EXHIBIT 4.01
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES
IN CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO A NOMINEE OF DTC OR
BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY. UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC TO CITIGROUP GLOBAL MARKETS HOLDINGS INC. OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
No. R- __ INITIAL PRINCIPAL AMOUNT
CUSIP 173075 50 8 REPRESENTED $ __________
representing ________ SynDECS
($37.60 per SynDECS)
CITIGROUP GLOBAL MARKETS HOLDINGS INC.
________ SynDECS (SM)
(Debt Exchangeable for Common Stock (SM))
Variable Rate Exchangeable Notes Due April 6, 2009
(Subject to Exchange into American Depositary Shares
of The News Corporation Limited)
CITIGROUP GLOBAL MARKETS HOLDINGS INC., a New York corporation
(hereinafter called the "Company," which term includes any successor corporation
under the Indenture hereinafter referred to), for value received, hereby
promises to pay to Cede & Co. or registered assigns, the principal sum of
___________________________ (or $37.60 for each SynDECS represented by this
Note) on April 6, 2009 (subject to the mandatory exchange provisions described
below), and to pay interest, on the basis and to the extent specified on the
reverse of this Note, on the principal amount of this Note (provided that
interest on the portion of the principal amount of this Note exchanged on a
Settlement Date shall cease to accrue on the originally scheduled Settlement
Date (without giving effect to any extensions) as further described on the
reverse of this Note).
Interest on this Note shall be payable on every February 1,
May 1, August 1 and November 1, beginning on May 1, 2004 (each, an "Interest
Payment Date"), and, with respect to the
portion of the principal amount of this Note exchanged on a Settlement Date,
each Settlement Date. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the person in whose
name this Note (or the Note in exchange or substitution for which this Note was
issued) is registered at the close of business on the Regular Record Date (as
defined on the reverse of this Note) for interest payable on such Interest
Payment Date, provided, however, that the interest paid on a Settlement Date
shall be payable to the person to whom the principal is payable.
On each Settlement Date (which shall be November 21, 2008,
January 29, 2009 and April 6, 2009, except as otherwise provided on the reverse
hereof), one-third of the original principal amount of this Note shall be
mandatorily exchanged for a number of ADSs (or their equivalent value in cash as
described on the reverse of this Note) plus, in certain cases, an additional
amount in cash, all as further described on the reverse of this Note. Under
certain circumstances described on the reverse of this Note, the Company may
deliver cash or other property in lieu of or in addition to ADSs.
ADDITIONAL PROVISIONS OF THIS NOTE ARE CONTAINED ON THE
REVERSE HEREOF AND SUCH PROVISIONS SHALL HAVE THE SAME EFFECT AS THOUGH FULLY
SET FORTH IN THIS PLACE.
Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee for this Note by manual signature, this
Note shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
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IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
CITIGROUP GLOBAL MARKETS HOLDINGS INC.
By: ______________________________________
Name: Xxxx X. Xxxxxxxx
Title: Executive Vice President and Treasurer
Corporate Seal
Attest:
By: ____________________________
Name: Xxxxxxx X. Xxxxxxxx
Title: Assistant Secretary
Dated: January 28, 2004
CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in
the within-mentioned Indenture.
The Bank of New York,
as Trustee
By: _______________________________
Authorized Signatory
F-3
Form of Reverse of Note
CITIGROUP GLOBAL MARKETS HOLDINGS INC.
Variable Rate Exchangeable Notes due April 6, 2009
(Subject to Exchange into American Depositary Shares
of The News Corporation Limited)
TERMS AND CONDITIONS
1. Definitions. Unless otherwise expressly provided or unless the context
otherwise requires, the terms defined in these Terms and Conditions
shall have the meanings assigned in these Terms and Conditions and
capitalized terms used but not defined herein shall have the meanings
assigned to such terms in the Indenture.
2. General Provisions.
(a) The title of the Debt Securities of the series is Variable
Rate Exchangeable Notes Due April 6, 2009 (the "SynDECS").
(b) Each SynDECS shall be issued with a principal amount of
$37.60. The SynDECS shall be issued only in fully registered
form and in denominations of $37.60 and integral multiples
thereof.
(c) The SynDECS shall not be redeemable at the option of the
Company prior to each Settlement Date.
(d) The SynDECS shall not be subject to any sinking fund.
(e) The SynDECS shall not be issued as Discount Securities.
(f) The Company shall not be obligated to pay any additional
amounts on the SynDECS in respect of taxes, except to the
extent set forth in Paragraph 13 hereof.
(g) At any time, the Company may, without the consent of the
Holders of the SynDECS, increase the aggregate number of
SynDECS outstanding by issuing additional SynDECS with terms
and conditions identical to those set forth herein. Such
additional SynDECS shall be consolidated with the SynDECS
previously issued under these terms and conditions and shall
form a single series for all purposes of the Indenture.
3. Settlement Dates.
(a) Except as set forth in Paragraph 3(b) or 3(c) hereof, the
"Settlement Dates" of the SynDECS shall be November 21, 2008,
January 29, 2009 and April 6, 2009;
(b) If the maturity of the SynDECS is accelerated pursuant to
Section 5.02 of the Indenture, "Settlement Date" shall mean,
with respect to each Settlement Date that has not already
occurred, the date upon which the principal amount and
interest are declared immediately due and payable in
accordance with that Section 5.02; or
(c) If a Market Disruption Event occurs during the period for
determining the Daily Amounts for the applicable Settlement
Date, "Settlement Date" shall mean the earlier of (i) the
Business Day following the last day of that 10 Trading Day
period and (ii) December 4, 2008, February 10, 2009 and April
16, 2009, as appropriate.
4. Interest Payments.
(a) Subject to adjustment as set forth in Paragraph 6 hereof, on
each Interest Payment Date, the amount of interest due on each
SynDECS with a principal amount of $37.60 shall equal interest
accrued at a floating rate equal to LIBOR, determined as set
forth in Paragraph 4(f) hereof, for the relevant period plus
0.05% per annum on the then outstanding principal amount of
that SynDECS.
(b) Interest shall accrue on the principal amount of each SynDECS
beginning on January 28, 2004 (the "Issue Date"). If any
Settlement Date is extended beyond its original date, the
interest described in Paragraph 4(a) hereof shall cease to
accrue on the original Settlement Date with respect to the
principal amount to be exchanged on that Settlement Date.
Interest shall be computed on the SynDECS on the basis of a
360-day year using the actual number of days elapsed during
the relevant period.
(c) Interest shall be payable on every February 1, May 1, August 1
and November 1, beginning on May 1, 2004 (each, an "Interest
Payment Date"), and, with respect to the principal amount of
SynDECS exchanged on a Settlement Date, each Settlement Date.
On the February 1, 2009 Interest Payment Date, interest shall
be paid only with respect to the last one-third of the
original principal amount of each SynDECS. Each payment of
interest due on an Interest Payment Date or on a Settlement
Date shall include interest accrued from and including the
last date to which interest has been paid or made available
for payment, or from and including the Issue Date, if none has
been paid or made available for payment, to but excluding the
relevant payment date (except that no additional interest
shall accrue in respect of any extension of a Settlement Date
in accordance with Paragraph 3(c) hereof).
