Contract
Exhibit 10.2
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCES. THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY
WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE SECURITIES
ACT AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE CORPORATION THAT SUCH SECURITY MAY BE OFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (A) (1) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144 UNDER THE SECURITIES ACT, (3) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” (AS DEFINED IN
RULE 501(a) (1), (2), (3) OR (7) UNDER THE SECURITIES ACT (AN “INSTITUTIONAL ACCREDITED INVESTOR”))
IF, PRIOR TO SUCH TRANSFER, THE HOLDER FURNISHES THE CORPORATION AND THE TRUSTEE (OR A SUCCESSOR
TRUSTEE, AS APPLICABLE) A SIGNED LETTER FROM THE TRANSFEREE CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE OR SUCCESSOR TRUSTEE, AS
APPLICABLE), OR (4) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT IF, PRIOR TO SUCH TRANSFER, THE HOLDER FURNISHES THE CORPORATION AND THE TRUSTEE (OR
A SUCCESSOR TRUSTEE, AS APPLICABLE) AN OPINION OF COUNSEL ACCEPTABLE TO THE CORPORATION AND THE
TRUSTEE OR SUCCESSOR TRUSTEE THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (B) TO
GENERAL MOTORS CORPORATION OR ANY SUBSIDIARY THEREOF, (C) FROM LBK, LLC (THE INITIAL HOLDER HEREOF)
TO THE NEW VEBA (AS DEFINED HEREIN) OR (D) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN
EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND,
IN EACH CASE, SUBJECT TO THE TAX-RELATED CERTIFICATION REQUIREMENTS OF SECTION 8 HEREIN.
WITHOUT THE WRITTEN CONSENT OF THE CORPORATION, THIS SECURITY MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED TO AN AFFILIATE OF THE CORPORATION.
UNLESS (A) THE HOLDING PERIOD APPLICABLE TO SALES BY NON-AFFILIATES UNDER RULE 144 UNDER THE
SECURITIES ACT HAS EXPIRED, (B) SUCH TRANSFER IS BEING MADE PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, (C) THIS SECURITY IS HELD BY A QUALIFIED INSTITUTIONAL BUYER
AND IS BEING TRANSFERRED TO A QUALIFIED INSTITUTIONAL BUYER OR (D) THIS SECURITY IS BEING
TRANSFERRED FROM
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LBK, LLC (THE INITIAL HOLDER HEREOF) TO THE NEW VEBA, THE HOLDER MUST, IN CONNECTION WITH ANY
TRANSFER OF THIS SECURITY, CHECK THE APPROPRIATE BOX SET FORTH ON THE ASSIGNMENT FORM RELATING TO
THE MANNER OF SUCH TRANSFER AND SUBMIT SUCH ASSIGNMENT FORM AND THIS CERTIFICATE TO THE BANK OF NEW
YORK AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE).
THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF ANY
SERIES U DEBENTURE IN VIOLATION OF THE FOREGOING RESTRICTIONS. THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF
THE RESTRICTIONS ON TRANSFER SET FORTH IN THIS LEGEND.
No. 1
GENERAL MOTORS CORPORATION
6.75% Series U Convertible Senior Debentures Due December 31, 2012
CUSIP 370442 DB8
CUSIP 370442 DB8
GENERAL MOTORS CORPORATION, a Delaware corporation (the “Company”), for value received, hereby
promises to pay to LBK, LLC, or its registered assigns, the principal sum of FOUR BILLION THREE
HUNDRED SEVENTY TWO MILLION FIVE HUNDRED THOUSAND DOLLARS ($4,372,500,000) (or, if this Note is in
Global Series U Security form, such other principal amount as noted in the “Schedule of Increases
or Decreases” attached hereto), at the Corporate Trust Office of the Paying Agent (as defined
below) or an office or agency maintained by the Company for such purpose, on December 31, 2012 (the
“Maturity Date”), in such coin or currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and private debts, and to pay interest on
said principal sum at the rate of 6.75% per annum, at the Corporate Trust Office of the Paying
Agent, or an office or agency maintained by the Company for such purpose, in like coin or currency,
from the first day of January or July, as the case may be, to which interest on the Series U
Debentures (as defined below) has been paid (unless no interest has been paid on the Series U
Debentures since the original issuance of this Note, in which case from February 22, 2008),
semi-annually on June 30 and December 31 (each, an “Interest Payment Date”), until payment of said
principal sum has been made or duly provided for. If the Company shall default in the payment of
interest due on such June 30 or December 31, then this Note shall bear interest from the next
preceding June 30 or December 31 to which interest has been paid or, if no interest has been paid
on the Series U Debentures since the original issuance of this Note, from February 22, 2008. The
first Interest Payment Date shall be June 30, 2008 in respect of the period from February 22, 2008
to June 30, 2008. The interest so payable on any June 30 or December 31 will, subject to certain
exceptions provided in the Indenture referred to below, be paid to the person in whose name this
Note is registered at the Close of Business (as defined below) on the June 15 or December 15
preceding such June 30 or December 31 (each, a “Record Date”), except that if the Series U
Debentures are to be redeemed by the Company on a date that falls on or after a Record Date and
prior to the
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corresponding Interest Payment Date, the interest so payable will be paid to the Holder that
tenders the Series U Debentures for redemption. At the option of the Company, interest may be paid
by check to the registered Holder hereof entitled thereto at its last address as it appears on the
registry books, and principal may be paid by check to the registered Holder hereof or to any other
Person (as defined herein) entitled thereto against surrender of this Note. If any June 30 or
December 31 falls on a day that is not a Business Day (as defined below), payment of interest shall
be made on the next succeeding Business Day with the same force and effect as if made on the
respective June 30 or December 31, but no additional interest shall accrue as a result of such
delay in payment. The Series U Debentures will bear interest, calculated on the basis of a 360-day
year consisting of twelve 30-day months. Interest payable on the Maturity Date of the Series U
Debentures, or on any redemption date that is not an Interest Payment Date, will be paid to the
person entitled to payment of principal on the Series U Debentures.
This Note is one of a duly authorized issue of debentures, notes, bonds or other evidences of
indebtedness of the Company (hereinafter called the “Series U Debentures”) of the series herein
specified, all issued or to be issued under and pursuant to an indenture by and between the Company
and The Bank of New York, as trustee (herein called the “Trustee”), dated as of January 8, 2008
(including all supplemental indentures thereto, herein called the “Indenture”), to which Indenture
and all indentures supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company
and the Holders of the Series U Debentures. The Series U Debentures shall be limited in aggregate
principal amount to $4,372,500,000.
The “Corporate Trust Office of the Paying Agent” means the principal office of the Paying
Agent at which at any time its corporate trust business shall be administered, which office as of
the date hereof is located at 000 Xxxxxxx Xxxxxx, Xxxxx 8 West, New York, New York 10286,
Attention: Corporate Trust Administration, or such other address as the Paying Agent may designate
from time to time by notice to the Holders and the Company, or the principal corporate trust office
of any successor Paying Agent (or such other address as such successor Paying Agent may designate
from time to time by notice to the Holders and the Company).
Subject to certain exceptions (i) requiring the consent of the Holder of each Security
affected or (ii) authorizing the execution of certain supplemental indentures without the consent
of the Holders of any of the Securities, the Indenture contains provisions permitting the Company
and the Trustee, with the consent of the Holders of not less than a majority in aggregate principal
amount of the Securities at the time outstanding of all series to be affected (voting as one
class), evidenced as in the Indenture, to execute supplemental indentures adding any provisions to
or changing in any manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or modifying in any manner the rights of the Holders of the Securities of
each such series. Any such consent or waiver by the Holder of this Note shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in lieu hereof, whether or not notation for such consent or
waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or of the Indenture shall
alter or impair the obligation of the Company, which is absolute and unconditional, to pay
the principal of and interest on this Note at the place, at the respective times, at the rate,
and in the coin or currency, herein prescribed.
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Section 1. Conversion Privilege.
Subject to and upon compliance with any applicable provisions set forth below and in the
Indenture (i) upon the occurrence of one or more of the events set forth below in Section 1(a)
(and, in each case, during the corresponding period) at any time after the original issuance of the
Series U Debentures hereunder but prior to 5:00 p.m., New York City time (the “Close of Business”)
on the Business Day immediately preceding September 30, 2012 or (ii) irrespective of the occurrence
of one of the events set forth below in Section 1(a), at any time on or after September 30, 2012
to, and including, the Close of Business on the second Business Day immediately preceding December
31, 2012, the Holders of the Series U Debentures shall have the right, at their option, to convert
the principal amount of this Note, or any portion of such outstanding principal amount that is an
integral multiple of $25.00, at the conversion rate (the “Conversion Rate”) in effect at such time,
by surrender of the Series U Debentures so to be converted, together with any required funds, in
the manner provided in Section 2 below; provided, however, that, with respect to any Series U
Debenture or portion of Series U Debenture that shall be called for redemption by the Company in
accordance with Section 5 below, such conversion right shall terminate at the Close of Business on
the second Business Day immediately preceding the Redemption Date (as defined below) fixed for
redemption of such Series U Debenture or portion of a Series U Debenture unless the Company shall
default in payment due upon redemption thereof. The Conversion Rate is 0.625 shares of the
Company’s common stock, par value
$12/3 per share (the “Common Stock”), per $25.00 principal amount
of Series U Debentures, subject to adjustment from time to time as set forth in Section 3 below.
(a) The Series U Debentures shall be convertible into cash or cash and shares of Common Stock,
as described in Section 2 below, prior to September 30, 2012, only upon the occurrence of one or
more of the following events (and, in each case, during the corresponding period):
(i) during any calendar quarter commencing after March 31, 2008, and only during such
calendar quarter, if the Closing Price (as defined below) of the Common Stock for at least
20 Trading Days in the period of 30 consecutive Trading Days ending on the last Trading Day
of the preceding calendar quarter exceeds the Conversion Price Trigger as defined in Section
1(b) (it being understood for purposes of this clause (i) that the Conversion Price in
effect on the close of each of the 30 consecutive Trading Days shall be used);
(ii) if all or any portion of the outstanding principal amount of the Series U
Debentures have been called for redemption by the Company in accordance with Section 5
below, at any time on or after the date the Holder receives the Redemption Notice (as
defined below) until the Close of Business on the second Business Day immediately preceding
the Redemption Date; provided that only such portion of the outstanding principal amount of
the Series U Debentures that have been called for redemption shall be convertible as a
result of such redemption call;
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(iii) if the Company elects to distribute to all holders of Common Stock rights,
options or warrants entitling all holders of Common Stock to subscribe for or purchase
Common Stock for a period expiring within 45 days after the record date for such
distribution, at less than the average of the Closing Prices of the Common Stock for the ten
consecutive Trading Days ending on the date immediately preceding the first public
announcement of such distribution, during the period beginning on, and including, the date
the Company provides notice to the Holders of such distribution as set forth in Section 1(c)
and ending on, and including, the earlier of (x) the Close of Business on the Business Day
prior to the Ex-Date for such distribution and (y) the Company’s announcement that such
distribution will not take place;
(iv) if the Company elects to distribute to all holders of Common Stock cash, debt
securities (or other evidence of indebtedness) or other assets (excluding dividends or
distributions described in Section 3(a) and Section 3(c)), which distribution has a per
share value exceeding 15% of the Closing Price of the Common Stock on the date immediately
preceding the first public announcement of such distribution, during the period beginning
on, and including, the date the Company provides notice to Holders of such distribution as
set forth in Section 1(c) and ending on, and including, the earlier of (x) the Close of
Business on the Business Day prior to the Ex-Date for such distribution and (y) the
Company’s announcement that such distribution will not take place;
(v) if a Make-Whole Fundamental Change (as defined below) occurs, during the period
from, and including, the date that is 50 Business Days prior to the anticipated effective
date of the transaction to, and including, the date that is 45 calendar days after the
actual effective date of such transaction (or, if such Make-Whole Fundamental Change also
constitutes a Fundamental Change (as defined below), until the Fundamental Change Repurchase
Date (as defined below) related to such Fundamental Change); or
(vi) if the Company is party to a consolidation, merger, binding share exchange, or
transfer or lease of all or substantially all of the Company’s assets, pursuant to which the
Common Stock would be converted into cash, securities or other assets, during the period
from, and including, the date that is 50 Business Days prior to the anticipated effective
date of the transaction to, and including, the date that is 45 calendar days after the
actual effective date of such transaction (or, if such transaction also constitutes a
Fundamental Change, until the Fundamental Change Repurchase Date related to such Fundamental
Change).
Upon determining that Holders of Series U Debentures are entitled to convert their Series U
Debentures in accordance with the provisions of this Section 1, the Company shall notify such
Holders in the manner set forth in Section 1.02 of the Indenture and, in the case of Series U
Debentures evidenced by Global Securities, through the facilities of the Depository.
(b) The “Conversion Price Trigger” on any date shall equal 120% of the Conversion Price on
such date. The Conversion Price Trigger will initially equal $48.00 and shall be automatically
adjusted whenever the Conversion Price is adjusted as a result of an adjustment in the Conversion
Rate pursuant to Section 3. The Conversion Agent will determine at the beginning of each calendar
quarter commencing after March 31, 2008 whether the Series U
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Debentures are convertible as a result of the price of Common Stock exceeding the Conversion
Price Trigger in accordance with Section 1(a)(i) and will notify the Company and the Trustee if the
Series U Debentures are so convertible. The Company hereby initially designates the Paying Agent
as the Conversion Agent.
