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-1 INITIAL PRINCIPAL AMOUNT
CUSIP 173073 87 5 REPRESENTED $45,000,000
representing 4,500,000
SEQUINS $10 per SEQUINS)
CITIGROUP GLOBAL MARKETS HOLDINGS INC.
7.0% Select EQUity Indexed NoteS(SM) Based Upon
the Common Stock of Intel Corporation Due May 27, 2005
Citigroup Global Markets Holdings Inc., a New York corporation
(hereinafter referred to as the "Company", which term includes any successor
corporation under the Indenture herein referred to), for value received and on
condition that this Note is not redeemed by the Company prior to May 27, 2005
(the "Stated Maturity Date"), hereby promises to pay to CEDE & CO., or its
registered assigns, the Maturity Payment (as defined below), on the Stated
Maturity Date. This Note will bear quarterly payments of interest, is not
subject to any sinking fund, is not subject to redemption at the option of the
holder thereof prior to the Stated Maturity Date, and is not subject to the
defeasance provisions of the Indenture.
Payment of the Maturity Payment with respect to this Note shall be made
upon presentation and surrender of this Note at the corporate trust office of
the Trustee in the Borough of Manhattan, The City and State of New York, in the
common stock of Intel Corporation ("Intel").
This Note is one of the series of 7.0% Select EQUity Indexed NoteSSM
based upon the common stock of Intel Corporation due May 27, 2005 (the
"SEQUINS").
INTEREST
The SEQUINS bear interest at the rate of 7.0% per annum. Interest will
be paid in cash quarterly on each 27th day of each February, May, August and
November, commencing on August 27, 2003 (each such date, an "Interest Payment
Date").
Interest will be payable to the persons in whose names the SEQUINS are
registered at the close of business on the Business Day preceding each Interest
Payment Date. If an Interest Payment Date falls on a day that is not a Business
Day, the interest payment to be made on such Interest Payment Date will be made
on the next succeeding Business Day with the same force and effect as if made on
such Interest Payment Date, and no additional interest will accrue as a result
of such delayed payment. Interest will be computed on the basis of a 360-day
year of twelve 30-day months.
"Business Day" means any day that is not a Saturday, a Sunday or a day
on which the securities exchanges or banking institutions or trust companies in
the City of New York are authorized or obligated by law or executive order to
close.
PAYMENT AT MATURITY
On the Stated Maturity Date, if the Company does not exercise its Call
Option (as described below) prior to or on such date, holders of the SEQUINS
will receive for each SEQUINS the final quarterly interest payment and the
Maturity Payment described below.
DETERMINATION OF THE MATURITY PAYMENT
The Maturity Payment for each SEQUINS equals a number of shares of
Intel common stock equal to the Exchange Ratio. The Exchange Ratio equals
0.50556.
In lieu of any fractional share of Intel common stock otherwise payable
in respect of any SEQUINS, at maturity each holder of a SEQUINS will receive an
amount in cash equal to the value of such fractional share. The number of full
shares of Intel common stock, and any cash in lieu of a fractional share, to be
delivered at maturity to a holder of a SEQUINS will be calculated based on the
aggregate number of SEQUINS held by such holder.
CALL OPTION
The Company may exercise its option to call (its "Call Option") the
SEQUINS in whole, but not in part, on any Business Day beginning on June 1, 2004
through and including the Stated Maturity Date (such day being the "Call Date").
The Company will provide at least 10 Business Days' notice (as described below)
before the Call Date.
If the Company exercises its Call Option, holders of the SEQUINS will
receive for each SEQUINS a price in cash (the "Call Price") that, together with
all other payments made on the SEQUINS from the date hereof (the "Issue Date")
to and including the Call Date, will provide a yield to call of 14.0% per annum
(compounded annually). The Call Price will be calculated by determining the
amount that, when discounted from the Call Date to the Issue Date by a discount
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factor based on an annual yield to call of 14.0% (calculated on the basis of a
360-day year of twelve 30-day months, compounded annually) and added to the
present value of all interest payments made to and including the Call Date
discounted to the Issue Date by that same discount factor, will equal the
initial price of the SEQUINS. The present value of each interest payment on the
SEQUINS used to determine the Call Price will be calculated assuming each
payment is made on the calendar day scheduled for that payment. A delay in
payment may arise for reasons such as a scheduled Interest Payment Date falling
on a day that is not a Business Day and, as a result, the payment being delayed
until the next succeeding Business Day. Any such delay will not be taken into
account when calculating the Call Price. The Call Price will be rounded to the
fourth decimal place and will not include the amount of unpaid interest accrued
to and including the Call Date; however, on the Call Date holders of the SEQUINS
will receive the Call Price plus an amount equal to the accrued and unpaid
interest.