(d) Payments of interest shall be made to the Persons in whose
names the SynDECS are registered at the close of business on
the Regular Record Date relating to the Interest Payment Date,
provided, however, that the interest payable on a Settlement
Date shall be payable to the Person to whom the principal is
payable. The regular record date ("Regular Record Date")
relating to an Interest Payment
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Date shall be the 15th day of the calendar month next
preceding such Interest Payment Date, whether or not that day
is a Business Day. For the purpose of determining the Holder
at the close of business on a Regular Record Date when
business is not being conducted, the close of business shall
mean 5:00 P.M., New York City time, on the preceding Business
Day.
(e) "Business Day" means any day that is not a Saturday, a Sunday
or a day on which the New York Stock Exchange or banking
institutions or trust companies in The City of New York are
authorized or obligated by law or executive order to close. If
an Interest Payment Date or a Settlement Date falls on a day
that is not a Business Day, the payment to be made on that
Interest Payment Date or Settlement Date shall be made on the
next succeeding Business Day with the same force and effect as
if made on that Interest Payment Date or Settlement Date, and
no additional interest shall accrue as a result of such
delayed payment.
(f) Determination of LIBOR.
(i) The LIBOR rate for the initial interest period shall
be set on the Issue Date and, for each subsequent
interest period, the LIBOR rate shall be reset
quarterly on each Interest Payment Date (each such
date, an "Interest Reset Date").
(ii) The interest rate in effect for the SynDECS on each
day shall be, (x) if that day is an Interest Reset
Date, the interest rate determined as of the
Determination Date immediately preceding that
Interest Reset Date, or (y) if that day is not an
Interest Reset Date, the interest rate determined as
of the Determination Date immediately preceding the
most recent Interest Reset Date. The "Determination
Date" for any Interest Reset Date shall be the second
London Business Day immediately preceding that
Interest Reset Date.
(iii) The Calculation Agent shall determine LIBOR for each
Interest Reset Date by reference to the rates that
appear on the Moneyline Telerate Page 3750 as of
11:00 a.m., London time, on the applicable
Determination Date, and LIBOR shall be the offered
rate for the relevant period determined by the
Calculation Agent in its reasonable judgment. If page
"3750" on the Moneyline Telerate Service is replaced
by another page, or if the Moneyline Telerate Service
is replaced by a nominee of the British Bankers'
Association, then LIBOR shall be determined by
reference to the replacement page or service selected
to display the London interbank offered rates of
major banks.
(iv) If LIBOR cannot be determined as set forth in
Paragraph 4(f)(iii) hereof, then the Calculation
Agent shall determine LIBOR as follows:
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(a) Four major banks in the London interbank
market shall be selected.
(b) The principal London offices of those four
selected banks shall be requested to provide
their offered quotations to prime banks in the
London interbank market. These quotations
shall be for deposits in U.S. dollars for the
relevant period. Offered quotations must be
based on a principal amount equal to at least
$1,000,000 that is representative of a single
transaction in such market at that time.
i. If two or more quotations are
provided, LIBOR shall be the
arithmetic mean of such quotations.
ii. If fewer than two quotations are
provided, three major banks in New
York City shall be selected and
LIBOR shall be determined as the
arithmetic mean of rates quoted by
those three major banks in New York
City to leading European banks.
Such rates quoted shall be for
loans in U.S. dollars for the
relevant period. Rates quoted must
be based on a principal amount of
at least $1,000,000 that is
representative of a single
transaction in such market at that
time. If fewer than the three
selected New York City banks are
quoting rates, LIBOR shall equal
the LIBOR rate for the immediately
preceding interest period. If there
was no such preceding interest
period, LIBOR shall be determined
by the Calculation Agent.
(v) Except as set forth in this Paragraph 4(f)(v), the
relevant period for the LIBOR rate is three months.
With respect to the interest period commencing on and
including the Issue Date and ending on but excluding
May 1, 2004, the relevant period for the LIBOR rate
is that interest period. With respect to the interest
periods commencing on and including November 1, 2008
and ending on but excluding each of the first and
second scheduled Settlement Dates, the relevant
period for the LIBOR rate is that respective interest
period. With respect to the interest period
commencing on and including February 1, 2009 and
ending on but excluding the third scheduled
Settlement Date, the relevant period for the LIBOR
rate is that interest period. If the relevant period
for determining the LIBOR rate is a period less than
or greater than three months, the Calculation Agent
shall determine the applicable LIBOR rate by linear
interpolation based on the next shortest and next
longest periods for which quotations are available.
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(vi) All percentages resulting from any of the
calculations described in this Paragraph 4 shall be
rounded, if necessary, to the nearest one
hundred-thousandth of a percentage point, with five
one-millionths of a percentage point rounded upwards
(e.g., 9.876545% (or .09876545) being rounded to
9.87655% or .0987655)) and all dollar amounts used in
or resulting from such calculations shall be rounded
to the nearest cent (with one-half cent being rounded
upwards).
(vii) "London Business Day" means any day on which dealings
in deposits in U.S. dollars are transacted in the
London interbank market.
5. Delivery of ADSs on the Settlement Dates. On each Settlement Date,
one-third of the original principal amount of each SynDECS shall be
mandatorily exchanged for a number of American Depositary Shares
("ADSs") of The News Corporation Limited ("News Corporation") (or their
equivalent value in cash as described in Paragraph 5(l) hereof) plus,
in certain cases, additional cash equal to the Total Exchange Shares,
as defined in Paragraph 5(a) hereof. The Holders of the SynDECS shall
be responsible for the payment of any and all brokerage costs upon the
subsequent sale of such ADSs.
(a) The "Total Exchange Shares" to be delivered in respect of each
SynDECS on each Settlement Date is an amount equal to the sum
of the Daily Amounts calculated as described in Paragraph 5(b)
hereof for each of the 10 Trading Days beginning on November
5, 2008, January 12, 2009 or March 19, 2009, as applicable,
provided that if the SynDECS are declared immediately due and
payable following an Event of Default in accordance with
Section 5.02 of the Indenture, each Settlement Date that has
not yet occurred shall be accelerated and the "Total Exchange
Shares" for each such Settlement Date shall be calculated
(i) using the Daily Amounts for any Trading Days in
respect of that Settlement Date that have already
occurred and,
(ii) with respect to each Trading Day that has not already
occurred, the Daily Amount for the date upon which
the SynDECS are so declared to be immediately due and
payable.