(c) Upon the first public announcement of any distribution described in Section 1(a)(iii) or
Section 1(a)(iv), the Company shall notify the Holders at least 50 Business Days prior to the
Ex-Date (as defined below) for such distribution by providing notice to Holders in the manner set
forth in Section 1.02 of the Indenture and, in the case of Series U Debentures evidenced by Global
Securities, through the facilities of the Depository. If the Company fails to notify Holders of
such a distribution at least 50 Business Days prior to the Ex-Date for such distribution, the
respective period during which Holders may surrender their Series U Debentures for conversion will
be extended by the number of days that such notification is delayed or not otherwise provided to
Holders beyond the specified notice deadline.
(d) Upon the first public announcement of the occurrence of a Make-Whole Fundamental Change
described in Section 1(a)(v) or a transaction described in Section 1(a)(vi), the Company shall
notify Holders and the Trustee as promptly as practicable following (A) the date the Company
publicly announces such transaction but in no event less than 50 Business Days prior to the
anticipated effective date of such transaction and (B) the actual effective date of the Make-Whole
Fundamental Change, but in no event more than 15 days after such effective date, in each case in
the manner set forth in Section 1.02 of the Indenture and, in the case of Series U Debentures
evidenced by Global Securities, through the facilities of the Depository. If the Company fails to
notify Holders with respect to any of the transactions described in the preceding sentence of this
Section 1(d) of (i) the anticipated effective date of such transaction at least 50 Business Days
prior to such anticipated effective date pursuant to the immediately preceding sentence or (ii) the
actual effective date of any Make-Whole Fundamental Change within 15 days of such actual effective
date, the period during which Holders may surrender their Series U Debentures for conversion will
be extended by the number of days that such notification is delayed or not otherwise provided to
Holders beyond the specified notice deadline.
(e) Holders shall not have the right to convert their Series U Debentures pursuant to Section
1(a)(iii) or Section 1(a)(iv) if in connection with the distribution described in Section 1(a)(iii)
or Section 1(a)(iv) that would otherwise give rise to a right to convert their Series U Debentures,
such Holders are entitled to participate (as a result of holding their Series U Debentures, and at
the same time as Holders of Common Stock participate) in the distribution described in such
Sections as if such Holders held a number of shares of Common Stock equal to the applicable
Conversion Rate on the Ex-Date for such distribution, multiplied by the principal amount (expressed
as a multiple of $25.00) of Series U Debentures held by such Holder, without having to convert
their Series U Debentures.
“Business Day” is any weekday that is not a day on which banking institutions in The City of
New York are authorized or obligated to close.
“Closing Price” of the Common Stock or any other security on any date means the closing sale
price per share (or, if no closing sale price is reported, the average of the bid and ask prices
or, if more than one in either case, the average of the average bid and the average ask
6
prices) on that date as reported in composite transactions for the principal U.S. securities
exchange on which the Common Stock or such other security is traded. If the Common Stock or such
other security is not listed for trading on a U.S. national or regional securities exchange on the
relevant date, the Closing Price will be the last quoted bid price for the Common Stock or such
other security in the over-the-counter market on the relevant date as reported by the National
Quotation Bureau or similar organization. If the Common Stock or such other security is not so
quoted, the Closing Price will be the average of the mid-point of the last bid and ask prices for
the Common Stock or such other security on the relevant date from each of at least three nationally
recognized independent investment banking firms selected by the Company for this purpose. The
Closing Price will be determined without reference to extended or after hours trading.
“Conversion Price” per share of Common Stock means, on any date, $25.00, divided by the
Conversion Rate as of that date.
“Ex-Date” means, with regard to any dividend or distribution on the Common Stock, the first
date on which the shares of Common Stock trade on the applicable exchange or in the applicable
market, regular way, without the right to receive such dividend or distribution.
(f) A Series U Debenture in respect of which a Holder is exercising its option to require the
Company to repurchase such Series U Debenture upon a Fundamental Change pursuant to Section 6
hereof may be converted only if such Holder withdraws its “Option to Elect Repayment Upon a
Fundamental Change” in accordance with Section 6 hereof.
Section 2. Conversion Procedures; Conversion Settlement.
(a) To convert its Series U Debentures, a Holder must: (i) complete and manually sign a
Conversion Notice (or a facsimile thereof), a form of which is on the back of the Series U
Debenture and deliver such Conversion Notice to the Conversion Agent; (ii) surrender the Series U
Debenture to the Conversion Agent; (iii) if required, furnish appropriate endorsement and transfer
documents; (iv) if required, pay all transfer or similar taxes; and (v) if required, pay funds
equal to the portion of interest payable on the next Interest Payment Date as described in Section
2(h) below. If a Holder holds a beneficial interest in a Global Series U Security, to convert such
beneficial interest, such Holder must comply with requirements (iv) and (v) as set forth in the
immediately preceding sentence and comply with the applicable procedures of the Depository for
converting a beneficial interest in a Global Series U Security. The date on which the requirement
set forth in the first sentence of this paragraph (in the case of a certificated Security) or the
second sentence of this paragraph (in the case of a Global Series U Security or a beneficial
interest therein) is fulfilled is referred to as the “Conversion Date.” A Holder receiving shares
of Common Stock upon conversion shall not be entitled to any rights as a holder of Common Stock,
including, among other things, the right to vote and receive dividends and notice of stockholder
meetings, until (i) if the Conversion Obligation (as defined below) is settled in accordance with
Section 2(b)(i), the Close of Business on the last Trading Day in the relevant Observation Period
or (ii) if the Conversion Obligation is settled in accordance with Section 2(b)(ii), the Close of
Business on the Election Deadline Day (as defined below).
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(b) Upon conversion of any Series U Debentures, the Company shall satisfy its obligation upon
conversion (the “Conversion Obligation”) as follows:
(i) If the Company either (1) specifies a Cash Percentage (as defined below) within the
time periods provided in Section 2(c) in connection with such conversion or (2) has
previously made an election under Section 2(k), the Company shall satisfy the Conversion
Obligation with respect to all Series U Debentures converted on the relevant Conversion Date
by payment or delivery, as applicable, of (A) cash and shares of Common Stock (if any) equal
to the sum of the Daily Settlement Amounts (as defined below) for each of the 40 Trading
Days during the relevant Observation Period (as defined below) and (B) cash in an amount
equal to the accrued and unpaid interest on the principal amount so converted to but not
including the Conversion Date; provided, however, that if such Conversion Date falls after a
Record Date and on or prior to the corresponding Interest Payment Date, then the full amount
of accrued and unpaid interest, if any, payable on such Interest Payment Date shall be paid
to the Holders of record of such Series U Debentures at the Close of Business on the
corresponding Record Date (which may or may not be the same person to whom the Company will
pay or deliver amounts in satisfaction of the Conversion Obligation) and the Conversion
Obligation shall consist only of the payment or delivery of the amounts required pursuant to
subclause (A) of this sentence. Settlement of the Conversion Obligation in accordance with
this subclause (i) shall occur on the third Trading Day immediately succeeding the last
Trading Day of the relevant Observation Period.
(ii) If the Company (1) does not specify a Cash Percentage within the time periods
provided in Section 2(c) in connection with such conversion and (2) has not previously made
an election under Section 2(k), the Company shall satisfy the Conversion Obligation with
respect to all Series U Debentures converted on the relevant Conversion Date by payment or
delivery, as applicable, of (A) shares of Common Stock at the applicable Conversion Rate and
(B) cash in an amount equal to the accrued and unpaid interest on the principal amount so
converted to but not including the Conversion Date; provided, however, that if such
Conversion Date falls after a Record Date and on or prior to the corresponding Interest
Payment Date, then the full amount of accrued and unpaid interest, if any, payable on such
Interest Payment Date shall be paid to the Holders of record of such Series U Debentures at
the Close of Business on the corresponding Record Date (which may or may not be the same
person to whom the Company will pay or deliver amounts in satisfaction of the Conversion
Obligation) and the Conversion Obligation shall consist only of the delivery of the amounts
required pursuant to subclause (A) of this sentence. Settlement of the Conversion
Obligation in accordance with this subclause (ii) shall occur on the third Trading Day
immediately succeeding the Election Deadline Day.
The “Daily Settlement Amount” for each of the 40 Trading Days during the Observation Period
means (i) an amount of cash (the “Cash Amount”) equal to the product of: (A) the Cash Percentage
and (B) 1/40th of the applicable Conversion Rate and (C) the Daily VWAP of the Common Stock for
such Trading Day, and (ii) the number of shares of the Common Stock equal to the product of: (A)
1/40th of the applicable Conversion Rate and (B) the difference obtained by subtracting (x) the
Cash Percentage from (y) 100%.
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The “Daily VWAP” of the Common Stock means, for each of the 40 consecutive Trading Days during
the Observation Period, the per share volume-weighted average price as displayed under the heading
“Bloomberg VWAP” on Bloomberg page GM.N <equity> AQR (or any equivalent successor page) in
respect of the period from the scheduled open of trading on the principal U.S. national or regional
securities exchange or market on which the Common Stock is listed or admitted for trading to the
scheduled close of trading on such exchange or market on such Trading Day (without regard to
after-hours trading), or if such volume-weighted average price is unavailable, the market value of
one share of the Common Stock on such Trading Day using a volume-weighted method as determined by a
nationally recognized independent investment banking firm retained for this purpose by the Company.
The “Observation Period” with respect to any Series U Debenture means the 40 consecutive
Trading Day period beginning on (and including) the third Trading Day immediately following the
Conversion Date for such Series U Debenture; provided, however, that if the Conversion Date for
such Series U Debentures occurs on or after September 30, 2012, the “Observation Period” with
respect to such Series U Debentures means the 40 Trading Day period beginning on (and including)
the 42nd Scheduled Trading Day (as defined below) immediately preceding December 31, 2012.
“Scheduled Trading Day” means a day that is scheduled to be a Trading Day.
“Trading Day” means a day during which (i) trading in the Common Stock generally occurs on the
principal U.S. national or regional securities exchange or market on which the Common Stock is
listed or admitted for trading and (ii) there is no VWAP Market Disruption Event (as defined
below). If the Common Stock is not so listed or traded, then “Trading Day” means a Business Day.
“VWAP Market Disruption Event” means (i) a failure by the principal U.S. national or regional
securities exchange or market on which the Common Stock is listed or admitted to trading to open
for trading during its regular trading session or (ii) the occurrence or existence prior to 1:00
p.m., New York City time, on any Scheduled Trading Day for the Common Stock for an aggregate one
half-hour period of any suspension or limitation imposed on trading (by reason of movements in
price exceeding limits permitted by the stock exchange or otherwise) in the Common Stock or in any
options contracts or futures contracts relating to the Common Stock.
(c) By the Close of Business on the Business Day immediately preceding the first Scheduled
Trading Day of the relevant Observation Period (or, with respect to any Conversion Date for the
Series U Debentures that occurs on or after September 30, 2012, on or prior to the Close of
Business on September 30, 2012) (the “Election Deadline Day”), the Company may specify a percentage
of the Conversion Obligation for the relevant Observation Period (or for certain specified Holders
with a given Observation Period) that will be settled in cash (the “Cash Percentage”) and will
notify the Paying Agent and the Holders of such Cash Percentage in the manner set forth in Section
1.02 of the Indenture and, in the case of Series U Debentures evidenced by Global Securities,
through the facilities of the Depository (the “Cash Percentage Notice”). The Company need not treat
all converting Holders with the same Observation Period in the same manner. So long as the Company
provides notice of the relevant Cash Percentage as
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described in the first sentence of this Section 2(c), the Company may choose with respect to
all or any portion of converting Holders with the same Observation Period to specify a Cash
Percentage, or the Company may specify different Cash Percentages for each such Holder.
(d) The Company may, at its option, revoke any Cash Percentage Notice through written notice
to the Holders and the Paying Agent by the Close of Business on the Business Day prior to the first
Scheduled Trading Day of the Observation Period (or, with respect to any Conversion Date for the
Series U Debentures that occurs on or after September 30, 2012, on or prior to the Close of
Business on September 30, 2012).
(e) Payment of cash and/or delivery of shares of Common Stock pursuant to this Section 2 shall
be made by the Company to the Holder of a Series U Debenture surrendered for conversion, or such
Holder’s nominee or nominees, and the Company shall deliver to the Conversion Agent or to such
Holder, or such Holder’s nominee or nominees, certificates or a book-entry transfer through the
Depository for the number of full shares of Common Stock, if any, to which such Holder shall be
entitled to in satisfaction of the Conversion Obligation.
(f) The Company shall not issue any fraction of a share of Common Stock in connection with any
conversion of Series U Debentures, but instead shall make a cash payment (calculated to the nearest
cent) equal to such fraction, multiplied by the Closing Price of the Common Stock on (i) if the
Conversion Obligation is settled in accordance with Section 2(b)(i), the last Trading Day of the
relevant Observation Period or (ii) if the Conversion Obligation is settled in accordance with
Section 2(b)(ii), the Election Deadline Day. In respect of any conversion of Series U Debentures
settled in accordance with Section 2(b)(i), the fractional amount of a share of Common Stock to be
delivered, if any, will be based on the sum of the Daily Settlement Amounts for all Trading Days in
the Observation Period (rather than on a per Trading Day basis).
