Exhibit 4.5
ANTHEM, INC.
AND
THE BANK OF NEW YORK,
AS PURCHASE CONTRACT AGENT
PURCHASE CONTRACT AGREEMENT
Dated as of November 2, 2001
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF
GENERAL APPLICATION
SECTION 1.1 Definitions.............................................. 1
SECTION 1.2 Compliance Certificates and Opinions..................... 12
SECTION 1.3 Form of Documents Delivered to Agent..................... 13
SECTION 1.4 Acts of Holders; Record Dates............................ 13
SECTION 1.5 Notices.................................................. 15
SECTION 1.6 Notice to Holders; Waiver................................ 16
SECTION 1.7 Effect of Headings and Table of Contents................. 16
SECTION 1.8 Successors and Assigns................................... 16
SECTION 1.9 Separability Clause...................................... 16
SECTION 1.10 Benefits of Agreement.................................... 16
SECTION 1.11 Governing Law............................................ 17
SECTION 1.12 Legal Holidays........................................... 17
SECTION 1.13 Counterparts............................................. 17
SECTION 1.14 Inspection of Agreement.................................. 17
ARTICLE II
CERTIFICATE FORMS
SECTION 2.1 Forms of Certificates Generally.......................... 18
SECTION 2.2 Form of Agent's Certificate of Authentication............ 19
ARTICLE III
THE UNITS
SECTION 3.1 Title and Terms; Denominations........................... 19
SECTION 3.2 Rights and Obligations Evidenced by the Certificates..... 19
SECTION 3.3 Execution, Authentication, Delivery and Dating........... 20
SECTION 3.4 Temporary Certificates................................... 21
SECTION 3.5 Registration; Registration of Transfer and Exchange...... 22
SECTION 3.6 Book-Entry Interests..................................... 23
SECTION 3.7 Notices to Holders....................................... 24
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SECTION 3.8 Appointment of Successor Clearing Agency.................... 24
SECTION 3.9 Definitive Certificates..................................... 24
SECTION 3.10 Mutilated, Destroyed, Lost and Stolen Certificates.......... 25
SECTION 3.11 Persons Deemed Owners....................................... 26
SECTION 3.12 Cancellation................................................ 27
SECTION 3.13 Establishment of Stripped Units............................. 27
SECTION 3.14 Reestablishment of Normal Units............................. 29
SECTION 3.15 Transfer of Collateral upon Occurrence of Termination.......
Event....................................................... 30
SECTION 3.16 No Consent to Assumption.................................... 31
ARTICLE IV
THE DEBENTURES
SECTION 4.1 Payment of Interest; Rights to Interest Payments
Preserved; Notice........................................... 31
SECTION 4.2 Notice and Voting........................................... 32
ARTICLE V
THE PURCHASE CONTRACTS; THE REMARKETING
SECTION 5.1 Purchase of Shares of Common Stock.......................... 32
SECTION 5.2 Contract Fee Payments....................................... 34
SECTION 5.3 Deferral of Contract Fee Payments........................... 35
SECTION 5.4 Payment of Purchase Price: Remarketing...................... 37
SECTION 5.5 Issuance of Shares of Common Stock.......................... 41
SECTION 5.6 Adjustment of Settlement Rate............................... 42
SECTION 5.7 Notice of Adjustments and Certain Other Events.............. 48
SECTION 5.8 Termination Event; Notice................................... 49
SECTION 5.9 Early Settlement............................................ 49
SECTION 5.10 Early Settlement Upon Merger................................ 51
SECTION 5.11 Charges and Taxes........................................... 53
SECTION 5.12 No Fractional Shares........................................ 53
ARTICLE VI
REMEDIES
SECTION 6.1 Unconditional Right of Holders to Purchase Common Stock..... 54
SECTION 6.2 Restoration of Rights and Remedies.......................... 54
SECTION 6.3 Rights and Remedies Cumulative.............................. 54
SECTION 6.4 Delay or Omission Not Waiver................................ 55
SECTION 6.5 Undertaking for Costs....................................... 55
