if any, thereon, plus the Remarketing Fee. After
deducting the Remarketing Fee, the Remarketing Agent will remit the remaining
portion of the proceeds from such remarketing to the Collateral Agent. Such
portion of the proceeds, equal to the aggregate principal amount of such Debt
Securities, will automatically be applied by the Collateral Agent, in accordance
with the Pledge Agreement to satisfy in full such Income PRIDES Holders'
obligations to pay the Purchase Price for the Common Stock under the related
Purchase Contracts on the Purchase Contract Settlement Date. Any proceeds in
excess of those required to pay the Purchase Price and the Remarketing Fee will
be remitted to the Agent for payment to the Holders of the related Income
PRIDES. Income PRIDES Holders whose Debt Securities are so remarketed will not
otherwise be responsible for the payment of any Remarketing Fee in
38
connection therewith. If such a remarketing results in a Failed Remarketing the
Collateral Agent, for the benefit of the Company, will exercise its rights as a
secured party with respect to such Debt Securities, including those actions
specified in paragraph (c) below; provided, that if upon a Failed Remarketing
the Collateral Agent exercises such rights for the benefit of the Company with
respect to such Debt Securities, any accrued and unpaid interest on such Debt
Securities will become payable by the Company to the Agent for payment to the
Holder of the Income PRIDES to which such Debt Securities relate. Such payment
will be made by the Company on or prior to 11 a.m., New York City time, on the
Purchase Contract Settlement Date in lawful money of the United States by
certified or cashiers' check or wire transfer, in each case, in immediately
available funds payable to or upon the order of the Agent. The Company will
cause a notice of such Failed Remarketing to be published on the Business Day
immediately preceding the Purchase Contract Settlement Date in an Authorized
Newspaper.
(c) With respect to any Debt Securities beneficially owned by Holders
who have elected Cash Settlement but failed to deliver cash as required in
(a)(ii) above, or with respect to Debt Securities which are subject to a Failed
Remarketing, the Collateral Agent for the benefit of the Company reserves all of
its rights as a secured party with respect thereto and, subject to applicable
law and paragraph (h) below, may, among other things, (i) retain such Debt
Securities in full satisfaction of the Holders' obligations under the Purchase
Contracts or (ii) sell such Debt Securities in one or more public or private
sales and apply the proceeds of such sale in full satisfaction of the Holders'
obligations under the Purchase Contracts.
(d) (i) Unless a Holder of a Growth PRIDES or Income PRIDES (if a
Treasury Portfolio has replaced the Debt Securities as a component of the Income
PRIDES) settles the underlying Purchase Contract through the early delivery of
cash to the Purchase Contract Agent in the manner described in Section 5.9, each
Holder of a Growth PRIDES or Income PRIDES (if a Treasury Portfolio has replaced
the Debt Securities as a component of the Income PRIDES) must notify the Agent
of its intention to pay in cash the Purchase Price for the shares of Common
Stock to be purchased pursuant to the Purchase Contract on the Purchase Contract
Settlement Date by presenting and surrendering to the Agent the Growth PRIDES
Certificate or Income PRIDES Certificate, as the case may be, with a notice in
substantially the form of Exhibit C hereto completed and executed. Such
presentation, surrender and notice must be made on or prior to 5:00 p.m., New
York City time, on the second Business Day immediately preceding the Purchase
Contract Settlement Date. The Agent shall promptly notify the Collateral Agent
of the receipt of such notice from a Holder intending to make a Cash Settlement.
(ii) A Holder of a Growth PRIDES or Income PRIDES (if a Treasury
Portfolio has replaced the Debt Securities as a component of the Income PRIDES),
who has so notified the Agent of its intention to make a Cash Settlement in
accordance with paragraph (d)(i) above is required to pay the Purchase Price to
the Collateral Agent prior to 11:00 a.m., New York City time, on the Business
Day immediately preceding the Purchase Contract Settlement Date in lawful money
of the United States by certified or cashiers' check or wire transfer, in each
case, in immediately available funds payable to or upon the order of the
Company. Any cash received by the Collateral Agent will be invested promptly by
the Collateral Agent in Permitted Investments and paid to the Company on the
Purchase Contract Settlement Date in settlement of the Purchase Contract in
accordance with the terms of this Agreement and the Pledge
39
Agreement. Any funds received by the Collateral Agent in respect of the
investment earnings from the investment in such Permitted Investments will be
distributed to the Agent when received for payment to the Holder.
(iii) If a Holder of a Growth PRIDES or Income PRIDES (if a Treasury
Portfolio has replaced the Debt Securities as a component of the Income PRIDES),
fails to notify the Agent of its intention to make a Cash Settlement in
accordance with paragraph (d)(i) above, or if such Holder does notify the Agent
as provided in paragraph (d)(i) above of its intention to pay the Purchase Price
in cash, but fails to make such payment as required by paragraph (d)(ii) above,
then such failure shall constitute a default under the Purchase Contract and
upon the maturity of the Pledged Treasury Securities or the Applicable Ownership
Interest in the appropriate Treasury Portfolio, as the case may be, held by the
Collateral Agent on the Business Day immediately prior to the Purchase Contract
Settlement Date, the principal amount of the Treasury Securities or the
Applicable Ownership Interest in the appropriate Treasury Portfolio, as the case
may be, received by the Collateral Agent will be invested promptly in overnight
Permitted Investments. On the Purchase Contract Settlement Date an amount equal
to the Purchase Price will be remitted to the Company as payment thereof without
receiving any instructions from the Holder. In the event the sum of the proceeds
from the related Pledged Treasury Securities or the Applicable Ownership
Interest in the appropriate Treasury Portfolio, as the case may be, and the
investment earnings earned from such investments is in excess of the aggregate
Purchase Price of the Purchase Contracts being settled thereby, the Collateral
Agent will distribute such excess to the Agent for the benefit of the Holder of
the related Growth PRIDES or Income PRIDES when received.
(e) Any distribution to Holders of excess funds and interest described
above, shall be payable at the Corporate Trust Office maintained for that
purpose or, at the option of the Holder, by check mailed to the address of the
Person entitled thereto at such address as it appears on the Register.
(f) The Company shall not be obligated to issue any shares of Common
Stock in respect of a Purchase Contract or deliver any certificate therefor to
the Holder unless it shall have received payment in full of the Purchase Price
for the shares of Common Stock to be purchased thereunder in the manner herein
set forth.
(g) Upon Cash Settlement with respect to a Purchase Contract, (i) the
Collateral Agent will in accordance with the terms of the Pledge Agreement cause
the Pledged Debt Security or the Pledged Applicable Ownership Interest in the
appropriate Treasury Portfolio, as the case may be, or the Pledged Treasury
Security underlying the relevant Security to be released from the Pledge by the
Collateral Agent free and clear of any security interest of the Company and
transferred to the Agent for delivery to the Holder thereof or its designee as
soon as practicable and (ii) subject to the receipt thereof from the Collateral
Agent, the Agent shall, by book-entry transfer, or other appropriate procedures,
in accordance with instructions provided by the Holder thereof, transfer such
Debt Security or the Applicable Ownership Interest in the appropriate Treasury
Portfolio, as the case may be, or such Treasury Security (or, if no such
instructions are given to the Agent by the Holder, the Agent shall hold such
Debt Security or the Applicable Ownership Interest in the appropriate Treasury
Portfolio, as the case may be, or such
40
Treasury Security, and any distribution thereon, in the name of the Agent or its
nominee in trust for the benefit of such Holder).
(h) The obligations of the Holders to pay the Purchase Price on the
Purchase Contract Settlement Date are non-recourse obligations and are payable
solely out of any Cash Settlement or the proceeds of any Collateral pledged to
secure the obligations of the Holders with respect to such Purchase Price, and
in no event will Holders be liable for any deficiency between the proceeds of
Collateral disposition and the Purchase Price.
SECTION 5.5 ISSUANCE OF SHARES OF COMMON STOCK.
Unless a Termination Event shall have occurred, and except with respect
to Purchase Contracts with respect to which there has been an Early Settlement
or Cash Merger Early Settlement, on the Purchase Contract Settlement Date, upon
the Company's receipt of payment in full of the Purchase Price for the shares of
Common Stock purchased by the Holders pursuant to the foregoing provisions of
this Article and subject to Section 5.6(b), the Company shall issue and deposit
with the Agent, for the benefit of the Holders of the Outstanding Securities,
one or more certificates representing the newly issued shares of Common Stock
registered in the name of the Agent (or its nominee) as custodian for the
Holders (such certificates for shares of Common Stock, together with any
dividends or distributions for which both a record date and payment date for
such dividend or distribution has occurred after the Purchase Contract
Settlement Date, being hereinafter referred to as the "Purchase Contract
Settlement Fund") to which the Holders are entitled hereunder. Subject to the
foregoing, upon surrender of a Certificate to the Agent on or after the Purchase
Contract Settlement Date, together with settlement instructions thereon duly
completed and executed, the Holder of such Certificate shall be entitled to
receive in exchange therefor a certificate representing that number of whole
shares of Common Stock which such Holder is entitled to receive pursuant to the
provisions of this Article V (after taking into account all Securities then held
by such Holder) together with cash in lieu of fractional shares as provided in
Section 5.10 and any dividends or distributions with respect to such shares
constituting part of the Purchase Contract Settlement Fund, but without any
interest thereon, and any Certificate so surrendered shall forthwith be
cancelled. Such shares shall be registered in the name of the Holder or the
Holder's designee as specified in the settlement instructions provided by the
Holder to the Agent. If any shares of Common Stock issued in respect of a
Purchase Contract are to be registered to a Person other than the Person in
whose name the Certificate evidencing such Purchase Contract is registered, no
such registration shall be made unless the Person requesting such registration
has paid any transfer and other taxes required by reason of such registration in
a name other than that of the registered Holder of the Certificate evidencing
such Purchase Contract or has established to the satisfaction of the Company
that such tax either has been paid or is not payable.
SECTION 5.6 ADJUSTMENT OF SETTLEMENT RATE.
(a) Adjustments for Dividends, Distributions, Stock Splits, Etc.
(1) In case the Company shall pay or make a dividend or other
distribution on the Common Stock in Common Stock, the Settlement Rate, as in
effect at the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such
41
dividend or other distribution shall be increased by dividing such Settlement
Rate by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for such
determination and the denominator shall be the sum of such number of shares and
the total number of shares constituting such dividend or other distribution,
such increase to become effective immediately after the opening of business on
the day following the date fixed for such determination. For the purposes of
this paragraph (1), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company but shall include
any shares issuable in respect of any scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company will not pay any dividend or
make any distribution on shares of Common Stock held in the treasury of the
Company.
(2) In case the Company shall issue rights, options or warrants to all
holders of its Common Stock that are not available on an equivalent basis to
Holders of the Securities upon settlement of the Purchase Contracts underlying
such Securities entitling such holders of the Common Stock, for a period
expiring within 45 days after the record date for the determination of
stockholders entitled to receive such rights, options or warrants, to subscribe
for or purchase shares of Common Stock at a price per share less than the
Current Market Price per share of the Common Stock on the date fixed for the
determination of stockholders entitled to receive such rights, options or
warrants (other than pursuant to any dividend reinvestment plan or share
purchase plan, including such a plan that provides for purchases of Common Stock
by non-shareholders), the Settlement Rate, in effect at the opening of business
on the day following the date fixed for such determination shall be increased by
dividing such Settlement Rate, by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding at the close of business on the
date fixed for such determination plus the number of shares of Common Stock
which the aggregate of the offering price of the total number of shares of
Common Stock so offered for subscription or purchase would purchase at such
Current Market Price and the denominator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase, such increase to become effective immediately after
the opening of business on the day following the date fixed for such
determination. For the purposes of this paragraph (2), the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include any shares issuable in respect of any
scrip certificates issued in lieu of fractions of shares of Common Stock. The
Company shall not issue any such rights, options or warrants in respect of
shares of Common Stock held in the treasury of the Company.
(3) In case outstanding shares of Common Stock shall be subdivided or
split into a greater number of shares of Common Stock, the Settlement Rate, in
effect at the opening of business on the day following the day upon which such
subdivision or split becomes effective shall be proportionately increased, and,
conversely, in case outstanding shares of Common Stock shall each be combined
into a smaller number of shares of Common Stock, the Settlement Rate, in effect
at the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately reduced, such increase or
reduction, as the case may be, to become effective immediately after the opening
of business on the day following the day upon which such subdivision, split or
combination becomes effective.
42
(4) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock evidences of its indebtedness or assets
(including securities, but excluding any rights or warrants referred to in
paragraph (2) of this Section, any dividend or distribution paid exclusively
in cash and any dividend or distribution referred to in paragraph (1) of this
Section), the Settlement Rate, in effect at the opening of business on the
day following the day on which such dividend or distribution was effected,
shall be adjusted so that the same shall equal the rate determined by
dividing the Settlement Rate in effect immediately prior to the close of
business on the date fixed for the determination of stockholders entitled to
receive such distribution by a fraction of which the numerator shall be the
Current Market Price per share of the Common Stock on the date fixed for such
determination less the then fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution) of the portion of the assets or evidences of indebtedness so
distributed applicable to one share of Common Stock and the denominator shall
be such Current Market Price per share of the Common Stock, such adjustment
to become effective immediately prior to the opening of business on the day
following the date fixed for the determination of stockholders entitled to
receive such distribution. In any case in which this paragraph (4) is
applicable, paragraph (2) of this Section shall not be applicable.
(5) In case the Company shall, (I) by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding any cash that
is distributed in a Reorganization Event to which Section 5.6(b) applies or
as part of a distribution referred to in paragraph (4) of this Section) in an
aggregate amount that, combined together with (II) the aggregate amount of
any other distributions to all holders of its Common Stock made exclusively
in cash within the 12 months preceding the date of payment of such
distribution and in respect of which no adjustment pursuant to this paragraph
(5) or paragraph (6) of this Section has been made and (III) the aggregate of
any cash plus the fair market value (as determined by the Board of Directors,
whose determination shall be conclusive and described in a Board Resolution)
of consideration payable in respect of any tender or exchange offer (other
than consideration payable in respect of any odd-lot tender offer) by the
Company or any of its subsidiaries for all or any portion of the Common Stock
concluded within the 12 months preceding the date of payment of the
distribution described in clause (I) above and in respect of which no
adjustment pursuant to this paragraph (5) or paragraph (6) of this Section
has been made, exceeds [__%] of the product of the Current Market Price per
share of the Common Stock on the date for the determination of holders of
shares of Common Stock entitled to receive such distribution times the number
of shares of Common Stock outstanding on such date, then, and in each such
case, immediately after the close of business on such date for determination,
the Settlement Rate, shall be increased so that the same shall equal the rate
determined by dividing the Settlement Rate in effect immediately prior to the
close of business on the date fixed for determination of the stockholders
entitled to receive such distribution by a fraction (i) the numerator of
which shall be equal to the Current Market Price per share of the Common
Stock on the date fixed for such determination less an amount equal to the
quotient of (x) the combined amount distributed or payable in the
transactions described in clauses (I), (II) and (III) above and (y) the
number of shares of Common Stock outstanding on such date for determination
and (ii) the denominator of which shall be equal to the Current Market Price
per share of the Common Stock on such date for determination.
43
(6) In case (I) a tender or exchange offer made by the Company or any
subsidiary of the Company for all or any portion of the Common Stock shall
expire and such tender or exchange offer (as amended upon the expiration
thereof) shall require the payment to stockholders (based on the acceptance
(up to any maximum specified in the terms of the tender or exchange offer) of
Purchased Shares (as defined below)) of an aggregate consideration having a
fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution) that
combined together with (II) the aggregate of the cash plus the fair market
value (as determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution), as of the expiration of such
tender or exchange offer, of consideration payable in respect of any other
tender or exchange offer (other than consideration payable in respect of any
odd-lot tender offer), by the Company or any subsidiary of the Company for
all or any portion of the Common Stock expiring within the 12 months
preceding the expiration of such tender or exchange offer and in respect of
which no adjustment pursuant to paragraph (5) of this Section or this
paragraph (6) has been made and (III) the aggregate amount of any
distributions to all holders of the Company's Common Stock made exclusively
in cash (other than regular quarterly cash dividends) within the 12 months
preceding the expiration of such tender or exchange offer and in respect of
which no adjustment pursuant to paragraph (5) of this Section or this
paragraph (6) has been made, exceeds 10% of the product of the Current
Market Price per share of the Common Stock as of the last time (the
"Expiration Time") tenders could have been made pursuant to such tender or
exchange offer (as it may be amended) times the number of shares of Common
Stock outstanding (including any tendered shares) on the Expiration Time,
then, and in each such case, immediately prior to the opening of business on
the day after the date of the Expiration Time, the Settlement Rate, shall be
adjusted so that the same shall equal the rate determined by dividing the
Settlement Rate immediately prior to the close of business on the date of the
Expiration Time by a fraction (i) the numerator of which shall be equal to
(A) the product of (I) the Current Market Price per share of the Common Stock
on the date of the Expiration Time and (II) the number of shares of Common
Stock outstanding (including any tendered shares) on the Expiration Time less
(B) the amount of cash plus the fair market value (determined as aforesaid)
of the aggregate consideration payable to stockholders based on the
transactions described in clauses (I), (II) and (III) above (assuming in the
case of clause (I) the acceptance, up to any maximum specified in the terms
of the tender or exchange offer, of Purchased Shares), and (ii) the
denominator of which shall be equal to the product of (A) the Current Market
Price per share of the Common Stock as of the Expiration Time and (B) the
number of shares of Common Stock outstanding (including any tendered shares)
as of the Expiration Time less the number of all shares validly tendered and
not withdrawn as of the Expiration Time (the shares deemed so accepted, up to
any such maximum, being referred to as the "Purchased Shares").