So long as the SEQUINS are represented by this Note and are held on
behalf of DTC, notices relating to the Company's Call Option and all other
notices will be given by delivery to DTC, in which event such notice will be
deemed to have been given to holders of the SEQUINS on the seventh trading day
after the day on which such notice is delivered. If the SEQUINS are no longer
represented by this Note and are not held on behalf of DTC, notices relating to
the Company's Call Option and all other notices will be published in a leading
daily newspaper in the City of New York, which is expected to be The Wall Street
Journal.
DILUTION ADJUSTMENTS
If Intel, after the closing date of the offering of the SEQUINS,
(1) pays a stock dividend or makes a distribution with respect to its
common stock in shares of the stock,
(2) subdivides or splits the outstanding shares of its common stock
into a greater number of shares,
(3) combines the outstanding shares of the common stock into a smaller
number of shares, or
(4) issues by reclassification of shares of its common stock any shares
of other common stock of Intel,
then, in each of these cases, the Exchange Ratio will be multiplied by a
dilution adjustment equal to a fraction, the numerator of which will be the
number of shares of common stock outstanding immediately after the event, plus,
in the case of a reclassification referred to in (4) above, the number of shares
of other common stock of Intel, and the denominator of which will be the number
of shares of common stock outstanding immediately before the event.
If Intel, after the closing date, issues, or declares a record date in
respect of an issuance of, rights or warrants to all holders of its common stock
entitling them to subscribe for or
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purchase shares of its common stock at a price per share less than the
Then-Current Market Price of the common stock, other than rights to purchase
common stock pursuant to a plan for the reinvestment of dividends or interest,
then, in each case, the Exchange Ratio will be multiplied by a dilution
adjustment equal to a fraction, the numerator of which will be the number of
shares of common stock outstanding immediately before the adjustment is
effected, plus the number of additional shares of common stock offered for
subscription or purchase pursuant to the rights or warrants, and the denominator
of which will be the number of shares of common stock outstanding immediately
before the adjustment is effected by reason of the issuance of the rights or
warrants, plus the number of additional shares of common stock which the
aggregate offering price of the total number of shares of common stock offered
for subscription or purchase pursuant to the rights or warrants would purchase
at the Then-Current Market Price of the common stock, which will be determined
by multiplying the total number of shares so offered for subscription or
purchase by the exercise price of the rights or warrants and dividing the
product obtained by the Then-Current Market Price. To the extent that, after the
expiration of the rights or warrants, the shares of common stock offered thereby
have not been delivered, the Exchange Ratio will be further adjusted to equal
the Exchange Ratio which would have been in effect had the adjustment for the
issuance of the rights or warrants been made upon the basis of delivery of only
the number of shares of common stock actually delivered.
If Intel, after the closing date, declares or pays a dividend or makes
a distribution to all holders of the common stock of any class of its capital
stock, the capital stock of one or more of its subsidiaries, evidences of its
indebtedness or other non-cash assets, excluding any dividends or distributions
referred to in the above paragraph, or issues to all holders of its common stock
rights or warrants to subscribe for or purchase any of its or one or more of its
subsidiaries' securities, other than rights or warrants referred to in the above
paragraph, then, in each of these cases, the Exchange Ratio will be multiplied
by a dilution adjustment equal to a fraction, the numerator of which will be the
Then-Current Market Price of one share of the common stock, and the denominator
of which will be the Then-Current Market Price of one share of the common stock,
less the fair market value (as determined by a nationally recognized independent
investment banking firm retained for this purpose by the Company, whose
determination will be final) as of the time the adjustment is effected of the
portion of the capital stock, assets, evidences of indebtedness, rights or
warrants so distributed or issued applicable to one share of common stock.