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SECTION 6.6 Waiver of Stay or Extension Laws............................... 55
ARTICLE VII
THE AGENT
SECTION 7.1 Certain Duties and Responsibilities............................ 55
SECTION 7.2 Notice of Default.............................................. 56
SECTION 7.3 Certain Rights of Agent........................................ 57
SECTION 7.4 Not Responsible for Recitals or Issuance of Units.............. 58
SECTION 7.5 May Hold Units................................................. 59
SECTION 7.6 Money Held in Custody.......................................... 59
SECTION 7.7 Compensation and Reimbursement................................. 59
SECTION 7.8 Corporate Agent Required; Eligibility.......................... 60
SECTION 7.9 Resignation and Removal; Appointment of Successor.............. 60
SECTION 7.10 Acceptance of Appointment by Successor......................... 61
SECTION 7.11 Merger, Conversion, Consolidation or Succession to Business.... 62
SECTION 7.12 Preservation of Information; Communications to Holders......... 62
SECTION 7.13 No Obligations of Agent........................................ 63
SECTION 7.14 Tax Compliance................................................. 63
ARTICLE VIII
SUPPLEMENTAL AGREEMENTS
SECTION 8.1 Supplemental Agreements Without Consent of Holders............. 63
SECTION 8.2 Supplemental Agreements with Consent of Holders................ 64
SECTION 8.3 Execution of Supplemental Agreements........................... 65
SECTION 8.4 Effect of Supplemental Agreements.............................. 66
SECTION 8.5 Reference to Supplemental Agreements........................... 66
ARTICLE IX
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1 Covenant Not to Merge, Consolidate, Sell or Convey
Property Except Under Certain Conditions....................... 66
SECTION 9.2 Rights and Duties of Successor Corporation..................... 67
SECTION 9.3 Opinion of Counsel Given to Agent.............................. 67
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ARTICLE X
COVENANTS
SECTION 10.1 Performance Under Purchase Contracts......................... 67
SECTION 10.2 Maintenance of Office or Agency.............................. 68
SECTION 10.3 Company to Reserve Common Stock.............................. 68
SECTION 10.4 Covenants as to Common Stock................................. 68
SECTION 10.5 Statements of Officer of the Company as to Default........... 69
EXHIBITS
EXHIBIT A Form of Normal Units Certificate
EXHIBIT B Form of Stripped Units Certificate
EXHIBIT C Instruction from Purchase Contract Agent to Collateral Agent
EXHIBIT D Instruction to Purchase Contract Agent
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PURCHASE CONTRACT AGREEMENT, dated as of November 2, 2001,
between Anthem, Inc., an Indiana corporation (the "Company"), and The Bank of
New York, a New York banking corporation, acting as purchase contract agent for
the Holders of Units from time to time (the "Agent").
RECITALS
The Company has duly authorized the execution and delivery of
this Agreement and the Certificates evidencing the Units.
All things necessary to make the Purchase Contracts, when the
Certificates are executed by the Company and authenticated, executed on behalf
of the Holders and delivered by the Agent, as provided in this Agreement, the
valid obligations of the Company, and to constitute this Agreement a valid
agreement of the Company, in accordance with its terms, have been done.
WITNESSETH:
For and in consideration of the premises and the purchase of
the Units by the Holders thereof, it is mutually agreed as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1 DEFINITIONS.
For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular, and nouns and pronouns of the masculine gender include the
feminine and neuter genders;
(b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles in the United States;
(c) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to
any particular Article, Section or other subdivision; and
(d) the following terms have the meanings given to them in
this Section 1.1(d):
"Act" when used with respect to any Holder, has the meaning
specified in Section 1.4.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereunder.