(7) The reclassification of Common Stock into securities including
securities other than Common Stock (other than any reclassification upon a
Reorganization Event to which Section 5.6(b) applies) shall be deemed to
involve (a) a distribution of such securities other than Common Stock to all
holders of Common Stock (and the effective date of such reclassification
shall be deemed to be "the date fixed for the determination of stockholders
entitled to receive such distribution" and the "date fixed for such
determination" within the meaning of paragraph (4) of this Section), and (b)
a subdivision, split or combination, as the case may be, of the number of
shares of Common Stock outstanding immediately prior to such reclassification
into the number of shares of Common Stock outstanding immediately thereafter
(and the effective
44
date of such reclassification shall be deemed to be "the day upon which such
subdivision or split becomes effective" or "the day upon which such combination
becomes effective", as the case may be, and "the day upon which such
subdivision, split or combination becomes effective" within the meaning of
paragraph (3) of this Section).
(8) The "Current Market Price" per share of Common Stock on any day
means the average of the daily Closing Prices for the five consecutive
Trading Days selected by the Company commencing not more than 30 Trading Days
before, and ending not later than, the earlier of the day in question and the
day before the "ex date" with respect to the issuance or distribution
requiring such computation. For purposes of this paragraph, the term "ex
date," when used with respect to any issuance or distribution, shall mean the
first date on which the Common Stock trades regular way the applicable
exchange or in the applicable market without the right to receive such
issuance or distribution.
(9) All adjustments to the Settlement Rate, shall be calculated to
the nearest 1/10,000th of a share of Common Stock (or if there is not a
nearest 1/10,000th of a share to the next lower 1/10,000th of a share). No
adjustment in the Settlement Rate shall be required unless such adjustment
would require an increase or decrease of at least one percent therein;
provided, however, that any adjustments which by reason of this subparagraph
are not required to be made shall be carried forward and taken into account
in any subsequent adjustment. If an adjustment is made to the Settlement
Rate pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this
Section 5.6(a), an adjustment shall also be made to the Applicable Market
Value solely to determine which of clauses (a), (b) or (c) of the definition
of Settlement Rate in Section 5.1 will apply on the Purchase Contract
Settlement Date. Such adjustment shall be made by multiplying the Applicable
Market Value by a fraction of which the numerator shall be the Settlement
Rate immediately after such adjustment pursuant to paragraph (1), (2), (3),
(4), (5), (6), (7) or (10) of this Section 5.6(a) and the denominator shall
be the Settlement Rate immediately before such adjustment; provided, however,
that if such adjustment to the Settlement Rate is required to be made
pursuant to the occurrence of any of the events contemplated by paragraph
(1), (2), (3), (4), (5), (7) or (10) of this Section 5.6(a) during the period
taken into consideration for determining the Applicable Market Value,
appropriate and customary adjustments shall be made to the Settlement Rate.
(10) The Company may make such increases in the Settlement Rate, in
addition to those required by this Section, as it considers to be advisable
in order to avoid or diminish the effect of any income tax to any holders of
shares of Common Stock resulting from any dividend or distribution of stock
or issuance of rights or warrants to purchase or subscribe for stock or from
any event treated as such for income tax purposes or for any other reasons.
(b) Adjustment for Consolidation, Merger or Other Reorganization
Event. In the event of (i) any consolidation or merger of the Company with
or into another Person (other than a merger or consolidation in which the
Company is the continuing corporation and in which the Common Stock
outstanding immediately prior to the merger or consolidation is not exchanged
for cash, securities or other property of the Company or another
corporation), (ii) any sale, transfer, lease or conveyance to another Person
of the property of the Company as an entirety or substantially as an
entirety, (iii) any statutory exchange of securities of the Company with
another Person (other than in connection with a merger or acquisition) or
(iv) any liquidation,
45
dissolution or winding up of the Company other than as a result of or after the
occurrence of a Termination Event (any such event, a "Reorganization Event"),
the Settlement Rate will be adjusted to provide that each Holder of Securities
will receive on the Purchase Contract Settlement Date with respect to each
Purchase Contract forming a part thereof, the kind and amount of securities,
cash and other property receivable upon such Reorganization Event (without any
interest thereon, and without any right to dividends or distribution thereon
which have a record date that is prior to the Purchase Contract Settlement Date)
by a Holder of the number of shares of Common Stock issuable on account of each
Purchase Contract if the Purchase Contract Settlement Date had occurred
immediately prior to such Reorganization Event assuming such Holder of Common
Stock is not a Person with which the Company consolidated or into which the
Company merged or which merged into the Company or with which such statutory
exchange of securities was effected or to which such sale, transfer, lease or
conveyance was made, as the case may be (any such Person, a "Constituent
Person"), or an Affiliate of a Constituent Person to the extent such
Reorganization Event provides for different treatment of Common Stock held by
Affiliates of the Company and non-affiliates and such Holder failed to exercise
its rights of election, if any, as to the kind or amount of securities, cash and
other property receivable upon such Reorganization Event (provided that if the
kind or amount of securities, cash and other property receivable upon such
Reorganization Event is not the same for each share of Common Stock held
immediately prior to such Reorganization Event by other than a Constituent
Person or an Affiliate thereof and in respect of which such rights of election
shall not have been exercised ("non-electing share"), then for the purpose of
this Section the kind and amount of securities, cash and other property
receivable upon such Reorganization Event by each non-electing share shall be
deemed to be the kind and amount so receivable per share by a plurality of the
non-electing shares). In the event of such a Reorganization Event, the Person
formed by such consolidation, merger or exchange or the Person which acquires
the assets of the Company or, in the event of a liquidation or dissolution of
the Company, the Company or a liquidating trust created in connection therewith,
shall execute and deliver to the Agent an agreement supplemental hereto
providing that the Holders of each Outstanding Security shall have the rights
provided by this Section 5.6. Such supplemental agreement shall provide for
adjustments which, for events subsequent to the effective date of such
supplemental agreement, shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Section. The above provisions of this
Section shall similarly apply to successive Reorganization Events.
SECTION 5.7 NOTICE OF ADJUSTMENTS AND CERTAIN OTHER EVENTS.
(a) Whenever the Settlement Rate is adjusted as herein provided, the
Company shall:
(i) forthwith compute the Settlement Rate in accordance with Section
5.6 and prepare and transmit to the Agent a Company Certificate setting forth
the Settlement Rate, the method of calculation thereof in reasonable detail,
and the facts requiring such adjustment and upon which such adjustment is
based; and
(ii) within 10 Business Days following the occurrence of an event that
requires an adjustment to the Settlement Rate pursuant to Section 5.6 (or if
the Company is not aware of such occurrence, as soon as practicable after
becoming so aware), provide a written notice to the Holders of the Securities
of the occurrence of such event and a statement in reasonable detail
46
setting forth the method by which the adjustment to the Settlement Rate was
determined and setting forth the adjusted Settlement Rate.
(b) The Agent shall not at any time be under any duty or
responsibility to any Holder of Securities to determine whether any facts
exist which may require any adjustment of the Settlement Rate, or with
respect to the nature or extent or calculation of any such adjustment when
made, or with respect to the method employed in making the same. The Agent
shall not be accountable with respect to the validity or value (or the kind
or amount) of any shares of Common Stock, or of any securities or property,
which may at the time be issued or delivered with respect to any Purchase
Contract, and the Agent makes no representation with respect thereto. The
Agent shall not be responsible for any failure of the Company to issue,
transfer or deliver any shares of Common Stock pursuant to a Purchase
Contract or to comply with any of the duties, responsibilities or covenants
of the Company contained in this Article.
SECTION 5.8 TERMINATION EVENT; NOTICE.
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Contract
Adjustment Payments or any Deferred Contract Adjustment Payments, and the
rights and obligations of the Holders to purchase Common Stock, will
immediately and automatically terminate, without the necessity of any notice
or action by any Holder, the Agent or the Company, if, on or prior to the
Purchase Contract Settlement Date, a Termination Event shall have occurred.
Upon the occurrence of a Termination Event, the Company shall promptly but in
no event later than two Business Days thereafter give written notice thereof
to the Agent, the Collateral Agent and to the Holders, at their addresses as
they appear in the applicable Register. Upon and after the occurrence of a
Termination Event, the Securities shall thereafter represent the right to
receive the Debt Securities or the Applicable Ownership Interest in the
appropriate Treasury Portfolio, as the case may be, forming a part of such
Securities in the case of Income PRIDES, or Treasury Securities in the case
of Growth PRIDES, in accordance with the provisions of Section 4.3 of the
Pledge Agreement.
SECTION 5.9 EARLY SETTLEMENT.
(a) At Option of Holder.
(i) A holder of Income PRIDES may settle the related Purchase Contracts
in their entirety at any time on or prior to the fifth Business Day immediately
preceding the Purchase Contract Settlement Date in the manner described herein,
but only in integral multiples of 40 Income PRIDES; provided, however, if a
Treasury Portfolio has become a component of the Income PRIDES, Holders of
Income PRIDES may settle early only in integral multiples of Income
PRIDES (or such other number of Income PRIDES as may be determined by the Reset
Agent upon a successful remarketing of Debt Securities if the Reset Date is not
an Interest Payment Date). A holder of Growth PRIDES may settle the related
Purchase Contracts in their entirety at any time on or prior to the second
Business Day immediately preceding the Purchase Contract Settlement Date in the
manner described herein (in either case, "Early Settlement") but only in
integral multiples of 40 Growth PRIDES. The right to Early Settlement is
subject to there being in effect, if so required under Federal securities laws,
a registration statement covering the shares of Common Stock to be delivered in
respect of the Purchase Contracts being settled (it being understood that, if so
required under Federal securities laws, the
47
Company shall use commercially reasonable efforts to (1) cause such a
registration statement to become effective and (2) provide a prospectus in
connection therewith, in each case, in a form appropriate for Early
Settlements). Upon Early Settlement, (i) the holder's rights to receive Deferred
Contract Adjustment Payments, if any, on the Purchase Contracts being settled
will be forfeited, (ii) the holder's right to receive additional Contract
Adjustment Payments in respect of such Purchase Contracts will terminate and
(iii) no adjustment will be made to or for the holder on account of Deferred
Contract Adjustment Payments, or any amount accrued in respect of Contract
Adjustment Payments. In order to exercise the right to effect any Early
Settlement with respect to any Purchase Contracts, the Holder of the Certificate
evidencing Securities shall deliver such Certificate to the Agent at the
Corporate Trust Office duly endorsed for transfer to the Company or in blank
with the form of Election to Settle Early therein duly completed and executed
and accompanied by payment payable to the Company in immediately available funds
in an amount (the "Early Settlement Amount") equal to the sum of (x) $25 times
the number of Purchase Contracts being settled and (y) if such delivery is made
with respect to any Purchase Contracts during the period from the close of
business on any Record Date next preceding any Payment Date to the opening of
business on such Payment Date, an amount equal to the Contract Adjustment
Payments payable on such Payment Date with respect to such Purchase Contracts;
provided that no payment is required if the Company has elected to defer the
Contract Adjustment Payments which would otherwise be payable on the Payment
Date. Except as provided in the immediately preceding sentence and subject to
the second to last paragraph of Section 5.2, no payment or adjustment shall be
made upon Early Settlement of any Purchase Contract on account of any Contract
Adjustment Payments accrued on such Purchase Contract or on account of any
dividends on the Common Stock issued upon such Early Settlement. In order for
any of the foregoing requirements to be considered satisfied or effective with
respect to a Purchase Contract underlying any Security on or by a particular
Business Day, such requirement must be met at or prior to 5:00 p.m., New York
City time, on such Business Day; the first Business Day on which all of the
foregoing requirements have been satisfied by 5:00 p.m., New York City time
shall be the "Early Settlement Date" with respect to such Security.
(ii) Upon Early Settlement of Purchase Contracts by a Holder of the
related Securities, the Company shall issue, and the Holder shall be entitled
to receive 0.7396 newly issued shares of Common Stock per Income PRIDES or
Growth PRIDES (the "Early Settlement Rate") (regardless of the market price
of the Common Stock on the date of Early Settlement); provided, however, that
upon the Early Settlement of the Purchase Contracts, the Holder of such
related Securities will forfeit the right to receive any Deferred Contract
Adjustment Payments. The Early Settlement Rate shall be adjusted in the same
manner and at the same time as the Settlement Rate is adjusted, in accordance
with Section 5.6. As promptly as practicable after Early Settlement of
Purchase Contracts in accordance with the provisions of this Section 5.9, the
Company shall issue and shall deliver to the Agent at the Corporate Trust
Office a certificate or certificates for the full number of shares of Common
Stock issuable upon such Early Settlement together with payment in lieu of
any fraction of a share, as provided in Section 5.10.
(iii) No later than the third Business Day after the applicable Early
Settlement Date the Company shall cause (i) the shares of Common Stock
issuable upon Early Settlement of Purchase Contracts to be issued and
delivered, and (ii) the related Debt Securities or the Applicable Ownership
Interest in the appropriate Treasury Portfolio, in the case of Income PRIDES,
or the related Treasury Securities, in the case of Growth PRIDES, to be
released from
48
the Pledge by the Collateral Agent and transferred, in each case to the Agent
for delivery to the Holder thereof or its designee.
(iv) Upon Early Settlement of any Purchase Contracts, and subject to
receipt of shares of Common Stock from the Company and the Debt Securities,
the Applicable Ownership Interest in the appropriate Treasury Portfolio or
Treasury Securities, as the case may be, from the Collateral Agent, as
applicable, the Agent shall, in accordance with the instructions provided by
the Holder thereof on the applicable form of Election to Settle Early in the
Certificate evidencing the related Securities, (i) transfer to the Holder the
Debt Securities, Treasury Portfolio or Treasury Securities, as the case may
be, forming a part of such Securities, and (ii) deliver to the Holder a
certificate or certificates for the full number of shares of Common Stock
issuable upon such Early Settlement together with payment in lieu of any
fraction of a share, as provided in Section 5.10.
(v) In the event that Early Settlement is effected with respect to
Purchase Contracts underlying less than all the Securities evidenced by a
Certificate, upon such Early Settlement the Company shall execute and the
Agent shall authenticate, countersign and deliver to the Holder thereof, at
the expense of the Company, a Certificate evidencing the Securities as to
which Early Settlement was not effected.
(b) Cash Merger.
(i) If, prior to the Purchase Contract Settlement Date, (i) the
Company merges with or into another entity, (ii) the Common Stock is
converted, exchanged, reclassified or cancelled in such merger, and (iii) at
least 30% of the consideration received by the Company's shareholders for its
Common Stock in such merger consists of cash or cash equivalents (a "Cash
Merger"), then each Holder of Securities shall have the right to settle the
Purchase Contract at the Settlement Rate in effect immediately before the
Cash Merger (a "Cash Merger Early Settlement"). The right to Cash Merger
Early Settlement is subject to there being in effect, if so required under
Federal securities laws, a registration statement covering the securities to
be delivered in respect of the Purchase Contracts being settled (it being
understood that, if so required under Federal securities laws, the Company
shall use commercially reasonable efforts to (1) cause such a registration
statement to become effective and (2) provide a prospectus in connection
therewith, in each case, in a form appropriate for Early Settlements). Upon
Cash Merger Early Settlement, (i) the holder's rights to receive Deferred
Contract Adjustment Payments, if any, on the Purchase Contracts being settled
will be forfeited, (ii) the holder's right to receive additional Contract
Adjustment Payments in respect of such Purchase Contracts will terminate and
(iii) no adjustment will be made to or for the holder on account of Deferred
Contract Adjustment Payments, or any amount accrued in respect of Contract
Adjustment Payments. The Company shall provide each of the Holders with a
notice of the consummation of the Cash Merger within five Business Days after
the consummation thereof. Such notice will specify, among other things, the
"Cash Merger Early Settlement Date," which shall be 10 Business Days after
the date of such notice, and the amount of the cash, securities and other
consideration receivable by each Holder upon a Cash Merger Early Settlement.