(b) The "Daily Amount" for each of the 10 Trading Days in the
calculation period preceding each Settlement Date means:
(i) if the Closing Price on the relevant Trading Day is
more than the Threshold Appreciation Price, a
fraction of one ADS equal to the result of
multiplying 1/30th of one ADS by the sum of:
(a) the result of dividing the Reference Price by
the Closing Price, plus
(b) the result of dividing
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i. the difference between the Closing
Price and the Threshold
Appreciation Price by
ii. the Closing Price;
(ii) if the Closing Price on the relevant Trading Day is
more than the Reference Price but less than or equal
to the Threshold Appreciation Price, a fraction of
one ADS equal to the result of multiplying 1/30th of
one ADS by the result of dividing the Reference Price
by the Closing Price;
(iii) if the Closing Price on the relevant Trading Day is
more than the Floor Price but less than or equal to
the Reference Price, 1/30th of one ADS plus an amount
in cash equal to the result of multiplying 1/30 by
the difference between the Reference Price and the
Closing Price; and
(iv) if the Closing Price on the relevant Trading Day is
less than or equal to the Floor Price, 1/30th of one
ADS plus an amount in cash equal to $0.188.
provided that (x) the Share Components of the Daily Amount shall be
adjusted in accordance with Paragraphs 6, 7, 8 and 9 hereof and (y)
under the circumstances set forth in Paragraph 8(c)(i) hereof, the
consideration received by Holders of the SynDECS shall be cash or
property received in respect of the ADSs or a combination thereof,
rather than (or in addition to) ADSs.
(c) The "Threshold Appreciation Price" shall equal $57.716,
subject to adjustment as described in Paragraphs 6, 8 and 9
hereof.
(d) The "Reference Price" shall equal $37.60, subject to
adjustment as described in Paragraphs 6, 8 and 9 hereof.
(e) The "Floor Price" shall equal $31.960, subject to adjustment
as described in Paragraphs 8 and 9 hereof.
(f) The number of ADSs per SynDECS specified in Paragraph 5(b)(i),
5(b)(ii), 5(b)(iii) and 5(b)(iv) hereof are referred to herein
as the "Share Components."
(g) The "Closing Price" of any security on any date of
determination means:
(i) the closing sale price for the regular trading
session (without considering after hours or other
trading outside regular trading session hours) of the
security (regular way) on the New York Stock Exchange
on that date (or, if no closing price is reported,
the last reported sale price during that regular
trading session),
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(ii) if the security is not listed for trading on the New
York Stock Exchange on that date, as reported in the
composite transactions for the principal United
States securities exchange on which the security is
so listed,
(iii) if the security is not so listed on a United States
national or regional securities exchange, as reported
by the Nasdaq Stock Market,
(iv) if the security is not so reported, the last quoted
bid price for such security in the over-the-counter
market as reported by Pink Sheets LLC or a similar
organization, or
(v) if the security is not so quoted, the average of the
mid-point of the last bid and ask prices for such
security from at least three nationally recognized
investment banking firms, which may include one or
more of the Company's affiliates, that the Company
selects for this purpose.
(h) A "Trading Day" means an Exchange Business Day on which there
has not occurred or does not exist a Market Disruption Event.
(i) If 10 Trading Days for the ADSs have not occurred
during the period beginning on November 5, 2008 and
ending on December 2, 2008,
(a) all remaining Trading Days shall be deemed to
occur on December 3, 2008, and
(b) the Closing Price for each of the remaining
Trading Days shall be the Closing Price on
December 3, 2008 or, if there is a Market
Disruption Event on that day, the market value
per ADS as determined by the Company in its
reasonable discretion.
(ii) If 10 Trading Days for the ADSs have not occurred
during the period beginning on January 12, 2009 and
ending on February 6, 2009,
(a) all remaining Trading Days shall be deemed to
occur on February 9, 2009, and
(b) the Closing Price for each of the remaining
Trading Days shall be the Closing Price on
February 9, 2009 or, if there is a Market
Disruption Event on that day, the market value
per ADS as determined by the Company in its
reasonable discretion.
(iii) If 10 Trading Days for the ADSs have not occurred
during the period beginning on March 19, 2009 and
ending on April 14, 2009,
(a) all remaining Trading Days shall be deemed to
occur on April 15, 2009, and
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(b) the Closing Price for each of the remaining
Trading Days shall be the Closing Price on
April 15, 2009 or, if there is a Market
Disruption Event on that day, the market value
per ADS as determined by the Company in its
reasonable discretion.
(i) "Exchange Business Day" means any day that is (or, but for the
occurrence of a Market Disruption Event, would have been) a
day of trading on each Exchange and each exchange or quotation
system on which futures or options contracts relating to the
ADSs or Ordinary Shares of News Corporation (the "Ordinary
Shares") are traded that the Company, in its reasonable
discretion, views as relevant, other than a day on which
trading on any such Exchange, exchange or quotation system is
scheduled to close prior to its regular weekday closing time.
(j) A "Market Disruption Event" means any suspension of or
limitation imposed on trading by the relevant exchange or
quotation system during the one-half hour period prior to the
scheduled close of trading for the regular trading session on
the relevant exchange or quotation system, whether by reason
of movements in price exceeding limits permitted by the
relevant exchange or quotation system or otherwise, that the
Company in its reasonable discretion determines is material:
(i) relating to the security the Closing Price of which
is being determined on the relevant Exchange or,
where that security is an ADS, relating to the
Ordinary Shares on the relevant Exchange, or
(ii) in futures or options contracts relating to such
security or underlying on any relevant exchange or
quotation system.
(k) "Exchange" means the New York Stock Exchange and the principal
Australian or other non-U.S. exchange on which the Ordinary
Shares are traded, or, if the relevant security is not listed
for trading on the New York Stock Exchange on the relevant day
for a reason other than a Market Disruption Event, the
principal United States securities exchange on which the
relevant security is so listed or, if the relevant security is
not so listed on a United States national or regional
securities exchange for a reason other than a Market
Disruption Event, the Nasdaq Stock Market or, if prices for
the relevant security are so not reported by the Nasdaq Stock
Market for a reason other than a Market Disruption Event, the
over-the-counter market.
(l) Cash Settlement Option. The Company may at its option pay
Holders of the SynDECS cash instead of delivering ADSs in
respect of some or all of the Daily Amounts. To exercise this
option, the Company must notify the Trustee of its election on
or before the beginning of the applicable 10 Trading Day
period and if the Company is electing to pay cash instead of
delivering only a portion of the ADSs it would otherwise be
required to deliver, it must specify the Trading Days in
respect of which it shall deliver the Daily Amount in cash
instead of ADSs. The Trustee shall in turn notify The
Depository Trust Company and publish a
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notice of the Company's election in a daily newspaper of
national circulation. For any day in respect of which the
Company elects to pay the Daily Amount in cash instead of
delivering ADSs, the Company shall pay an amount equal to the
Daily Amount as calculated for that Trading Day multiplied by
the Closing Price on that Trading Day.
6. Adjustments for Changes in Dividend Rate. If the total cash dividends
on the Ordinary Shares in respect of which a record date occurs during
the six-month periods ending May 1 and November 1 of any year (the
"Declared Dividend") differ from the Expected Dividend, an event
referred to as a "Dividend Adjustment Event," adjustments shall be
made, at the option of the Company, either to the interest payable on
the SynDECS or to the Threshold Appreciation Price (or, under certain
circumstances described below, to both). The Company may adjust either
the interest payment or the Threshold Appreciation Price, but not both,
provided that if the full application of such adjustment would result
in an interest payment of less than zero or a Threshold Appreciation
Price of less than the Reference Price, the Company shall adjust both
the interest payment and the Threshold Appreciation Price.
