EXHIBIT (4)
THIS PROCEEDS IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE THEREOF. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
PROCEEDS IN CERTIFICATED FORM, THIS PROCEEDS 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 DEPOSITORY OR A
NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS PROCEEDS IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC TO XXXXXXX XXXXX & CO., INC. OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY PROCEEDS 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 21,878 Units
CUSIP: 000000X00 (each Unit representing $1,000 principal
amount of PROtected Covered Call
EnhancED Income NoteS(SM))
XXXXXXX XXXXX & CO., INC.
PROtected Covered Call EnhancED Income NoteS(SM)
Linked to the Income Select 10 PROCEEDS Index
due May 12, 2010
(the "PROCEEDS")
Xxxxxxx Xxxxx & Co., Inc., a Delaware corporation (hereinafter referred to
as the "Company", which term includes any successor corporation under the
Indenture herein referred to), for value received, hereby promises to pay to
CEDE & CO., or its registered assigns, for each Unit the Interest Amount (as
defined below) on each Interest Payment Date (as defined below). On May 12,
2010 (the "Stated Maturity"), the Company hereby promises to pay to CEDE & CO.,
or its registered assigns, a sum for each Unit equal to the sum of $1,000 and
the Supplemental Redemption Amount (as defined below), if any.
Payment or delivery per Unit of the above-referenced principal amount of
the PROCEEDS and the Supplemental Redemption Amount, if any, and any interest
on any overdue amount thereof with respect to this PROCEEDS and the Interest
Amount, if any, shall be made at the office or agency of the Company maintained
for that purpose in the Borough of Manhattan, The City of New York, in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts.
This PROCEEDS is one of the series of PROtected Covered Call EnhancED
Income NoteS(SM) Linked to the Income Select 10 PROCEEDS Index due May 12, 2010.
Interest
The Company shall pay interest, if any, on each Unit of the PROCEEDS equal
to the Interest Amount on the third Business Day (as defined below) following
each Commencement Date (as defined below) (each, an "Interest Payment Date"). A
"Commencement Date" shall mean each February 1, May 1, August 1 and November 1,
beginning August 1, 2005. The Company shall pay interest to the persons in
whose names the PROCEEDS are registered at the close of business on a "Regular
Record Date", which shall be the last day of the applicable quarterly
calculation period. If a Commencement Date falls on a day that is not a
Business Day, the Commencement Date shall be the next succeeding Business Day.
If an Interest Payment Date falls on a day that is not a Business Day, the
Interest Amount payment, if any, to be made on such day shall 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 shall be paid as a result of
such delayed payment.
The "Interest Amount" shall be the amount determined by the Calculation
Agent (as defined below) as described in the prospectus relating to the
PROCEEDS in a notice provided to the Trustee (as defined below) on or before
the second Business Day immediately following the last day of the applicable
Quarterly Calculation Period (as defined below).
"Quarterly Calculation Period" means the period from and including a
Commencement Date to, but excluding, the next Commencement Date, provided that
the initial Quarterly Calculation Period shall commence on, and include, May 5,
2005 and the final Quarterly Calculation Period shall extend to, and include,
the Valuation Date (as defined below).
Payment on the Maturity Date
On the maturity date, a Holder shall receive a cash payment with respect
to each Unit of the PROCEEDS equal to the sum of:
(i) the principal amount of $1,000;
and
(ii) the Supplemental Redemption Amount, if any.
The "Supplemental Redemption Amount" with respect to each Unit of this
PROCEEDS shall be determined by the Calculation Agent and shall equal:
$1,000 X ((Ending Value - Threshold Value)/Threshold Value)
provided, however, that in no event shall the Supplemental
Redemption Amount be less than zero.
The "Ending Value" shall be determined by the Calculation Agent and shall
equal the closing level of the Reference Index (as defined below) determined on
the Valuation Date.
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The "Threshold Value" equals 100.
The "Reference Index" means the Income Select 10 PROCEEDS Index (as
described in the prospectus supplement relating to the PROCEEDS) published as
of 4:00 p.m. (New York City time) on each Business Day (as defined below) on
Reuters Page XXXXXXX00 (or any successor page or source as identified by the
Calculation Agent).