"Agent" means the Person named as the "Agent" in the first
paragraph of this instrument until a successor Agent shall have become
such pursuant to the applicable provisions of this Agreement, and
thereafter "Agent" shall mean such Person.
"Agent-purchased Treasury Consideration" has the meaning
specified in Section 5.4(b)(i).
"Agreement" means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more
agreements supplemental hereto entered into pursuant to the applicable
provisions hereof.
"Applicable Market Value" has the meaning specified in Section
5.1.
"Applicants" has the meaning specified in Section 7.12(b).
"Bankruptcy Code" means Title 11 of the United States Code, or
any other law of the United States that from time to time provides a
uniform system of bankruptcy laws.
"Beneficial Owner" means, with respect to a Book-Entry
Interest, a Person who is the beneficial owner of such Book-Entry
Interest as reflected on the books of the Clearing Agency or on the
books of a Person maintaining an account with such Clearing Agency
(directly as a Clearing Agency Participant or as an indirect
participant, in each case in accordance with the rules of such Clearing
Agency).
"Board of Directors" means either the Board of Directors of
the Company or the Executive Committee of such Board or any other
committee of such Board duly authorized to act generally or in any
particular respect for the Board hereunder.
"Board Resolution" means (i) a copy of a resolution certified
by the Secretary or the Assistant Secretary of the Company to have been
duly adopted by the Board of Directors and to be in full force and
effect on the date of such certification, (ii) a copy of a unanimous
written consent of the Board of Directors or (iii) a certificate signed
by the authorized officer or officers to whom the Board of Directors
has delegated its authority, and in each case, delivered to the Agent.
2
"Book-Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and
made through book entries by a Clearing Agency as described in Section
3.6.
"Business Day" means any day that is not a Saturday, Sunday or
day on which banking institutions and trust companies in The City of
New York or at a place of payment are authorized or required by law,
regulation or executive order to close.
"Capital Stock" means any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or
interests in (however designated, whether voting or non-voting)
corporate stock or similar interests in other types of entities.
"Cash Merger" has the meaning set forth in Section 5.10.
"Certificate" means a Normal Units Certificate or a Stripped
Units Certificate.
"Clearing Agency" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act that is
acting as a depositary for the Units and in whose name, or in the name
of a nominee of that organization, shall be registered a Global
Certificate and which shall undertake to effect book-entry transfers
and pledges of the Units.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time
the Clearing Agency effects book-entry transfers and pledges of
securities deposited with the Clearing Agency.
"Closing Price" has the meaning specified in Section 5.1.
"Collateral" has the meaning specified in Section 2.1 of the
Pledge Agreement.
"Collateral Agent" means The Chase Manhattan Bank, a New York
banking corporation, as Collateral Agent under the Pledge Agreement
until a successor Collateral Agent shall have become such pursuant to
the applicable provisions of the Pledge Agreement, and thereafter
"Collateral Agent" shall mean the Person who is then the Collateral
Agent thereunder.
"Collateral Substitution" has the meaning specified in Section
3.13.
"Common Stock" means the Common Stock, par value $0.01 per
share, of the Company.
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"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such
pursuant to the applicable provision of this Agreement, and thereafter
"Company" shall mean such successor.
"Constituent Person" has the meaning specified in Section
5.6(b).
"Contract Fee Payments" means, in the case of Normal Units and
Stripped Units, the amount payable by the Company in respect of each
Purchase Contract constituting a part of such Unit, equal to 0.05% per
year of the Stated Amount, in each case computed on the basis of a
360-day year of twelve 30-day months, plus any Deferred Contract Fee
Payments accrued pursuant to Section 5.3.
"Corporate Trust Office" means the corporate trust office of
the Agent at which, at any particular time, its corporate trust
business shall be principally administered, which office at the date
hereof is located at 0 Xxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000,
Attention: Corporate Trust Administration.
"Coupon Rate" means the percentage rate per annum at which
each Debenture will bear interest initially.