(a) Interest Payment Adjustment. If the Company elects to adjust
the interest payment:
(i) If the Declared Dividend is greater than the Expected
Dividend, the Company shall increase the interest
payment due for the Interest Payment Date ending the
applicable period by a dividend adjustment amount
equal to the dividend differential multiplied by the
number of Ordinary Shares comprising an ADS,
converted to U.S. dollars at the noon-buying rate for
Australian dollars on the relevant record date, times
the percentage of an ADS appropriate to delta hedge a
SynDECS, as determined by the Calculation Agent in
its reasonable commercial discretion using the
Black-Scholes pricing formula, determined as of the
record date for the applicable dividend.
(ii) If the Declared Dividend is less than the Expected
Dividend, the Company shall reduce the interest
payment due for the Interest Payment Date ending the
applicable period by a dividend adjustment amount
equal to the dividend differential multiplied by the
number of Ordinary Shares comprising an ADS,
converted to U.S. dollars at the noon-buying rate for
Australian dollars on the relevant record date, times
the percentage of an ADS appropriate to delta hedge a
SynDECS, as determined by the Calculation Agent in
its reasonable commercial discretion using the
Black-Scholes pricing formula, determined as of the
record date for the applicable dividend.
Notwithstanding the foregoing, if the dividend
adjustment amount calculated as set forth in this
Paragraph 6(a)(ii) is greater than the interest
payment otherwise payable on the applicable Interest
Payment Date, the interest payment for that
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Interest Payment Date shall be reduced to zero, and
an appropriate adjustment shall be made to the
Threshold Appreciation Price in respect of any excess
dividend adjustment amount as set forth in Paragraph
6(b) hereof.
(b) Threshold Appreciation Price Adjustment. If the Company elects
to adjust the Threshold Appreciation Price:
(i) the Expected Dividend shall be reset to equal the
Declared Dividend, and such reset Expected Dividend
shall apply for future periods, provided that the
Expected Dividend shall not be reset if the Threshold
Appreciation Price is being adjusted for the reason
described in the last sentence of Paragraph 6(a)(ii)
hereof; and
(ii) the Calculation Agent shall make such adjustments to
the Threshold Appreciation Price to reflect the
change in the Expected Dividend as the Calculation
Agent deems appropriate to preserve the economics of
the transaction by reference to the Black-Scholes
pricing formula assuming the Expected Dividend as
reset continues for the remainder of the term of the
SynDECS. In no event shall the Threshold Appreciation
Price be adjusted in a manner that would cause the
adjusted Threshold Appreciation Price to be lower
than the Reference Price. Any excess adjustment
amounts shall instead be applied to the interest
payment as set forth in Paragraph 6(a) hereof.
(c) "Expected Dividend" means the aggregate cash dividends for
which a record date is expected to occur during the six-month
periods ending May 1 and November 1, initially equal to
A$0.015 per semi-annual period per Ordinary Share (or A$0.06
per ADS), except that the Expected Dividend for the period
beginning on the Issue Date of the SynDECS and ending on May
1, 2004 is A$0.015 and the Expected Dividend for the period
beginning November 1, 2008 is initially zero. If the Threshold
Appreciation Price is adjusted for a dividend differential as
set forth in Paragraph 6(b) hereof, the Expected Dividend for
the periods after such adjustment shall, to the extent
described in such Paragraph, be reset to equal the Declared
Dividend for the period in which the adjustment to the
Threshold Appreciation Price is made. If as a result of any
Adjustment Event or dilution adjustment (or any combination
thereof) referred to in Paragraph 7 or 8 hereof the ADSs
underlying the SynDECS are adjusted to include the securities
of an issuer other than News Corporation or of more than one
issuer (whether or not including News Corporation), then such
adjustment shall apply with respect to any cash dividends to
which the successor or additional securities of the applicable
issuer(s) are entitled and the Calculation Agent shall adjust
the amount of the Expected Dividend after the relevant event.
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7. Anti-dilution Adjustments. The Daily Amount and the Closing Price shall
be subject to adjustment under the circumstances described in this
Paragraph 7. Each adjustment to the Daily Amount and the Closing Price
shall be made successively.
(a) Adjustment of the Daily Amount.
(i) The Daily Amount is subject to adjustment if News
Corporation:
(a) subdivides, consolidates or reclassifies its
Ordinary Shares (unless such subdivision,
consolidation or reclassification constitutes
a "Merger Event" as defined in Paragraph
8(a)(ii) hereof), or changes the number of
Ordinary Shares represented by one ADS, or
makes a free distribution or dividend of any
ADSs or Ordinary Shares to existing holders
thereof by way of a bonus, capitalization or
any other similar means;
(b) makes a distribution or dividend to existing
holders of ADSs or Ordinary Shares of ADSs or
Ordinary Shares;
(c) makes a distribution or dividend to existing
holders of ADSs or Ordinary Shares of (x)
other share capital or securities granting the
right to payment of dividends and/or the
proceeds of liquidation of News Corporation
equally or proportionately with such payments
to holders of ADSs or Ordinary Shares, or (y)
any other type of securities, rights or
warrants or other assets (other than cash), in
any case for cash or other payment (or no
payment) at less than the market price (as
determined by a nationally recognized
investment banking firm, which may be an
affiliate of the Company, that it retains for
this determination); or
(d) engages in any similar event or action which,
in the reasonable judgment of the Company, may
dilute or concentrate the theoretical value of
the ADSs or Ordinary Shares.
(ii) In the case of Paragraphs 7(a)(i)(a) and 7(a)(i)(b)
hereof, the Company shall adjust the Daily Amount by
adjusting each of the Share Components of the Daily
Amount in effect immediately prior to such event so
that the Holder of a SynDECS shall be entitled to
receive, when the Company exchanges one-third of the
principal amount of the SynDECS on a Settlement Date,
the number of ADSs that such Holder would have owned
or been entitled to own had such SynDECS been
exchanged immediately before such event or any record
date with respect to it.
(iii) In the case of the distribution of rights or warrants
to purchase Ordinary Shares referred to in clause
Paragraph 7(a)(i)(c)(y) hereof, the Company
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shall adjust the Daily Amount by multiplying each of
the Share Components of the Daily Amount in effect on
the record date for the determination of holders of
Ordinary Shares entitled to receive those rights or
warrants by the following fraction.
(a) The numerator of this fraction shall be (x)
the number of Ordinary Shares outstanding on
such record date, plus (y) the number of
additional Ordinary Shares offered for
subscription or purchase by the terms of the
rights or warrants.