(ii) To exercise a Cash Merger Early Settlement, a Holder shall
deliver, present and surrender the Certificates evidencing such Securities as
shall be settled at the offices of the
49
Agent, accompanied by payment to the Company in immediately available funds of
an amount equal to (1) $25 multiplied by (2) the number of Purchase Contracts
being settled, plus (3) if such delivery is made with respect to any Purchase
Contracts during the period from the close of business on any Record Date next
preceding any Payment Date to the opening of business on such Payment Date, an
amount equal to the Contract Adjustment Payments payable on such Payment Date
with respect to such Purchase Contracts; provided that no payment is required if
the Company has elected to defer the Contract Adjustment Payments which would
otherwise be payable on the Payment Date, no later than 5:00 p.m., New York City
time, on the Business Day immediately preceding the Cash Merger Early Settlement
Date. Except as provided in the immediately preceding sentence and subject to
the second to last paragraph of Section 5.2, no payment or adjustment shall be
made upon Cash Merger Early Settlement of any Purchase Contract on account of
any Contract Adjustment Payments accrued on such Purchase Contract or on account
of any dividends on the Common Stock issued upon such Cash Merger Early
Settlement.
(iii) Upon a Cash Merger Early Settlement, the Company will deliver, or
cause to be delivered, to Holders duly exercising a Cash Merger Early
Settlement on the Cash Merger Early Settlement Date the kind and amount of
securities, cash or other property that such Holders would have been entitled
to receive if they had settled the Purchase Contracts immediately before the
Cash Merger at the Settlement Rate in effect at such time.
(iv) No later than the third Business Day after the applicable Cash Merger
Early Settlement Date the Company shall cause (i) the shares of Common Stock
issuable upon Cash Merger Early Settlement of Purchase Contracts to be issued
and delivered, and (ii) the related Debt Securities or the Applicable Ownership
Interest in the appropriate Treasury Portfolio, in the case of Income PRIDES, or
the related Treasury Securities, in the case of Growth PRIDES, to be released
from the Pledge by the Collateral Agent and transferred, in each case to the
Agent for delivery to the Holder thereof or its designee.
(v) In the event that Cash Merger Early Settlement is effected with
respect to Purchase Contracts underlying less than all the Securities evidenced
by a Certificate, upon such Cash Merger Early Settlement the Company shall
execute and the Agent shall authenticate, countersign and deliver to the Holder
thereof, at the expense of the Company, a Certificate evidencing the Securities
as to which Early Settlement was not effected.
SECTION 5.10 NO FRACTIONAL SHARES.
No fractional shares or scrip representing fractional shares of Common
Stock shall be issued or delivered upon settlement on the Purchase Contract
Settlement Date or upon Early Settlement or Cash Merger Early Settlement of
any Purchase Contracts. If Certificates evidencing more than one Purchase
Contract shall be surrendered for settlement at one time by the same Holder,
the number of full shares of Common Stock which shall be delivered upon
settlement shall be computed on the basis of the aggregate number of Purchase
Contracts evidenced by the Certificates so surrendered. Instead of any
fractional share of Common Stock which would otherwise be deliverable upon
settlement of any Purchase Contracts on the Purchase Contract Settlement Date
or upon Early Settlement or Cash Merger Early Settlement, the Company,
through the Agent, shall make a cash payment in respect of such fractional
interest in an amount equal to the fractional share times (i) the Threshold
Appreciation Price, in the case
50
of an Early Settlement or (ii) the Applicable Market Value, in all other
circumstances. The Company shall provide the Agent from time to time with
sufficient funds to permit the Agent to make all cash payments required by this
Section 5.10 in a timely manner.
SECTION 5.11 CHARGES AND TAXES.
The Company will pay all stock transfer and similar taxes attributable
to the initial issuance and delivery of the shares of Common Stock pursuant
to the Purchase Contracts and in payment of any Deferred Contract Adjustment
Payments; provided, however, that the Company shall not be required to pay
any such tax or taxes which may be payable in respect of any exchange of or
substitution for a Certificate evidencing a Security or any issuance of a
share of Common Stock in a name other than that of the registered Holder of a
Certificate surrendered in respect of the Securities evidenced thereby, other
than in the name of the Agent, as custodian for such Holder, and the Company
shall not be required to issue or deliver such share certificates or
Certificates unless or until the Person or Persons requesting the transfer or
issuance thereof shall have paid to the Company the amount of such tax or
shall have established to the satisfaction of the Company that such tax has
been paid or that no such tax is due.
ARTICLE VI
REMEDIES
SECTION 6.1 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE CONTRACT ADJUSTMENT
PAYMENTS AND TO PURCHASE COMMON STOCK.
The Holder of any Income PRIDES or Growth PRIDES shall have the right,
which is absolute and unconditional (subject to the right of the Company to
defer payment thereof pursuant to Section 5.3, the prepayment of Contract
Adjustment Payments pursuant to Section 5.9 and the forfeiture of any
Deferred Contract Adjustment Payments upon Early Settlement or Cash Merger
Early Settlement pursuant to Section 5.9 or upon the occurrence of a
Termination Event), to receive payment of each installment of the Contract
Adjustment Payments with respect to the Purchase Contract constituting a part
of such Security on the respective Payment Date for such Security and to
purchase Common Stock pursuant to such Purchase Contract and, in each such
case, to institute suit for the enforcement of any such payment and right to
purchase Common Stock, and such rights shall not be impaired without the
consent of such Holder.
SECTION 6.2 RESTORATION OF RIGHTS AND REMEDIES.
If any Holder has instituted any proceeding to enforce any right or
remedy under this Agreement and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to such Holder,
then and in every such case, subject to any determination in such proceeding,
the Company and such Holder shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of
such Holder shall continue as though no such proceeding had been instituted.
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SECTION 6.3 RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Certificates in the last paragraph of
Section 3.10, no right or remedy herein conferred upon or reserved to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of
any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 6.4 DELAY OR OMISSION NOT WAIVER.
No delay or omission of any Holder to exercise any right or remedy upon
a default shall impair any such right or remedy or constitute a waiver of any
such right. Every right and remedy given by this Article or by law to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by such Holders.
SECTION 6.5 UNDERTAKING FOR COSTS.
All parties to this Agreement agree, and each Holder of Income PRIDES
or Growth PRIDES, by its acceptance of such Income PRIDES or Growth PRIDES
shall be deemed to have agreed, that any court may in its discretion require,
in any suit for the enforcement of any right or remedy under this Agreement,
or in any suit against the Agent for any action taken, suffered or omitted by
it as Agent, the filing by any party litigant in such suit of an undertaking
to pay the costs of such suit, and that such court may in its discretion
assess reasonable costs, including reasonable attorneys' fees, against any
party litigant in such suit, having due regard to the merits and good faith
of the claims or defenses made by such party litigant; provided that the
provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Agent, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% of the
Outstanding Securities, or to any suit instituted by any Holder for the
enforcement of payment of interest on any Debt Securities or Contract
Adjustment Payments on any Purchase Contract on or after the respective
Payment Date therefor in respect of any Security held by such Holder, or for
enforcement of the right to purchase shares of Common Stock under the
Purchase Contracts constituting part of any Security held by such Holder.
SECTION 6.6 WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Agreement; and the Company (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Agent or the Holders,
but will suffer and permit the execution of every such power as though no
such law had been enacted.
52
ARTICLE VII
THE AGENT
SECTION 7.1 CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Prior to a Default and after the curing or waiving of all such
Defaults that may have occurred,
(1) the Agent undertakes to perform, with respect to the Securities,
such duties and only such duties as are specifically set forth in this
Agreement and no implied covenants or obligations shall be read into this
Agreement against the Agent; and
(2) the Agent may, with respect to the Securities, conclusively rely,
as to the truth of the statements and the correctness of the opinions
expressed therein, in the absence of bad faith, negligence or willful
misconduct on the part of the Agent, upon certificates or opinions furnished
to the Agent and conforming to the requirements of this Agreement; but in the
case of any certificates or opinions which by any provision hereof are
specifically required to be furnished to the Agent, the Agent shall be under
a duty to examine the same to determine whether or not they conform to the
requirements of this Agreement.
(b) No provision of this Agreement shall be construed to relieve the
Agent from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Agent shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the Agent
was negligent in ascertaining the pertinent facts; and
(3) no provision of this Agreement shall require the Agent to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers.
(c) Whether or not therein expressly so provided, every provision of
this Agreement relating to the conduct or affecting the liability of or
affording protection to the Agent shall be subject to the provisions of this
Section.
(d) The Agent is authorized to execute, deliver and perform the
Pledge Agreement in its capacity as Agent and to grant the Pledge. The Agent
shall be entitled to all of the rights, privileges, immunities and
indemnities contained in this Agreement with respect to any duties of the
Agent under, or actions taken by the Agent pursuant to, such Pledge Agreement.
(e) In case a Default has occurred (that has not been cured or
waived), and is actually known by a Responsible Officer of the Agent, the
Agent shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in its exercise
53
thereof, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(f) At the request of the Company, the Agent is authorized to execute
and deliver one or more Remarketing Agreements to, among other things,
effectuate Section 5.4.
SECTION 7.2 NOTICE OF DEFAULT.
Within 90 days after the occurrence of any Default hereunder of which a
Responsible Officer of the Agent has actual knowledge, the Agent shall
transmit by mail to the Company and the Holders of Securities, as their names
and addresses appear in the Register, notice of such Default hereunder,
unless such Default shall have been cured or waived; provided that, except
for a Default in any payment obligation hereunder, the Agent shall be
protected in withholding such notice if and so long as a Responsible Officer
of the Agent in good faith determines that the withholding of such notice is
in the interests of the Holders of the Securities.
SECTION 7.3 CERTAIN RIGHTS OF AGENT.
Subject to the provisions of Section 7.1:
(a) the Agent may conclusively rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Certificate, Issuer Order or Issuer
Request, and any resolution of the Board of Directors of the Company may be
sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Agreement the Agent shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Agent (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its
part, rely upon a Company Certificate;
(d) the Agent may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Agent shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Agent, in its discretion, may make reasonable further
inquiry or investigation into such facts or matters related to the execution,
delivery and performance of the Purchase Contracts as it may see fit, and, if
the Agent shall determine to make such further inquiry or investigation, it
shall be given a reasonable opportunity to examine the books, records and
premises of the Company, personally or by agent or attorney;
54
(f) the Agent may execute any of the powers hereunder or perform any
duties hereunder either directly or by or through agents or attorneys or an
Affiliate and the Agent shall not be responsible for any misconduct or
negligence on the part of any agent or attorney or an Affiliate appointed
with due care by it hereunder; and
(g) the rights, privileges, protections, immunities and benefits
given to the Agent, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Agent in each
of its capacities hereunder.
SECTION 7.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Certificates shall be taken as
the statements of the Company, and the Agent assumes no responsibility for
their accuracy. The Agent makes no representations as to the validity or
sufficiency of either this Agreement or of the Securities, or of the Pledge
Agreement or the Pledge. The Agent shall not be accountable for the use or
application by the Company of the proceeds in respect of the Purchase
Contracts.
SECTION 7.5 MAY HOLD SECURITIES.
Any Registrar or any other agent of the Company, or the Agent and its
Affiliates, in their individual or any other capacity, may become the owner
or pledgee of Securities and may otherwise deal with the Company, the
Collateral Agent or any other Person with the same rights it would have if it
were not Registrar or such other agent, or the Agent.
SECTION 7.6 MONEY HELD IN CUSTODY.
Money held by the Agent in custody hereunder need not be segregated
from the other funds except to the extent required by law or provided
herein. The Agent shall be under no obligation to invest or pay interest on
any money received by it hereunder except as otherwise agreed in writing with
the Company.
SECTION 7.7 COMPENSATION AND REIMBURSEMENT.
The Company agrees:
(a) to pay to the Agent from time to time such compensation for all
services rendered by it hereunder as the parties shall agree from time to
time in writing (which compensation shall not be limited by any provisions of
law in regards to the compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Agent upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Agent in accordance with any provision of
this Agreement (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(c) to indemnify the Agent and any predecessor Agent for, and to hold
it harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising
55
out of or in connection with the acceptance or administration or the performance
of its duties hereunder, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder.
"Agent" for purposes of this Section 7.7 shall include any predecessor
Agent; provided, however, that the negligence or bad faith of any Agent
hereunder shall not affect the rights of any other Agent hereunder.
When the Agent incurs expenses or renders services in an action or
proceeding commenced pursuant to Section 4.3 of the Pledge Agreement upon the
occurrence of a Termination Event, the expenses (including the reasonable
charges and expenses of its counsel) and the compensation for the services
are intended to constitute expenses of administration under any applicable
Federal or State bankruptcy, insolvency or other similar law.
The provisions of this Section 7.7 shall survive the termination of
this Agreement and the Pledge Agreement.
SECTION 7.8 CORPORATE AGENT REQUIRED; ELIGIBILITY.
There shall at all times be an Agent hereunder which shall be (i) not
an Affiliate of the Company and (ii) a corporation organized and doing
business under the laws of the United States of America, any State thereof or
the District of Columbia, authorized under such laws to exercise corporate
trust powers, having (or being a member of a bank holding company having) a
combined capital and surplus of at least $50,000,000 and subject to
supervision or examination by Federal or State authority. If such
corporation publishes reports of condition at least annually, pursuant to law
or to the requirements of said supervising or examining authority, then for
the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. If at any time
the Agent shall cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
SECTION 7.9 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Agent and no appointment of a
successor Agent pursuant to this Article shall become effective until the
acceptance of appointment by the successor Agent in accordance with the
applicable requirements of Section 7.10.
(b) The Agent may resign at any time by giving written notice thereof
to the Company 60 days prior to the effective date of such resignation. If
the instrument of acceptance by a successor Agent required by Section 7.10
shall not have been delivered to the Agent within 30 days after the giving of
such notice of resignation, the resigning Agent may petition any court of
competent jurisdiction for the appointment of a successor Agent.
(c) The Agent may be removed at any time by Act of the Holders of a
majority in number of the Outstanding Securities delivered to the Agent and
the Company.
(d) If at any time
56
(1) the Agent fails to comply with Section 310(b) of the TIA,
as if the Agent was an indenture trustee under an indenture qualified
under the TIA, after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Security for at least six
months, or
(2) the Agent shall cease to be eligible under Section 7.8 and
shall fail to resign after written request therefor by the Company or
by any such Holder, or
(3) the Agent shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Agent or of its
property shall be appointed or any public officer shall take charge or
control of the Agent or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then, in any such case,
(i) the Company by a Board Resolution may remove the Agent, or (ii) any
Holder who has been a bona fide Holder of a Security for at least six
months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the
Agent and the appointment of a successor Agent.
(e) If the Agent shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Agent for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Agent and
shall comply with the applicable requirements of Section 7.10. If no
successor Agent shall have been so appointed by the Company and accepted
appointment in the manner required by Section 7.10, the Agent or any Holder
who has been a bona fide Holder of a Security for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Agent.
(f) The Company shall give, or shall cause such successor Agent to
give, notice of each resignation and each removal of the Agent and each
appointment of a successor Agent by mailing written notice of such event by
first-class mail, postage prepaid, to all Holders as their names and
addresses appear in the applicable Register. Each notice shall include the
name of the successor Agent and the address of its Corporate Trust Office.
SECTION 7.10 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Agent, every
such successor Agent so appointed shall execute, acknowledge and deliver to
the Company and to the retiring Agent an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Agent
shall become effective and such successor Agent, without any further act,
deed or conveyance, shall become vested with all the rights, powers, agencies
and duties of the retiring Agent; but, on the request of the Company or the
successor Agent, such retiring Agent shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Agent all
the rights, powers and trusts of the retiring Agent and shall duly assign,
transfer and deliver to such successor Agent all property and money held by
such retiring Agent hereunder.
57
(b) Upon request of any such successor Agent, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Agent all such rights, powers and agencies
referred to in paragraph (a) of this Section.
(c) No successor Agent shall accept its appointment unless at the
time of such acceptance such successor Agent shall be qualified and eligible
under this Article.
SECTION 7.11 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any Person into which the Agent may be merged or converted or with
which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Agent shall be a party, or any
Person succeeding to all or substantially all the corporate trust business of
the Agent, shall be the successor of the Agent hereunder, provided such
Person shall be otherwise qualified and eligible under this Article, without
the execution or filing of any paper or any further act on the part of any of
the parties hereto. In case any Certificates shall have been authenticated
and executed on behalf of the Holders, but not delivered, by the Agent then
in office, any successor by merger, conversion or consolidation to such Agent
may adopt such authentication and execution and deliver the Certificates so
authenticated and executed with the same effect as if such successor Agent
had itself authenticated and executed such Securities.
SECTION 7.12 PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
(a) The Agent shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders received by the Agent in its
capacity as Registrar.
(b) If three or more Holders (herein referred to as "applicants")
apply in writing to the Agent, and furnish to the Agent reasonable proof that
each such applicant has owned a Security for a period of at least six months
preceding the date of such application, and such application states that the
applicants desire to communicate with other Holders with respect to their
rights under this Agreement or under the Securities and is accompanied by a
copy of the form of proxy or other communication which such applicants
propose to transmit, then the Agent shall mail to all the Holders copies of
the form of proxy or other communication which is specified in such request,
with reasonable promptness after a tender to the Agent of the materials to be
mailed and of payment, or provision for the payment, of the reasonable
expenses of such mailing.
SECTION 7.13 NO OBLIGATIONS OF AGENT.