(g) Before any Holder of a Series U Debenture shall be entitled to convert the same, such
Holder shall, in the case of Series U Debentures evidenced by Global Securities, comply with the
procedures of the Depository in effect at that time, and in the case of certificated Series U
Debentures, surrender such Series U Debentures, duly endorsed to the Company or in blank, at the
office of the Conversion Agent, and shall give written notice to the Company at said office or
place that such Holder elects to convert the same and shall state in writing therein the principal
amount of Series U Debentures to be converted and the name or names (with addresses) in which such
Holder wishes the certificate or certificates for Common Stock to be issued, and, if required, pay
funds equal to the portion of interest payable on the next Interest Payment Date as described in
Section 2(h) below.
(h) If a Series U Debenture is tendered for conversion during the period after a Record Date
but prior to the next succeeding Interest Payment Date, then the Holder of such Series U Debenture
at the Close of Business on such Record Date shall be entitled to the full amount of interest due
on such Interest Payment Date and the converted Series U Debenture must be accompanied by funds
equal to the interest payable on that Interest Payment Date on the principal amount so converted
with respect to the period from the Conversion Date to but not including the Interest Payment Date;
provided that no such payment by the Holder need be made (i) if the Company has specified a
Fundamental Change Repurchase Date that is after a Record
Date but on or prior to the next succeeding Interest Payment Date, (ii) in respect of any
conversions that occur after the Record Date immediately preceding December 31, 2012 or (iii) to
the extent of any overdue interest that exists at the time of conversion with respect to such
Series U Debenture.
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(i) The issue of any stock certificates upon conversion of Series U Debentures shall be made
without charge to the converting Holder for any documentary, stamp or similar issue or transfer
taxes in respect of the issue thereof, and the Company shall pay any and all documentary, stamp or
similar issue or transfer taxes that may be payable in respect of the issue or delivery of shares
of Common Stock on conversion of Series U Debentures pursuant hereto. The Company shall not,
however, be required to pay any such tax which may be payable in respect of any transfer involved
in the issue or delivery of shares of Common Stock or the portion, if any, of the Series U
Debentures which are not so converted in a name other than that in which the Series U Debentures so
converted were registered, and no such issue or delivery shall be made unless and until the person
requesting such issue has paid to the Company the amount of such tax or has established to the
satisfaction of the Company that such tax has been paid.
(j) If more than one Series U Debenture shall be surrendered for conversion at one time by the
same Holder, the amount of cash or number of full shares of Common Stock that shall be deliverable
upon conversion shall be computed on the basis of the aggregate principal amount of the Series U
Debentures (or specified portions thereof to the extent permitted thereby) so surrendered for
conversion. Subject to the next succeeding sentence, the Company will, on (i) the third Trading Day
immediately succeeding the last Trading Day of the relevant Observation Period (if the Conversion
Obligation is settled in accordance with Section 2(b)(i)) or (ii) the third Trading Day immediately
succeeding the Election Deadline Day (if the Conversion Obligation is settled in accordance with
Section 2(b)(ii)), issue and deliver at said office or place to such Holder of a Series U
Debenture, or to such Holder’s nominee or nominees, (1) cash and certificates, as applicable, for
the number of full shares of Common Stock to which such Holder shall be entitled as aforesaid, (2)
cash for the accrued and unpaid interest on the principal amount so converted to which such Holder
shall be entitled as aforesaid, and (3) cash in lieu of any fraction of a share to which such
Holder would otherwise be entitled. The Company shall not be required to deliver certificates for
shares of Common Stock while the stock transfer books for such stock or the security register are
duly closed for any purpose, but certificates for shares of Common Stock shall be issued and
delivered as soon as practicable after the opening of such books or security register.
(k) Notwithstanding anything in Section 2(b), (c) or (d) to the contrary, at any time prior to
the maturity of the Series U Debentures, the Company may unilaterally and irrevocably make an
election (the “Principal Return Election”) that, in connection with any conversion of Series U
Debentures:
(i) with respect to each converting Holder, the Cash Amount for each Trading Day during
the relevant Observation Period shall be at least equal to the lesser of (A) $0.625 and (B)
1/40th of the product of (x) the applicable Conversion Rate and (y) the Daily VWAP of the
Common Stock for such Trading Day (such lesser amount, the “Principal Return”); and
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(ii) in order to ensure that result:
if the Cash Percentage specified by the Company
pursuant to Section 2(c) for any particular Holder yields a Cash Amount
for such Holder on any Trading Day that is less than the Principal
Return for such Trading Day, the Cash Percentage for such Holder for
such Trading Day (and only for such Holder for such Trading Day) shall
be disregarded and shall be deemed to be equal to the percentage amount
(rounded up to the nearest whole percentage amount) that when
substituted for the Cash Percentage in the definition of “Daily
Settlement Amount” would yield a Cash Amount equal to the Principal
Return for such Trading Day; and
if the Company has not specified a Cash Percentage
pursuant to Section 2(c) for any particular Holder, the Cash Percentage
for such Holder for such Trading Day (and only for such Holder for such
Trading Day) shall be deemed to be equal to the percentage amount
(rounded up to the nearest whole percentage amount) that when
substituted for the Cash Percentage in the definition of “Daily
Settlement Amount” would yield a Cash Amount equal to the Principal
Return for such Trading Day.
If the Company makes the Principal Return Election, the Company will notify the Trustee, the Paying
Agent and the Holders of the Principal Return Election in the manner set forth in Section 1.02 of
the Indenture and, in the case of Series U Debentures evidenced by Global Securities, through the
facilities of the Depository and the Company will disclose its Principal Return Election on a Form
8-K.
(l) In case any Series U Debenture shall be surrendered for partial conversion, the Company
shall execute and the Trustee shall authenticate and deliver to or upon the written order of the
Holder of the Series U Debenture so surrendered, without charge to such Holder unless the new
Series U Debenture or Series U Debentures are to be registered in a name other than that in which
the Series U Debentures were originally registered, a new Series U Debenture or Series U Debentures
in authorized denominations in an aggregate principal amount equal to the unconverted portion of
the surrendered Series U Debentures.
Section 3. Conversion Rate Adjustments.
The Conversion Rate shall be subject to adjustment from time to time by the Company as
follows:
(a) If the Company shall, at any time and from time to time while any of the Series U
Debentures are outstanding, issue dividends or make distributions on the Common Stock payable in
shares of the Common Stock, then the Conversion Rate shall be increased so that the same shall
equal the rate determined by multiplying the Conversion Rate in effect immediately prior to 9:00
a.m., New York City time (the “Open of Business”) on the Ex-Date for such dividend or distribution
by a fraction:
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(i) the numerator of which shall be the number of shares of Common Stock outstanding at
the Close of Business on the Business Day immediately preceding the Ex-Date for such
dividend or distribution, plus the total number of shares of Common Stock constituting such
dividend or distribution; and
(ii) the denominator of which shall be the number of shares of Common Stock outstanding
at the Close of Business on the Business Day immediately preceding such Ex-Date.
Such increase shall become effective immediately after the Open of Business on the Ex-Date for
such dividend or distribution. For the purpose of this paragraph (a), the number of shares of
Common Stock at any time outstanding shall not include shares held in the treasury of the Company.
If any dividend or distribution of the type described in this Section 3(a) is declared but not so
paid or made, the Conversion Rate shall again be adjusted to the Conversion Rate which would then
be in effect if such dividend or distribution had not been declared. In no event shall the
Conversion Rate be decreased pursuant to this Section 3(a).
(b) If the Company shall, at any time or from time to time while any of the Series U
Debentures are outstanding, distribute to all holders of Common Stock rights, options or warrants
to purchase shares of Common Stock for a period expiring within 45 days of the record date for such
distribution at less than the average of the Closing Prices of Common Stock for the ten consecutive
Trading Days immediately preceding the first public announcement of such distribution, then the
Conversion Rate shall be increased so that the same shall equal the rate determined by multiplying
the Conversion Rate in effect immediately prior to the Open of Business on the Ex-Date for such
distribution by a fraction:
(i) the numerator of which shall be the number of shares of Common Stock outstanding at
the Close of Business on the Business Day immediately preceding the Ex-Date for such
distribution, plus the total number of additional shares of Common Stock so offered for
purchase; and
(ii) the denominator of which shall be the number of shares of Common Stock outstanding
on the Close of Business on the Business Day immediately preceding the Ex-Date for such
distribution, plus the number of shares of Common Stock that the aggregate offering price of
the total number of shares of Common Stock so offered would purchase at the Current Market
Price (as defined below) of Common Stock on the first public announcement date for such
distribution (determined by multiplying such total number of shares of Common Stock so
offered by the exercise price of such rights, options or warrants and dividing the product
so obtained by such Current Market Price).
Such adjustment shall be successively made whenever any such rights, options or warrants are
issued, and shall become effective immediately after the Open of Business on the Ex-Date for such
distribution. To the extent that shares of Common Stock are not delivered after the expiration of
such rights, options or warrants, the Conversion Rate shall be readjusted to the Conversion Rate
that would then be in effect had the adjustments made upon the issuance of such rights, options or
warrants been made on the basis of delivery of only the number of shares of Common Stock actually
delivered. If such rights, options or warrants are not so issued, the
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Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect
if the Ex-Date for such distribution had not occurred. In determining whether any rights, options
or warrants entitle the holders to subscribe for or purchase shares of Common Stock at less than
the average of the Closing Prices of Common Stock for the ten consecutive Trading Days immediately
preceding the first public announcement of such distribution, and in determining the aggregate
offering price of such shares of Common Stock, there shall be taken into account any consideration
received by the Company for such rights, options or warrants and any amount payable on exercise or
conversion thereof, the value of such consideration, if other than cash, to be determined by the
Board of Directors (whose determination shall be conclusive, and described in a resolution of the
Board of Directors). In no event shall the Conversion Rate be decreased pursuant to this Section
3(b).
If the Company elects to make a distribution described in this Section 3(b) that has a per
share of Common Stock value equal to more than 15% of the Closing Price of the Common Stock on the
day preceding the first public announcement of such distribution, the Company shall give notice to
the Holders at least 50 Business Days prior to the Ex-Date for such distribution.
(c) If the Company shall, at any time or from time to time while any of the Series U
Debentures are outstanding, subdivide or reclassify outstanding shares of Common Stock into a
greater number of shares of Common Stock, then the Conversion Rate in effect at the Open of
Business on the day upon which such subdivision or reclassification becomes effective shall be
proportionately increased, and conversely, if the Company shall, at any time or from time to time
while any of the Series U Debentures are outstanding, combine or reclassify outstanding shares of
Common Stock into a smaller number of shares of Common Stock, then the Conversion Rate in effect at
the Open of Business on the day upon which such combination or reclassification becomes effective
shall be proportionately decreased. In each such case, the Conversion Rate shall be adjusted by
multiplying such Conversion Rate by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding immediately after giving effect to such subdivision,
reclassification or combination and the denominator of which shall be the number of shares of
Common Stock outstanding immediately prior to such subdivision, reclassification or combination.
Such increase or reduction (solely in the case of any combination or reclassification of
outstanding shares of Common Stock into a smaller number of shares of Common Stock), as the case
may be, shall become effective immediately after the Open of Business on the day upon which such
subdivision, reclassification or combination becomes effective.
(d) If the Company shall, at any time or from time to time while any of the Series U
Debentures are outstanding, distribute to all holders of Common Stock any of its Capital Stock (as
defined below), assets (including shares of any subsidiary of the Company or business unit of the
Company), or debt securities or rights to purchase securities of the Company (excluding (i) any
dividends or distributions described in Section 3(a), (ii) any rights, options or warrants
described in Section 3(b) and (iii) any dividends or distributions described in Section 3(e) or
Section 3(f) (such Capital Stock, assets, debt securities or rights to purchase securities of the
Company hereinafter in this Section 3(d) called the “Distributed Assets”)), then the Conversion
Rate shall be increased so that the same shall equal the rate determined by multiplying the
14
Conversion Rate in effect immediately prior to the Open of Business on the Ex-Date for such
distribution by a fraction:
(i) the numerator of which will be the Current Market Price of Common Stock on the
Business Day immediately preceding the Ex-Date for such distribution, and
(ii) the denominator of which will be the Current Market Price of Common Stock on the
Business Day immediately preceding the Ex-Date for such distribution, minus the Fair Market
Value (as defined below), as determined by the Board of Directors in a Board Resolution, of
the portion of Distributed Assets so distributed applicable to one share of Common Stock.
Such increase shall become effective immediately after the Open of Business on the Ex-Date for
such distribution; provided that if “the Fair Market Value, as determined by the Board of Directors
in a Board Resolution, of the portion of Distributed Assets so distributed applicable to one share
of Common Stock” as set forth above is equal to or greater than “the Current Market Price of Common
Stock on the Business Day immediately preceding the Ex-Date for such distribution” as set forth
above, in lieu of the foregoing adjustment, adequate provision shall be made so that each Holder
shall receive on the date on which the Distributed Assets are distributed to holders of Common
Stock, for each $25.00 principal amount of Series U Debentures, the amount of Distributed Assets
such Holder would have received on the record date for such distribution had such Holder owned a
number of shares of Common Stock equal to the Conversion Rate as of the Ex-Date for such
distribution. In the event that such distribution is not so made, the Conversion Rate shall again
be adjusted to be the Conversion Rate which would then be in effect if such distribution had not
been declared. In no event shall the Conversion Rate be decreased pursuant to this Section 3(d).
If the Board of Directors determines the Fair Market Value of any distribution for purposes of
this Section 3(d) by reference to the actual or when issued trading market for any Distributed
Assets comprising all or part of such distribution, it must in doing so consider the prices in such
market over the same period (the “Reference Period”) used in computing the Current Market Price for
purposes of clause (i) above, unless the Board of Directors determines in good faith that
determining the Fair Market Value during the Reference Period would not be in the best interest of
the Holders.