(b) The denominator of this fraction shall be (x)
the number of Ordinary Shares outstanding on
such record date, plus (y) the number of
additional Ordinary Shares which the total
offering price of the total number of Ordinary
Shares specified in Paragraph 7(a)(iii)(a)(y)
hereof would purchase at the market price of
the Ordinary Shares on the Business Day next
following such record date, which number of
additional Ordinary Shares shall be determined
by:
i. multiplying that total number of
Ordinary Shares by the exercise
price of the rights or warrants,
and
ii. dividing the product so obtained by
the market price of Ordinary
Shares, as reasonably determined by
the Company.
Such adjustment shall become effective at the opening
of business on the Business Day next following the
record date for the determination of holders of
Ordinary Shares entitled to receive such rights or
warrants. If such rights or warrants expire before
the maturity of the SynDECS and Ordinary Shares are
not delivered by the terms of such rights or warrants
before such expiration, the Company shall readjust
the Share Components to the Share Components which
would then be in effect if the adjustments for the
issuance of such rights and warrants had been made on
the basis of delivery of only the number of Ordinary
Shares actually delivered by the terms of the rights
or warrants.
(iv) In the case of an event referred to in Paragraphs
7(a)(i)(c) or 7(a)(i)(d) hereof (other than a
distribution of rights or warrants to purchase
Ordinary Shares), unless the Company elects to treat
such event as an Adjustment Event under Paragraph 8
hereof, the Company shall adjust the terms of the
SynDECS as the Company, in its reasonable judgment,
determines appropriate to preserve the economics of
the transaction.
(v) Any Ordinary Shares issuable in payment of a dividend
shall be deemed to have been issued immediately prior
to the close of business on the
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record date for such dividend for purposes of
calculating the number of outstanding Ordinary Shares
under this Paragraph 7. All adjustments to the Daily
Amount shall be calculated to the nearest 1/100,000th
of an ADS (or, if there is not a nearest 1/100,000th
of an ADS, to the next higher 1/100,000th of an ADS).
(b) Adjustment of the Closing Price. If an adjustment is made to
the Daily Amount pursuant to Paragraph 7(a)(i) hereof, an
adjustment shall also be made to the Closing Price as such
term is used throughout the definition of Daily Amount. The
required adjustment to the Closing Price shall be made on each
day for which a Daily Amount is calculated by multiplying the
Closing Price by the cumulative number or fraction determined
pursuant to the Daily Amount adjustment procedures described
in Paragraph 7(a) hereof.
8. Adjustment Events.
(a) Definition of Adjustment Event. "Adjustment Event" means:
(i) any event described in Paragraphs 7(a)(i)(c) or
7(a)(i)(d) hereof (other than a distribution of
rights or warrants to purchase Ordinary Shares
described in Paragraph 7(a)(i)(c)(y) hereof) that the
Company elects to treat as subject to the provisions
of this Paragraph 8, and
(ii) any of the following "Merger Events," in respect of
which the consideration for the relevant ADSs or
Ordinary Shares consists (or, at the option of the
holders of such ADSs or Ordinary Shares, may consist)
solely of Publicly Traded Equity,
(a) any reclassification or change of ADSs or
Ordinary Shares that results in a transfer of
or an irrevocable commitment to transfer all
of such ADSs or Ordinary Shares outstanding;
(b) any consolidation, amalgamation or merger of
News Corporation with or into another entity
(other than a consolidation, amalgamation or
merger in which News Corporation is the
continuing entity and which does not result in
any reclassification or change as described in
Paragraph 8(a)(ii)(a) hereof); or
(c) any other takeover offer for ADSs or Ordinary
Shares that results in a transfer of or an
irrevocable commitment to transfer all such
ADSs or Ordinary Shares (other than the ADSs
or Ordinary Shares owned or controlled by the
offeror).
(b) For purposes of a Merger Event,
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(i) "Publicly Traded Equity" means ADSs or Ordinary
Shares traded on a U.S. national securities exchange
or quoted on the Nasdaq National Market and
(ii) "Merger Date" means, with respect to a Merger Event,
the effective date of the Merger Event.
(c) Delivery of Cash or Reported Securities after an Adjustment
Event.
(i) After the occurrence of any Adjustment Event on or
prior to a Settlement Date, the Company shall deliver
cash or Reported Securities on the relevant
Settlement Date (or, if the cash or Reported
Securities have not yet been delivered to holders of
ADSs on the relevant Settlement Date, as soon as
practical after so delivered), instead of or (in the
case of an Adjustment Event described in Paragraph
8(a)(i) hereof) in addition to, ADSs.
(ii) The cash or Reported Securities to be delivered shall
have a value equal to the Adjustment Event Amount.
(iii) "Adjustment Event Amount" means the sum of the Daily
Adjustment Event Amounts for each of the 10 Trading
Days beginning on November 5, 2008, January 12, 2009
and March 19, 2009 (subject to adjustment pursuant to
Paragraphs 5(h) if a Market Disruption Event occurs
and 5(a) hereof if the SynDECS are declared
immediately due and payable following an Event of
Default in accordance with Section 5.02 of the
Indenture).
(iv) "Daily Adjustment Event Amount" means, for each of
such Trading Days described in Paragraph 8(c)(iii)
hereof, for each SynDECS, subject to the
anti-dilution adjustments described in Paragraph 7
hereof:
(a) if the Closing Price on the relevant Trading
Day is more than the Threshold Appreciation
Price, a fraction of the Transaction Value
equal to the result of multiplying 1/30th of
the Transaction Value by the sum of (x) the
result of dividing the Reference Price by the
Closing Price, plus (y) the result of dividing
(i) the difference between the Closing Price
and the Threshold Appreciation Price by (ii)
the Closing Price;
(b) if the Closing Price on the relevant Trading
Day is more than the Reference Price but less
than or equal to the Threshold Appreciation
Price, a fraction of the Transaction Value
equal to the result of multiplying 1/30th of
the Transaction Value by the result of
dividing the Reference Price by the Closing
Price;
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(c) if the Closing Price on the relevant Trading
Day is more than the Floor Price but less than
or equal to the Reference Price, 1/30th of the
Transaction Value plus an amount in cash equal
to the result of multiplying 1/30 by the
difference between the Reference Price and the
Closing Price; and
(d) if the Closing Price is less than or equal to
the Floor Price, 1/30th of the Transaction
Value plus an amount in cash equal to the
result of multiplying 1/30 by the difference
between the Reference Price and the Floor
Price.
(v) If Reported Securities are delivered with respect to
an Adjustment Event, the Company shall deliver a
number of such Reported Securities equal to the
Adjustment Event Amount. In all other cases the
Company shall deliver the Adjustment Event Amount in
cash. Any Adjustment Event shall be deemed to occur
prior to a Settlement Date if it occurs or if the
record date therefor falls on or prior to the
Settlement Date. If a Reported Security delivered in
an Adjustment Event ceases to qualify as a Reported
Security prior to the relevant Settlement Date, the
Adjustment Event Amount shall be delivered in cash.