Notwithstanding the foregoing, in the event that, with respect to any
dividend or distribution to which the above paragraph would otherwise apply, the
denominator in the fraction referred to in the above formula is less than $1.00
or is a negative number, then the Company may, at its option, elect to have the
adjustment provided by the above paragraph not be made and in lieu of this
adjustment, the Maturity Payment will be deemed to be equal to the fair market
value of the capital stock, evidences of indebtedness, assets, rights or
warrants (determined, as of the date the dilution adjustment would otherwise be
effected as described below, by a nationally recognized independent investment
banking firm retained for this purpose by the Company, whose determination will
be final) so distributed or issued applicable to one share of Intel common stock
and each holder of the SEQUINS will have the right to receive at maturity cash
in an amount per SEQUINS equal to the Exchange Ratio multiplied by such fair
market value.
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If Intel, after the closing date, declares a record date in respect of
a distribution of cash, other than any Permitted Dividends described below, any
cash distributed in consideration of fractional shares of common stock and any
cash distributed in a Reorganization Event referred to below, by dividend or
otherwise, to all holders of its common stock, or makes an Excess Purchase
Payment, then the Exchange Ratio will be multiplied by a dilution adjustment
equal to a fraction, the numerator of which will be the Then-Current Market
Price of the common stock, and the denominator of which will be the Then-Current
Market Price of the common stock on the record date less the amount of the
distribution applicable to one share of common stock which would not be a
Permitted Dividend, or, in the case of an Excess Purchase Payment, less the
aggregate amount of the Excess Purchase Payment for which adjustment is being
made at the time divided by the number of shares of common stock outstanding on
the record date.
For purposes of these adjustments:
A "Permitted Dividend" is any quarterly cash dividend in respect of
Intel common stock, other than a quarterly cash dividend that exceeds the
immediately preceding quarterly cash dividend, and then only to the extent that
the per share amount of this dividend results in an annualized dividend yield on
the common stock in excess of 10%.
An "Excess Purchase Payment" is the excess, if any, of (x) the cash and
the value (as determined by a nationally recognized independent investment
banking firm retained for this purpose by the Company, whose determination will
be final) of all other consideration paid by Intel with respect to one share of
common stock acquired in a tender offer or exchange offer by Intel, over (y) the
Then-Current Market Price of the common stock.
Notwithstanding the foregoing, in the event that, with respect to any
dividend, distribution or Excess Purchase Payment to which the fifth paragraph
in this section would otherwise apply, the denominator in the fraction referred
to in the formula in that paragraph is less than $1.00 or is a negative number,
then the Company may, at its option, elect to have the adjustment provided by
the fifth paragraph in this section not be made and in lieu of this adjustment,
the Maturity Payment will be deemed to be equal to the sum of the amount of cash
and the fair market value of other consideration (determined, as of the date the
dilution adjustment would otherwise be effected as described below, by a
nationally recognized independent investment banking firm retained for this
purpose by the Company, whose determination will be final) so distributed or
applied to the acquisition of the common stock in the tender offer or exchange
offer applicable to one share of Intel common stock and each holder of the
SEQUINS will have the right to receive at maturity cash in an amount per SEQUINS
equal to the Exchange Ratio multiplied by such sum.
Each dilution adjustment will be effected as follows:
- in the case of any dividend, distribution or issuance, at the
opening of business on the Business Day next following the
record date for determination of holders of Intel common stock
entitled to receive this dividend, distribution or issuance
or, if
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the announcement of this dividend, distribution, or issuance
is after this record date, at the time this dividend,
distribution or issuance was announced by Intel;
- in the case of any subdivision, split, combination or
reclassification, on the effective date of the transaction;
- in the case of any Excess Purchase Payment for which Intel
announces, at or prior to the time it commences the relevant
share repurchase, the repurchase price per share for shares
proposed to be repurchased, on the date of the announcement;
and
- in the case of any other Excess Purchase Payment, on the date
that the holders of the repurchased shares become entitled to
payment in respect thereof.