"Current Market Price" has the meaning specified in Section
5.6(a)(8).
"Custodial Agent" means The Chase Manhattan Bank, a New York
banking corporation, as Custodial Agent under the Pledge Agreement
until a successor Custodial Agent shall have become such pursuant to
the applicable provisions of the Pledge Agreement, and thereafter
"Custodial Agent" shall mean the Person who is then the Custodial Agent
thereunder.
"Debentures" means the series of subordinated debt securities
of the Company designated the 5.95% Subordinated Debentures due 2006,
to be issued under the First Supplemental Indenture.
"Deferred Contract Fee Payments" has the meaning specified in
Section 5.3.
"Depositary" means, initially, DTC, until another Clearing
Agency becomes its successor.
"DTC" means The Depository Trust Company, the initial Clearing
Agency.
"Early Settlement" has the meaning specified in Section
5.9(a).
"Early Settlement Amount" has the meaning specified in Section
5.9(a).
4
"Early Settlement Date" has the meaning specified in Section
5.9(a).
"Early Settlement Rate" has the meaning specified in Section
5.9(b).
"Exchange Act" means the Securities Exchange Act of 1934 and
any statute successor thereto, in each case as amended from time to
time, and the rules and regulations promulgated thereunder.
"Expiration Date" has the meaning specified in Section 1.4.
"Expiration Time" has the meaning specified in Section
5.6(a)(6).
"Failed Remarketing" has the meaning specified in Section
5.4(b)(ii).
"First Supplemental Indenture" means the First Supplemental
Indenture, dated as of November 2, 2001, between the Company and the
Trustee.
"Global Certificate" means a Certificate that evidences all or
part of the Units and is registered in the name of a Depositary or a
nominee thereof.
"Holder" means the Person in whose name the Unit evidenced by
a Normal Units Certificate and/or a Stripped Units Certificate is
registered in the related Normal Units Register and/or the Stripped
Units Register, as the case may be.
"Indenture" means the Indenture, dated as of November 2, 2001,
between the Company and the Trustee.
"Issuer Order" or "Issuer Request" means a written order or
request signed in the name of the Company by the Chief Executive
Officer, the Chief Financial Officer, the President, any
Vice-President, the Treasurer, any Assistant Treasurer, the Secretary
or any Assistant Secretary (or other officer performing similar
functions) of the Company and delivered to the Agent.
"Last Failed Remarketing" has the meaning specified in Section
5.4(b)(ii).
"Merger Early Settlement" has the meaning specified in Section
5.10.
"Merger Early Settlement Amount" has the meaning specified in
Section 5.10.
"Merger Early Settlement Date" has the meaning specified in
Section 5.10.
"Non-electing Share" has the meaning specified in Section
5.6(b).
5
"Normal Unit" means the collective rights and obligations of a
Holder of a Normal Units Certificate in respect of a Debenture or the
appropriate Treasury Consideration, as the case may be, subject in each
case to the Pledge thereof, and the related Purchase Contract.
"Normal Units Certificate" means a certificate evidencing the
rights and obligations of a Holder in respect of the number of Normal
Units specified on such certificate, substantially in the form of
Exhibit A hereto.
"Normal Units Register" and "Normal Units Registrar" have the
respective meanings specified in Section 3.5.
"NYSE" has the meaning specified in Section 5.1.
"Officers' Certificate" means a certificate signed by the
Chief Executive Officer, the Chief Financial Officer, the President or
any Vice-President, and by the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant Secretary (or other officer performing
similar functions) of the Company and delivered to the Agent.
"Opinion of Counsel" means an opinion in writing signed by
legal counsel, who may be an employee of or counsel to the Company or
an Affiliate and who shall be reasonably acceptable to the Agent.
"Opt-out Treasury Consideration" has meaning specified in
Section 5.4(b)(iv).