(d) Adjustment of Closing Price. Following an Adjustment Event,
the Closing Price shall be deemed to equal:
(i) if ADSs are outstanding on any day when the Daily
Amount is calculated, the Closing Price of the ADSs,
as adjusted pursuant to Paragraph 7 hereof, otherwise
zero, plus
(ii) the Transaction Value.
(e) Definition of Reported Securities. "Reported Securities" means
securities received by holders of ADSs in an Adjustment Event
that:
(i) are
(a) listed on a United States national securities
exchange, or
(b) reported on a United States national
securities system subject to last sale
reporting, or
(c) traded in the over-the-counter market and
reported by Pink Sheets LLC or a similar
organization, or
(d) securities for which bid and ask prices are
available from at least three nationally
recognized investment banking firms, and
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(ii) are either
(a) perpetual equity securities or
(b) non-perpetual equity or debt securities with a
stated maturity after the final Settlement
Date.
(f) "Transaction Value" means:
(i) for any cash received in any Adjustment Event, the
amount of cash received per ADS,
(ii) for any Reported Securities received in any
Adjustment Event, an amount equal to
(a) the Closing Price per unit of such Reported
Securities on the date of determination
multiplied by
(b) the number of such Reported Securities (as
adjusted pursuant to Paragraph 7 hereof and
this Paragraph 8) received per ADS, and
(iii) for any property received in any Adjustment Event
other than cash or Reported Securities, an amount
equal to the fair market value of the property
received per ADS on the date such property is
received or ceases to be a Reported Security, as
determined by a nationally recognized investment
banking firm, which may be an affiliate of the
Company, that the Company retains for this purpose;
provided, however, that in the case of Paragraph 8(f)(ii)
hereof, with respect to securities that are Reported
Securities by virtue of only Paragraph 8(e)(i)(d) hereof,
Transaction Value with respect to any such Reported Security
means the average of the mid-point of the last bid and ask
prices for such Reported Security as of the date of
determination from each of at least three nationally
recognized investment banking firms, which may include one or
more of the Company's affiliates, that the Company retains for
such purpose, multiplied by the number of such Reported
Securities (as adjusted under Paragraph 7 hereof and this
Paragraph 8) received per ADS.
For purposes of calculating the Transaction Value, any cash,
Reported Securities or other property receivable in an
Adjustment Event shall be deemed to have been received
immediately prior to the close of business on the record date
for such Adjustment Event or, if there is no record date for
such Adjustment Event, immediately prior to the close of
business on the effective date of such Adjustment Event.
(g) Other adjustments. If the SynDECS become exchangeable, in
whole or in part, into any property other than ADSs, such
exchange shall be subject to adjustment
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in the same manner and upon the occurrence of the same types
of events described in Paragraph 7 hereof and in this
Paragraph 8 with respect to the ADSs. Each Holder of SynDECS
shall be responsible for the payment of any and all brokerage
and other transaction costs upon the sale of such other
property.
9. Mandatory Redemption Events and Partial Mandatory Redemption Events.
(a) Definitions. Each of the following are called "Mandatory
Redemption Events":
(i) all the ADSs or Ordinary Shares or all the assets or
substantially all the assets of News Corporation are
nationalized, expropriated or are otherwise required
to be transferred to any governmental agency,
authority or entity;
(ii) by reason of the voluntary or involuntary
liquidation, bankruptcy or insolvency of or any
analogous proceeding affecting News Corporation:
(a) all the ADSs or Ordinary Shares of News
Corporation are required to be transferred to
a trustee, liquidator or other similar
official, or
(b) holders of the ADSs or Ordinary Shares of News
Corporation become legally prohibited from
transferring them;
(iii) any Merger Event in respect of which the
consideration for the relevant ADSs or Ordinary
Shares consists solely of assets other than Publicly
Traded Equity; and
(iv) any Merger Event in respect of which the
consideration for the relevant ADSs or Ordinary
Shares consists of Publicly Traded Equity and assets
other than Publicly Traded Equity, unless the Company
elects to treat such event as a Partial Mandatory
Redemption Event.
For purposes of determining whether a Merger Event satisfies
Paragraphs 9(a)(iii), 9(a)(iv) or 8(a)(ii) hereof, to the
extent holders of an ADS or Ordinary Share are entitled to
elect the form of consideration in a Merger Event, the
consideration shall consist of Publicly Traded Equity to the
maximum extent permitted. If an event described in Paragraph
9(a)(iv) hereof occurs, the Company may elect to treat such
event as a "Partial Mandatory Redemption Event" instead of
treating such event as a Mandatory Redemption Event.
(b) Mandatory Redemption and Payment Upon Occurrence of a
Mandatory Redemption Event or a Partial Mandatory Redemption
Event.
(i) In the case of a Mandatory Redemption Event, the
SynDECS shall be automatically redeemed as of the
date of the occurrence of such Mandatory Redemption
Event, and the Company shall pay to Holders of
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the SynDECS an amount per SynDECS determined as set
forth in Paragraph 9(b)(ii), with payment to be made
not later than three Business Days following the
occurrence of such Mandatory Redemption Event.
(ii) The Calculation Agent shall determine the amount
payable to Holders of the SynDECS based on its
reasonable judgment and based on quotations sought
from four leading equity derivatives dealers, which
may include an affiliate of the Company, that the
Calculation Agent retains for this determination.
Each quotation shall represent the quoting dealer's
expert opinion as to the fair value to the holder of
a SynDECS on the date the Mandatory Redemption Event
occurs of a forward contract with terms that would
preserve for the Holder the economic equivalent of
any payment or delivery in respect of a SynDECS that
would have been required after that date but for the
occurrence of the Mandatory Redemption Event. The
Calculation Agent shall provide to each dealer from
which it seeks a quotation following a Mandatory
Redemption Event the following information, which
shall serve as the basis for the dealer's
calculation:
(a) a volatility equal to the average of the
volatilities of the ADSs, (calculated by
referring to the closing price of the ADSs)
for a period equal to the number of days
between the Announcement Date and the relevant
Trading Day for calculation of the Daily
Amount, for each Exchange Business Day during
the two-year historical period ending on the
Announcement Date;
(b) dividends based on, and payable on the same
dates as, amounts to have been paid in respect
of gross ordinary cash dividends on the ADSs
in the calendar year ending on the
Announcement Date; and
(c) a value ascribed to the ADSs equal to the
consideration, if any, paid in respect of such
ADSs to holders of such ADSs at the time of
the Mandatory Redemption Event.
(iii) "Announcement Date" means, as determined by the
Calculation Agent,
(a) in the case of Paragraph 9(a)(i) hereof, the
date of the first public announcement of a
firm intention to nationalize (whether or not
amended or on the terms originally announced)
that leads to that event;
(b) in the case of Paragraph 9(a)(ii) hereof, the
date of the first public announcement of the
institution of a proceeding or presentation of
a petition or passing of a resolution (or
other analogous procedure in any jurisdiction)
that leads to that event; and
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(c) in the case of Paragraphs 9(a)(iii) or
9(a)(iv) hereof, the date of the first public
announcement of a firm intention to merge or
make an offer (whether or not amended or on
the terms originally announced) that leads to
such event.
