Exhibit 99(B)
THIS NOTE 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 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 DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITORY. UNLESS THIS NOTE 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 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- Units
CUSIP (Each Unit representing $10
original issue price per Note)
XXXXXXX XXXXX & CO., INC.
Enhanced Return Notes(SM) Linked to the Nasdaq-100 Index/R/
due March , 2004
(the "Notes")
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, a sum equal to the Redemption Amount, if
any, as defined below, on March , 2004 (the "Stated Maturity").
Payment or delivery of the Redemption Amount and any interest on any
overdue amount thereof with respect to this Note 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 Note is one of the series of Enhanced Return Notes(SM) Linked to
the Nasdaq-100 Index/R/ due March , 2004.
Redemption Amount
The "Redemption Amount" with respect to this Note equals:
i) If the Ending Value is greater than the Starting Value:
( (Ending Value-Starting Value))
$10+ ($20 x (---------------------------))
( ( Starting Value ))
provided, however, the Redemption Amount cannot exceed $15.00
per Unit (the "Capped Value").
ii) If the Ending Value is less than or equal to the Starting
Value:
( Ending Value )
$10 x (--------------)
(Starting Value)
The Starting Value equals . The Ending Value will be determined by Xxxxxxx
Xxxxx, Xxxxxx, Xxxxxx & Xxxxx Incorporated (the "Calculation Agent") and will
equal the average (arithmetic mean) of the closing values of the Nasdaq-100
Index determined on each of the first five Calculation Days during the
Calculation Period (as defined below). If there are fewer than five Calculation
Days in the Calculation Period, then the Ending Value will equal the average
(arithmetic mean) of the closing values of the Nasqaq-100 Index on those
Calculation Days. If there is only one Calculation Day during the Calculation
Period, then the Ending Value will equal the closing value of the Nasdaq-100
Index on that Calculation Day. If no Calculation Days occur during the
Calculation Period, then the Ending Value shall equal the closing value of the
Nasdaq-100 Index determined on the last scheduled Index Business Day (as defined
below) in the Calculation Period regardless of the occurrence of a Market
Disruption Event (as defined below) on that Index Business Day.
The "Calculation Period" means the period from and including the
seventh scheduled Index Business Day prior to the Stated Maturity to and
including the second scheduled Index Business Day prior to the Stated Maturity.
"Calculation Day" means any Index Business Day during the Calculation
Period on which a Market Disruption Event has not occurred.
An "Index Business Day" is any day on which The Nasdaq Stock Market,
Inc. ( "The Nasdaq Stock Market" or "Nasdaq"/R/), The New York Stock Exchange
(the "NYSE") and the American Stock Exchange (the "AMEX") are open for trading
and the Nasdaq-100 Index or any Successor Index (as defined below) is calculated
and published.
All determinations made by the Calculation Agent shall be at the sole
discretion of the Calculation Agent and, absent a determination by the
Calculation Agent of a manifest error, shall be conclusive for all purposes and
binding on the Company and the Holders and beneficial owners of the Notes.
2
Adjustments to the Nasdaq-100 Index; Market Disruption Events
If at any time The Nasdaq Stock Market changes its method of
calculating the Nasdaq-100 Index, or the value of the Nasdaq-100 Index changes,
in any material respect, or if the Nasdaq-100 Index is in any other way modified
so that the Nasdaq-100 Index does not, in the opinion of the Calculation Agent,
fairly represent the value of the Nasdaq-100 Index had those changes or
modifications not been made, then, from and after that time, the Calculation
Agent shall, at the close of business in New York, New York, on each date that
the closing value of the Nasdaq-100 Index is to be calculated, make any
adjustments as, in the good faith judgment of the Calculation Agent, may be
necessary in order to arrive at a calculation of a value of a stock index
comparable to the Nasdaq-100 Index as if those changes or modifications had not
been made, and calculate the closing value with reference to the Nasdaq-100
Index, as so adjusted. Accordingly, if the method of calculating the Nasdaq-100
Index is modified so that the value of the Nasdaq-100 Index is a fraction or a
multiple of what it would have been if it had not been modified, e.g., due to a
split, then the Calculation Agent shall adjust the Nasdaq-100 Index in order to
arrive at a value of the Nasdaq-100 Index as if it had not been modified, e.g.,
as if the split had not occurred.
"Market Disruption Event" means either of the following events, as
determined by the Calculation Agent:
(A) a suspension, material limitation or absence of trading on The
Nasdaq Stock Market of 20% or more of the underlying stocks
which then comprise the Nasdaq-100 Index or a successor index
during the one-half hour period preceding the close of trading
on The Nasdaq Stock Market or the applicable exchange (without
taking into account any extended or after-hours trading
session); or
(B) the suspension or material limitation on The Nasdaq Stock
Market or any other major futures or securities market from
trading in futures or options contracts related to the
Nasdaq-100 Index or a successor index during the one-half hour
period preceding the close of trading on The Nasdaq Stock
Market or the applicable exchange (without taking into account
any extended or after hours trading session).
For the purpose of the above definition:
1. a limitation on the hours 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 Nasdaq
Stock Market or the relevant exchange;
2. a decision to permanently discontinue trading in the relevant
futures or options contract will not constitute a Market
Disruption Event;
3. a suspension in trading in a futures or options contract on the
Nasdaq-100 Index by a major securities market for more than two
hours by reason of:
. a price change violating limits set by that securities market,
. an imbalance of orders relating to those contracts, or
3
. a disparity in bid and ask quotes relating to those contracts
will constitute a suspension or material limitation of trading in
futures or options contracts related to the Nasdaq-100 Index; and
4. an absence of trading on The Nasdaq Stock Market will not include any
time when The Nasdaq Stock Market is closed for trading under
ordinary circumstances.