"Outstanding Units" means, as of the date of determination,
all Normal Units or Stripped Units evidenced by Certificates
theretofore authenticated, executed and delivered under this Agreement,
except:
(i) If a Termination Event has occurred, (A) Stripped
Units and (B) Normal Units for which the related Debenture or
the appropriate Treasury Consideration, as the case may be,
has been theretofore deposited with the Agent in trust for the
Holders of such Normal Units;
(ii) Normal Units and Stripped Units evidenced by
Certificates theretofore cancelled by the Agent or delivered
to the Agent for cancellation or deemed cancelled pursuant to
the provisions of this Agreement; and
(iii) Normal Units and Stripped Units evidenced by
Certificates in exchange for or in lieu of which other
Certificates have been authenticated, executed on behalf of
the Holder and delivered pursuant to this Agreement, other
than any such Certificate in respect of which there shall have
been presented to the Agent proof satisfactory to it that such
6
Certificate is held by a bona fide purchaser in whose hands
the Normal Units or Stripped Units evidenced by such
Certificate are valid obligations of the Company;
provided, that in determining whether the Holders of the requisite
number of the Normal Units or Stripped Units have given any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Normal Units or Stripped Units owned by the Company or any Affiliate of
the Company shall be disregarded and deemed not to be outstanding,
except that, in determining whether the Agent shall be protected in
relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Normal Units or Stripped Units which a
Responsible Officer of the Agent knows to be so owned shall be so
disregarded. Normal Units or Stripped Units so owned which have been
pledged in good faith may be regarded as Outstanding Units if the
pledgee establishes to the satisfaction of the Agent the pledgee's
right so to act with respect to such Normal Units or Stripped Units and
that the pledgee is not the Company or any Affiliate of the Company.
"Payment Date" means each February 15, May 15, August 15 and
November 15, commencing February 15, 2002.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Pledge" means the pledge under the Pledge Agreement of the
Debentures, the Treasury Securities or the appropriate Treasury
Consideration, in each case constituting a part of the Units, property,
cash, securities, financial assets and security entitlements of the
Collateral Account (as defined in the Pledge Agreement) and any
proceeds of any of the foregoing.
"Pledge Agreement" means the Pledge Agreement, dated as of the
date hereof, by and among the Company, the Collateral Agent, the
Custodial Agent, the Securities Intermediary and the Agent, on its own
behalf and as attorney-in-fact for the Holders from time to time of the
Units.
"Pledged Debentures" has the meaning set forth in the Pledge
Agreement.
"Pledged Treasury Consideration" has the meaning set forth in
the Pledge Agreement.
"Pledged Treasury Securities" has the meaning set forth in the
Pledge Agreement.
"Predecessor Certificate" means a Predecessor Normal Units
Certificate or a Predecessor Stripped Units Certificate.
7
"Predecessor Normal Units Certificate" of any particular
Normal Units Certificate means every previous Normal Units Certificate
evidencing all or a portion of the rights and obligations of the
Company and the Holder under the Normal Units evidenced thereby; and,
for the purposes of this definition, any Normal Units Certificate
authenticated and delivered under Section 3.10 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Normal Units Certificate
shall be deemed to evidence the same rights and obligations of the
Company and the Holder as the mutilated, destroyed, lost or stolen
Normal Units Certificate.
"Predecessor Stripped Units Certificate" of any particular
Stripped Units Certificate means every previous Stripped Units
Certificate evidencing all or a portion of the rights and obligations
of the Company and the Holder under the Stripped Units evidenced
thereby; and, for the purposes of this definition, any Stripped Units
Certificate authenticated and delivered under Section 3.10 in exchange
for or in lieu of a mutilated, destroyed, lost or stolen Stripped Units
Certificate shall be deemed to evidence the same rights and obligations
of the Company and the Holder as the mutilated, destroyed, lost or
stolen Stripped Units Certificate.