(iv) If more than three quotations are provided, the
amount shall be the arithmetic mean of the
quotations, without regard to the quotations having
the highest and the lowest values. If exactly three
quotations are provided, the amount shall be the
quotation remaining after disregarding the highest
and the lowest quotations. For this purpose, if more
than one quotation has the same highest or lowest
value, then one of such quotations shall be
disregarded. If two quotations are provided, the
amount shall be the arithmetic mean of the
quotations. If one quotation is provided, the amount
shall equal the quotation. If no quotation is
provided, the amount shall be determined by the
Calculation Agent.
(v) If a Partial Mandatory Redemption Event occurs, the
SynDECS shall be automatically redeemed in part, as
follows:
(a) the Calculation Agent shall determine the
amount that would be payable in respect of a
SynDECS assuming the event were treated as a
Mandatory Redemption Event, which is referred
to as the "Component Termination Amount";
(b) the Company shall pay to Holders of the
SynDECS three Business Days following the
occurrence of the Partial Mandatory Redemption
Event an amount per SynDECS equal to the
Component Termination Amount multiplied by a
percentage (the "Other Consideration
Percentage"), determined by dividing (x) the
value of the consideration other than Publicly
Traded Equity to be received by a holder of
one ADS in the relevant Merger Event (as
determined by the Calculation Agent as of the
Merger Date) by (y) the value of the total
consideration to be received by a holder of
one ADS in the relevant Merger Event (as
determined by the Calculation Agent as of the
Merger Date); and
(c) the portion of the SynDECS that is not
redeemed shall continue with respect to the
consideration consisting of Publicly Traded
Equity and the provisions of Paragraph 8 apply
to that portion of the consideration that
consists of Publicly Traded Equity, and in
addition, the Company shall reduce the
Threshold Appreciation Price, the Reference
Price and the Floor Price by multiplying each
by one minus the Other Consideration
Percentage.
10. Fractional Shares. The Company shall not deliver fractional ADSs in
exchange for the SynDECS. If more than one SynDECS is held or
surrendered at one time by the same
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Holder, the number of full ADSs or related securities to be delivered
on a Settlement Date shall be computed on the basis of the total number
of SynDECS so held or surrendered at the relevant Settlement Date.
Instead of delivering any fractional share or security, each such
Holder shall be entitled to receive an amount in cash equal to the
value of such fractional share based on the Closing Price on the
Trading Day immediately preceding the relevant Settlement Date. Any
cash amounts owed by the Company to Holders of the SynDECS shall be
rounded to the nearest cent (with one-half cent being rounded upwards).
11. Global Securities. Upon issuance, all SynDECS shall be represented by
one or more fully registered global securities (the "Global
Securities"). Each such Global Security shall be deposited with, or on
behalf of, The Depository Trust Company ("DTC") and registered in the
name of DTC or a nominee thereof. Unless and until it is exchanged in
whole or in part for SynDECS in definitive form, no Global Security may
be transferred except as a whole by DTC to a nominee of DTC or by a
nominee of DTC to DTC or another nominee of DTC or by DTC or any such
nominee to a successor of DTC or a nominee of such successor.
12. Form of Payment. The Company shall make all payments of interest on the
SynDECS, and any cash payments on a Settlement Date, in immediately
available funds.
13. Taxes.
(a) The Company will pay any and all documentary, stamp, transfer
or similar taxes that may be payable in respect of the
transfer and delivery of ADSs (or Reported Securities)
pursuant hereto; provided, however, that the Company shall not
be required to pay any such tax which may be payable in
respect of any transfer involved in the delivery of ADSs (or
Reported Securities) in a name other than that in which the
SynDECS so exchanged were registered, and no such transfer or
delivery shall be made unless and until the person requesting
such transfer has paid to the Company the amount of any such
tax, or has established, to the satisfaction of the Company,
that such tax has been paid.
(b) The Company and each Holder of a SynDECS by its acquisition of
a SynDECS hereby agree (in the absence of an administrative
determination or judicial ruling to the contrary):
(i) to characterize the SynDECS for all tax purposes as a
forward purchase contract to purchase ADSs on each of
the three Settlement Dates on which the Company
delivers ADSs to the Holder (subject to the Company's
right to deliver cash in lieu of ADSs) under the
terms of which:
(a) at the time of issuance of the SynDECS the
Holder deposits irrevocably with the Company a
fixed amount of cash equal to the purchase
price of the SynDECS to assure the fulfillment
of the
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Holder's purchase obligations described in
clause (c) below, one-third of which deposit
generally will unconditionally and irrevocably
be applied on each of the three Settlement
Dates to satisfy such obligations;
(b) the Company will be obligated to pay a return
on such deposit at a rate equal to the stated
rate of interest (as it may be adjusted from
time to time upon the occurrence of any
Dividend Adjustment Events) on the SynDECS as
compensation to the Holder for the Company's
use of such cash deposit during the term of
the SynDECS; and
(c) on each of the three Settlement Dates,
generally one-third of such cash deposit
unconditionally and irrevocably will be
applied by the Company in full satisfaction of
the Holder's obligation under the forward
purchase contract with respect to that
Settlement Date, and the Company will deliver
to the Holder the number of ADSs, and the
amount of cash, if any, that the Holder is
entitled to receive at that time pursuant to
the terms of the SynDECS (subject to the
Company's right to deliver cash in lieu of
ADSs);
(ii) to treat, consistent with the characterization in
Paragraph 13(b)(i) hereof,
(a) amounts paid to the Company in respect of the
original issue of a SynDECS as allocable in
their entirety to the amount of the cash
deposit attributable to such SynDECS; and
(b) amounts denominated as interest that are
payable with respect to the SynDECS as
ordinary income payable on the amount of such
deposit, includible annually in the Holder's
income in accordance with such Holder's method
of accounting; and
(iii) to file all United States federal, state and local
income and franchise tax returns consistent with the
forward purchase contract characterization (unless
required otherwise by an applicable taxing
authority).
14. Notice of Adjustments and Certain Other Events.
(a) Whenever the Closing Price is adjusted as herein provided or
an Adjustment Event occurs, the Company shall:
(i) forthwith compute the adjusted Share Components and
prepare a certificate signed by an officer of the
Company setting forth the adjusted Share Components,
the method of calculation thereof in reasonable
detail and the facts requiring such adjustment and
upon which such adjustment is based, which
certificate shall be conclusive, final and
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binding evidence of the correctness of the
adjustment, and file such certificate forthwith with
the Trustee; and
(ii) within ten Business Days following the occurrence of
an event that permits or requires an adjustment to
the Daily Amount pursuant to Paragraph 7 hereof
(each, a "Dilution Event"), an Adjustment Event that
permits or requires a change in the consideration to
be received by Holders pursuant to Paragraph 8
hereof, or a Mandatory Redemption Event or a Partial
Mandatory Redemption Event, each as described in
Paragraph 9 hereof (or, in any case, if the Company
is not aware of such occurrence, as soon as
practicable after becoming so aware), provide written
notice to the Trustee and to the Holders of the
outstanding SynDECS of the occurrence of such event,
including, in the case of a Dilution Event or
Adjustment Event, a statement in reasonable detail
setting forth the method by which any adjustment to
the Daily Amount or change in the consideration to be
received by Holders of SynDECS following the
Adjustment Event was determined and setting forth the
factors by which the Closing Price and the Share
Components are to be adjusted in order to determine
which clause of the Daily Amount definition shall
apply on each day on which a Daily Amount is required
to be calculated, and in the case of a Mandatory
Redemption Event or a Partial Mandatory Redemption
Event the date on which the SynDECS shall be redeemed
and the amount payable to Holders of SynDECS upon
such redemption..