Except to the extent otherwise provided in this Agreement, the Agent
assumes no obligations and shall not be subject to any liability under this
Agreement, the Pledge Agreement or any Purchase Contract in respect of the
obligations of the Holder of any Security thereunder. The Company agrees,
and each Holder of a Certificate, by his acceptance thereof, shall be deemed
to have agreed, that the Agent's execution of the Certificates on behalf of
the Holders shall be solely as agent and attorney-in-fact for the Holders,
and that the Agent shall have no obligation to perform such Purchase
Contracts on behalf of the Holders, except to the extent expressly provided
in Article V hereof.
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SECTION 7.14 TAX COMPLIANCE.
(a) The Agent, on its own behalf and on behalf of the Company, will
comply with all applicable certification, information reporting and
withholding (including "backup" withholding) requirements imposed by
applicable tax laws, regulations or administrative practice with respect to
(i) any payments made with respect to the Securities or (ii) the issuance,
delivery, holding, transfer, redemption or exercise of rights under the
Securities. Such compliance shall include, without limitation, the
preparation and timely filing of required returns and the timely payment of
all amounts required to be withheld to the appropriate taxing authority or
its designated agent.
(b) The Agent shall comply with any written direction received from
the Company with respect to the application of such requirements to
particular payments or Holders or in other particular circumstances, and may
for purposes of this Agreement conclusively rely on any such direction in
accordance with the provisions of Section 7.1(a)(2) hereof.
(c) The Agent shall maintain all appropriate records documenting
compliance with such requirements, and shall make such records available, on
written request, to the Company or its authorized representative within a
reasonable period of time after receipt of such request.
ARTICLE VIII
SUPPLEMENTAL AGREEMENTS
SECTION 8.1 SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company and the Agent, at any
time and from time to time, may enter into one or more agreements
supplemental hereto, in form satisfactory to the Company and the Agent, for
any of the following purposes:
(a) to evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company herein
and in the Certificates; or
(b) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company; or
(c) to evidence and provide for the acceptance of appointment
hereunder by a successor Agent; or
(d) to make provision with respect to the rights of Holders pursuant
to the requirements of Section 5.6(b); or
(e) to cure any ambiguity, to correct or supplement any provisions
herein which may be inconsistent with any other provisions herein, or to make
any other provisions with respect to such matters or questions arising under
this Agreement, provided such action shall not adversely affect the interests
of the Holders.
59
SECTION 8.2 SUPPLEMENTAL AGREEMENTS WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority of the
outstanding Purchase Contracts voting together as one class, by Act of said
Holders delivered to the Company and the Agent, the Company, when authorized
by a Board Resolution, and the Agent may enter into an agreement or
agreements supplemental hereto for the purpose of modifying in any manner the
terms of the Purchase Contracts, or the provisions of this Agreement or the
rights of the Holders in respect of the Securities; provided, however, that,
except as contemplated herein, no such supplemental agreement shall, without
the consent of the Holder of each Outstanding Security affected thereby,
(a) change any Payment Date;
(b) change the amount or the type of Collateral required to be
Pledged to secure a Holder's Obligations under the Purchase Contract, impair
the right of the Holder of any Purchase Contract to receive distributions on
the related Collateral (except for the rights of Holders of Income PRIDES to
substitute the Treasury Securities for the Pledged Debt Securities or the
Applicable Ownership Interest in a Treasury Portfolio or the rights of
holders of Growth PRIDES to substitute Debt Securities or the Applicable
Ownership Interest in a Treasury Portfolio for the Pledged Treasury
Securities) or otherwise adversely affect the Holder's rights in or to such
Collateral or adversely alter the rights in or to such Collateral;
(c) reduce any Contract Adjustment Payments or any Deferred Contract
Adjustment Payment, or change any place where, or the coin or currency in
which, any Contract Adjustment Payment is payable;
(d) impair the right to institute suit for the enforcement of any
Purchase Contract;
(e) reduce the number of shares of Common Stock to be purchased
pursuant to any Purchase Contract, increase the price to purchase shares of
Common Stock upon settlement of any Purchase Contract, change the Purchase
Contract Settlement Date or the right to Early Settlement or Cash Merger
Early Settlement or otherwise adversely affect the Holder's rights under any
Purchase Contract; or
(f) reduce the percentage of the outstanding Purchase Contracts the
consent of whose Holders is required for any such supplemental agreement;
provided, that if any amendment or proposal referred to above would
adversely affect only the Income PRIDES or the Growth PRIDES, then only the
Holders of the affected class of Security as of the record date for the
Holders entitled to vote thereon will be entitled to vote on or consent to
such amendment or proposal, and such amendment or proposal shall not be
effective except with the consent of Holders of not less than a majority of
such class; provided further, however, that no such agreement, whether with
or without the consent of the Holders, shall affect Section 3.16 hereof.
It shall not be necessary for any Act of the Holders under this Section
to approve the particular form of any proposed supplemental agreement, but it
shall be sufficient if such Act shall approve the substance thereof.
60
SECTION 8.3 EXECUTION OF SUPPLEMENTAL AGREEMENTS.
In executing, or accepting the additional agencies created by, any
supplemental agreement permitted by this Article or the modifications thereby
of the agencies created by this Agreement, the Agent shall be entitled to
receive and (subject to Section 7.1) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
agreement is authorized or permitted by this Agreement. The Agent may, but
shall not be obligated to, enter into any such supplemental agreement which
affects the Agent's own rights, duties or immunities under this Agreement or
otherwise.
SECTION 8.4 EFFECT OF SUPPLEMENTAL AGREEMENTS.
Upon the execution of any supplemental agreement under this Article,
this Agreement shall be modified in accordance therewith, and such
supplemental agreement shall form a part of this Agreement for all purposes;
and every Holder of Certificates theretofore or thereafter authenticated,
executed on behalf of the Holders and delivered hereunder shall be bound
thereby.
SECTION 8.5 REFERENCE TO SUPPLEMENTAL AGREEMENTS.
Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any supplemental agreement pursuant to this
Article may, and shall if required by the Agent, bear a notation in form
approved by the Agent as to any matter provided for in such supplemental
agreement. If the Company shall so determine, new Certificates so modified
as to conform, in the opinion of the Agent and the Company, to any such
supplemental agreement may be prepared and executed by the Company and
authenticated, executed on behalf of the Holders and delivered by the Agent
in exchange for Outstanding Certificates.
ARTICLE IX
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1 COVENANT NOT TO MERGE, CONSOLIDATE, SELL OR CONVEY PROPERTY
EXCEPT UNDER CERTAIN CONDITIONS.
The Company covenants that it will not merge or consolidate with or
into any other Person or sell, assign, transfer, lease or convey all or
substantially all of its properties and assets to any Person or group of
affiliated Persons in one transaction or a series of related transactions,
unless (i) either the Company shall be the continuing entity, or the
successor (if other than the Company) shall be a Person, other than an
individual, organized and existing under the laws of the United States of
America or a State thereof or the District of Columbia and such entity shall
expressly assume all the obligations of the Company under the Purchase
Contracts, the Debt Securities, this Agreement and the Pledge Agreement by
one or more supplemental agreements in form reasonably satisfactory to the
Agent and the Collateral Agent, executed and delivered to the Agent and the
Collateral Agent by such Person, and (ii) the Company or such successor
entity, as the case may be, shall not, immediately after such merger or
consolidation, or such sale, assignment, transfer, lease or conveyance, be in
default in its payment obligations or in any material default in the
performance of any of its other obligations hereunder, or under any of the
Securities or the Pledge Agreement.
61
SECTION 9.2 RIGHTS AND DUTIES OF SUCCESSOR ENTITY.
In case of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance and upon any such assumption by a successor entity in
accordance with Section 9.1, such successor entity shall succeed to and be
substituted for the Company with the same effect as if it had been named
herein as the Company. Such successor entity thereupon may cause to be
signed, and may issue either in its own name or in the name of AmerUs Group
Co. any or all of the Certificates evidencing Securities issuable hereunder
which theretofore shall not have been signed by the Company and delivered to
the Agent; and, upon the order of such successor corporation, instead of the
Company, and subject to all the terms, conditions and limitations in this
Agreement prescribed, the Agent shall authenticate and execute on behalf of
the Holders and deliver any Certificates which previously shall have been
signed and delivered by the officers of the Company to the Agent for
authentication and execution, and any Certificate evidencing Securities which
such successor entity thereafter shall cause to be signed and delivered to
the Agent for that purpose. All the Certificates so issued shall in all
respects have the same legal rank and benefit under this Agreement as the
Certificates theretofore or thereafter issued in accordance with the terms of
this Agreement as though all of such Certificates had been issued at the date
of the execution hereof.
In case of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance such change in phraseology and form (but not in
substance) may be made in the Certificates evidencing Securities thereafter
to be issued as may be appropriate.
SECTION 9.3 OPINION OF COUNSEL GIVEN TO AGENT.
The Agent, subject to Sections 7.1 and 7.3, shall receive an Opinion of
Counsel as conclusive evidence that any such consolidation, merger, sale,
assignment, transfer, lease or conveyance, and any such assumption, complies
with the provisions of this Article and that all conditions precedent to the
consummation of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance have been met.
ARTICLE X
COVENANTS
SECTION 10.1 PERFORMANCE UNDER PURCHASE CONTRACTS.
The Company covenants and agrees for the benefit of the Holders from
time to time of the Securities that it will duly and punctually perform its
obligations under the Purchase Contracts in accordance with the terms of the
Purchase Contracts and this Agreement.
SECTION 10.2 MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in the Borough of Manhattan, The City of New
York an office or agency where Certificates may be presented or surrendered
for acquisition of shares of Common Stock upon settlement of the Purchase
Contracts on the Purchase Contract Settlement Date or Early Settlement or
Cash Merger Early Settlement and for transfer of Collateral upon occurrence
of a Termination Event, where Certificates may be surrendered for
registration of
62
transfer or exchange, for a Collateral Substitution or establishment of an
Income PRIDES and where notices and demands to or upon the Company in respect of
the Securities and this Agreement may be served. The Company will give prompt
written notice to the Agent of the location, and any change in the location, of
such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Agent with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office, and the Company hereby appoints the
Agent as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other
offices or agencies where Certificates may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York for such purposes. The Company
will give prompt written notice to the Agent of any such designation or
rescission and of any change in the location of any such other office or
agency. The Company hereby designates as the place of payment for the
Securities the Corporate Trust Office and appoints the Agent at its Corporate
Trust Office as paying agent in such city.
SECTION 10.3 COMPANY TO RESERVE COMMON STOCK.
The Company shall at all times prior to the Purchase Contract
Settlement Date reserve and keep available, free from preemptive rights, out
of its authorized but unissued Common Stock the full number of shares of
Common Stock issuable against tender of payment in respect of all Purchase
Contracts constituting a part of the Securities evidenced by Outstanding
Certificates.
SECTION 10.4 COVENANTS AS TO COMMON STOCK.
The Company covenants that all shares of Common Stock which may be
issued against tender of payment in respect of any Purchase Contract
constituting a part of the Outstanding Securities will, upon issuance, be
duly authorized, validly issued, fully paid and nonassessable.
63
IN WITNESS WHEREOF, the parties hereto have caused this Purchase
Contract Agreement to be duly executed as of the day and year first above
written.
AMERUS GROUP CO.
By:
Name:______________________________
Title:_____________________________
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Purchase Contract Agent and Trustee
By:
Name:______________________________
Title:_____________________________
64
EXHIBIT A
FORM OF INCOME PRIDES CERTIFICATE
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT
BE EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO
TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE
NAME OF ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF,
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT
AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER
NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. _____ Cusip No.___________
Number of Income PRIDES _______
AMERUS GROUP CO.
6.25% Income PRIDES
($25 Stated Amount)
This Income PRIDES Certificate certifies that ___________ is the
registered Holder of the number of Income PRIDES set forth above. Each Income
PRIDES represents (a) a stock purchase contract of AmerUs Group Co., an Iowa
corporation (the "Company") (as modified and supplemented and in effect from
time to time, a "Purchase Contract") and (b) beneficial ownership of either (A)
(i) beneficial ownership of a Senior Note initially due 2008 of the Company
("Debt Security"), having a principal amount of $25 or (ii) following the Reset
Date, an Applicable Ownership Interest in the appropriate Treasury Portfolio,
subject to the pledge of such Debt Security or Applicable Ownership Interest in
the appropriate Treasury Portfolio by the Holder pursuant to the Pledge
Agreement or (B) upon the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, an Applicable Ownership Interest in the
appropriate Treasury Portfolio, subject to the Pledge of such Applicable
Ownership Interest in the appropriate Treasury Portfolio by the Holder pursuant
to the Pledge Agreement. All
A-1
capitalized terms used herein without definition herein shall have the meaning
set forth in the Purchase Contract Agreement referred to below.
Pursuant to the Pledge Agreement, the Debt Securities or the
appropriate Applicable Ownership Interest in the Treasury Portfolio, as the
case may be, constituting part of each Income PRIDES evidenced hereby have
been pledged to the Collateral Agent, for the benefit of the Company, to
secure the obligations of the Holder under the Purchase Contract comprising a
portion of such Income PRIDES.
The Pledge Agreement provides that all payments of the principal amount of
Pledged Debt Securities or the Stated Amount of the Pledged Applicable Ownership
Interest (as specified in clause (1) of the definition of such term) in the
appropriate Treasury Portfolio, as the case may be, or payments of interest on
any Pledged Debt Securities or the Pledged Applicable Ownership Interest in the
appropriate Treasury Portfolio, as the case may be, constituting part of the
Income PRIDES received by the Collateral Agent shall be paid by the Collateral
Agent by wire transfer in same day funds (i) in the case of (A) payments of
interest with respect to Pledged Debt Securities or cash distributions on the
Pledged Applicable Ownership Interest (as specified in clauses (1)(ii), (1)(iii)
or (2)(ii) of the definition of such term) in the appropriate Treasury
Portfolio, as the case may be, and (B) any payments of the principal amount of
Pledged Debt Securities or the Stated Amount of the Pledged Applicable Ownership
Interest (as specified in clauses (1)(i) or (2)(i) of the definition of such
term) in the appropriate Treasury Portfolio, as the case may be, with respect to
any Debt Securities or the Applicable Ownership Interest in the appropriate
Treasury Portfolio, as the case may be, that have been released from the Pledge
pursuant to the Pledge Agreement, to the Agent to the account designated by the
Agent, no later than 2:00 p.m., New York City time, on the Business Day such
payment is received by the Collateral Agent (provided that in the event such
payment is received by the Collateral Agent on a day that is not a Business Day
or after 12:30 p.m., New York City time, on a Business Day, then such payment
shall be made no later than 10:30 a.m., New York City time, on the next
succeeding Business Day) and (ii) in the case of payments of the principal
amount of Debt Securities or the Applicable Ownership Interest (as specified in
clauses (1)(i) or (2)(i) of the definition of such term) in the appropriate
Treasury Portfolio, as the case may be, to the Company on the Purchase Contract
Settlement Date (as defined herein) in accordance with the terms of the Pledge
Agreement, in full satisfaction of the respective obligations of the Holders of
the Income PRIDES of which such Pledged Debt Securities or the Pledged
Applicable Ownership Interest in the appropriate Treasury Portfolio, as the case
may be, are a part under the Purchase Contracts forming a part of such Income
PRIDES; provided that if the Pledged Debt Securities are successfully remarketed
and the Reset Date if not February 16, 2006 or May 16, 2006, the Collateral
Agent shall receive on such Reset Date the payment representing accrued and
unpaid interest on such Pledged Debt Securities from the Interest Payment Date
immediately preceding such Reset Date, which payment shall be made to the
account designated by the Agent on the Payment Date next following such Reset
Date. Payment of interest on any Pledged Debt Securities or cash distribution
on the Pledged Applicable Ownership Interest (as specified in clauses (1)(ii),
1(iii) or (2)(ii) of the definition of such term) in the appropriate Treasury
Portfolio, as the case may be, forming part of an Income PRIDES evidenced hereby
which are payable quarterly in arrears on February 16, May 16, August 16 and May
16 of each year, commencing August 16, 2003, (each a "Payment Date"), shall,
subject to receipt thereof by the Agent from the Collateral Agent, be paid to
the Person in whose name this Income PRIDES Certificate (or a Predecessor Income
PRIDES Certificate) is registered at the close of business on the Record Date
for such Payment Date.
A-2
Each Purchase Contract evidenced hereby obligates the Holder of this
Income PRIDES Certificate to purchase, and the Company to sell, not later
than August 16, 2006 (the "Purchase Contract Settlement Date"), at a price of
$25 in cash (the "Purchase Price"), a number of newly-issued shares of Common
Stock, without par value including, where applicable, the preference stock
purchase rights appurtenant thereto ("Common Stock"), of the Company equal to
the applicable Settlement Rate (as defined below), unless on or prior to the
Purchase Contract Settlement Date there shall have occurred a Termination
Event or an Early Settlement with respect to the Income PRIDES of which such
Purchase Contract is a part, all as provided in the Purchase Contract
Agreement and more fully described on the herein.