Discontinuance of the Nasdaq-100 Index
If Nasdaq discontinues publication of the Nasdaq-100 Index and Nasdaq
or another entity publishes a successor or substitute index that the Calculation
Agent determines, in its sole discretion, to be comparable to the Nasdaq-100
Index (a "Successor Index"), then, upon the Calculation Agent's notification of
its determination to the Trustee (as defined below) and ML&Co., the Calculation
Agent will substitute the Successor Index as calculated by Nasdaq or any other
entity for the Nasdaq-100 Index and calculate the Ending Value as described
above under "Redemption Amount". Upon any selection by the Calculation Agent of
a Successor Index, ML&Co. shall cause notice to be given to Holders of the
Notes.
In the event that Nasdaq discontinues publication of the Nasdaq-100 Index
and:
. the Calculation Agent does not select a Successor Index, or
. the Successor Index is no longer published on any of the Calculation
Days,
the Calculation Agent will compute a substitute value for the Nasdaq-100 Index
in accordance with the procedures last used to calculate the Nasdaq-100 Index
before any discontinuance. If a Successor Index is selected or the Calculation
Agent calculates a value as a substitute for the Nasdaq-100 Index as described
below, the Successor Index or value will be used as a substitute for the
Nasdaq-100 Index for all purposes, including for purposes of determining whether
a Market Disruption Event exists.
If Nasdaq discontinues publication of the Nasdaq-100 Index before the
Calculation Period and the Calculation Agent determines that no Successor Index
is available at that time, then on each Business Day until the earlier to occur
of:
. the determination of the Ending Value, or
. a determination by the Calculation Agent that a Successor Index is
available,
the Calculation Agent will determine the value that would be used in computing
the Redemption Amount as described in the preceding paragraph as if that day
were a Calculation Day. The Calculation Agent will cause notice of each value to
be published not less often than once each month in The Wall Street Journal or
another newspaper of general circulation, and arrange for information with
respect to these values to be made available by telephone.
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A "Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in The City of New York are
authorized or obligated by law to close and that is a day on which the NYSE, the
Nasdaq National Market System and the AMEX are open for trading.
General
This Note 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, 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 the Notes, and the terms upon which the Notes are, and are to
be, authenticated and delivered.
The Company hereby covenants for the benefit of the Holders of the Notes,
to the extent permitted by ap+plicable law, not to claim voluntarily the
benefits of any laws concerning usurious rates of interest against a Holder of
the Notes.
The Notes are not subject to redemption by the Company or at the option of
the Holder prior to the Stated Maturity.
In case an Event of Default with respect to any Notes shall have occurred
and be continuing, the amount payable to a Holder of a Note upon any
acceleration permitted by the Notes, with respect to each Unit, will be equal to
the Redemption Amount, calculated as though the date of early repayment were the
Stated Maturity of the Notes.
In case of default in payment of the Notes (whether at the Stated Maturity
or upon acceleration), from and after such date the Notes shall bear interest,
payable upon demand of the Holders thereof, at the rate of % per annum (to the
extent that payment of such interest shall be legally enforceable) on the unpaid
amount due and payable on such date in accordance with the terms of the Notes 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 Notes 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 original public offering
price of the Notes at the time Outstanding, as defined in the Indenture, of each
series affected thereby. The Indenture also contains provisions permitting the
Holders of specified percentages in aggregate original public offering price of
the Notes of each series at the time Outstanding, on behalf of the Holders of
all Notes of each 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.
5
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the Redemption Amount with respect to this
Note 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 Note may be
registered on the Security Register of the Company, upon surrender of this Note
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 Notes, of authorized denominations and for the
same aggregate original public offering price, will be issued to the designated
transferee or transferees.
The Notes are issuable only in registered form without coupons in
denominations of $10 and integral multiples thereof. This Note shall remain in
the form of a global security held by a Depository. Notwithstanding the
foregoing, if (x) any Depository is at 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 Note shall be exchangeable or (z) an Event of Default has
occurred and is continuing with respect to the Notes, this Note shall be
exchangeable for Notes in definitive form of like tenor and of an equal
aggregate original public offering price, in denominations of $10 and integral
multiples thereof. Such definitive Notes shall be registered in such name or
names as the Depository shall instruct the Trustee. If definitive Notes are so
delivered, the Company may make such changes to the form of this Note as are
necessary or appropriate to allow for the issuance of such definitive Notes.
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 of a Note by acceptance hereof hereby agreee
(in the absence of an administrative determination or judicial ruling to the
contrary) to characterize and treat each Note for all tax purposes as a cash
settled pre-paid forward contract linked to the Nasdaq-100 Index.
Prior to due presentment of this Note 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 Note is registered as the owner hereof for all
purposes, whether or not this Note 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 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
JPMorgan Chase Bank, the Trustee under the Indenture, or its successor
thereunder, by the manual signature of
6
one of its authorized officers, this Note shall not be entitled to any benefits
under the Indenture or be valid or obligatory for any purpose.
7
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: February , 2002
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, as Trustee By:
Treasurer
By: Attest:
Authorized Officer Secretary
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