(b) In case at any time while any of the SynDECS are outstanding
the Company becomes aware that:
(i) News Corporation will declare a dividend (or any
other distribution) on or in respect of the ADSs to
which Paragraph 7 shall apply;
(ii) News Corporation will authorize the issuance to all
holders of the ADSs or Ordinary Shares of rights or
warrants to subscribe for or purchase ADSs or
Ordinary Shares or of any other subscription rights
or warrants; or
(iii) there will occur any conversion or reclassification
of News Corporation (other than a subdivision or
combination of outstanding ADSs or Ordinary Shares)
or any consolidation, amalgamation or merger to which
News Corporation is a party and for which approval of
any stockholders of News Corporation is required;
then, if the Company becomes aware of the information
described in clause (x) and (y) below within a reasonable
amount of time in advance of the delivery and filing
requirements set forth in this subparagraph (b), the Company
shall cause to be delivered to the Trustee, and shall promptly
cause to be mailed to the Holders
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of SynDECS at their last addresses as they shall appear upon
the registration books of the Security Registrar, at least ten
days before the date hereinafter specified (or the earlier of
the dates hereinafter specified, in the event that more than
one is specified), a notice stating (x) the date on which a
record is to be taken for the purpose of such dividend,
distribution or grant of rights or warrants or, if a record is
not to be taken, the date as of which holders of the ADSs or
Ordinary Shares of record to be entitled to such dividend,
distribution or grant of rights or warrants are to be
determined, or (y) the date, if known by the Company, on which
such conversion, reclassification, consolidation, amalgamation
or merger is expected to become effective. Following any
Adjustment Event, the provisions of this Paragraph 14(b) shall
apply with respect to any Reported Securities in the same
manner as with respect to News Corporation and the ADSs.
(c) On or prior to each Settlement Date, the Company shall notify
the Trustee, and the Trustee shall promptly thereafter publish
a notice in a daily newspaper of national circulation stating
whether and the extent to which the Company shall deliver, in
accordance with Paragraph 5(l), ADSs or cash (and/or, in
accordance with Paragraph 8, cash or Reported Securities) on
the relevant Settlement Date. The Trustee shall notify DTC of
the form of consideration to be delivered by the Company.
(d) After the close of business on the Business Day immediately
preceding each Settlement Date of the SynDECS, the Company
shall notify the Trustee in writing of the number of ADSs
and/or Reported Securities, and/or the amount of cash to be
paid per SynDECS.
(e) If a Market Disruption Event occurs during the period
beginning on November 5, 2008, January 12, 2009 or March 19,
2009 and ending upon completion of the 10 Trading Day period
for determining the Daily Amounts for the applicable
Settlement Date, the Company shall cause notice of such Market
Disruption Event to be delivered to the Trustee, and shall
promptly cause notice of such Market Disruption Event to be
mailed to the Holders of the SynDECS at their last addresses
as they shall appear upon the registration books of the
Security Registrar.
(f) If a Dividend Adjustment Event occurs, the Company shall cause
notice of such Dividend Adjustment Event to be delivered to
the Trustee, and shall, prior to the relevant record date of
the occurrence of such event, cause notice of such Dividend
Adjustment Event to be mailed to the Holders of the SynDECS at
their last addresses as they shall appear upon the
registration books of the Security Registrar, indicating in
that notice whether the Company elects to adjust the interest
payment or the Threshold Appreciation Price. The Company shall
cause notice of the relevant adjustments to be delivered to
the Trustee, and shall, promptly following the relevant record
date of such adjustments, cause notice of such adjustments to
be mailed to the Holders of the SynDECS at their last
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addresses as they shall appear upon the registration books of
the Security Registrar.
15. Calculation Agent. The Calculation Agent, which may be an affiliate of
the Company, shall be selected by the Company in its reasonable
discretion. All determinations made by the Calculation Agent shall be
at the sole discretion of the Calculation Agent and shall, in the
absence of manifest error, be conclusive for all purposes and binding
on the Company and the Holders of the SynDECS.
GENERAL
This Note is one of a duly authorized issue of debt securities
of the Company (the "Debt Securities"), issued and to be issued in one or more
series under a Senior Debt Indenture, dated as of October 27, 1993, as
supplemented by a First Supplemental Indenture, dated as of November 28, 1997, a
Second Supplemental Indenture, dated as of July 1, 1999, and as further
supplemented from time to time (the "Indenture"), between the Company and The
Bank of New York, as Trustee (the "Trustee," which term includes any successor
trustee under the Indenture), to which Indenture reference is hereby made for a
statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the holders of the SynDECS, and the
terms upon which the SynDECS are, and are to be, authenticated and delivered.
If an Event of Default with respect to the Notes shall have
occurred and be continuing, the principal of the Notes may be declared due and
payable in the manner and with the effect provided in the Indenture. In such
case each Settlement Date that has not yet occurred shall be accelerated and the
Total Exchange Shares for each such Settlement Date shall be calculated using
the Daily Amounts for any Trading Days in respect of that Settlement Date that
have already occurred and, with respect to each Trading Day that has not already
occurred, the Daily Amount for the date upon which the SynDECS are so declared
to be immediately due and payable. In case of default at Maturity (as defined in
the Indenture), this Note shall continue to accrue interest, on the basis
provided for in Paragraph 4 hereof, payable upon demand of the beneficial owners
of this Note in accordance with the terms of the SynDECS, from and after
Maturity through the date when the principal amount of this Note has been
exchanged for ADSs or other property (or the equivalent value in cash) in
accordance with the Indenture.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Debt Securities
of each series to be affected under the Indenture at any time by the Company and
by the Holders of a majority in aggregate principal amount of the Debt
Securities at the time Outstanding of each series affected thereby. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Debt Securities of any series
at the time Outstanding, on behalf of the Holders of all Debt Securities of such
series, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
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
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hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Note.
The Holder of this Note may not enforce such Holder's rights
pursuant to the Indenture or the Notes except as provided in the Indenture. 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 to pay the amounts
due under this Note, and to pay any interest on any overdue amount at the time,
place and rate, and in the coin or currency, herein prescribed.
All terms used in this Note which are defined in the Indenture
but not in this Note shall have the meanings assigned to them in the Indenture.
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