"Purchase Contract," when used with respect to any Unit, means
the contract forming a part of such Unit and obligating the Company to
sell and the Holder of such Unit to purchase Common Stock on the terms
and subject to the conditions set forth in Article Five.
"Purchase Contract Settlement Fund" has the meaning specified
in Section 5.5.
"Purchase Price" has the meaning specified in Section 5.1.
"Purchased Shares" has the meaning specified in Section
5.6(a)(6).
"Record Date" for the distribution payable on any Payment Date
means, as to any Global Certificate, the Business Day next preceding
such Payment Date, and as to any other Certificate, a day selected by
the Company which shall be more than one Business Day but less than 60
Business Days prior to such Payment Date.
"Register" means the Normal Units Register and the Stripped
Units Register, as applicable.
"Registrar" means the Normal Units Registrar and the Stripped
Units Registrar, as applicable.
"Remarketing Agent" has the meaning specified in Section
5.4(b)(i).
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"Remarketing Agreement" means the Remarketing Agreement to be
entered into by and among the Company, the Remarketing Agent and the
Agent.
"Remarketing Date" means the third business day preceding
August 15, 2004.
"Remarketing Fee" has the meaning specified in Section
5.4(b)(i).
"Remarketing Value" means the sum of
(i) the value at the Remarketing Date or the Subsequent
Remarketing Date, as the case may be, of U.S. Treasury
securities that will pay, on or prior to the Payment Date
falling on the Stock Purchase Date, an amount of cash equal to
the aggregate distributions that are scheduled to be payable
on that Payment Date, on (1) the Debentures which are included
in Normal Units and (2) the Separate Debentures, in each case,
which are participating in the remarketing, assuming for that
purpose that (x) no interest payment on the Debentures will
then have been deferred and (y) the interest rate on the
Debentures is equal to the Coupon Rate,
(ii) the value at the Remarketing Date or the
Subsequent Remarketing Date, as the case may be, of U.S.
Treasury securities that will pay, on or prior to the Stock
Purchase Date, an amount of cash equal to the Stated Amount of
(1) such Debentures that are included in Normal Units and (2)
the Separate Debentures, in each case, which are participating
in the remarketing, and
(iii) if interest payments on the Debentures are then
being deferred, the amount equal to the aggregate unpaid
interest payments on (1) the Debentures that are included in
Normal Units and (2) the Separate Debentures, in each case,
which are participating in the remarketing accrued to the
third business day following the Remarketing Date or the
Subsequent Remarketing Date, as the case may be;
provided that for purposes of clauses (i) and (ii) above, the
Remarketing Value shall be calculated on the assumptions that (x) the
U.S. Treasury securities are highly liquid and mature on or within 35
days prior to the Stock Purchase Date, as determined in good faith by
the Remarketing Agent in a manner intended to minimize the Remarketing
Value, and (y) the U.S. Treasury securities are valued based on the
ask-side price of such U.S. Treasury securities at a time between 9:00
a.m. and 11:00 a.m., New York City time, selected by the Remarketing
Agent, on the Remarketing Date or Subsequent Remarketing Date, as the
case may be, as determined on a third-day settlement basis by a
reasonably and customary means selected in good faith by the
Remarketing Agent, plus accrued interest to that date.
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"Reorganization Event" has the meaning specified in Section
5.6(b).
"Responsible Officer" means, when used with respect to the
Agent, any officer within the Corporate Trust Administration unit of
the Agent (or any successor unit or department of the Agent) located at
the Corporate Trust Office of the Agent who has direct responsibility
for the administration of this Agreement and, for the purposes of
Section 7.1(b)(2), shall also include any officer of the Agent to whom
any corporate trust matter is referred because of such person's
knowledge of and familiarity with the particular subject.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Intermediary" means The Chase Manhattan Bank, a
New York banking corporation, in its capacity as Securities
Intermediary under the Pledge Agreement, together with its successors
in such capacity.