Notwithstanding anything to the contrary in this Section 3(d), if the Company distributes
Capital Stock of, or similar equity interests in, a subsidiary of the Company or other business
unit of the Company (a “Spin-Off”), then, in lieu of the adjustment set forth above, the Conversion
Rate shall be increased so that the same shall equal the rate determined by multiplying the
Conversion Rate in effect immediately after the Close of Business on the fifteenth Trading Day
immediately following the Ex-Date for such Spin-Off by a fraction:
(i) the numerator of which will be the sum of (A) the average of the Closing Prices of
Capital Stock or similar equity interest distributed to holders of Common Stock applicable
to one share of Common Stock over the ten consecutive Trading Day period immediately
following, and including, the fifth Trading Day after the Ex-Date for the Spin-Off and (B)
the average of the Closing Prices of Common Stock over the ten
consecutive Trading Day period immediately following, and including, the fifth Trading
Day after the Ex-Date for the Spin-Off; and
15
(ii) the denominator of which is the average of the Closing Prices of Common Stock over
the ten consecutive Trading Day period immediately following, and including, the fifth
Trading Day after the Ex-Date for the Spin-Off.
In no event shall the Conversion Rate be decreased pursuant to this Section 3(d).
If the Company elects to make a distribution described in this Section 3(d) that has a per
share of Common Stock value equal to more than 15% of the Closing Price of the Common Stock on the
day preceding the first public announcement of such distribution, the Company shall give notice to
Holders at least 50 Business Days prior to the Ex-Date for such distribution.
Rights or warrants distributed by the Company to all holders of Common Stock entitling the
holders thereof to subscribe for or purchase shares of the Company’s Capital Stock (either
initially or under certain circumstances), which rights or warrants, until the occurrence of a
specified event or events (“Trigger Event”): (i) are deemed to be transferred with such shares of
Common Stock; (ii) are not exercisable; and (iii) are also issued in respect of future issuances of
Common Stock, shall be deemed not to have been distributed for purposes hereof (and no adjustment
to the Conversion Rate will be required) until the occurrence of the earliest Trigger Event,
whereupon such rights and warrants shall be deemed to have been distributed and an appropriate
adjustment (if any is required) to the Conversion Rate shall be made pursuant to the first
adjustment formula in this paragraph (d). If any such right or warrant, including any such existing
rights or warrants distributed prior to the date hereof, are subject to events, upon the occurrence
of which such rights or warrants become exercisable to purchase different securities, evidences of
indebtedness or other assets, then the date of the occurrence of any and each such event shall be
deemed to be the date of distribution and record date with respect to new rights or warrants with
such rights (and a termination or expiration of the existing rights or warrants without exercise by
any of the holders thereof). In addition, in the event of any distribution (or deemed distribution)
of rights or warrants, or any Trigger Event or other event (of the type described in the preceding
sentence) with respect thereto that was counted for purposes of calculating a distribution amount
for which an adjustment to the Conversion Rate was made, (1) in the case of any such rights or
warrants that shall all have been redeemed or repurchased without exercise by any holders thereof,
the Conversion Rate shall be readjusted upon such final redemption or repurchase to give effect to
such distribution or Trigger Event, as the case may be, as though it were a cash distribution,
equal to the per share redemption or repurchase price received by a holder or holders of Common
Stock with respect to such rights or warrants (assuming such holder had retained such rights or
warrants), made to all holders of Common Stock as of the date of such redemption or repurchase, and
(2) in the case of such rights or warrants that shall have expired or been terminated without
exercise by any holders thereof, the Conversion Rate shall be readjusted as if such rights and
warrants had not been issued.
For purposes of paragraphs (a), (b) and (d), any dividend or distribution to which paragraph
(d) is applicable that also includes shares of Common Stock, or rights or warrants to subscribe for
or purchase shares of Common Stock (or both), shall be deemed instead to be: (1) a dividend or
distribution of the evidences of indebtedness, assets or shares of capital stock other
16
than such shares of Common Stock or rights or warrants (and any Conversion Rate adjustment
required by paragraph (d) with respect to such dividend or distribution shall then be made),
immediately followed by (2) a dividend or distribution of such shares of Common Stock or such
rights or warrants (and any further Conversion Rate adjustment required by paragraphs (a) and (b)
with respect to such dividend or distribution shall then be made), except any shares of Common
Stock included in such dividend or distribution shall not be deemed “outstanding at the Close of
Business on the Business Day immediately preceding the Ex-Date for such dividend or distribution”
within the meaning of paragraph (a).
“Capital Stock” for any corporation means any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests in (however designated)
stock issued by that corporation.
(e) If the Company shall, at any time or from time to time while any of the Series U
Debentures are outstanding, distribute any regular, quarterly cash dividend or distribution to all
holders of Common Stock during any quarterly fiscal period that does not equal $0.25 per share of
Common Stock (the “Initial Dividend Threshold”), the Conversion Rate shall be adjusted as follows:
(i) if the per share amount of such regular, quarterly cash dividend or distribution is
greater than the Initial Dividend Threshold, the Conversion Rate immediately prior to the
Open of Business on the Ex-Date for such dividend or distribution will be increased by
multiplying such Conversion Rate by a fraction, the numerator of which will be the Closing
Price of Common Stock on the Trading Day immediately preceding the Ex-Date for such dividend
or distribution, and the denominator of which will be the Closing Price of Common Stock on
the Trading Day immediately preceding the Ex-Date for such dividend or distribution, minus
the amount in cash per share of Common Stock the Company distributes to all holders of
Common Stock in excess of the Initial Dividend Threshold; and
(ii) if the per share amount of such regular, quarterly cash dividend or distribution
is less than the Initial Dividend Threshold (which, for the avoidance of doubt, would
include the failure to pay any regular, quarterly cash dividend or distribution during the
relevant quarterly fiscal period, in which case the Company will be deemed to have declared
and paid a cash dividend of $0.00, the Ex-Date of which will be deemed to be the second to
last Trading Day of the applicable fiscal period), the Conversion Rate immediately prior to
the Open of Business on the Ex-Date for such dividend or distribution will be decreased by
multiplying such Conversion Rate by a fraction, the numerator of which will be the Closing
Price of Common Stock on the Trading Day immediately preceding the Ex-Date for such dividend
or distribution, and the denominator of which will be the Closing Price of Common Stock on
the Trading Day immediately preceding the Ex-Date for such dividend or distribution, plus
the amount of the Initial Dividend Threshold in excess of cash per share of Common Stock the
Company distributes to all holders of Common Stock.
In the case of an adjustment pursuant to this Section 3(e), such adjustment shall become
effective immediately after the Open of Business on the Ex-Date for such dividend or
17
distribution; provided that in the case of an adjustment pursuant to Section 3(e)(i), if the
portion of the cash so distributed applicable to one share of Common Stock is equal to or greater
than the Closing Price of Common Stock on the Trading Day immediately preceding the Ex-Date for
such dividend or distribution, in lieu of the foregoing adjustment, adequate provision shall be
made so that each Holder shall have the right to receive on the date on which such cash dividend or
distribution is distributed to holders of Common Stock, for each $25.00 principal amount of Series
U Debentures upon conversion, the amount of cash such Holder would have received had such Holder
owned a number of shares equal to the Conversion Rate on the Ex-Date for such distribution. If any
such dividend or distribution described in clause (e)(i) or clause (e)(ii) above is not so paid or
made, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in
effect if such dividend or distribution had not been declared.
If the Company elects to make a dividend or distribution described in this paragraph that has
a per share of Common Stock value equal to more than 15% of the Closing Price of the Common Stock
on the date preceding the first public announcement of such dividend or distribution, the Company
shall give notice to Holders at least 50 Business Days prior to the Ex-Date for such dividend or
distribution.
(f) If the Company shall, at any time or from time to time while the Series U Debentures are
outstanding, pay any cash dividend or distribution that is not a regular, quarterly cash dividend
or distribution to all holders of the Common Stock, the Conversion Rate immediately prior to the
Open of Business on the Ex-Date for such dividend or distribution shall be increased by multiplying
such Conversion Rate by a fraction, the numerator of which will be the Closing Price of Common
Stock on the Trading Day immediately preceding the Ex-Date for such dividend or distribution, and
the denominator of which will be the Closing Price of Common Stock on the Trading Day immediately
preceding the Ex-Date for such dividend or distribution, minus the amount of cash per share of
Common Stock that the Company dividends or distributes to all holders of Common Stock.
Such adjustment shall become effective immediately after the Open of Business on the Ex-Date
for such dividend or distribution; provided that if the portion of the cash so distributed
applicable to one share of the Common Stock is equal to or greater than the Closing Price of Common
Stock on the Trading Day immediately preceding the Ex-Date for such dividend or distribution, in
lieu of the foregoing adjustment, adequate provision shall be made so that each Holder shall have
the right to receive on the date on which such cash dividend or distribution is distributed to
holders of Common Stock, for each $25.00 principal amount of Series U Debentures upon conversion,
the amount of cash such Holder would have received had such Holder owned a number of shares equal
to the Conversion Rate on the Ex-Date for such dividend or distribution. If such dividend or
distribution is not so paid or made, the Conversion Rate shall again be adjusted to be the
Conversion Rate that would then be in effect if such dividend or distribution had not been
declared.
If the Company elects to make a dividend or distribution described in this paragraph that has
a per share of Common Stock value equal to more than 15% of the Closing Price of the Common Stock
on the date preceding the first public announcement for such distribution, the Company shall give
notice to Holders at least 50 Business Days prior to the Ex-Date for such dividend or distribution.
18
(g) If the Company or any of its subsidiaries shall, at any time or from time to time, while
any of the Series U Debentures are outstanding, distribute cash or other consideration in respect
of a tender offer or exchange offer for Common Stock, where such cash and the value of any such
other consideration per share of Common Stock validly tendered or exchanged exceeds the Closing
Price of Common Stock on the Trading Day immediately following the last date on which tenders or
exchanges may be made pursuant to the tender or exchange offer (such last date, the “Expiration
Date”), then the Conversion Rate shall be increased so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect immediately prior to the Open of Business
on the Business Day immediately following the Trading Day immediately following the Expiration Date
by a fraction:
(i) the numerator of which will be the sum of (A) the Fair Market Value, as determined
by the Board of Directors, of the aggregate consideration payable for all shares of Common
Stock that the Company purchases in such tender or exchange offer and (B) the product of the
number of shares of Common Stock outstanding as of the Expiration Date, less the number of shares of Common Stock purchased in the relevant tender offer or exchange offer (the
“Purchased Shares”), and the Closing Price of Common Stock on the Trading Day immediately
following the Expiration Date; and
(ii) the denominator of which will be the product of the number of shares of Common
Stock outstanding as of the Expiration Date, including the Purchased Shares, and the Closing
Price of Common Stock on the Trading Day immediately following the Expiration Date.
An adjustment, if any, to the Conversion Rate pursuant to this Section 3(g) shall become
effective immediately after the Open of Business on the Business Day immediately following the
Trading Day immediately following the Expiration Date. In the event that the Company or a
subsidiary of the Company is obligated to purchase shares of Common Stock pursuant to any such
tender offer or exchange offer, but the Company or such subsidiary is permanently prevented by
applicable law from effecting any such purchases, or all such purchases are rescinded, then the
Conversion Rate shall again be adjusted to be the Conversion Rate which would then be in effect if
such tender offer or exchange offer had not been made. If the application of this Section 3(g) to
any tender offer or exchange offer would result in a decrease in the Conversion Rate, no adjustment
shall be made for such tender offer or exchange offer under this Section 3(g).
If the Company elects to make a distribution described in this paragraph that has a per share
of Common Stock value equal to more than 15% of the Closing Price of the Common Stock on the date
preceding the first public announcement of such distribution, the Company shall give notice to
Holders at least 50 Business Days prior to the Ex-Date for such distribution.
“Current Market Price” of Common Stock on any day means the average of the Closing Prices of
Common Stock for each of the five consecutive Trading Days ending on the earlier of the day in
question and the day before the Ex-Date with respect to the dividend or distribution requiring such
computation.
19
“Fair Market Value” shall mean the amount which a willing buyer would pay a willing seller in
an arm’s-length transaction.
(h) The Board of Directors shall make appropriate adjustments to the Conversion Rate, and the
amount of cash and shares of Common Stock, if any, due upon conversion, in its good faith judgment,
to account for any adjustment to the Conversion Rate that becomes effective, or any event requiring
an adjustment to the Conversion Rate where the Ex-Date of the event occurs, during the period
beginning on the Conversion Date and ending on the Close of Business on the last Trading Day of the
relevant Observation Period.
(i) The Company may make such increases in the Conversion Rate, in addition to those required
by Sections 3(a), (b), (c), (d), (e), (f) or (g), as the Board of Directors considers to be
advisable to avoid or diminish any income tax to holders of Common Stock or rights to purchase
Common Stock resulting from any dividend or distribution of stock (or rights to acquire stock) or
from any event treated as such for income tax purposes. The Company from time to time may also
increase the Conversion Rate by any amount for any period of time if the period is at least twenty
(20) days and the increase is irrevocable during the period, and such determination shall be
conclusive. Whenever the Conversion Rate is increased pursuant to the preceding sentence, the
Company shall provide to Holders, in the manner set forth in Section 1.02 of the Indenture and, in
the case of Series U Debentures evidenced by Global Securities, through the facilities of the
Depository, a notice of the increase at least five (5) Business Days prior to the date the
increased Conversion Rate takes effect, and such notice shall state the increased Conversion Rate
and the period during which it will be in effect.