All dilution adjustments will be rounded upward or downward to the
nearest 1/10,000th or, if there is not a nearest 1/10,000th, to the next lower
1/10,000th. No adjustment in the Exchange Ratio will be required unless the
adjustment would require an increase or decrease of at least one percent
therein, provided, however, that any adjustments which by reason of this
sentence are not required to be made will be carried forward (on a percentage
basis) and taken into account in any subsequent adjustment. If any announcement
or declaration of a record date in respect of a dividend, distribution, issuance
or repurchase requiring an adjustment as described herein is subsequently
canceled by Intel, or this dividend, distribution, issuance or repurchase fails
to receive requisite approvals or fails to occur for any other reason, then,
upon the cancellation, failure of approval or failure to occur, the Exchange
Ratio will be further adjusted to the Exchange Ratio which would then have been
in effect had adjustment for the event not been made. If any Reorganization
Event, as described below, occurs after the occurrence of one or more events
requiring an adjustment as described herein, the dilution adjustments previously
applied to the Exchange Ratio will not be rescinded but will be applied to the
new Exchange Ratio provided for below.
The "Then-Current Market Price" of the common stock, for the purpose of
applying any dilution adjustment, means the average Closing Price per share of
common stock for the ten Trading Days immediately before this adjustment is
effected or, in the case of an adjustment effected at the opening of business on
the Business Day next following a record date, immediately before the earlier of
the date the adjustment is effected and the related Ex-Date. For purposes of
determining the Then-Current Market Price, the determination of the Closing
Price by the calculation agent in the event of a Market Disruption Event, as
described in the definition of Closing Price, may be deferred by the calculation
agent for up to five consecutive Trading Days on which a Market Disruption Event
is occurring.
The "Closing Price" of Intel common stock (or any other security for
which a Closing Price must be determined) on any date of determination will be
(1) if the common stock is listed on a national securities exchange on that date
of determination, the closing sale price or, if no closing sale price is
reported, the last reported sale price on that date on the principal U.S.
exchange on which the common stock is listed or admitted to trading, (2) if the
common stock is not listed on a national securities exchange on that date of
determination, or if the closing sale
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price or last reported sale price is not obtainable (even if the common stock is
listed or admitted to trading on such exchange), and the common stock is quoted
on the Nasdaq National Market, the closing sale price or, if no closing sale
price is reported, the last reported sale price on that date as reported on the
Nasdaq, and (3) if the common stock is not quoted on the Nasdaq on that date of
determination or, if the closing sale price or last reported sale price is not
obtainable (even if the common stock is quoted on the Nasdaq), the last quoted
bid price for the common stock in the over-the-counter market on that date as
reported by the OTC Bulletin Board, the National Quotation Bureau or a similar
organization. If no closing sale price or last reported sale price is available
pursuant to clauses (1), (2) or (3) of the preceding sentence or if there is a
Market Disruption Event, the Closing Price on any date of determination, unless
deferred by the calculation agent as described in the preceding paragraph, will
be the arithmetic mean, as determined by the calculation agent, of the bid
prices of the common stock obtained from as many dealers in such stock (which
may include the Company or any of its other subsidiaries or affiliates), but not
exceeding three such dealers, as will make such bid prices available to the
calculation agent. A security "quoted on the Nasdaq National Market" will
include a security included for listing or quotation in any successor to such
system and the term "OTC Bulletin Board" will include any successor to such
service.
A "Trading Day" means a day, as determined by the calculation agent, on
which trading is generally conducted (or was scheduled to have been generally
conducted, but for the occurrence of a Market Disruption Event) on the New York
Stock Exchange, the American Stock Exchange, the Nasdaq National Market, the
Chicago Mercantile Exchange and the Chicago Board Options Exchange, and in the
over-the-counter market for equity securities in the United States.
The "Ex-Date" with respect to any dividend, distribution or issuance is
the first date on which the shares of the common stock trade in the regular way
on their principal market without the right to receive this dividend,
distribution or issuance.