The "Income Select 10 Basket" is a hypothetical investment in a "covered
call" strategy in which (i) the Income Select 10 Stocks (as defined below) are
purchased and (ii) call options are sold, on a quarterly basis for a three
month term, on the Income Select 10 Stocks.
The "Valuation Date" shall be the seventh scheduled Index Business Day
before the Stated Maturity, or if that day is not an Index Business Day (as
defined below), the next Index Business Day; provided, however, that if no
Index Business Days occur between the seventh scheduled Index Business Day
before the Stated Maturity and the second scheduled Index Business Day before
the Stated Maturity, the Valuation Date shall be the second scheduled Index
Business Day prior to the Stated Maturity, regardless of the occurrence or
continuance of a Market Disruption Event (as defined below).
An "Index Business Day" shall be any day (as described in the prospectus
supplement relating to the PROCEEDS) designated as such by the Calculation
Agent.
"Business Day" shall be any day other than a Saturday or Sunday that is
not a day on which banking institutions in The City of New York are authorized
or required by law, regulation or executive order to close.
"Calculation Agent" means Xxxxxxx Xxxxx International.
All determinations made by the Calculation Agent shall be made in good
faith and in a commercially reasonable manner by the Calculation Agent and,
absent a determination of a manifest error, shall be conclusive for all
purposes and binding on the Company, the Holders and the beneficial owners of
this PROCEEDS.
"Market Disruption Event" means either of the following events as
determined by the Calculation Agent:
(A) the suspension of or material limitation on trading for more
than two hours of trading, or during the one-half hour period
preceding the close of trading, on the applicable exchange
(without taking into account any extended or after-hours
trading session), in 20% or more of the stocks which then
comprise the Reference Index; or
(B) the suspension of or material limitation on trading, in each
case, for more than two hours of trading, or during the
one-half hour period preceding the close of trading, on the
applicable exchange (without taking into account any extended
or after-hours trading session), whether by reason of movements
in price otherwise exceeding levels permitted by the relevant
exchange or otherwise, in option
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contracts or futures contracts related to 20% or more of the stocks
which then comprise the Reference Index.
For the purpose of the above definition:
(1) a limitation on the hours in a trading day and/or number of
days of trading will not constitute a Market Disruption Event
if it results from an announced change in the regular business
hours of the applicable exchange;
(2) a suspension in trading in a futures or option contract on a
stock which then comprises a part of the Income Select 10
Basket by the primary securities market trading in the options
contracts related to such stock by reason of (a) price change
exceeding limits set by the securities exchange or market, (b)
an imbalance of orders relating to those contracts on the
stock, or (c) a disparity in bid and ask quotes relating to
those contracts on the stock, will constitute a suspension or
material limitation of trading in futures or option contracts
related to that stock; and
(3) a suspension of, absence of or material limitation on trading
on the primary securities market on which futures or option
contracts on a stock which then comprises a part of the Income
Select 10 Basket are traded will not include any time when that
securities market is closed for trading under ordinary
circumstances.
(4) for the purpose of clause (A) above, any limitations on trading
during significant market fluctuations under New York Stock
Exchange (the "NYSE") Rule 80A, or any applicable rule or
regulation enacted or promulgated by the NYSE or any other self
regulatory organization or the Securities and Exchange
Commission of similar scope as determined by the Calculation
Agent, will be considered "material".
General
This PROCEEDS is one of a duly authorized issue of Securities of the
Company, issued and to be issued under an Indenture, dated as of April 1, 1983,
as amended and restated (herein referred to as the "Indenture"), between the
Company and JPMorgan Chase Bank, N.A., as Trustee (herein referred to as the
"Trustee", which term includes any successor Trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights thereunder of the Company, the
Trustee and the Holders of this PROCEEDS, and the terms upon which this
PROCEEDS are to be authenticated and delivered.
The Company hereby covenants for the benefit of the Holders of this
PROCEEDS, to the extent permitted by applicable law, not to claim voluntarily
the benefits of any laws concerning usurious rates of interest against a Holder
of this PROCEEDS.
This PROCEEDS is not subject to redemption by the Company or at the option
of the Holder prior to the Stated Maturity.