(j) Notwithstanding anything in this Section 3 to the contrary, no adjustment in the
Conversion Rate shall be required unless such adjustment would require an increase or decrease of
at least one percent (1%) in such rate; provided, that (A) any adjustments that by reason of this
paragraph (j) are not required to be made shall be carried forward and taken into account in any
subsequent adjustment and (B) the Company will make any carry forward adjustments to the Conversion
Rate not otherwise affected on or prior to the 43rd Scheduled Trading Day immediately preceding
December 31, 2012 and each Trading Day thereafter. All calculations shall be made by the Company
and shall be made to the nearest cent or to the nearest one-ten thousandth (1/10,000) of a share of
Common Stock, as the case may be.
(k) No adjustment to the Conversion Rate need be made in the following circumstances:
(i) No adjustment need be made for a transaction or event referred to in Section 3(a),
(b), (c), (d), (e), (f) or (g) if Holders participate, without conversion, in the
transaction or event that would otherwise give rise to an adjustment pursuant to such
Section at the same time as holders of Common Stock participate with respect to such
transaction or event and on the same terms as holders of Common Stock participate with
respect to such transaction or event as if Holders, at such time, held a number of shares of
Common Stock equal to the applicable Conversion Rate as of the Ex-Date or Expiration Date,
as the case may be, for such transaction or event, multiplied by the principal amount
(expressed in integral multiples of $25.00) of Series U Debentures held by such Holder,
without having to convert their Series U Debentures;
20
(ii) No adjustment need be made for the issuance of Common Stock or any securities
convertible into or exchangeable for Common Stock or carrying the right to purchase Common
Stock or any such security, except as set forth above in this Section 3;
(iii) No adjustment need be made for rights to purchase Common Stock pursuant to a
Company plan for reinvestment of dividends or interest;
(iv) No adjustment need be made for a change in the par value or no par value of Common
Stock;
(v) To the extent the Series U Debentures become convertible pursuant to Section 2 into
cash, no adjustment need be made thereafter as to the cash. Interest will not accrue on the
cash into which the Series U Debentures are convertible;
(vi) No adjustment need be made for accrued interest.
(l) Whenever the Conversion Rate is adjusted as herein provided, the Company shall promptly
file with the Trustee and any Conversion Agent other than the Trustee an Officers’ Certificate
setting forth the Conversion Rate after such adjustment and setting forth a brief statement of the
facts requiring such adjustment. Unless and until a responsible officer of the Trustee shall have
received such Officers’ Certificate, the Trustee shall not be deemed to have knowledge of any
adjustment of the Conversion Rate and may assume that the last Conversion Rate of which it has
knowledge is still in effect. Promptly after delivery of such certificate, the Company shall
prepare a notice of such adjustment of the Conversion Rate setting forth the adjusted Conversion
Rate and the date on which each adjustment becomes effective and shall mail such notice of such
adjustment of the Conversion Rate to the Holder of each Series U Debenture at his last address
appearing on the Series U Debenture register provided for in the Indenture, within twenty (20) days
after execution thereof. Failure to deliver such notice shall not affect the legality or validity
of any such adjustment.
(m) If any of the following events (each, a “Disposition Event”) occurs:
(i) any reclassification of Common Stock (other than a change in par value, or from par
value to no par value, or from no par value to par value, or as a result of a subdivision or
combination);
(ii) consolidation, merger, or other combination involving the Company; or
(iii) sale or conveyance to another individual, corporation, partnership, limited
liability company, association, trust or other entity, including a government or political
subdivision or an agency or instrumentality thereof (a “Person”) of all or substantially all
of the assets of the Company;
in each case, in which holders of outstanding Common Stock would be entitled to receive cash,
securities or other property for their shares of Common Stock, if a Holder converts its Series U
Debentures on or after the effective date of any such event, the Series U Debentures will be
convertible into (A) cash in an amount equal to the portion of the Conversion Obligation that the
Company has elected to settle in cash in accordance with Section 2; and (B) in lieu of shares of
21
Common Stock otherwise deliverable, if any, the same type (in the same proportions) of
consideration received by holders of Common Stock in the relevant event (collectively, “Reference
Property”). In addition, the amount of cash and Reference Property, if any, Holders will receive
will be based on the Daily Settlement Amounts of Reference Property and the Conversion Rate, as
described in Section 2.
If a Disposition Event provides the holders of Common Stock with the right to receive more
than a single type of consideration determined based in part upon any form of stockholder election,
the Reference Property shall be comprised of the weighted average of the types and amounts of
consideration received by the holders of Common Stock upon the occurrence of such event.
Upon the occurrence of a Disposition Event, the Company or the successor or purchasing Person,
as the case may be, shall execute with the Trustee a supplemental indenture (which shall comply
with the Trust Indenture Act as in force at the date of execution of such supplemental indenture if
such supplemental indenture is then required to so comply) permitted under Section 10.01 of the
Indenture providing for the conversion and settlement of the Series U Debentures as set forth
herein. Such supplemental indenture shall provide for adjustments that shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Section 3. If, in the case
of any Disposition Event, the Reference Property includes shares of stock or other securities and
assets of a Person other than the successor or purchasing Person, as the case may be, in such
reclassification, consolidation, merger, combination, sale or conveyance, then such supplemental
indenture shall also be executed by such other Person and shall contain such additional provisions
to protect the interests of the Holders of the Series U Debentures as the Board of Directors of the
Company shall reasonably consider necessary by reason of the foregoing, including to the extent
required by the Board of Directors and practicable the provisions providing for the repurchase
rights set forth in Section 6 herein.
In the event the Company shall execute a supplemental indenture pursuant to this Section 3(m),
the Company shall promptly file with the Trustee an Officers’ Certificate briefly stating the
reasons therefor, the kind or amount of cash, securities or property or asset that will comprise
the Reference Property after any such Disposition Event, any adjustment to be made with respect
thereto and that all conditions precedent have been complied with.
The Company shall cause notice of the execution of such supplemental indenture to be mailed to
each Holder of Series U Debentures, at its address appearing on the Security Register for the
Series U Debentures, within twenty (20) days after execution thereof. Failure to deliver such
notice shall not affect the legality or validity of such supplemental indenture. The above
provisions shall similarly apply to successive reclassifications, changes, consolidations, mergers,
combinations, sales and conveyances.
(n) The Company shall provide, free from preemptive rights, out of its authorized but unissued
shares or shares held in treasury, sufficient shares of Common Stock to provide for the conversion
of the Series U Debentures from time to time as such Series U Debentures are presented for
conversion. Before taking any action which would cause an adjustment increasing the Conversion Rate
to an amount that would cause the Conversion Price to be reduced below the then par value, if any,
of the shares of Common Stock issuable upon conversion of Series U
22
Debentures, the Company will take all corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue shares of such Common
Stock at such adjusted Conversion Rate. The Company covenants that all shares of Common Stock which
may be issued upon conversion of Series U Debentures will upon issue be validly issued, fully paid
and non-assessable by the Company and free from all taxes, liens and charges with respect to the
issue thereof. The Company covenants that, if any shares of Common Stock to be provided for the
purpose of conversion of Series U Debentures hereunder require registration with or approval of any
governmental authority under any federal or state law before such shares may be validly issued upon
conversion, the Company will in good faith and as expeditiously as possible, to the extent then
permitted by the rules and interpretations of the Securities and Exchange Commission (or any
successor thereto), secure such registration or approval, as the case may be.
(o) The Company further covenants that, if at any time the Common Stock shall be listed on the
New York Stock Exchange or any other national securities exchange or automated quotation system,
the Company will, if permitted by the rules of such exchange or automated quotation system, list
and keep listed, so long as the Common Stock shall be so listed on such exchange or automated
quotation system, all Common Stock issuable upon conversion of the Series U Debentures; provided,
that if the rules of such exchange or automated quotation system permit the Company to defer the
listing of such Common Stock until the first conversion of the Series U Debentures into Common
Stock in accordance with the provisions hereof, the Company covenants to list such Common Stock
issuable upon conversion of the Series U Debentures in accordance with the requirements of such
exchange or automated quotation system at such time.
(p) If (i) the Company shall declare a dividend (or any other distribution) on its Common
Stock that would require an adjustment in the Conversion Rate, (ii) the Company shall authorize the
granting to the holders of all or substantially all of its Common Stock of rights or warrants to
subscribe for or purchase any share of any class or any other rights or warrants; (iii) there shall
be any reclassification or reorganization of the Common Stock of the Company (other than a
subdivision or combination of its outstanding Common Stock, or a change in par value, or from par
value to no par value, or from no par value to par value), or of any consolidation or merger to
which the Company is a party and for which approval of any stockholders of the Company is required,
or of the sale or transfer of all or substantially all of the assets of the Company; or (iv) there
shall be the voluntary or involuntary dissolution, liquidation or winding up of the Company; the
Company shall notify Holders in the manner set forth in Section 1.02 of the Indenture and, in the
case of Series U Debentures evidenced by Global Securities, through the facilities of the
Depository, as promptly as possible but in any event at least ten (10) days prior to the applicable
date hereinafter specified, a notice stating (x) the payment or delivery date for such dividend,
distribution or rights or warrants, or (y) the date on which such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding up is expected to become effective or
occur, and the date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their Common Stock for securities or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up.
Failure to give such notice, or any defect therein, shall not affect the legality or validity of
such dividend, distribution, reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up.
23
(q) Each share of Common Stock issued upon conversion of Series U Debentures pursuant to
Section 2 shall be entitled to receive the appropriate number of rights (“Rights”), if any, and the
certificates representing the Common Stock issued upon such conversion shall bear such legends, if
any, in each case as may be provided by the terms of any future rights plan adopted by the Company,
as the same may be amended from time to time (a “Share Holders Rights Plan”). Upon conversion of
Series U Debentures, and subject to the terms, limitations and conditions of the Share Holders
Rights Plan, the Holder will receive, in addition to any Common Stock received in connection with
such conversion, the Rights under the Share Holders Rights Plan, unless prior to any conversion,
the Rights have separated from the Common Stock, in which case the Conversion Rate will be adjusted
at the time of separation as if the Company distributed to all holders of Common Stock, shares of
Capital Stock, assets, debt securities or certain rights to purchase securities of the Company as
described in the first adjustment formula in Section 3(d), subject to readjustment in the event of
the expiration, termination or redemption of such Rights. Subject to the terms, limitations and
conditions of the Share Holders Rights Plan, any distribution of Rights pursuant to a Share Holders
Rights Plan that would allow a Holder to receive upon conversion, in addition to shares of Common
Stock, the Rights described therein (unless such Rights have separated from Common Stock) shall not
constitute a distribution of Rights that would entitle the Holder to an adjustment to the
Conversion Rate.
Section 4. Adjustment to Conversion Rate Upon a Make-Whole Fundamental Change
(a) If, after the date hereof and on or prior to the second Business Day immediately preceding
December 31, 2012, a Make-Whole Fundamental Change (as defined below) occurs, and a Holder elects
to convert its Series U Debentures in connection with such Make-Whole Fundamental Change, the
Company will, under certain circumstances, increase the Conversion Rate for the Series U Debentures
so surrendered for conversion by a number of additional shares of Common Stock (the “Make-Whole
Shares”), as determined in this Section 4 below. A conversion of Series U Debentures will be deemed
for these purposes to be “in connection with” a Make-Whole Fundamental Change if the notice of
conversion of the Series U Debentures is received by the Conversion Agent from, and including, the
Effective Date (as defined below) of the Make-Whole Fundamental Change up to, and including, the
45th calendar day immediately following the Effective Date of such Make-Whole Fundamental Change
(or, in the case of an event that also constitutes a Fundamental Change, the Fundamental Change
Repurchase Date for such Fundamental Change).
If the Company fails to notify Holders as required by Section 1(d) of the effective date of
any Make-Whole Fundamental Change within 15 calendar days of such effective date, the period during
which Holders may surrender their Series U Debentures for conversion and receive the relevant
Make-Whole Shares will be extended by the number of days that such notification is delayed or not
otherwise provided to Holders beyond the specified notice deadline.
“Make-Whole Fundamental Change” means:
(i) any transaction or event (whether by means of an exchange offer, liquidation,
tender offer, consolidation, merger, combination, recapitalization or otherwise) in
connection with which 90% or more of the Common Stock is exchanged for, converted into,
acquired for or constitutes solely the right to receive consideration 10% or
24
more of which is not common stock that is listed on, or immediately after the
transaction or event will be listed on, a United States national securities exchange; or
(ii) any “person” or “group” (as such terms are used for purposes of Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or
not applicable), other than the Company or any majority-owned subsidiary of the Company or
any employee benefit plan of the Company or such subsidiary, becomes the “beneficial owner,”
directly or indirectly, of more than 50% of the total voting power in the aggregate of all
classes of Capital Stock then outstanding entitled to vote generally in elections of the
Company’s directors,
(a) The number of Make-Whole Shares will be determined by reference to the table set forth in
Section 4(c) below and shall be based on the date on which such Make-Whole Fundamental Change
becomes effective (the “Effective Date”) and the price paid per share of Common Stock in the
Make-Whole Fundamental Change (in the case of a Make-Whole Fundamental Change described in clause
(a) of the definition of Make-Whole Fundamental Change, in which holders of Common Stock receive
only cash) or, in the case of any other Make-Whole Fundamental Change, the average of the Closing
Prices per share of Common Stock over the five Trading Day period ending on the Trading Day
preceding the Effective Date of such Make-Whole Fundamental Change (the “Stock Price”).