A "Market Disruption Event" means the occurrence or existence of any
suspension of or limitation imposed on trading (by reason of movements in price
exceeding limits permitted by any exchange or market or otherwise) of, or the
unavailability, through a recognized system of public dissemination of
transaction information, of accurate price, volume or related information in
respect of, (1) the shares of Intel common stock on any exchange or market, or
(2) any options contracts or futures contracts relating to the shares of Intel
common stock, or any options on such futures contracts, on any exchange or
market if, in each case, in the determination of the calculation agent, any such
suspension, limitation or unavailability is material.
In the event of any of the following "Reorganization Events":
- any consolidation or merger of Intel, or any surviving entity
or subsequent surviving entity of Intel, with or into another
entity, other than a merger or consolidation in which Intel is
the continuing corporation and in which the common stock
outstanding immediately before the merger or consolidation is
not exchanged for cash, securities or other property of Intel
or another issuer;
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- any sale, transfer, lease or conveyance to another corporation
of the property of Intel or any successor as an entirety or
substantially as an entirety;
- any statutory exchange of securities of Intel or any successor
of Intel with another issuer, other than in connection with a
merger or acquisition; or
- any liquidation, dissolution or winding up of Intel or any
successor of Intel,
each holder of the SEQUINS will have the right to receive a Maturity Payment per
SEQUINS of (i) cash in an amount equal to the Exchange Ratio multiplied by the
sum of clauses (1) and (2) in the definition of "Transaction Value" below and
(ii) the number of Marketable Securities received for each share of stock in the
Reorganization Event multiplied by the Exchange Ratio.
The "Transaction Value" will be the sum of:
(1) for any cash received in a Reorganization Event, the amount of
cash received per share of common stock,
(2) for any property other than cash or Marketable Securities
received in a Reorganization Event, an amount equal to the
market value on the date the Reorganization Event is
consummated of that property received per share of common
stock, as determined by a nationally recognized independent
investment banking firm retained for this purpose by the
Company, whose determination will be final, and
(3) for any Marketable Securities received in a Reorganization
Event, an amount equal to the Closing Price per share of these
Marketable Securities on the applicable Trading Day multiplied
by the number of these Marketable Securities received for each
share of common stock.
"Marketable Securities" are any perpetual equity securities or debt
securities with a stated maturity after the maturity date, in each case that are
listed on a U.S. national securities exchange or reported by the Nasdaq Stock
Market. The number of shares of any equity securities constituting Marketable
Securities included in the calculation of Transaction Value pursuant to clause
(3) above will be adjusted if any event occurs with respect to the Marketable
Securities or the issuer of the Marketable Securities between the time of the
Reorganization Event and maturity that would have required an adjustment as
described above, had it occurred with respect to Intel common stock or Intel.
Adjustment for these subsequent events will be as nearly equivalent as
practicable to the adjustments described above.
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
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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 SEQUINS, and the terms upon which the SEQUINS are, and are to be,
authenticated and delivered.
If an Event of Default with respect to the SEQUINS shall have occurred
and be continuing, the principal of the SEQUINS may be declared due and payable
in the manner and with the effect provided in the Indenture. In such case, the
amount declared due and payable upon any acceleration permitted by the Indenture
will be determined by the calculation agent and will be equal to, with respect
to this Note, the Maturity Payment calculated as though the Stated Maturity Date
of this Note were the date of early repayment. In case of default at Maturity of
this Note, this Note shall bear interest, payable upon demand of the beneficial
owners of this Note in accordance with the terms of the SEQUINS, from and after
Maturity through the date when payment of such amount has been made or duly
provided for, at the rate of - % per annum on the unpaid amount (or the cash
equivalent of such unpaid amount) due.
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 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
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 SEQUINS 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
Maturity Payment with respect to this Note, and to pay any interest on any
overdue amount thereof 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.
Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purposes.
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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: /s/ Xxxx X. Xxxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Executive Vice President and
Treasurer
Corporate Seal
Attest:
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Assistant Secretary
Dated: May 30, 2003
CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in
the within-mentioned Indenture.
The Bank of New York,
as Trustee
By: /s/ Xxxxxxxx Xxxxxx
-----------------------------
Authorized Signatory
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