The "Settlement Rate" is equal to (a) if the Applicable Market Value (as
defined below) is equal to or greater than $33.80 (the "Threshold Appreciation
Price"), a number of shares per Purchase Contract equal to the product of (i)
the Stated Amount divided by the Reference Price, multiplied by (ii) one minus a
fraction, the numerator of which is $7.80 and the denominator of which is the
Applicable Market Value, (b) if the Applicable Market Value is less than the
Threshold Appreciation Price, but is greater than $26.00 (the "Reference
Price"), the number of shares of Common Stock per Purchase Contract equal to $25
divided by the Applicable Market Value and (c) if the Applicable Market Value is
less than or equal to the Reference Price, 0.9615 shares of Common Stock per
Purchase Contract, in each case subject to adjustment as provided in the
Purchase Contract Agreement (and in each case rounded upward or downward to the
nearest 1/10,000th of a share). No fractional shares of Common Stock will be
issued upon settlement of Purchase Contracts, as provided in the Purchase
Contract Agreement.
The Company shall pay, on each Payment Date other than the Initial Reset
Date, if the Initial Reset Date is not also a regular quarterly Payment Date in
respect of each Purchase Contract forming part of an Income PRIDES evidenced
hereby, an amount (the "Contract Adjustment Payments") equal to __% per annum of
the Stated Amount; computed on the basis of a 360-day year of twelve 30-day
months, subject to deferral at the option of the Company as provided in the
Purchase Contract Agreement and more fully described herein. Such Contract
Adjustment Payments shall be payable to the Person in whose name this Income
PRIDES Certificate (or a Predecessor Income PRIDES Certificate or a Predecessor
Growth PRIDES Certificate) is registered on the Register at the close of
business on the Record Date for such Payment Date.
Contract Adjustment Payments will be payable at the Corporate Trust Office
or, at the option of the Company, by check mailed to the address of the Person
entitled thereto at such Person's address as it appears on the Income PRIDES
Register or by wire transfer to an account appropriately designated in writing
by the Person entitled to payment.
Unless the context otherwise requires, each provision of this Security
shall be part of the Purchase Contracts evidenced hereby. This Security and
each Purchase Contract evidenced hereby is governed by a Purchase Contract
Agreement, dated as of May 28, 2003 (as may be supplemented from time to time,
the "Purchase Contract Agreement"), between the Company and Wachovia Bank,
National Association, as purchase contract agent (including any successor
thereunder, herein called the "Agent"), to which Purchase Contract Agreement and
supplemental agreements thereto reference is hereby made for a description of
the respective rights, limitations of rights,
A-3
obligations, duties and immunities thereunder of the Agent, the Company, and the
Holders and of the terms upon which the Income PRIDES Certificates are, and are
to be, executed and delivered.
Each Purchase Contract evidenced hereby, which is settled either
through Early Settlement, Cash Merger Early Settlement or Cash Settlement,
shall obligate the Holder of the related Income PRIDES to purchase at the
applicable Purchase Price, and the Company to sell, a number of newly issued
shares of Common Stock equal to the Early Settlement Rate or the applicable
Settlement Rate, as the case may be.
The "Applicable Market Value" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending
on the third Trading Day immediately preceding the Purchase Contract
Settlement Date. The "Closing Price" of the Common Stock on any date of
determination means the closing sale price (or, if no closing price is
reported, the last reported sale price) of the Common Stock on the New York
Stock Exchange (the "NYSE") on such date or, if the Common Stock is not
listed for trading on the NYSE on any such date, as reported in the composite
transactions for the principal United States national or regional securities
exchange on which the Common Stock is so listed. If the Common Stock is not
so listed on a United States national or regional securities exchange, the
Closing Price means the last sale price of the Common Stock as reported by
the NASDAQ Stock Market, or if the Common Stock is not so reported, the last
quoted bid price for the Common Stock in the over-the-counter market as
reported by the National Quotation Bureau or similar organization. If such
bid price is not available, the Closing Price means market value of the
Common Stock on such date as determined by a nationally recognized
independent investment banking firm retained by the Company for this
purpose. A "Trading Day" means a day on which the Common Stock (A) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of the Income PRIDES evidenced hereby shall pay, on the Purchase
Contract Settlement Date, the applicable Purchase Price for the shares of
Common Stock purchased pursuant to each Purchase Contract evidenced hereby by
effecting a Cash Settlement or, an Early Settlement or Cash Merger Early
Settlement. A Holder of Income PRIDES who does not make such payment in
accordance with the Purchase Contract Agreement or who does not notify the
Agent of such Holder's intention, on or prior to 5:00 p.m., New York City
time, on the fifth Business Day immediately preceding the Purchase Contract
Settlement Date, to make an effective Cash Settlement or an Early Settlement
or Cash Merger Early Settlement, shall have defaulted in its obligations
under the related Purchase Contract and the Collateral Agent shall exercise
its rights as a secured creditor for the benefit of the Company under the
Purchase Contract Agreement and the Pledge Agreement and shall apply the
Proceeds of the sale of the related applicable Pledged Debt Securities held
by the Collateral Agent to satisfy the Holder's obligations under such
Purchase Contract to purchase Common Stock at the Purchase Price.
The Company shall not be obligated to issue any shares of Common Stock
in respect of the Purchase Contract on the Purchase Contract Settlement Date
or deliver any certificates
A-4
therefor to the Holder unless it shall have received payment in full of the
aggregate Purchase Price for the shares of Common Stock to be purchased
thereunder in the manner herein set forth.
Under and subject to the terms of the Pledge Agreement and the Purchase
Contract Agreement, the Agent will be entitled to exercise the voting and any
other consensual rights pertaining to the Pledged Debt Securities, but only
to the extent instructed by the Holders as described in the paragraph below.
Upon receipt of notice of any meeting at which holders of Debt Securities are
entitled to vote or upon the solicitation of consents, waivers or proxies of
holders of Debt Securities, the Agent shall, as soon as practicable
thereafter, mail to the Holders of Income PRIDES a notice (a) containing such
information as is contained in the notice or solicitation, (b) stating that
each Income PRIDES Holder on the record date set by the Agent therefor shall
be entitled to instruct the Agent as to the exercise of the voting rights
pertaining to the Debt Securities constituting a part of such Holder's Income
PRIDES and (c) stating the manner in which such instructions may be given.
Upon the written request of the Income PRIDES Holders on such record date,
the Agent shall endeavor insofar as practicable to vote or cause to be voted,
in accordance with the instructions set forth in such requests, the maximum
number of Debt Securities as to which any particular voting instructions are
received. In the absence of specific instructions from the Holder of an
Income PRIDES, the Agent shall abstain from voting any Debt Securities
evidenced by such Income PRIDES.
Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Redemption Price payable on the Tax Event
Redemption Date with respect to the Applicable Principal Amount of Debt
Securities shall be delivered to the Collateral Agent in exchange for the
Pledged Debt Securities. Pursuant to the terms of the Pledge Agreement, the
Collateral Agent will apply an amount equal to the Redemption Amount of such
Redemption Price to purchase on behalf of the Holders of Income PRIDES the
Tax Event Treasury Portfolio and promptly remit the remaining portion of such
Redemption Price, if any, to the Agent for payment to the Holders of such
Income PRIDES. The Tax Event Treasury Portfolio will be substituted for the
Pledged Debt Securities, and will be held by the Collateral Agent in
accordance with the terms of the Pledge Agreement to secure the obligation of
each Holder of an Income PRIDES to purchase the Common Stock of the Company
on the Purchase Contract Settlement Date under the Purchase Contract
constituting a part of such Income PRIDES. Following the occurrence of a Tax
Event Redemption prior to the Purchase Contract Settlement Date, the Holders
of Income PRIDES and the Collateral Agent shall have such security interests,
rights and obligations with respect to the Tax Event Treasury Portfolio as
the Holder of Income PRIDES and the Collateral Agent had in respect of the
Debt Securities subject to the Pledge thereof as provided in Articles II,
III, IV, V and VI of the Pledge Agreement, and any reference herein to the
Pledged Debt Securities shall be deemed to be reference to such Tax Event
Treasury Portfolio. The Company may cause to be made in any Income PRIDES
Certificates thereafter to be issued such change in phraseology and form (but
not in substance) as may be appropriate to reflect the substitution of the
Tax Event Treasury Portfolio for Debt Securities as collateral.
Upon the successful remarketing of the Pledged Debt Securities on a
Remarketing Date, the proceeds of such remarketing (after deducting any
Remarketing Fee) shall be delivered to the Collateral Agent in exchange for
the Pledged Debt Securities. Pursuant to the terms of the Pledge Agreement,
the Collateral Agent will apply an amount equal to the Remarketing Treasury
A-5
Portfolio Purchase Price to purchase on behalf of the Holders of Income PRIDES
on the Reset Date the Remarketing Treasury Portfolio and promptly remit the
remaining portion of such proceeds to the Agent for payment to the Holders of
such Income PRIDES. The Remarketing Treasury Portfolio will be substituted for
the outstanding Pledged Debt Securities, and will be held by the Collateral
Agent in accordance with the terms of the Pledge Agreement to secure the
obligation of each Holder of an Income PRIDES to purchase the Common Stock of
the Company on the Purchase Contract Settlement Date under the Purchase Contract
constituting a part of such Income PRIDES. Following the successful remarketing
of the Pledged Debt Securities on a Remarketing Date upon the substitution of
the Treasury Portfolio, the Holders of Income PRIDES and the Collateral Agent
shall have such security interests, rights and obligations with respect to the
Remarketing Treasury Portfolio as the Holder of Income PRIDES and the Collateral
Agent had in respect of the Debt Securities subject to the Pledge thereof as
provided in Articles II, III, IV, V and VI of the Pledge Agreement, and any
reference herein to the Debt Securities shall be deemed to be reference to such
Remarketing Treasury Portfolio. The Company may cause to be made in any Income
PRIDES Certificates thereafter to be issued such change in phraseology and form
(but not in substance) as may be appropriate to reflect the substitution of the
Remarketing Treasury Portfolio for Debt Securities as collateral.
The Income PRIDES are issuable only in registered form and only in
denominations of a single Income PRIDES and any integral multiple thereof.
The transfer of any Income PRIDES Certificate will be registered and Income
PRIDES Certificates may be exchanged as provided in the Purchase Contract
Agreement. The Income PRIDES Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents permitted
by the Purchase Contract Agreement. No service charge shall be required for
any such registration of transfer or exchange, but the Company and the Agent
may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
A Holder of an Income PRIDES may, at any time on or prior to the fifth
Business Day immediately preceding the Purchase Contract Settlement Date, create
or recreate a Growth PRIDES and separate the Debt Security or the Applicable
Ownership Interest in the appropriate Treasury Portfolio, as applicable, from
the related Purchase Contract in respect of such Income PRIDES by substituting
the appropriate Treasury Security for the Debt Security, or the Applicable
Ownership Interest in the appropriate Treasury Portfolio, that form a part of
such Income PRIDES in accordance with the Purchase Contract Agreement; provided,
however, that if a successful remarketing of the Debt Securities has occurred on
a Remarketing Date or a Tax Event Redemption has occurred, Holders of such
Income PRIDES may make such Collateral Substitutions at any time on or prior to
the second Business Day immediately preceding the Purchase Contract Settlement
Date. Holders may make Collateral Substitutions and establish Growth PRIDES (i)
only in integral multiples of 40 Income PRIDES if only Debt Securities are being
substituted by Treasury Securities, or (ii) only in integral multiples of
Income PRIDES (or such other number of Income PRIDES as may be determined by the
Reset Agent upon a successful remarketing of Debt Securities if the Reset Date
is not an Interest Payment Date) if the Applicable Ownership Interests in the
appropriate Treasury Portfolio are being substituted by Treasury Securities. To
create 40 Growth PRIDES (if a Tax Event Redemption has not occurred and the Debt
Securities remain a component of the Income PRIDES), or Growth PRIDES (or
such other number of Growth PRIDES as may be determined by the Reset Agent upon
a successful remarketing of Debt Securities if the Reset Date is not an Interest
Payment Date) (if a Tax Event Redemption has occurred or the Remarketing
Treasury Portfolio has replaced the Debt Securities as a component of the Income
PRIDES as a result of a successful remarketing of such Debt Securities), the
Income PRIDES Holder shall
A-6
(a) if a Treasury Portfolio has not replaced any Debt
Securities as a component of Income PRIDES as a result of a successful
remarketing of the Debt Securities on a Remarketing Date or a Tax Event
Redemption, deposit with the Collateral Agent a Treasury Security
having a principal amount at maturity of $1,000; or
(b) if a Treasury Portfolio has replaced the Debt Securities as
a component of Income PRIDES as a result of a successful remarketing of
the Debt Securities on a Remarketing Date or a Tax Event Redemption, on
or prior to the second Business Day immediately preceding the Purchase
Contract Settlement Date, deposit with the Collateral Agent Treasury
Securities having an aggregate principal amount at maturity of
$ ; and
(c) in each case, transfer and surrender the related 40 Income
PRIDES, or, in the event a Treasury Portfolio is a component of Income
PRIDES, Income PRIDES (or such other number of Income PRIDES as may
be determined by the Reset Agent upon a successful remarketing of Debt
Securities if the Reset Date is not an Interest Payment Date), to the
Agent accompanied by a notice to the Agent, substantially in the form of
Exhibit B to the Pledge Agreement, stating that the Holder has transferred
the relevant types and amounts of Treasury Securities to the Collateral
Agent and requesting that the Agent instruct the Collateral Agent to
release the applicable Debt Securities or the Applicable Ownership
Interest in the appropriate Treasury Portfolio, as the case may be,
underlying such Income PRIDES, whereupon the Agent shall promptly give
such instruction to the Collateral Agent, substantially in the form of
Exhibit A to the Pledge Agreement.
Upon receipt of the Treasury Securities described in clause (a) or (b)
above and the instructions described in clause (c) above, in accordance with
the terms of the Pledge Agreement, the Collateral Agent will release from the
Pledge, to the Agent, on behalf of the Holder, Debt Securities or the
Applicable Ownership Interest in the appropriate Treasury Portfolio, as the
case may be, that had been components of such Income PRIDES, free and clear
of the Company's security interest therein, and upon receipt thereof the
Agent shall promptly:
(i) cancel the related Income PRIDES surrendered and transferred;
(ii) transfer the Debt Securities or the Applicable Ownership Interest
in the appropriate Treasury Portfolio, as the case may be, that had been
components of such Income PRIDES to the Holder; and
(iii) authenticate, execute on behalf of such Holder and deliver a
Growth PRIDES Certificate executed by the Company in accordance with the
Purchase Contract Agreement evidencing the same number of Purchase Contracts
as were evidenced by the cancelled Income PRIDES.
Holders who elect to separate the Debt Securities or the Applicable
Ownership Interest in the appropriate Treasury Portfolio, as the case may be,
from the related Purchase Contracts and to substitute Treasury Securities for
such Debt Securities or the Applicable Ownership Interest in the appropriate
Treasury Portfolio, as the case may be, shall be responsible for any fees or
expenses payable to the Collateral Agent for its services as Collateral Agent
in respect of the substitution, and the Company shall not be responsible for
any such fees or expenses.
A-7
A Holder of a Growth PRIDES may create or recreate an Income PRIDES by
depositing with the Collateral Agent a Debt Security or the Applicable
Ownership Interest in the appropriate Treasury Portfolio, as the case may be,
having an aggregate principal amount equal to the aggregate principal amount
at maturity of, and in substitution for all, but not less than all, of the
Treasury Securities comprising part of the Growth PRIDES in exchange for the
release of such Pledged Treasury Securities in accordance with the terms of
the Purchase Contract Agreement and the Pledge Agreement.