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In case an Event of Default with respect to this PROCEEDS shall have
occurred and be continuing, the amount payable to a Holder of a PROCEEDS upon
any acceleration permitted by this PROCEEDS, with respect to each Unit hereof,
shall be equal to the amount payable on the Stated Maturity with respect to
such Unit, calculated as though the date of acceleration were the Stated
Maturity of this PROCEEDS, provided, however, the Index Adjustment Factor (as
defined in the prospectus supplement relating to the PROCEEDS) shall be
applied to the values used to calculate the Supplemental Redemption Amount as
if the PROCEEDS had not been accelerated and had remained outstanding to the
Stated Maturity.
In case of default in payment of this PROCEEDS (whether at any Interest
Payment Date, Stated Maturity or upon acceleration), from and after such date
this PROCEEDS shall bear interest, payable upon demand of the Holders of this
PROCEEDS, at the rate of 2.25% per annum on the unpaid amount due and payable
on such date in accordance with the terms of this PROCEEDS to the date payment
of such amount has been made or duly provided for.
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 Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with
the consent of the Holders of not less than 66 2/3% in aggregate principal
amount of the Securities at the time Outstanding of each series affected
thereby. Holders of specified percentages in aggregate principal amount of the
Securities of each series at the time Outstanding, on behalf of the Holders of
all Securities of each series, are permitted 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 PROCEEDS shall be conclusive and binding upon such Holder and upon all
future Holders of this PROCEEDS and of any PROCEEDS 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 PROCEEDS.
No reference herein to the Indenture and no provision of this PROCEEDS or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay any amount payable with respect to this
PROCEEDS and any interest on any overdue amount thereof at the time, place and
rate, and in the coin or currency herein prescribed.
As provided in the Indenture and subject to certain limitations set forth
therein and on the first page hereof, the transfer of this PROCEEDS may be
registered on the Security Register of the Company, upon surrender of this
PROCEEDS for registration of transfer at the office or agency of the Company in
the Borough of Manhattan, The City of New York, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company duly executed by, the Holder hereof or by his attorney duly authorized
in writing, and thereupon one or more new PROCEEDS, of authorized denominations
and for the same aggregate principal amount, shall be issued to the designated
transferee or transferees.
The PROCEEDS are issuable only in registered form without coupons in
denominations of a single Unit and integral multiples thereof. This PROCEEDS
shall remain in the form of a global security held by a Depository.
Notwithstanding the foregoing, if (x) any Depository is at
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any time unwilling or unable to continue as Depository and a successor
depository is not appointed by the Company within 60 days, (y) the Company
executes and delivers to the Trustee a Company Order to the effect that this
PROCEEDS shall be exchangeable or (z) an Event of Default has occurred and is
continuing with respect to this PROCEEDS, this PROCEEDS shall be exchangeable
for PROCEEDS in definitive form of like tenor and of an equal aggregate
principal amount, in denominations of a single Unit and integral multiples
thereof. Such definitive PROCEEDS shall be registered in such name or names as
the Depository shall instruct the Trustee. If definitive PROCEEDS are so
delivered, the Company may make such changes to the form of this PROCEEDS as
are necessary or appropriate to allow for the issuance of such definitive
PROCEEDS.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or governmental charge payable in connection therewith.
The Company and each Holder by acceptance hereof hereby agree to treat
this PROCEEDS for all tax purposes as a debt instrument that is subject to U.S.
Treasury Regulation section 1.1275-4(b) governing contingent payment debt
instruments, and, where required, the Company shall file information returns
with the Internal Revenue Service in accordance with this treatment, in the
absence of any change or clarification in the law, by regulation or otherwise,
requiring a different characterization of the PROCEEDS.
Prior to due presentment of this PROCEEDS for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this PROCEEDS is registered as the owner hereof for
all purposes, whether or not this PROCEEDS be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this PROCEEDS which are defined in the Indenture but not
in this PROCEEDS shall have the meanings assigned to them in the Indenture.
Unless the certificate of authentication hereon has been executed by
JPMorgan Chase Bank, N.A., the Trustee under the Indenture, or its successor
thereunder, by the manual signature of one of its authorized officers, this
PROCEEDS shall not be entitled to any benefits 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.
Dated: May 5, 2005
CERTIFICATE OF AUTHENTICATION Xxxxxxx Xxxxx & Co., Inc.
This is one of the Securities of the series
designated therein referred to in the [Copy of Seal]
within-mentioned Indenture.
JPMorgan Chase Bank, N.A., as Trustee By:
Treasurer
By: Attest:
Authorized Officer Secretary
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