(b) The Stock Prices set forth in the top row of the table below will be adjusted as of any
date on which the Conversion Rate is adjusted. The adjusted Stock Prices will equal the Stock
Prices immediately prior to such adjustment, multiplied by a fraction, the numerator of which is
the Conversion Rate immediately prior to the adjustment giving rise to the Stock Price adjustment,
and the denominator of which is the Conversion Rate as so adjusted. In addition, the number of
Make-Whole Shares will be subject to adjustment in the same manner as the Conversion Rate as set
forth in Section 3(a) through Section 3(g).
| Effective | Stock Price | |||||||||||||||||||||||||||||
| Date | 32.00 | 34.00 | 36.00 | 38.00 | 40.00 | 42.00 | 44.00 | 46.00 | 48.00 | 50.00 | 52.00 | 54.00 | 56.00 | 58.00 | 60.00 | |||||||||||||||
[_______], 20081 |
0.2176 | 0.1923 | 0.1709 | 0.1527 | 0.1372 | 0.1239 | 0.1124 | 0.1024 | 0.0938 | 0.0862 | 0.0795 | 0.0736 | 0.0684 | 0.0638 | 0.0596 | |||||||||||||||
June 30, 2008 |
0.2083 | 0.1824 | 0.1607 | 0.1423 | 0.1267 | 0.1135 | 0.1021 | 0.0923 | 0.0839 | 0.0766 | 0.0702 | 0.0646 | 0.0597 | 0.0553 | 0.0515 | |||||||||||||||
December 31, 2008 |
0.1973 | 0.1707 | 0.1486 | 0.1300 | 0.1144 | 0.1013 | 0.0901 | 0.0806 | 0.0724 | 0.0655 | 0.0594 | 0.0542 | 0.0497 | 0.0458 | 0.0423 | |||||||||||||||
June 30, 2009 |
0.1839 | 0.1565 | 0.1338 | 0.1150 | 0.0994 | 0.0864 | 0.0755 | 0.0664 | 0.0587 | 0.0523 | 0.0468 | 0.0422 | 0.0382 | 0.0348 | 0.0319 | |||||||||||||||
December 31, 2009 |
0.1677 | 0.1389 | 0.1154 | 0.0962 | 0.0805 | 0.0678 | 0.0575 | 0.0490 | 0.0421 | 0.0365 | 0.0319 | 0.0281 | 0.0250 | 0.0224 | 0.0203 | |||||||||||||||
June 30, 2010 |
0.1476 | 0.1158 | 0.0904 | 0.0703 | 0.0546 | 0.0424 | 0.0332 | 0.0262 | 0.0209 | 0.0170 | 0.0140 | 0.0118 | 0.0102 | 0.0089 | 0.0080 | |||||||||||||||
December 31, 2010 |
0.1340 | 0.0937 | 0.0584 | 0.0274 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | |||||||||||||||
June 30, 2011 |
0.1375 | 0.0961 | 0.0599 | 0.0281 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | |||||||||||||||
December 31, 2011 |
0.1412 | 0.0987 | 0.0615 | 0.0289 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | |||||||||||||||
June 30, 2012 |
0.1467 | 0.1026 | 0.0640 | 0.0300 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | |||||||||||||||
December 31, 2012 |
0.1563 | 0.1103 | 0.0694 | 0.0329 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | |||||||||||||||
| 1 | To be the issuance date. |
25
(c) If the exact Stock Price and Effective Date is not set forth in the table, then (i) if the
Stock Price is between two Stock Prices in the table or the Effective Date is between two Effective
Dates in the table, the Make-Whole Shares issued upon conversion of the Series U Debentures will be
determined by a straight-line interpolation between the number of Make-Whole Shares set forth for
the higher and lower Stock Prices and/or the earlier and later Effective Dates in the table, as
applicable, based on a 365-day year, (ii) if the Stock Price is in excess of $60.00 per share of
Common Stock (subject to adjustment in the same manner as the Stock Prices set forth in the table
above), no Make-Whole Shares will be issued upon conversion of the Series U Debentures; and (iii)
if the Stock Price is less than $32.00 per share of Common Stock (subject to adjustment in the same
manner as the Stock Prices set forth in the table above), no Make-Whole Shares will be issued upon
conversion of the Series U Debentures.
(d) In no circumstances shall the Conversion Rate of the Series U Debentures as adjusted
pursuant to this Section 4 exceed 0.8426 per $25.00 principal amount of Series U Debentures,
subject to adjustment in the same manner as the Conversion Rate as set forth in Section 3.
Section 5. Redemption.
Prior to January 1, 2011, the Series U Debentures will not be redeemable at the Company’s
option. At any time and from time to time on or after January 1, 2011, the Company may redeem the
Series U Debentures, in whole or in part, in cash at a price (the “Redemption Price") equal to 100%
of the principal amount of the redeemed Series U Debentures, plus (1) accrued and unpaid interest
on the redeemed Series U Debentures to but not including the date of redemption (the “Redemption
Date”), and (2) as applicable and as provided below, the Redemption Adjustment Amount with respect
to the Series U Debentures selected for redemption and scheduled to be redeemed on such Redemption
Date (including any such Series U Debentures selected for redemption with respect to which a
Conversion Date has been set on or prior to the Close of Business on the second Business Day
immediately preceding the Redemption Date) (the “Called Debentures"); provided, however, that if
such Redemption Date falls after a Record Date and on or prior to the corresponding Interest
Payment Date, then the full amount of accrued and unpaid interest, if any, payable on such Interest
Payment Date shall be paid to the Holders of record of the Series U Debentures at the Close of
Business on the corresponding Record Date (which may or may not be the same person to whom the
Company will pay the Redemption Price) and the Redemption Price shall equal 100% of the principal
amount of the redeemed Series U Debentures plus, as applicable and as provided below, the
Redemption Adjustment Amount with respect to the Called Debentures minus an amount equal to the
interest payable on that Interest Payment Date on the principal amount of the redeemed Series U
Debentures with respect to the period from the Redemption Date to but not including the Interest
Payment Date. For the avoidance of doubt, the Redemption Adjustment Amount (if any) shall only be
due and payable upon a redemption under and pursuant to this Section 5 and not upon the occurrence
of, or in connection with, any other circumstance, event or condition, including without limitation
a repurchase pursuant to Section 6 hereof. The Series U Debentures are not entitled to any sinking
fund.
26
In the case of any partial redemption, selection of the Series U Debentures for redemption
will be made by the Trustee in compliance with the requirements of the principal national
securities exchange, if any, on which the Series U Debentures are listed or, if the Series U
Debentures are not listed on a national securities exchange, by lot or by such other method as
directed by the Company. The Trustee will make that selection not more than forty-five days before
the Redemption Date. If a portion of a Holder’s Series U Debentures is selected for redemption and
a Holder converts a portion of its Series U Debentures, the converted portion will, notwithstanding
the conversion, be deemed to be part of the portion selected for redemption (so that only the
difference between the portion selected for redemption and the converted portion will need to
actually be redeemed). The Company shall not redeem any Series U Debentures if it has failed to
pay interest on the Series U Debentures and such failure to pay is continuing. Series U Debentures
that the Trustee selects shall be in principal amounts of $25.00 or integral multiples of $25.00.
Notwithstanding anything in the first two paragraphs of this Section 5 to the contrary, the
Company may redeem all (but not less than all) of the Series U Debentures if the Board of Directors
determines in good faith by resolution that the Series U Debentures will not be transferred to the
New VEBA (as defined in the Settlement Agreement) in accordance with the terms of that Settlement
Agreement, dated February 21, 2008 (as amended, supplemented, replaced or otherwise altered from
time to time, the “Settlement Agreement”), between the Company, the International Union, United
Automobile, Aerospace and Agricultural Implement Workers of America, and certain class
representatives, on behalf of the class of plaintiffs in (1) the class action of Int’l Union, UAW,
et. al. v. General Motors Corp., Civil Action No. 07-14074 (E.D. Mich. filed Sept. 9, 2007) and/or
(2) the class action of UAW et al. v. General Motors Corp., No. 05-CV-73991, 2006 WL 891151 (E.D.
Mich. Mar. 31, 2006, aff’d, Int’l Union, UAW v. General Motors Corp., 497 F.3d 615 (6th Cir. 2007).
Any such redemption pursuant to the preceding sentence is referred to as a “Termination
Redemption.” A Termination Redemption shall be made in cash at a price equal to 100% of the
principal amount of the Series U Debentures, plus accrued and unpaid interest thereon to but not
including the Redemption Date. For the avoidance of doubt, no Redemption Adjustment Amount shall
be payable in connection with any Termination Redemption.
The “Redemption Adjustment Amount” shall be payable only as follows:
(i) If the Redemption Date occurs during the period beginning on January 1, 2011 and
ending on January 1, 2012 and the Closing Price of the Common Stock on the second Business
Day prior to the Redemption Date is less than $69.04 per share, the Redemption Adjustment
Amount shall be paid only on the New VEBA Called Debentures (as defined below) (if any). In
this case, the Redemption Adjustment Amount with respect to any such New VEBA Called
Debentures shall be an amount in cash equal to (1) the Discounted Interest Payments with
respect to such New VEBA Called Debentures minus (2) the Discounted Dividend
Payments with respect to such New VEBA Called Debentures.
(ii) If the Redemption Date occurs on any date after January 1, 2012 and the Closing
Price of the Common Stock on the second Business Day prior to the Redemption Date is less
than $72.75 per share, the Redemption Adjustment Amount shall be paid
27
only on the New VEBA Called Debentures (if any). In this case, the Redemption
Adjustment Amount with respect to any such New VEBA Called Debentures shall be an amount in
cash equal to (1) the Discounted Interest Payments with respect to such New VEBA Called
Debentures minus (2) the Discounted Dividend Payments with respect to such New VEBA
Called Debentures.
(iii) If the Redemption Date occurs during the period beginning on January 1, 2011 and
ending on January 1, 2012 and the Closing Price of the Common Stock on the second Business
Day prior to the Redemption Date is equal to or greater than $69.04 per share, the
Redemption Adjustment Amount shall be paid only on the New VEBA Stock-Settled Debentures (as
defined below) (if any) that constitute Excess Debentures (as defined below). In this case,
the Redemption Adjustment Amount with respect to any such New VEBA Stock-Settled Debentures
that constitute Excess Debentures shall be an amount in cash equal to (1) the Discounted
Interest Payments with respect to the portion of such New VEBA Stock-Settled Debentures that
constitute Excess Debentures minus (2) the Discounted Dividend Payments with respect
to the portion of such New VEBA Stock-Settled Debentures that constitute Excess Debentures.
(iv) If the Redemption Date occurs on any date after January 1, 2012 and the Closing
Price of the Common Stock on the second Business Day prior to the Redemption Date is equal
to or greater than $72.75 per share, the Redemption Adjustment Amount shall be paid only on
the New VEBA Stock-Settled Debentures (if any) that constitute Excess Debentures. In this
case, the Redemption Adjustment Amount with respect to any such New VEBA Stock-Settled
Debentures that constitute Excess Debentures shall be an amount in cash equal to (1) the
Discounted Interest Payments with respect to the portion of such New VEBA Stock-Settled
Debentures that constitute Excess Debentures minus (2) the Discounted Dividend
Payments with respect to the portion of such New VEBA Stock-Settled Debentures that
constitute Excess Debentures.
Any Redemption Adjustment Amount that is payable as provided in clause (iii) or (iv) of the
definition of Redemption Adjustment Amount above on any New VEBA Stock-Settled Debentures that
constitute Excess Debentures need not be paid or deposited in trust with the Trustee or the Paying
Agent at the same time that the other elements of the Purchase Price (that is, 100% of the
principal amount thereof and the accrued and unpaid interest thereon) are paid or deposited in
trust with the Trustee or the Paying Agent in any instance where (x) the Conversion Obligation in
connection with the conversion of such New VEBA Stock-Settled Debentures that constitute Excess
Debentures will be settled in accordance with Section 2(b)(i), (y) the Company has previously made
an election under Section 2(k), and (z) the Company has either (1) specified a Cash Percentage for
the New VEBA that is less than 100% or (2) not specified a Cash Percentage for the New VEBA.
Rather, any such Redemption Adjustment Amount that is so payable on such New VEBA Stock-Settled
Debentures that constitute Excess Debentures in connection with such redemption shall be paid by
the Company to the New VEBA (or deposited in trust with the Trustee or the Paying Agent) on or
prior to the third Trading Day immediately succeeding the last Trading Day of the relevant
Observation Period for the conversion of such New VEBA Stock-Settled Debentures that constitute
Excess Debentures.
28
Notwithstanding anything to the contrary in the definition of Redemption Adjustment Amount
above, no Redemption Adjustment Amount shall be payable with respect to any Series U Debentures to
the extent that any Person other than the New VEBA is the Holder of, or the beneficial owner of an
interest in, such Series U Debenture. In addition, each of the $69.04 and $72.75 per share prices
referenced in the definition of Redemption Adjustment Amount above shall be adjusted as of any date
on which the Conversion Rate is adjusted by multiplying such price by a fraction, the numerator of
which is the Conversion Rate immediately prior to the event giving rise to the adjustment, and the
denominator of which is the Conversion Rate as so adjusted.
The “New VEBA Called Debentures” means, with respect to any redemption, the Called Debentures
that are held or beneficially owned by the New VEBA.