Subject to the next succeeding paragraph, the Company shall pay, on
each Payment Date, except the Initial Reset Date, if the Initial Reset Date
is not also a quarterly Payment Date the Contract Adjustment Payments payable
in respect of each Purchase Contract to the Person in whose name the Income
PRIDES Certificate evidencing such Purchase Contract is registered on the
Register at the close of business on the Record Date next preceding such
Payment Date. The Contract Adjustment Payments will be payable at the
Corporate Trust Office or, at the option of the Company, by check mailed to
the address of the Person entitled thereto at such address as it appears on
the Income PRIDES Register or by wire transfer to an account appropriately
designated in writing by such person.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments otherwise payable on any Payment Date, but only if the
Company shall give the Holders and the Agent written notice of its election to
defer such payment (specifying the amount to be deferred) as provided in the
Purchase Contract Agreement. Any Contract Adjustment Payments so deferred shall
bear additional Contract Adjustment Payments thereon at the rate of 6.25% per
annum (computed on the basis of a 360-day year of twelve 30-day months),
compounding on each succeeding Payment Date, until paid in full (such deferred
installments of Contract Adjustment Payments, if any, together with the
additional Contract Adjustment Payments accrued thereon, are referred to herein
as the "Deferred Contract Adjustment Payments"). Deferred Contract Adjustment
Payments, if any, shall be due on the next succeeding Payment Date except to the
extent that payment is deferred pursuant to the Purchase Contract Agreement. No
Contract Adjustment Payments may be deferred to a date that is after the
Purchase Contract Settlement Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until the Purchase Contract
Settlement Date, the Holder of this Income PRIDES Certificate will receive on
the Purchase Contract Settlement Date, in lieu of a cash payment, a number of
shares of Common Stock (in addition to the number of shares equal to the
Settlement Rate) equal to (x) the aggregate amount of Deferred Contract
Adjustment Payments payable to the Holder of this Income PRIDES Certificate
divided by (y) the Applicable Market Value.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, then, until the Deferred Contract Adjustment
Payments have been paid, the Company shall not declare or pay dividends on,
make distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock or make
guarantee payments with respect to the foregoing (other than (i) purchases,
redemptions or acquisitions of shares of capital stock of the Company in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of
A-8
employees, officers, directors or agents or a stock purchase or dividend
reinvestment plan, or the satisfaction by the Company of its obligations
pursuant to any contract or security outstanding on the date of such event or
agent benefit plans or the satisfaction by the Company of its obligations
pursuant to any contract or security outstanding on the date of such event
requiring the Company to purchase, redeem or acquire its capital stock, (ii) as
a result of a reclassification of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for another
class or series of the Company's capital stock, (iii) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion or
exchange provisions of the Company's capital stock or the security being
converted or exchanged, (iv) dividends or distributions in capital stock of the
Company (or rights to acquire capital stock) or repurchases, redemptions or
acquisitions of capital stock in connection with the issuance or exchange of the
Company's capital stock (or securities convertible into or exchangeable for
shares of capital stock) or (v) redemptions, exchanges or repurchases of any
rights outstanding under a shareholder rights plan or the declaration or payment
thereunder of a dividend or distribution of or with respect to rights in the
future.
The Company's obligations with respect to Contract Adjustment Payments
(including any accrued or Deferred Contract Adjustment Payments), will be
subordinated and junior in right of payment to the Company's obligations
under any Senior Indebtedness. Upon any payment or distribution of the
Company's assets to its creditors upon any dissolution, winding up,
liquidation or reorganization, whether voluntary or involuntary, or in
bankruptcy, insolvency, receivership or other similar proceedings, the
holders of all Senior Indebtedness shall first be entitled to receive payment
in full of all amounts due or to become due thereon, or payment of such
amounts shall have been provided for, before the holders of the Securities
shall be entitled to receive any Contract Adjustment Payments.
No payment of Contract Adjustment Payments may be made if (i) any
payment default on any Senior Indebtedness has occurred and is continuing
beyond any applicable grace period; or (ii) any default other than a payment
default with respect to Senior Indebtedness occurs and is continuing that
permits the acceleration of the maturity thereof and the Agent receives a
written notice of such default from the Company or the holders of such Senior
Indebtedness.
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Contract
Adjustment Payments or any Deferred Contract Adjustment Payments, and the
rights and obligations of the Holders to purchase Common Stock, shall
immediately and automatically terminate, without the necessity of any notice
or action by any Holder, the Agent or the Company, if, on or prior to the
Purchase Contract Settlement Date, a Termination Event shall have occurred.
Upon the occurrence of a Termination Event, the Company shall promptly but in
no event later than two Business Days thereafter give written notice to the
Agent, the Collateral Agent and to the Holders, at their addresses as they
appear in the Income PRIDES Register. Upon and after the occurrence of a
Termination Event, the Collateral Agent shall release the Debt Securities or
the Applicable Ownership Interest in the appropriate Treasury Portfolio, as
the case may be, forming a part of the Income PRIDES evidenced hereby from
the Pledge in accordance with the provisions of the Pledge Agreement.
A-9
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, a Holder of Income PRIDES may settle the related Purchase
Contracts in their entirety at any time on or prior to the fifth Business Day
immediately preceding the Purchase Contract Settlement Date, but only in
integral multiples of 40 Income PRIDES; provided, however, that if a Treasury
Portfolio has become a component of the Income PRIDES, Holders of Income
PRIDES may settle early only in integral multiples of ______ Income PRIDES at
any time on or prior to the second Business Day immediately preceding the
Purchase Contract Settlement Date. The right to Early Settlement is subject
to there being in effect, if so required under Federal securities laws, a
registration statement covering the shares of Common Stock to be delivered in
respect of the Purchase Contracts being settled (it being understood that, if
so required under Federal securities laws, the Company shall use commercially
reasonable efforts to (1) cause such a registration statement to become
effective and (2) provide a prospectus in connection therewith, in each case,
in a form appropriate for Early Settlements). In order to exercise the right
to effect any such early settlement ("Early Settlement") with respect to any
Purchase Contracts evidenced by this Income PRIDES Certificate, the Holder of
this Income PRIDES Certificate shall deliver this Income PRIDES Certificate
to the Agent at the Corporate Trust Office duly endorsed for transfer to the
Company or in blank with the form of Election to Settle Early set forth below
duly completed and executed and accompanied by payment payable to the Company
in immediately available funds in an amount (the "Early Settlement Amount")
equal to the sum of (i) $25 times the number of Purchase Contracts being
settled, plus (ii) if such delivery is made with respect to any Purchase
Contracts during the period from the close of business on any Record Date
next preceding any Payment Date to the opening of business on such Payment
Date, an amount equal to the Contract Adjustment Payments payable, if any, on
such Payment Date with respect to such Purchase Contracts. Upon Early
Settlement of Purchase Contracts by a Holder of the related Securities, the
Pledged Debt Securities or the Pledged Applicable Ownership Interest in the a
Treasury Portfolio underlying such Securities shall be released from the
Pledge as provided in the Pledge Agreement and the Holder shall be entitled
to receive a number of shares of Common Stock on account of each Purchase
Contract forming part of an Income PRIDES as to which Early Settlement is
effected equal to the Early Settlement Rate which shall be equal to 0.7396
newly issued shares of Common Stock per Purchase Contract (the "Early
Settlement Rate"); provided however, that upon the Early Settlement of the
Purchase Contracts, (i) the Holder thereof will forfeit the right to receive
any Deferred Contract Adjustment Payments, if any, on such Purchase
Contracts, (ii) the Holder's right to receive additional Contract Adjustment
Payments in respect of such Purchase Contracts will terminate, and (iii) no
adjustment will be made to or for the Holder on account of Deferred Contract
Adjustment Payments, or any amount accrued in respect of Contract Adjustment
Payments. The Early Settlement Rate shall be adjusted in the same manner and
at the same time as the Settlement Rate is adjusted as provided in the
Purchase Contract Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, if, prior to the Purchase Contract Settlement Date, (i)
the Company merges with or into another entity, (ii) the Common Stock is
converted, exchanged, reclassified or cancelled in such merger, and (iii) at
least 30% of the consideration received by the Company's shareholders for its
Common Stock in such merger consists of cash or cash equivalents (a "Cash
Merger"), then each Holder of Securities shall have the right to settle the
Purchase Contract at the Settlement Rate in effect immediately before the
Cash Merger (a "Cash Merger Early Settlement"). The right to Cash Merger
Early Settlement is subject to there being in effect, if so required under
Federal
A-10
securities laws, a registration statement covering the securities to be
delivered in respect of the Purchase Contracts being settled (it being
understood that, if so required under Federal securities laws, the Company shall
use commercially reasonable efforts to (1) cause such a registration statement
to become effective and (2) provide a prospectus in connection therewith, in
each case, in a form appropriate for Early Settlements). Upon Cash Merger Early
Settlement, (x) the holder's rights to receive Deferred Contract Adjustment
Payments, if any, on the Purchase Contracts being settled will be forfeited, (y)
the holder's right to receive additional Contract Adjustment Payments in respect
of such Purchase Contracts will terminate and (z) no adjustment will be made to
or for the holder on account of Deferred Contract Adjustment Payments, or any
amount accrued in respect of Contract Adjustment Payments. The Company shall
provide each of the Holders with a notice of the consummation of the Cash Merger
within five Business Days after the consummation thereof. Such notice will
specify, among other things, the "Cash Merger Early Settlement Date," which
shall be 10 Business Days after the date of such notice, and the amount of the
cash, securities and other consideration receivable by each Holder upon a Cash
Merger Early Settlement. To exercise a Cash Merger Early Settlement, a Holder
shall deliver, present and surrender the this Income PRIDES Certificate duly
endorsed for transfer to the Company in blank at the offices of the Agent,
accompanied by payment to the Company in immediately available funds of an
amount equal to (I) $25 multiplied by (II) the number of Purchase Contracts
being settled, plus (III) if such delivery is made with respect to any Purchase
Contracts during the period from the close of business on any Record Date next
preceding any Payment Date to the opening of business on such Payment Date, an
amount equal to the Contract Adjustment Payments payable on such Payment Date
with respect to such Purchase Contracts; provided that no payment is required if
the Company has elected to defer the Contract Adjustment Payments which would
otherwise be payable on the Payment Date, no later than 5:00 p.m., New York City
time, on the Business Day immediately preceding the Cash Merger Early Settlement
Date. Except as provided in the immediately preceding sentence and subject to
the second to last paragraph of Section 5.2 of the Purchase Contract Agreement,
no payment or adjustment shall be made upon Early Settlement of any Purchase
Contract on account of any Contract Adjustment Payments accrued on such Purchase
Contract or on account of any dividends on the Common Stock issued upon such
Early Settlement. Upon a Cash Merger Early Settlement, the Pledged Debt
Securities or the Pledged Applicable Ownership Interest in the a Treasury
Portfolio underlying the Securities being settled shall be released from the
Pledge as provided in the Pledge Agreement and the Company will deliver, or
cause to be delivered, to Holders duly exercising a Cash Merger Early Settlement
on the Cash Merger Early Settlement Date the kind and amount of securities, cash
or other property that such Holders would have been entitled to receive if they
had settled the Purchase Contracts immediately before the Cash Merger at the
Settlement Rate in effect at such time.
Upon registration of transfer of this Income PRIDES Certificate, the
transferee shall be bound (without the necessity of any other action on the
part of such transferee, except as may be required by the Agent pursuant to
the Purchase Contract Agreement), under the terms of the Purchase Contract
Agreement and the Purchase Contracts evidenced hereby and the transferor
shall be released from the obligations under the Purchase Contracts evidenced
by this Income PRIDES Certificate. The Company covenants and agrees, and the
Holder, by its acceptance hereof, likewise covenants and agrees, to be bound
by the provisions of this paragraph.
A-11
The Holder of this Income PRIDES Certificate, by its acceptance hereof,
irrevocably authorizes the Agent to enter into and perform the related
Purchase Contracts forming part of the Income PRIDES evidenced hereby on its
behalf as its attorney-in-fact, expressly withholds any consent to the
assumption of the Purchase Contracts by the Company, its trustee in
bankruptcy, receiver, liquidator or a person or entity performing similar
functions, in the event that the Company becomes the subject of a case under
the Bankruptcy Code or subject to other similar Federal or State law
providing for reorganization or liquidation, agrees to be bound by the terms
and provisions thereof, covenants and agrees to perform its obligations under
such Purchase Contracts, consents to the provisions of the Purchase Contract
Agreement, authorizes the Agent to enter into and perform the Pledge
Agreement on its behalf as its attorney-in-fact, and consents to and agrees
to be bound by the Pledge of the Pledged Debt Securities or the Pledged
Applicable Ownership Interest in a Treasury Portfolio, as the case may be,
underlying this Income PRIDES Certificate pursuant to the Pledge Agreement.
The Holder, by its acceptance hereof, further covenants and agrees, that, to
the extent and in the manner provided in the Purchase Contract Agreement and
the Pledge Agreement, but subject to the terms thereof, payments in respect
of the principal of the Pledged Debt Securities, or the portion of the
Applicable Ownership Interest (as specified in clauses (1)(i) or 2(i) of the
definition of such term) in the appropriate Treasury Portfolio, on the
Purchase Contract Settlement Date shall be paid by the Collateral Agent to
the Company in satisfaction of such Holder's obligations under such Purchase
Contract and such Holder shall acquire no right, title or interest in such
payments.
The Holder of this Income PRIDES Certificate, by its acceptance hereof,
covenants and agrees to treat itself as the owner, for United States federal,
state and local income and franchise tax purposes, of the Debt Securities or
the Applicable Ownership Interest in the appropriate Treasury Portfolio
forming part of the Income PRIDES evidenced hereby. The Holder of this
Income PRIDES Certificate, by its acceptance hereof, further covenants and
agrees to treat the Debt Securities forming part of the Income PRIDES
evidenced hereby as indebtedness of the Company for United States federal,
state and local income and franchise tax purposes.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts. In addition, certain amendments to the Purchase Contract
Agreement may be made without any consent of the Holders as provided in the
Purchase Contract Agreement.
THE PURCHASE CONTRACTS SHALL FOR ALL PURPOSES BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
The Company and the Agent and any agent of the Company or the Agent may
treat the Person in whose name this Income PRIDES Certificate is registered on
the Income PRIDES Register as the owner of the Income PRIDES evidenced hereby
for the purpose of receiving payments of interest payable quarterly on the Debt
Securities receiving payments of Contract Adjustment Payments and any Deferred
Contract Adjustment Payments, performance of the Purchase Contracts and for all
other purposes whatsoever, whether or not any payments in respect thereof
A-12
be overdue and notwithstanding any notice to the contrary, and neither the
Company, the Agent nor any such agent shall be affected by notice to the
contrary.
The Purchase Contracts shall not, prior to the settlement thereof in
accordance with the Purchase Contract Agreement, entitle the Holder to any of
the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent during regular business hours of the Agent.
Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Income PRIDES Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
AMERUS GROUP CO.
By:______________________________________
Name:
Title:
A-13
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts evidenced hereby)
By: WACHOVIA BANK, NATIONAL ASSOCIATION
not individually but solely as
Attorney-in-Fact of such Holder
By:______________________________________
Name:
Title:
Dated:
A-14
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Income PRIDES Certificates referred to in the within
mentioned Purchase Contract Agreement.
Wachovia Bank, National Association
as Purchase Contract Agent and Trustee
By:______________________________________
Authorized Signatory
A-15
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - ---------------Custodian-------------
(cust) (minor)
Under Uniform Gifts to Minors Act
---------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
Additional abbreviations may also be used though not in the above list.
-----------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Income PRIDES Certificate and all rights thereunder, hereby
irrevocably constituting and appointing attorney to transfer said Income PRIDES
Certificate on the books of AmerUs Group Co. with full power of substitution in
the premises.
Dated:_____________________________________________________________________
Signature
NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within
Income PRIDES Certificates in every
particular, without alteration or
enlargement or any change whatsoever.
Signature Guarantee: ________________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be
A-16
determined by the Registrar in addition to, or in substitution for, STAMP, all
in accordance with the Securities Exchange Act of 1934, as amended.
A-17
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Income PRIDES evidenced
by this Income PRIDES Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the undersigned at
the address indicated below unless a different name and address have been
indicated below. If shares are to be registered in the name of a Person other
than the undersigned, the undersigned will pay any transfer tax payable incident
thereto.
Dated:
--------------------------------- ---------------------------------------
Signature
Signature Guarantee: ______________
(if assigned to another person)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
If shares are to be registered in the name of and REGISTERED HOLDER
delivered to a Person other than the Holder, please
(i) print such Person's name and address and (ii)
provide a guarantee of your signature:
Please print name and address of
Registered Holder:
--------------------------------- ---------------------------------------
Name Name
--------------------------------- ---------------------------------------
Address Address
--------------------------------- ---------------------------------------
--------------------------------- ---------------------------------------
--------------------------------- ---------------------------------------
Social Security or other
Taxpayer Identification
Number, if any
-------------------------
A-18
ELECTION TO SETTLE EARLY
The undersigned Holder of this Income PRIDES Certificate hereby irrevocably
exercises the option to effect Early Settlement in accordance with the terms of
the Purchase Contract Agreement with respect to the Purchase Contracts
underlying the number of Income PRIDES evidenced by this Income PRIDES
Certificate specified below. The undersigned Holder directs that a certificate
for shares of Common Stock deliverable upon such Early Settlement be registered
in the name of, and delivered, together with a check in payment for any
fractional share and any Income PRIDES Certificate representing any Income
PRIDES evidenced hereby as to which Early Settlement of the related Purchase
Contracts is not effected, to the undersigned at the address indicated below
unless a different name and address have been indicated below. Pledged Debt
Securities or the Applicable Ownership Interest in the appropriate Treasury
Portfolio, as the case may be, deliverable upon such Early Settlement will be
transferred in accordance with the transfer instructions set forth below. If
shares are to be registered in the name of a Person other than the undersigned,
the undersigned will pay any transfer tax payable incident thereto.
Dated:
--------------------------------- ---------------------------------------
Signature
Signature Guarantee:
--------------
(if assigned to another person)
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Number of Securities evidenced hereby as to which Early Settlement of the
related Purchase Contracts is being elected:
If shares of Common Stock or Income PRIDES REGISTERED HOLDER
Certificates are to be registered in the name of
and delivered to, and Pledged Debt Securities, or
the Treasury Portfolio, as the case may be, are
to be transferred to, a Person other than the
Holder, please print such Person's name and
address:
Please print name and address of
Registered Holder:
--------------------------------- ---------------------------------------
Name Name
A-19
--------------------------------- ---------------------------------------
Address Address
--------------------------------- ---------------------------------------
--------------------------------- ---------------------------------------
--------------------------------- ---------------------------------------
Social Security or other
Taxpayer Identification
Number, if any
--------------------------
A-20
Transfer Instructions for Pledged Debt Securities, or the Treasury Portfolio, as
the case may be, Transferable Upon Early Settlement or a Termination Event:
{TO BE ATTACHED TO GLOBAL CERTIFICATES}
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have been
made:
Date Amount of decrease in Amount of increase in Principal Amount Signature of
Principal Amount of the Principal Amount of the of this Global authorized officer of
Global Certificate Global Certificate Certificate Trustee or Securities
following such Custodian
decrease or
increase
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A-21
EXHIBIT B
FORM OF GROWTH PRIDES CERTIFICATE
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY,
AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No.______________________________________ Cusip No.___________________
Number of Growth PRIDES__________________
AMERUS GROUP CO.
Growth PRIDES
($25 Stated Amount)
This Growth PRIDES Certificate certifies that ___________ is the
registered Holder of the number of Growth PRIDES set forth above. Each Growth
PRIDES represents (a) a stock purchase contract of AmerUs Group Co., an Iowa
corporation (the "Company") (as modified and supplemented and in effect from
time to time, a "Purchase Contract") and (b) a 1/40, or 2.5% undivided
beneficial ownership interest in a Treasury Security. All capitalized terms used
herein without definition herein have the meaning set forth in the Purchase
Contract Agreement referred to below.
Pursuant to the Pledge Agreement, the Treasury Securities constituting
part of each Growth PRIDES evidenced hereby have been pledged to the Collateral
Agent, for the benefit of the Company, to secure the obligations of the Holder
under the Purchase Contract comprising a portion of such Growth PRIDES.
The Pledge Agreement provides that all payments of the principal of any
Treasury Securities received by the Collateral Agent shall be paid by the
Collateral Agent by wire transfer in same day funds (i) in the case of any
principal payments with respect to any Treasury
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Securities that have been released from the Pledge pursuant to the Pledge
Agreement, to the Holders of the applicable Growth PRIDES to the accounts
designated by them in writing for such purpose no later than 2:00 p.m. New York
City time, on the Business Day such payment is received by the Collateral Agent
(provided that in the event such payment is received by the Collateral Agent on
a day that is not a Business Day or after 12:30 p.m., New York City time, on a
Business Day, then such payment shall be made no later than 10:30 a.m., New York
City time, on the next succeeding Business Day), and (ii) in the case of the
principal of any Pledged Treasury Securities, to the Company on the Purchase
Contract Settlement Date (as defined herein) in accordance with the terms of the
Pledge Agreement, in full satisfaction of the respective obligations of the
Holders of the Growth PRIDES of which such Pledged Treasury Securities are a
part under the Purchaser Contracts forming a part of such Growth PRIDES.
Each Purchase Contract evidenced hereby obligates the Holder of this
Growth PRIDES Certificate to purchase, and the Company, to sell not later than
August 16, 2006 (the "Purchase Contract Settlement Date"), at a price of $25 in
cash (the "Purchase Price"), a number of newly issued shares of Common Stock,
without par value, of the Company including, where applicable, the preference
stock purchase rights appurtenant thereto ("Common Stock"), equal to the
applicable Settlement Rate (as defined below), unless on or prior to the
Purchase Contract Settlement Date there shall have occurred a Termination Event
or an Early Settlement with respect to the Growth PRIDES of which such Purchase
Contract is a part, all as provided in the Purchase Contract Agreement and more
fully described below.
The "Settlement Rate" is equal to (a) if the Applicable Market Value (as
defined below) is equal to or greater than $33.80 (the "Threshold Appreciation
Price"), a number of shares per Purchase Contract equal to the product of (i)
the Stated Amount divided by the Reference Price multiplied by (ii) one minus a
fraction, the numerator of which is $7.80 and the denominator of which is the
Applicable Market Value, (b) if the Applicable Market Value is less than the
Threshold Appreciation Price, but is greater than $26.00 (the "Reference
Price"), the number of shares of Common Stock per Purchase Contract equal to $25
divided by the Applicable Market Value and (c) if the Applicable Market Value is
less than or equal to the Reference Price, 0.9615 shares of Common Stock per
Purchase Contract, in each case subject to adjustment as provided in the
Purchase Contract Agreement (and in each case rounded upward or downward to the
nearest 1/10,000th of a share). No fractional shares of Common Stock will be
issued upon settlement of Purchase Contracts, as provided in the Purchase
Contract Agreement.
The Company shall pay on each Payment Date other than the Initial Reset
Date is not also a regular quarterly Payment Date in respect of each Purchase
Contract forming part of a Growth PRIDES evidenced hereby an amount (the
"Contract Adjustment Payments") equal to ____% per annum of the Stated Amount
computed on the basis of a 360 day year of twelve 30 day months, subject to
deferral at the option of the Company as provided in the Purchase Contract
Agreement and more fully described below. Such Contract Adjustment Payments
shall be payable to the Person in whose name this Growth PRIDES Certificate (or
a Predecessor Growth PRIDES Certificate or a Predecessor Income PRIDES
Certificate) is registered on the Register at the close of business on the
Record Date for such Payment Date.
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Contract Adjustment Payments will be payable at the Corporate Trust Office
or, at the option of the Company, by check mailed to the address of the Person
entitled thereto as such address appears on the Growth PRIDES Register or by
wire transfer to an account appropriately designated in writing by the Person
entitled to payment.
Unless the context otherwise requires, each provision of this Security
shall be part of the Purchase Contracts evidenced hereby. This Security and each
Purchase Contract evidenced hereby is governed by a Purchase Contract Agreement,
dated as of May __, 2003 (as may be supplemented from time to time, the
"Purchase Contract Agreement") between the Company and Wachovia Bank, National
Association, as purchase contract agent (including any successor thereunder,
herein called the "Agent"), to which Purchase Contract Agreement and
supplemental agreements thereto reference is hereby made for a description of
the respective rights, limitations of rights, obligations, duties and immunities
thereunder of the Agent, the Company and the Holders and of the terms upon which
the Growth PRIDES Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby, which is settled either through
Early Settlement or Cash Settlement, shall obligate the Holder of the related
Growth PRIDES to purchase at the applicable Purchase Price, and the Company to
sell, a number of newly issued shares of Common Stock equal to the applicable
Early Settlement Rate or the Settlement Rate, as applicable.
The "Applicable Market Value" means the average of the Closing Price per
share of Common Stock on each of the 20 consecutive Trading Days ending on the
third Trading Day immediately preceding the Purchase Contract Settlement Date.
The "Closing Price" of the Common Stock on any date of determination means the
closing sale price (or, if no closing price is reported, the last reported sale
price) of the Common Stock on the New York Stock Exchange (the "NYSE") on such
date or, if the Common Stock is not listed for trading on the NYSE on any such
date, as reported in the composite transactions for the principal United States
national or regional securities exchange on which the Common Stock is so listed.
If the Common Stock is not so listed on a United States national or regional
securities exchange, the Closing Price means the last sale price of the Common
Stock as reported by the NASDAQ Stock Market, or if the Common Stock is not so
reported, the last quoted bid price for the Common Stock in the over-the-counter
market as reported by the National Quotation Bureau or similar organization. If
such bid price is not available, the Closing Price means market value of the
Common Stock on such date as determined by a nationally recognized independent
investment banking firm retained by the Company for this purpose. A "Trading
Day" means a day on which the Common Stock (A) is not suspended from trading on
any national or regional securities exchange or association or over-the-counter
market at the close of business and (B) has traded at least once on the national
or regional securities exchange or association or over-the-counter market that
is the primary market for the trading of the Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of the Growth PRIDES evidenced hereby shall pay, on the Purchase Contract
Settlement Date, the Purchase Price for the shares of Common Stock purchased
pursuant to each Purchase Contract evidenced hereby by effecting a Cash
Settlement or an Early Settlement of each such Purchase Contract or by applying
a principal amount of the Pledged Treasury Securities underlying such Holder's
Growth PRIDES equal to the Stated Amount of such Purchase Contract to the
purchase
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of Common Stock. A Holder of Growth PRIDES who does not make such payment in
accordance with the Purchase Contract Agreement or who does not notify the Agent
of such Holder's intention, on or prior to 5:00 p.m., New York City time, on the
fifth Business Day immediately preceding the Purchase Contract Settlement Date,
to make an effective Cash Settlement or an Early Settlement, shall have
defaulted in its obligations under the related Purchase Contract, and the
Collateral Agent shall exercise its rights as a secured creditor for the benefit
of the Company under the Purchase Contract Agreement and the Pledge Agreement
and shall apply the principal amount at maturity of the related Pledged Treasury
Securities held by the Collateral Agent to the Purchase Price of the Common
Stock on such Purchase Contract Settlement Date.
The Company shall not be obligated to issue any shares of Common Stock in
respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the Purchase Price for
the shares of Common Stock to be purchased thereunder in the manner set forth in
the Purchase Contract Agreement.
The Growth PRIDES Certificates are issuable only in registered form and
only in denominations of a single Growth PRIDES and any integral multiple
thereof. The transfer of any Growth PRIDES Certificate will be registered and
Growth PRIDES Certificates may be exchanged as provided in the Purchase Contract
Agreement. The Growth PRIDES Registrar may require a Holder, among other things,
to furnish appropriate endorsements and transfer documents permitted by the
Purchase Contract Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the Agent may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
A Holder of a Growth PRIDES may, at any time on or prior to the fifth
Business Day immediately preceding the Purchase Contract Settlement Date, create
or recreate an Income PRIDES by depositing with the Collateral Agent a Debt
Security or the Applicable Ownership Interest in the applicable Treasury
Portfolio, as the case may be, having an aggregate principal amount equal to the
aggregate principal amount at maturity of, and in substitution for all, but not
less than all, of the Treasury Securities comprising part of the Growth PRIDES
in accordance with the Purchase Contract Agreement; provided, however, that if
the Treasury Portfolio has replaced the Debt Securities as a component of Income
PRIDES as a result of a successful remarketing of the Debt Securities on a
Remarketing Date or a Tax Event Redemption, such Collateral Substitutions may be
made at any time on or prior to the second Business Day immediately preceding
the Purchase Contract Settlement Date. Holders of Growth PRIDES may make such
Collateral Substitutions and establish Income PRIDES (i) only in integral
multiples of 40 Growth PRIDES if Treasury Securities are being replaced by only
Debt Securities, or (ii) only in integral multiples of Growth PRIDES (or
such other number of Growth PRIDES as may be determined by the Reset Agent upon
a successful remarketing of Debt Securities if the Reset Date is not an Interest
Payment Date) if any Treasury Security is being replaced by the Applicable
Ownership Interest in the appropriate Treasury Portfolio. To create 40 Income
PRIDES (if a Tax Event Redemption has not occurred and the Debt Securities
remain components of Income PRIDES), or Income PRIDES (or such other
number of Income PRIDES as may be determined by the Reset Agent upon a
successful remarketing of Debt Securities if the Reset Date is not an Interest
Payment Date) (if a Tax Event Redemption has occurred or the Remarketing
Treasury Portfolio has replaced the Debt Securities as a result of a successful
remarketing of such Debt Securities), the Growth PRIDES Holder shall
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(a) if a Treasury Portfolio has not replaced the Debt Securities as
a component of Income PRIDES as a result of a successful remarketing of
the Debt Securities on Remarketing Date or a Tax Event Redemption, on or
prior to the fifth Business Day immediately preceding the Purchase
Contract Settlement Date, deposit with the Collateral Agent $1,000 in
aggregate principal amount of Debt Securities; or
(b) if a Treasury Portfolio has replaced the Debt Securities as a
component of Income PRIDES as a result of a successful remarketing of the
Debt Securities on a Remarketing Date or a Tax Event Redemption, on or
prior to the second Business Day immediately preceding the Purchase
Contract Settlement Date, deposit with the Collateral Agent the Applicable
Ownership Interest in the Treasury Portfolio for each Income PRIDES
(or such other number of Income PRIDES as may be determined by the Reset
Agent upon a successful remarketing of Debt Securities if the Reset Date
is not an Interest Payment Date) being created by the Holder, and having
an aggregate principal amount of $ ; and
(c) in each case, transfer and surrender the related 40 Growth
PRIDES, or in the event the Treasury Portfolio is a component of Income
PRIDES, Income PRIDES (or such other number of Income PRIDES as may
be determined by the Reset Agent upon a successful remarketing of Debt
Securities if the Reset Date is not an Interest Payment Date), to the
Agent accompanied by a notice to the Agent, substantially in the form of
Exhibit B to the Pledge Agreement, stating that the Holder has transferred
the relevant amount of Debt Securities or the appropriate Applicable
Ownership Interest in the Treasury Portfolio, as the case may be, to the
Collateral Agent and requesting that the Agent instruct the Collateral
Agent to release the Treasury Securities underlying such Growth PRIDES,
whereupon the Agent shall promptly give such instruction to the Collateral
Agent, substantially in the form of Exhibit A to the Pledge Agreement.
Upon receipt of the Debt Securities or the Applicable Ownership Interest
in the appropriate Treasury Portfolio, as the case may be, described in clause
(a) or (b) above and the instructions described in clause (c) above, in
accordance with the terms of the Pledge Agreement, the Collateral Agent will
effect the release of the Treasury Securities having a corresponding aggregate
principal amount from the Pledge to the Agent free and clear of the Company's
security interest therein, and upon receipt thereof the Agent shall promptly:
(i) cancel the related Growth PRIDES surrendered and transferred;
(ii) transfer the Treasury Securities that had been components of
such Growth PRIDES to the Holder; and
(iii) authenticate, execute on behalf of such Holder and deliver an
Income PRIDES Certificate executed by the Company in accordance with the
Purchase Contract Agreement evidencing the same number of Purchase
Contracts as were evidenced by the cancelled Growth PRIDES.
Holders who elect to separate Pledged Treasury Securities from the related
Purchase Contracts and to substitute Debt Securities or the Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, for such Pledged
Treasury Securities shall be responsible for any fees or expenses payable to the
Collateral Agent for its services as Collateral Agent in respect of the
substitution, and the Company shall not be responsible for any such fees or
expenses.
A-26
A Holder of an Income PRIDES may create or recreate a Growth PRIDES and
separate the Debt Security or the Applicable Ownership Interest in the
appropriate Treasury Portfolio, as applicable, from the related Purchase
Contract in respect of such Income PRIDES by substituting a Treasury Security
for the Debt Security, or the Applicable Ownership Interest in the appropriate
Treasury Portfolio, that form a part of such Income PRIDES in accordance with
the Purchase Contract Agreement.
Subject to the next succeeding paragraph, the Company shall pay, on each
Payment Date, except Initial Reset Date, if the Initial Reset Date is not also a
quarterly Payment Date, the Contract Adjustment Payments payable in respect of
each Purchase Contract to the Person in whose name the Growth PRIDES Certificate
evidencing such Purchase Contract is registered on the Register at the close of
business on the Record Date next preceding such Payment Date. The Contract
Adjustment Payments will be payable at the Corporate Trust Office or, at the
option of the Company, by check mailed to the address of the Person entitled
thereto at such address as it appears on the Growth PRIDES Register or by wire
transfer to an account appropriately designated in writing by such person.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments otherwise payable on any Payment Date, but only if the
Company shall give the Holders and the Agent written notice of its election to
defer such payment (specifying the amount to be deferred) as provided in the
Purchase Contract Agreement. Any Contract Adjustment Payments so deferred shall
bear additional Contract Adjustment Payments thereon at the rate of ____% per
annum (computed on the basis of a 360-day year of twelve 30-day months),
compounding on each succeeding Payment Date, until paid in full (such deferred
installments of Contract Adjustment Payments, if any, together with the
additional Contract Adjustment Payments accrued thereon, are referred to herein
as the "Deferred Contract Adjustment Payments"). Deferred Contract Adjustment
Payments, if any, shall be due on the next succeeding Payment Date except to the
extent that payment is deferred pursuant to the Purchase Contract Agreement. No
Contract Adjustment Payments may be deferred to a date that is after the
Purchase Contract Settlement Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until the Purchase Contract
Settlement Date, the Holder of this Growth PRIDES Certificate will receive on
the Purchase Contract Settlement Date, in lieu of a cash payment, a number of
shares of Common Stock (in addition to the number of shares equal to the
Settlement Rate) equal to (x) the aggregate amount of Deferred Contract
Adjustment Payments payable to the Holder of this Growth PRIDES Certificate
divided by (y) the Applicable Market Value.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, then, until the Deferred Contract Adjustment
Payments have been paid, the Company shall not declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock or make guarantee
payments with respect to the foregoing (other than (i) purchases, redemptions or
acquisitions of shares of capital stock of the Company in connection with any
employment contract, benefit plan or other similar arrangement with or for the
benefit of employees, officers, directors or agents or a stock purchase or
dividend reinvestment plan, or the
A-27
satisfaction by the Company of its obligations pursuant to any contract or
security outstanding on the date of such event or agent benefit plans or the
satisfaction by the Company of its obligations pursuant to any contract or
security outstanding on the date of such event requiring the Company to
purchase, redeem or acquire its capital stock, (ii) as a result of a
reclassification of the Company's capital stock or the exchange or conversion of
one class or series of the Company's capital stock for another class or series
of the Company's capital stock, (iii) the purchase of fractional interests in
shares of the Company's capital stock pursuant to the conversion or exchange
provisions of the Company's capital stock or the security being converted or
exchanged, (iv) dividends or distributions in capital stock of the Company (or
rights to acquire capital stock) or repurchases, redemptions or acquisitions of
capital stock in connection with the issuance or exchange of the Company's
capital stock (or securities convertible into or exchangeable for shares of
capital stock) or (v) redemptions, exchanges or repurchases of any rights
outstanding under a shareholder rights plan or the declaration or payment
thereunder of a dividend or distribution of or with respect to rights in the
future.