The “New VEBA Called/Converted Debentures” means, with respect to any redemption, the Called
Debentures that are (x) held or beneficially owned by the New VEBA and (y) converted by the New
VEBA such that a Conversion Date is set on or prior to the Close of Business on the second Business
Day immediately preceding the Redemption Date.
The “New VEBA Stock-Settled Debentures” means, with respect to any redemption, the portion of
any New VEBA Called/Converted Debentures equal to the product of:
(A) the aggregate principal amount of such New VEBA Called/Converted Debentures,
multiplied by
(B) either (x) the number 1, if the Conversion Obligation in connection with such
conversion of the New VEBA Called/Converted Debentures by the New VEBA will be settled in
accordance with Section 2(b)(ii), (y) a fraction equal to 1 minus the Cash Percentage
(expressed as a fraction) for such conversion of the New VEBA Called/Converted Debentures by
the New VEBA, if the Conversion Obligation in connection with such conversion by the New
VEBA will be settled in accordance with Section 2(b)(i) and the Company has not previously
made an election under Section 2(k) or (z) a fraction equal to 1 minus the average of the
Cash Percentages (expressed as fractions) for such conversion of the New VEBA
Called/Converted Debentures by the New VEBA for each Trading Day in the relevant Observation
Period in connection with such conversion, if the Conversion Obligation in connection with
such conversion by the New VEBA will be settled in accordance with Section 2(b)(i) and the
Company has previously made an election under Section 2(k).
The “Excess Debentures” means, with respect to any redemption, the aggregate principal amount
(if greater than zero) of any New VEBA Stock-Settled Debentures in connection with such redemption
equal to the amount (if any) by which (x) the sum of (1) the principal amount of New VEBA
Stock-Settled Debentures in connection with such redemption and (2) the aggregate principal amount
of all Series U Debentures that constituted “New VEBA Stock-Settled Debentures” in connection with
all prior redemptions having Redemption Dates
within less than one year prior to the Redemption Date in connection with the current redemption is
greater than (y) $2,160,000,000.
29
The “Subject Debentures” means, as applicable, any New VEBA Called Debentures or any portion
of any New VEBA Called/Converted Debentures that constitute Excess Debentures.
The “Discounted Interest Payments” means, with respect to any Subject Debentures, the amount
obtained by discounting all Remaining Interest Payments with respect to such Subject Debentures
from their respective assumed due dates to the Redemption Date with respect to such Subject
Debentures, in accordance with accepted financial practice and at a discount factor (applied on the
same periodic basis as that on which interest on the Series U Debentures is payable) equal to 9%
per annum.
The “Discounted Dividend Payments” means, with respect to any Subject Debentures, the amount
obtained by discounting all Expected Dividend Payments with respect to such Subject Debentures from
their respective assumed payment dates to the Redemption Date with respect to such Subject
Debentures, in accordance with accepted financial practice and at a discount factor (applied on the
same periodic basis as that on which dividends on the Common Stock are payable) equal to 9% per
annum.
The “Expected Dividend Payments” means, with respect to any Subject Debentures:
(e) a stream of quarterly dividend payments from the Redemption Date through the
Maturity Date on the number of shares (the “Underlying Shares”) of Common Stock into which
such Subject Debentures are then convertible, calculated as if (1) such Subject Debentures
are then convertible (notwithstanding any terms hereof to the contrary), (2) the Holder so
converted such Subject Debentures on the Redemption Date, (3) the Company does not specify a
Cash Percentage in connection with such conversion, (4) the Company has not previously made
an election under Section 2(k) hereof, (5) each quarterly dividend payment on each
Underlying Share is in an amount (the “Dividend Amount”) equal to the average of the regular
quarterly per share dividends paid by the Company over the last four quarters immediately
preceding the Redemption Date and (6) the payment dates for each such quarterly dividend
payment are set on the same calendar days as the respective payment dates for the regular
quarterly dividends paid by the Company over the last four quarters immediately preceding
the Redemption Date (provided, that if the Company did not pay a regular quarterly dividend
with respect to any such quarter, the calendar day on which the Company last paid a regular
quarterly dividend with respect to such quarter in a prior year shall be used), and
(b) a final dividend payment on such Underlying Shares on the Maturity Date in an
amount equal to the product of (1) such number of Underlying Shares multiplied by (2) the
Dividend Amount multiplied by (3) a fraction, (x) the numerator of which is the number of
calendar days from the last assumed payment date under clause (a)(6) of this definition to
the Maturity Date (or, in the event that clause (a) of this definition yields no quarterly
dividend payment as a result of the first assumed payment date under clause
(a)(6) being after the Maturity Date, the number of calendar days from the Redemption
Date to the Maturity Date) and (y) the denominator of which is 90.
30
The “Remaining Interest Payments” means, with respect to any Subject Debentures, all payments
of interest thereon that would otherwise have become due and payable after the Redemption Date with
respect to such Subject Debentures if no payment of the principal amount of such Subject Debentures
was made prior to its scheduled due date, provided, that (i) if such Redemption Date falls after an
Interest Payment Date and on or prior to the next succeeding Record Date, then, for purposes of
this definition, the amount of the next succeeding scheduled interest payment will be reduced by
the amount of interest that has accrued on the principal amount of such Subject Debentures to such
Redemption Date and (ii) if such Redemption Date falls after a Record Date and on or prior to the
corresponding Interest Payment Date, then, for purposes of this definition, the amount of the next
succeeding interest payment will be deemed to be $0.
Section 6. Repurchase of Series U Debentures Upon a Fundamental Change
(f) If there shall occur a Fundamental Change (as defined in Section 6(b) below) at any time
prior to December 31, 2012, then each Holder shall have the right, at such Holder’s option, to
require the Company to repurchase all of such Holder’s Series U Debentures, or any portion thereof
that is an integral multiple of $25.00 principal amount, on the date (the “Fundamental Change
Repurchase Date”) that is thirty (30) days after the date the Company provides the Fundamental
Change Notice (as defined below) (or, if such 30th day is not a Business Day, the next succeeding
Business Day), for cash at a repurchase price (the “Fundamental Change Repurchase Price”) equal to
100% of the principal amount thereof, together with accrued and unpaid interest to, but excluding,
the Fundamental Change Repurchase Date; provided, however, that if such Fundamental Change
Repurchase Date falls after a Record Date and on or prior to the corresponding Interest Payment
Date, then the full amount of accrued and unpaid interest, if any, payable on such Interest Payment
Date shall be paid to the Holders of record of the Series U Debentures at the Close of Business on
the corresponding Record Date (which may or may not be the same person to whom the Company will pay
the Fundamental Change Repurchase Price) and the Fundamental Change Repurchase Price shall equal
100% of the principal amount of Series U Debentures to be repurchased.
(g) A “Fundamental Change” of the Company is any transaction or event (whether by means of an
exchange offer, liquidation, tender offer, consolidation, merger, combination, recapitalization or
otherwise) in connection with which 90% or more of the Common Stock is exchanged for, converted
into, acquired for or constitutes solely the right to receive, consideration 10% or more of which
is not common stock that is listed on, or immediately after the transaction or event will be listed
on, a United States national securities exchange, but only if such transaction or event also
includes either of the following: (i) the filing by any person, including the Company’s Affiliates
(as defined below) and associates, other than the Company and its employee benefit plans, of a
Schedule 13D or Schedule TO, or any successor schedule, form or report, under the Exchange Act,
disclosing that such person has become the beneficial owner of 50% or more of the voting power of
the Common Stock or other Capital Stock into which the Common Stock is reclassified or exchanged;
or (ii) the consummation of any share exchange, consolidation or merger pursuant to which the
Common Stock would be converted to
31
cash, securities or other property, other than any share exchange, consolidation or merger of
the Company in which the holders of Common Stock immediately prior to the share exchange,
consolidation or merger have, directly or indirectly, at least a majority of the total voting power
in the aggregate of all classes of Capital Stock of the continuing or surviving corporation
immediately after the share exchange, consolidation or merger.
“Affiliate” of any specified person means any other person directly or indirectly controlling
or controlled by or under direct or indirect common control with such specified person. For
purposes of this definition, “control” when used with respect to any specified person means the
power to direct or cause the direction of the management and policies of such person, directly or
indirectly, whether through the ownership of voting securities, by contract or otherwise; and the
terms “controlling” and “controlled” have meanings correlative to the foregoing.
(h) The Company will make payment of the Fundamental Change Repurchase Price on the later of
the Fundamental Change Repurchase Date and the time of book-entry transfer, in the case of Series U
Debentures evidenced by Global Securities, or delivery of the Series U Debentures.
(i) On or before the fifteenth day after the occurrence of a Fundamental Change, the Company
or at its written request (which must be received by the Trustee at least five (5) Business Days
prior to the date the Trustee is requested to give notice as described below, unless the Trustee
shall agree in writing to a shorter period) the Trustee, in the name of and at the expense of the
Company, shall mail or cause to be mailed to all Holders of record on the date of the Fundamental
Change a notice (the “Fundamental Change Notice”) of the occurrence of such Fundamental Change and
of the repurchase right at the option of the Holders arising as a result thereof. If the Company
shall give such notice, the Company shall also deliver a copy of the Fundamental Change Notice to
the Trustee at such time as it is mailed to Holders.
(j) Each Fundamental Change Notice shall include a form of Option to Elect Repayment Upon A
Fundamental Change, a form of which comprises part of this Note, and shall specify the
circumstances constituting the Fundamental Change, the Fundamental Change Repurchase Date, the
Fundamental Change Repurchase Price, that the Holder must exercise the repurchase right on or
before the Close of Business on the Business Day immediately preceding the Fundamental Change
Repurchase Date (the “Fundamental Change Expiration Time”), a description of the procedure which a
Holder must follow to exercise such repurchase right and to withdraw any surrendered Series U
Debentures, the place or places where the Holder is to surrender such Holder’s Series U Debentures,
the amount of interest accrued on each $25.00 principal amount of the Series U Debentures to the
Fundamental Change Repurchase Date and the “CUSIP” number or numbers of the Series U Debentures (if
then generally in use). No failure of the Company or its successor to give the foregoing notices
and no defect therein shall limit the Holder’s repurchase right or affect the validity of the
proceedings for the repurchase of the Series U Debentures pursuant to this Section 6.
(k) For a Series U Debenture to be so repurchased at the option of the Holder, the Paying
Agent must receive such Series U Debenture with the form entitled “Option to Elect Repayment Upon A
Fundamental Change” on the reverse thereof duly completed, together with
32
such Series U Debentures duly endorsed for transfer, on or before the Fundamental Change
Expiration Time. All questions as to the validity, eligibility (including time of receipt) and
acceptance of any Series U Debenture for repayment shall be determined by the Company, whose
determination shall be final and binding absent manifest error.
(l) Notwithstanding anything herein to the contrary, any Holder delivering to the Paying Agent
the Option to Elect Repayment Upon a Fundamental Change shall have the right to withdraw such
Option to Elect Repayment Upon a Fundamental Change at any time up to the Close of Business on the
Business Day prior to the Fundamental Change Repurchase Date by delivery of a written notice of
withdrawal (a “Withdrawal Notice”) to the Paying Agent. The Paying Agent shall promptly notify the
Company of the receipt by it of any Option to Elect Repayment Upon a Fundamental Change or
Withdrawal Notice. The Withdrawal Notice shall state: (i) the principal amount of Series U
Debentures withdrawn (which must be in an amount of $25.00 or a integral multiple thereof); (ii)
the certificate numbers of the withdrawn Series U Debentures or evidence of compliance with the
appropriate Depository procedures if certificated Series U Debentures have not been issued; and
(iii) the principal amount, if any, of Series U Debentures that remains subject to the “Option to
Elect Repayment Upon a Fundamental Change.”
(m) The Company and its successor shall comply with any tender offer rules under the Exchange
Act that may be applicable in connection with the repurchase rights of the Holders of Series U
Debentures in the event of a Fundamental Change.
(n) The Company shall not repurchase any Series U Debentures in the event of a Fundamental
Change if the principal amount of the Series U Debentures has been accelerated (other than as a
result of a failure to pay the relevant Fundamental Change Repurchase Price), and such acceleration
has not been rescinded on or prior to the Fundamental Change Repurchase Date.
(o) Prior to 10:00 a.m. (New York City Time) on the Fundamental Change Repurchase Date, the
Company or its successor shall deposit with the Trustee or with the Paying Agent an amount of cash
(in immediately available funds if deposited on such Business Day) sufficient to pay the aggregate
Fundamental Change Repurchase Price of all the Series U Debentures or portions thereof that are to
be purchased as of the Fundamental Change Repurchase Date. If prior to 10:00 a.m. (New York City
Time) on the Fundamental Change Repurchase Date the Trustee or Paying Agent holds an amount of cash
sufficient to pay the aggregate Fundamental Change Repurchase Price of the Series U Debentures that
are to be so repurchased, then, on and after the Fundamental Change Repurchase Date (i) the Series
U Debentures to be repurchased will cease to be outstanding; (ii) interest on such Series U
Debentures will cease to accrue; and (iii) all other rights of the Holders with respect to such
Series U Debentures will terminate, other than the right to receive the Fundamental Change
Repurchase Price upon delivery of the Series U Debentures. This will be the case whether or not
book-entry transfer of the Series U Debentures has been made or the Series U Debentures have been
delivered to the Paying Agent.