The Company's obligations with respect to Contract Adjustment Payments
(including any accrued or Deferred Contract Adjustment Payments), will be
subordinated and junior in right of payment to the Company's obligations under
any Senior Indebtedness. Upon any payment or distribution of the Company's
assets to its creditors upon any dissolution, winding up, liquidation or
reorganization, whether voluntary or involuntary, or in bankruptcy, insolvency,
receivership or other similar proceedings, the holders of all Senior
Indebtedness shall first be entitled to receive payment in full of all amounts
due or to become due thereon, or payment of such amounts shall have been
provided for, before the holders of the Securities shall be entitled to receive
any Contract Adjustment Payments.
No payment of Contract Adjustment Payments may be made if (i) any payment
default on any Senior Indebtedness has occurred and is continuing beyond any
applicable grace period; or (ii) any default other than a payment default with
respect to Senior Indebtedness occurs and is continuing that permits the
acceleration of the maturity thereof and the Agent receives a written notice of
such default from the Company or the holders of such Senior Indebtedness.
The Purchase Contracts and all obligations and rights of the Company and
the Holders thereunder, including, without limitation, the rights of the Holders
to receive and the obligation of the Company to pay any Contract Adjustment
Payments or any Deferred Contract Adjustment Payments, and the rights and
obligations of the Holders to purchase Common Stock shall immediately and
automatically terminate, without the necessity of any notice or action by any
Holder, the Agent or the Company, if, on or prior to the Purchase Contract
Settlement Date, a Termination Event shall have occurred. Upon the occurrence of
a Termination Event, the Company shall promptly but in no event later than two
Business Days thereafter give written notice to the Agent, the Collateral Agent
and to the Holders, at their addresses as they appear in the Growth PRIDES
Register. Upon and after the occurrence of a Termination Event, the Collateral
Agent shall release the Treasury Securities from the Pledge in accordance with
the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, a Holder of Growth PRIDES may settle the related Purchase
Contracts in their entirety at any time on or prior to the second Business Day
immediately preceding the Purchase Contract
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Settlement Date, but only in integral multiples of Growth PRIDES. The
right to Early Settlement is subject to there being in effect, if so required
under Federal securities laws, a registration statement covering the shares of
Common Stock to be delivered in respect of the Purchase Contracts being settled
(it being understood that, if so required under Federal securities laws, the
Company shall use commercially reasonable efforts to (1) cause such a
registration statement to become effective and (2) provide a prospectus in
connection therewith, in each case, in a form appropriate for Early
Settlements). In order to exercise the right to effect any such early settlement
("Early Settlement") with respect to any Purchase Contracts evidenced by this
Growth PRIDES Certificate, the Holder of this Growth PRIDES Certificate shall
deliver this Growth PRIDES Certificate to the Agent at the Corporate Trust
Office duly endorsed for transfer to the Company or in blank with the form of
Election to Settle Early set forth below duly completed and executed and
accompanied by payment payable to the Company in immediately available funds in
an amount (the "Early Settlement Amount") equal to the sum of (i) $25 times the
number of Purchase Contracts being settled, plus (ii) if such delivery is made
with respect to any Purchase Contracts during the period from the close of
business on any Record Date next preceding any Payment Date to the opening of
business on such Payment Date, an amount equal to the Contract Adjustment
Payments payable, if any, on such Payment Date with respect to such Purchase
Contracts. Upon Early Settlement of Purchase Contracts by a Holder of the
related Securities, the Pledged Debt Securities or the Pledged Applicable
Ownership Interest in the a Treasury Portfolio underlying such Securities shall
be released from the Pledge as provided in the Pledge Agreement and the Holder
shall be entitled to receive a number of shares of Common Stock on account of
each Purchase Contract forming part of an Growth PRIDES as to which Early
Settlement is effected equal to the Early Settlement Rate which shall be equal
to 0._____ newly issued shares of Common Stock per Purchase Contract (the "Early
Settlement Rate"); provided however, that upon the Early Settlement of the
Purchase Contracts, (i) the Holder thereof will forfeit the right to receive any
Deferred Contract Adjustment Payments, if any, on such Purchase Contracts, (ii)
the Holder's right to receive additional Contract Adjustment Payments in respect
of such Purchase Contracts will terminate, and (iii) no adjustment will be made
to or for the Holder on account of Deferred Contract Adjustment Payments, or any
amount accrued in respect of Contract Adjustment Payments. The Early Settlement
Rate shall be adjusted in the same manner and at the same time as the Settlement
Rate is adjusted as provided in the Purchase Contract Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, if, prior to the Purchase Contract Settlement Date, (i) the
Company merges with or into another entity, (ii) the Common Stock is converted,
exchanged, reclassified or cancelled in such merger, and (iii) at least 30% of
the consideration received by the Company's shareholders for its Common Stock in
such merger consists of cash or cash equivalents (a "Cash Merger"), then each
Holder of Securities shall have the right to settle the Purchase Contract at the
Settlement Rate in effect immediately before the Cash Merger (a "Cash Merger
Early Settlement"). The right to Cash Merger Early Settlement is subject to
there being in effect, if so required under Federal securities laws, a
registration statement covering the securities to be delivered in respect of the
Purchase Contracts being settled (it being understood that, if so required under
Federal securities laws, the Company shall use commercially reasonable efforts
to (1) cause such a registration statement to become effective and (2) provide a
prospectus in connection therewith, in each case, in a form appropriate for
Early Settlements). Upon Cash Merger Early Settlement, (x) the holder's rights
to receive Deferred Contract Adjustment Payments, if any, on the Purchase
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Contracts being settled will be forfeited, (y) the holder's right to receive
additional Contract Adjustment Payments in respect of such Purchase Contracts
will terminate and (z) no adjustment will be made to or for the holder on
account of Deferred Contract Adjustment Payments, or any amount accrued in
respect of Contract Adjustment Payments. The Company shall provide each of the
Holders with a notice of the consummation of the Cash Merger within five
Business Days after the consummation thereof. Such notice will specify, among
other things, the "Cash Merger Early Settlement Date," which shall be 10
Business Days after the date of such notice, and the amount of the cash,
securities and other consideration receivable by each Holder upon a Cash Merger
Early Settlement. To exercise a Cash Merger Early Settlement, a Holder shall
deliver, present and surrender the this Growth PRIDES Certificate duly endorsed
for transfer to the Company in blank at the offices of the Agent, accompanied by
payment to the Company in immediately available funds of an amount equal to (I)
$25 multiplied by (II) the number of Purchase Contracts being settled, plus
(III) if such delivery is made with respect to any Purchase Contracts during the
period from the close of business on any Record Date next preceding any Payment
Date to the opening of business on such Payment Date, an amount equal to the
Contract Adjustment Payments payable on such Payment Date with respect to such
Purchase Contracts; provided that no payment is required if the Company has
elected to defer the Contract Adjustment Payments which would otherwise be
payable on the Payment Date, no later than 5:00 p.m., New York City time, on the
Business Day immediately preceding the Cash Merger Early Settlement Date. Except
as provided in the immediately preceding sentence and subject to the second to
last paragraph of Section 5.2 of the Purchase Contract Agreement, no payment or
adjustment shall be made upon Early Settlement of any Purchase Contract on
account of any Contract Adjustment Payments accrued on such Purchase Contract or
on account of any dividends on the Common Stock issued upon such Early
Settlement. Upon a Cash Merger Early Settlement, the Pledged Debt Securities or
the Pledged Applicable Ownership Interest in the a Treasury Portfolio underlying
the Securities being settled shall be released from the Pledge as provided in
the Pledge Agreement and the Company will deliver, or cause to be delivered, to
Holders duly exercising a Cash Merger Early Settlement on the Cash Merger Early
Settlement Date the kind and amount of securities, cash or other property that
such Holders would have been entitled to receive if they had settled the
Purchase Contracts immediately before the Cash Merger at the Settlement Rate in
effect at such time.
Upon registration of transfer of this Growth PRIDES Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase Contract Agreement
and the Purchase Contracts evidenced hereby and the transferor shall be released
from the obligations under the Purchase Contracts evidenced by this Growth
PRIDES Certificate. The Company covenants and agrees, and the Holder, by its
acceptance hereof, likewise covenants and agrees, to be bound by the provisions
of this paragraph.
The Holder of this Growth PRIDES Certificate, by its acceptance hereof,
irrevocably authorizes the Agent to enter into and perform the related Purchase
Contracts forming part of the Growth PRIDES evidenced hereby on its behalf as
its attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its trustee in
bankruptcy, receiver, liquidator or a person or entity performing similar
functions, in the event that the Company becomes the subject of a case under the
Bankruptcy Code or subject to other similar Federal or State law providing for
reorganization or liquidation, agrees to be
A-30
bound by the terms and provisions thereof, covenants and agrees to perform its
obligations under such Purchase Contracts, consents to the provisions of the
Purchase Contract Agreement, authorizes the Agent to enter into and perform the
Pledge Agreement on its behalf as its attorney-in-fact, and consents to the
Pledge of the Treasury Securities underlying this Growth PRIDES Certificate
pursuant to the Pledge Agreement. The Holder, by its acceptance hereof, further
covenants and agrees, that, to the extent and in the manner provided in the
Purchase Contract Agreement and the Pledge Agreement, but subject to the terms
thereof, payments in respect to the Stated Amount of the Pledged Treasury
Securities on the Purchase Contract Settlement Date shall be paid by the
Collateral Agent to the Company in satisfaction of such Holder's obligations
under such Purchase Contract and such Holder shall acquire no right, title or
interest in such payments.
The Holder of this Growth PRIDES Certificate, by its acceptance hereof,
covenants and agrees to treat itself as the owner, for United States federal,
state and local income and franchise tax purposes, of the Treasury Securities
forming part of the Growth PRIDES evidenced hereby.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts. In addition, certain amendments to the Purchase Contract
Agreement may be made without any consent of the Holders as provided in the
Purchase Contract Agreement.
THE PURCHASE CONTRACTS SHALL FOR ALL PURPOSES BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
The Company and the Agent and any agent of the Company or the Agent may
treat the Person in whose name this Growth PRIDES Certificate is registered on
the Growth PRIDES Register as the owner of the Growth PRIDES evidenced hereby
for the purpose of receiving payments of interest on the Treasury Securities,
receiving payments of Contract Adjustment Payments and any Deferred Contract
Adjustment Payments, performance of the Purchase Contracts and for all other
purposes whatsoever, whether or not any payments in respect thereof be overdue
and notwithstanding any notice to the contrary, and neither the Company, the
Agent nor any such agent shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof, in
accordance with the Purchase Agreement, entitle the Holder to any of the rights
of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection at
the offices of the Agent during regular business hours of the Agent.
Unless the certificate of authentication hereon has been executed by the
Agent by manual signature, this Growth PRIDES Certificate shall not be entitled
to any benefit under the Pledge Agreement or the Purchase Contract Agreement or
be valid or obligatory for any purpose.
A-31
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
AMERUS GROUP CO.
By:
-----------------------------------
Name:
Title:
HOLDER SPECIFIED ABOVE
(as to obligations of such Holder under
the Purchase Contracts evidenced
hereby)
By: Wachovia Bank, National Association,
------------------------------------
not individually but solely as
Attorney-in-Fact of such Holder
By:
------------------------------------
Name:
Title:
Dated:
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Growth PRIDES Certificates referred to in the within
mentioned Purchase Contract Agreement.
Wachovia Bank, National Association,
--------------------------------------
as Purchase Contract Agent and Trustee
By:
-----------------------------------
Authorized Signatory
A-32
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT ----------------Custodian-------------
(cust) (minor)
Under Uniform Gifts to Minors Act
---------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN as joint tenants with right of survivorship and
not as tenants in common
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
(Please insert Social Security or Taxpayer I.D. or other Identifying
Number of Assignee)
(Please Print or Type Name and Address Including Postal Zip Code of
Assignee)
the within Growth PRIDES Certificate and all rights thereunder, hereby
irrevocably constituting and appointing attorney to transfer said Growth PRIDES
Certificate on the books of AmerUs Group Co. with full power of substitution in
the premises.
Dated:
--------------------------------- ---------------------------------------
Signature
NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within
Growth PRIDES Certificates in every
particular, without alteration or
enlargement or any change whatsoever.
Signature Guarantee: ______________
A-33
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A-34
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Growth PRIDES evidenced
by this Growth PRIDES Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the undersigned at
the address indicated below unless a different name and address have been
indicated below. If shares are to be registered in the name of a Person other
than the undersigned, the undersigned will pay any transfer tax payable incident
thereto.
Dated:
--------------------------------------------------------------------------------
Signature
Signature Guarantee:
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
If shares are to be registered in the name of and REGISTERED HOLDER
delivered to Person other than the Holder, please
print such Person's name and address:
Please print name and address of
Registered Holder:
Name Name
Address Address
Social Security or other Taxpayer Identification
Number, if any
---------------------------------------
A-35
ELECTION TO SETTLE EARLY
The undersigned Holder of this Growth PRIDES Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Growth PRIDES evidenced by this Growth PRIDES
Certificate specified below. The undersigned Holder directs that a certificate
for shares of Common Stock deliverable upon such Early Settlement be registered
in the name of, and delivered, together with a check in payment for any
fractional share and any Growth PRIDES Certificate representing any Growth
PRIDES evidenced hereby as to which Early Settlement of the related Purchase
Contracts is not effected, to the undersigned at the address indicated below
unless a different name and address have been indicated below. Pledged Treasury
Securities deliverable upon such Early Settlement will be transferred in
accordance with the transfer instructions set forth below. If shares are to be
registered in the name of a Person other than the undersigned, the undersigned
will pay any transfer tax payable incident thereto.
Dated:
--------------------------------------------------------------------------------
Signature
Signature Guarantee:
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Number of Securities evidenced hereby as to which Early Settlement of the
related Purchase Contracts is being elected:
If shares of Common Stock or Growth PRIDES REGISTERED HOLDER
Certificates are to be registered in the name of
and delivered to, and Pledged Treasury Securities
are to be transferred to, a Person other than the
Holder, please print such Person's name and
address:
Please print name
and address of
Registered Holder:
Name Name
Address Address
A-36
Social Security or other Taxpayer Identification
Number, if any
---------------------------------
A-37
Transfer Instructions for Pledged Treasury Securities Transferable Upon Early
Settlement or a Termination Event:
{TO BE ATTACHED TO GLOBAL CERTIFICATES}
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have been
made:
Date Amount of decrease in Amount of increase in Principal Amount Signature of
Principal Amount of the Principal Amount of the of this Global authorized officer of
Global Certificate Global Certificate Certificate Trustee or Securities
following such Custodian
decrease or
increase
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A-38
EXHIBIT C
NOTICE TO SETTLE BY SEPARATE CASH
Attention:
Re: Securities of AmerUs Group Co. (the "Company")
The undersigned Holder hereby irrevocably notifies you in accordance with
Section 5.4 of the Purchase Contract Agreement, dated as of June 1, 2002 among
the Company, yourselves, as Purchase Contract Agent and as Attorney-in-Fact for
the Holders of the Purchase Contracts, that such Holder has elected to pay to
the Collateral Agent, on or prior to 11:00 a.m. New York City time, on the
Business Day immediately preceding the Purchase Contract Settlement Date, (in
lawful money of the United States by (certified or cashiers check or) wire
transfer, in immediately available funds), $_________ as the Purchase Price for
the shares of Common Stock issuable to such Holder by the Company under the
related Purchase Contract on the Purchase Contract Settlement Date. The
undersigned Holder hereby instructs you to notify promptly the Collateral Agent
of the undersigned Holders election to make such cash settlement with respect to
the Purchase Contracts related to such Holder's (Income PRIDES) (Growth PRIDES).
Dated:
--------------------------------------------------------------------------------
Signature
Signature Guarantee: ______________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Please print name and address of Registered Holder:
--------------------------------------------------------------------------------
Name Social Security or other Taxpayer Identification
Number, if any
Address
-----------------------------------------
-----------------------------------------
A-39