(p) Any certificated Series U Debenture that is to be repurchased only in part shall be
surrendered at the office of the Paying Agent (with, if the Company, its successor or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the
33
Company and the Trustee duly executed by, the Holder thereof or such Holder’s attorney duly
authorized in writing) and the Company or its successor shall execute and the Trustee shall
authenticate and deliver to the Holder of such Series U Debenture, without any service charge, a
new Series U Debenture or Series U Debentures, of any authorized denomination as requested by such
Holder in aggregate principal amount equal to, and in exchange for, the portion of the principal
amount of the Series U Debenture so surrendered which is not purchased.
(q) The Trustee and the Paying Agent shall return to the Company or its successor any cash
that remains unclaimed, together with interest, if any, thereon, held by them for the payment of
the Fundamental Change Repurchase Price; provided, however, that to the extent that the aggregate
amount of cash deposited by the Company or its successor exceeds the aggregate Fundamental Change
Repurchase Price of the Series U Debentures or portions thereof which the Company or its successor
is obligated to purchase as of the Fundamental Change Repurchase Date then, unless otherwise agreed
in writing with the Company or its successor, promptly after the Business Day following the
Fundamental Change Repurchase Date the Trustee shall return any such excess to the Company.
Section 7. Events of Default
In case an Event of Default, as defined in the Indenture and as supplemented by this Section
7, with respect to the Series U Debentures shall have occurred and be continuing, the principal
hereof may be declared, and upon such declaration shall become, due and payable in the manner, with
the effect and subject to the conditions provided in the Indenture.
In addition to the Events of Default set forth in the Indenture, each of the following (for
whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or
be effected by operation of law or pursuant to any judgment decree or order of any court or any
order, rule or regulation of any administrative or governmental body) shall constitute an Event of
Default with respect to the Series U Debentures:
(i) default in the issuance of a Fundamental Change Notice, and such default continues for a
period of (A) five Business Days (in the case of a Fundamental Change, the occurrence of which is
not publicly announced) or (B) five Business Days after written notice of such default has been
provided to the Company by the Trustee or a Holder of, or a holder of a beneficial interest in,
Series U Debentures (in the case of a Fundamental Change, the occurrence of which is publicly
announced);
(ii) failure to issue any notice pursuant to Section 1(c) or Section 1(d) during the time
periods described in such Sections, which failure continues for a period of (A) five Business Days
(in the case of any such transaction or event, the occurrence of which is not publicly announced)
or (B) five Business Days after written notice of such failure has been provided to the Company by
the Trustee or a Holder of, or a holder of a beneficial interest in, Series U Debentures (in the
case of any such transaction or event, the occurrence of which is publicly announced);
(iii) failure to comply with the obligation to convert the Series U Debentures into shares of
Common Stock and cash, if any, as required by Section 2; or
34
(iv) failure to comply with the Company’s payment obligations under the Settlement Agreement
for a period of 15 Business Days after the date on which written notice of such failure, requiring
the Company to remedy the same, shall have been given to the Company by the committee that
administers the New VEBA, unless, within such 15 Business Day period, the Company remedies the
failure to comply with its payment obligations under the Settlement Agreement by paying the amount
then in default plus accrued interest on such amount at the rate of 9% per annum; provided that an
Event of Default shall not arise under this clause (iv) with respect to any portion of the
principal amount of any Series U Debentures that is held or beneficially owned by any Person other
than the New VEBA.
Section 8. Registration, Transfer, Governing Law.
Upon due presentment for registration of transfer of this Note at the office or agency
designated and maintained by the Company for such purpose in The Borough of Manhattan, The City of
New York, pursuant to the provisions of the Indenture, a new Note for an equal aggregate principal
amount will be issued to the transferee in exchange therefor, subject to the limitations provided
in the Indenture and in this Note (including any legends set forth on the face of this Note and
including the certification requirements of Section 8(i) or (ii) below), without charge except for
any tax or other governmental charge imposed in connection therewith.
The Company, the Trustee and any authorized agent of the Company or the Trustee may deem and
treat the Holder in whose name this Note is registered as the absolute owner of this Note (whether
or not this Note shall be overdue and notwithstanding any notation of ownership or other writing
hereon), for the purpose of receiving payment of, or on account of, the principal hereof and
premium, if any, and subject to the provisions contained herein, interest hereon, and for all other
purposes, and neither the Company nor the Trustee nor any authorized agent of the Company or the
Trustee shall be affected by any notice to the contrary.
The obligation of the Company, the Trustee and any authorized agent of the Company or the
Trustee to register any transfer of the Note to any transferee whatsoever (other than a transferee
that will hold this Note in Global Series U Security form if the Company or the Trustee concludes
that the satisfaction of the following requirements is not necessary for such transferee) is
subject to the following provisions which must be satisfied by such transferee prior to such
transfer:
(i) Each transferee that is not a “U.S. Person” as defined in Section 7701(a)(30) of the
Internal Revenue Code of 1986, as amended (the “Code”) (a “Non-U.S. Transferee”) shall deliver to
the Company, the Trustee and any authorized agent of the Company or the Trustee, as the case may
be, two copies of either U.S. Internal Revenue Service Form W-8BEN (claiming benefits under an
applicable treaty), Form W-8ECI or Form W-8IMY, or, in the case of a Non-U.S. Transferee claiming
exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of “portfolio interest,” a properly completed and duly executed certificate as
described in Section 871(h)(5) of the Code and a Form W-8BEN, or any subsequent versions thereof or
successors thereto, properly completed and duly executed by such Non-U.S. Transferee claiming
complete exemption from U.S. federal withholding tax on all payments under this Note. Such forms
shall be delivered by each Non-U.S. Transferee on or before the date of such transfer or
assignment. In addition, each
35
Non-U.S. Transferee shall deliver such forms, or other applicable forms or similar
documentation, promptly as may be required to maintain the validity of exemption from or reduction
of the withholding tax or upon the receipt of notice from the Company, the Trustee and any
authorized agent of the Company or the Trustee of the obsolescence or invalidity of any form
previously delivered by such Non-U.S. Transferee. Notwithstanding anything to the contrary in this
Note, the Company may properly withhold from any payments of principal or interest under this Note
any tax due as a result of a Non-U.S. Transferee’s failure to comply with this Section 8 or tax
otherwise due as a result of such Non-U.S. Transferee failing to qualify for complete exemption
from any U.S. federal withholding tax with respect to the payments of principal and interest under
this Note, including under Section 871(h) or 881(c) of the Code as “portfolio interest” exemption;
and
(ii) Each transferee that is a “U.S. person” as described in Section 7701(a)(30) of the Code
(a “U.S. Transferee”) shall deliver to the Company, the Trustee and any authorized agent of the
Company or the Trustee two copies of properly completed and duly executed U.S. Internal Revenue
Service Form W-9, or any subsequent versions or successors thereto, on or before the date of such
transfer or assignment. In addition, each U.S. Transferee shall deliver such forms, or other
applicable forms or similar documentation, promptly as may be required to maintain the validity of
exemption from backup withholding of U.S. federal income tax, or upon the receipt of notice from
the Company, the Trustee and any authorized agent of the Company or the Trustee of the obsolescence
or invalidity of any form previously delivered by such U.S. Transferee. Notwithstanding anything
to the contrary in this Note, the Company may properly withhold from any payments of principal or
interest under this Note any tax due as a result of a U.S. Transferee’s failure to comply with this
Section 8 or tax otherwise due as a result of such U.S. Transferee becoming subject to any tax
backup withholding or any other type of withholding tax.
For the avoidance of doubt, any taxes withheld or paid by the Company under Sections 8(i) or
(ii) above shall be treated under this Note as having been paid to the transferee and shall not
result in the Company being viewed or treated as in default of its obligations under this Note for
any reason.
Notwithstanding anything to the contrary set forth herein, nothing in this Section 8 shall
prevent the (1) transfer of this Note into a Global Series U Security form to be held by the
Depository or a nominee of the Depository or (2) transfer of this Note to the New VEBA.
No recourse under or upon any obligation, covenant or agreement of the Company in the
Indenture or any indenture supplemental thereto or in this Note, or because of the creation of any
indebtedness represented thereby, shall be had against any incorporator, stockholder, officer or
director, as such, of the Company or of any successor corporation, either directly or through the
Company or any successor corporation, under any rule of law, statute or constitutional provision or
by the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance hereof and as part of the
consideration for the issue hereof.
This Note is governed by the laws of the State of New York.
36
Terms used herein without definition which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.
This Note shall not be valid or become obligatory for any purpose until the certificate of
authentication hereon shall have been signed by the Trustee under the Indenture.
For the avoidance of doubt, in the event of any inconsistency between this Section 8 and the
Indenture, the Indenture shall govern to the extent of such inconsistency.
37
WITNESS THE SEAL OF THE COMPANY AND THE SIGNATURES OF ITS DULY AUTHORIZED OFFICERS.
| Dated: February 25, 2008 | GENERAL MOTORS CORPORATION |
|||
| By: | /s/ Xxxxxxxxx X. Xxxxxxxxx | |||
| Name: | Xxxxxxxxx X. Xxxxxxxxx | |||
| Title: | Vice Chairman and Chief Financial Officer | |||
[SEAL]
| By: | Xxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxx | |||
| Title: | Assistant Secretary | |||
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE SECURITIES OF THE SERIES DESIGNATED THEREIN REFERRED TO IN THE WITHIN-MENTIONED
INDENTURE.
THE BANK OF NEW YORK, AS TRUSTEE,
By:
|
Xxxxxx Xxxxxx | |||
| Title: Assistant Treasurer |
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned hereby sells,
assigns and transfers unto
assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
IDENTIFYING NUMBER OF ASSIGNEE
______________________________________________________________
______________________________________________________________
______________________________________________________________
Please print or typewrite name and address including postal zip code of assignee
______________________________________________________________the within Note of GENERAL MOTORS
CORPORATION and hereby irrevocably constitutes and appoints
attorney to transfer said Note on the books of the within-named Company, with full power of
substitution in the premises.
Additional Certifications:
In connection with any transfer of this Note (other than (i) any transfer pursuant to a
registration statement that has been declared effective under the Securities Act, (ii) any transfer
from a qualified institutional buyer to another qualified institutional buyer or (iii) any transfer
by LBK, LLC (the initial holder of this Note) to the New VEBA), unless the holding period
applicable to sales by non-Affiliates under Rule 144 under the Securities Act has expired, the
undersigned confirms that this Note is being transferred:
| o | To a person whom the seller reasonably believes is a “qualified institutional buyer” in a transaction meeting the requirements of Rule 144A under the Securities Act of 1933, as amended; or | ||
| o | Pursuant to and in compliance with Rule 144 under the Securities Act of 1933, as amended; or | ||
| o | To an Institutional Accredited Investor pursuant to and in compliance with the Securities Act of 1933, as amended; or | ||
| o | In accordance with another exemption from the registration requirements of the Securities Act of 1933, as amended; or | ||
| o | To General Motors Corporation or a subsidiary thereof. |
and unless the box below is checked, the undersigned confirms that this Note is not being
transferred to an Affiliate of the Company.
| o | The transferee is an Affiliate of the Company. |
Dated:___________________________
| SIGN HERE | ||||||
| SIGNATURE GUARANTEED |
CONVERSION NOTICE
To convert this Note into cash, if any, and Common Stock, if any, as described in Section 2 hereof,
check the box o
To convert only part of this Note, state the principal amount to be converted (which must be $25.00
or an integral multiple of $25.00):
If you want the stock certificate made out in another person’s name fill in the form below:
______________________________________________________________
______________________________________________________________
(Insert the other person’s soc. sec. tax ID no.)
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
(Print or type other person’s name, address and zip code)
______________________________________________________________
Date: ________________ Your Signature: ________________________________________
______________________________________________________________
(Sign exactly as your name appears on the other side of this Note) Signature Guaranteed
______________________________________________________________
Participant in a Recognized Signature Guarantee Medallion Program
By:_____________________________________
Authorized Signatory
OPTION TO ELECT REPAYMENT UPON A FUNDAMENTAL CHANGE
| TO: | GENERAL MOTORS CORPORATION THE BANK OF NEW YORK, AS TRUSTEE |
The undersigned registered owner of this Series U Debenture hereby irrevocably acknowledges receipt
of a notice from General Motors Corporation (the “Company”) as to the occurrence of a Fundamental
Change with respect to the Company and requests and instructs the Company to repay the entire
principal amount of this Series U Debenture in cash, or the portion thereof (which is $25.00 or an
integral multiple thereof) below designated, in accordance with the terms of this Series U
Debenture at the Fundamental Change Repurchase Price, to the registered Holder hereof. Capitalized
terms used herein but not defined shall have the meanings ascribed to such terms in the Series U
Debenture. The Series U Debentures shall be purchased by the Company as of the Fundamental Change
Repurchase Date pursuant to the terms and conditions specified in the Series U Debenture.
Dated: ________________________
Signature(s): ________________________
NOTICE: The above signatures of the Holder(s) hereof must correspond with the name as written upon
the face of the Series U Debenture in every particular without alteration or enlargement or any
change whatever.
Certificate Number (if applicable): ________________________
Principal amount to be repaid (if less than all): ________________________
Social Security or Other Taxpayer Identification Number: ________________________
SCHEDULE OF INCREASES OR DECREASES
The following increases or decreases in part of this Note have been made; provided that any
increases or decreases may be made only if this Note is in Global Series U Security form:
| Amount of | Amount of | Principal Amount | ||||||||||||||
| Increase in | Decrease in | of this Note | ||||||||||||||
| Principal | Principal | following such | ||||||||||||||
| Amount of | Amount of this | Increase or | Signature of Authorized | |||||||||||||
| Date | this Note | Note | Decrease | Officer or Trustee | ||||||||||||