"Separate Debentures" has the meaning set forth in the Pledge
Agreement.
"Settlement Date" means any Early Settlement Date or Merger
Early Settlement Date or the Stock Purchase Date.
"Settlement Rate" has the meaning specified in Section 5.1.
"Stated Amount" means, with respect to any one Debenture,
Normal Unit or Stripped Unit, $50.
"Stock Purchase Date" means November 15, 2004.
"Stripped Unit" means the collective rights and obligations of
a holder of a Stripped Units Certificate in respect of a 1/20 undivided
beneficial interest in a Treasury Security, subject in each case to the
Pledge thereof, and the related Purchase Contract.
"Stripped Units Certificate" means a certificate evidencing
the rights and obligations of a Holder in respect of the number of
Stripped Units specified on such certificate, substantially in the form
of Exhibit B hereto.
"Stripped Units Register" and "Stripped Units Registrar" have
the respective meanings specified in Section 3.5.
"Subsequent Remarketing" has the meaning specified in Section
5.4(b)(ii).
"Subsequent Remarketing Date" means any date on which the
Remarketing Agent attempts a Subsequent Remarketing in accordance with
Section 5.4 hereof, such date in no event to be later than four
business days immediately preceding the Stock Purchase Date.
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"Termination Date" means the date, if any, on which a
Termination Event occurs.
"Termination Event" means the occurrence of any of the
following events:
(i) at any time on or prior to the Stock Purchase
Date, a judgment, decree or court order shall have been
entered granting relief under the Bankruptcy Code or any other
similar Federal or state law, adjudicating the Company to be
insolvent, or approving as properly filed a petition seeking
reorganization or liquidation of the Company, and, unless such
judgment, decree or order shall have been entered within 60
days prior to the Stock Purchase Date, such decree or order
shall have continued undischarged and unstayed for a period of
60 days;
(ii) a judgment, decree or court order for the
appointment of a receiver or liquidator or trustee or assignee
in bankruptcy or insolvency of the Company or of its property,
or for the winding up or liquidation of its affairs, shall
have been entered, and, unless such judgment, decree or order
shall have been entered within 60 days prior to the Stock
Purchase Date, such judgment, decree or order shall have
continued undischarged and unstayed for a period of 60 days;
or
(iii) at any time on or prior to the Stock Purchase
Date the Company shall file a petition for relief under the
Bankruptcy Code or any other similar federal or state law, or
shall consent to the filing of a bankruptcy proceeding against
it, or shall file a petition or answer or consent seeking
reorganization or liquidation under the Bankruptcy Code or any
other similar federal or state law, or shall consent to the
filing of any such petition, or shall consent to the
appointment of a receiver or liquidator or trustee or assignee
in bankruptcy or insolvency of it or of its property, or shall
make an assignment for the benefit of creditors, or shall
admit in writing its inability to pay its debts generally as
they become due.
"Threshold Appreciation Price" has the meaning specified in
Section 5.1.
"TIA" means the Trust Indenture Act of 1939, as amended.
"Trading Day" has the meaning specified in Section 5.1.
"Treasury Consideration" means the Agent-purchased Treasury
Consideration or the Opt-out Treasury Consideration.
"Treasury Security" means a zero coupon U.S. Treasury security
(CUSIP Number 000000XX0) maturing on November 15, 2004 that will pay
$1,000 on such maturity date.
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"Trustee" means The Bank of New York, a New York banking
corporation, as trustee under the Indenture and the First Supplemental
Indenture, or any successor thereto.
"Underwriting Agreement" means the Underwriting Agreement
relating to the Units dated October 29, 2001 among the Company and the
underwriters named therein.
"Unit" means a Normal Unit or a Stripped Unit.
"Vice-President" means any vice-president, whether or not
designated by a number or a word or words added before or after the
title "vice-president."
SECTION 1.2 COMPLIANCE CERTIFICATES AND OPINIONS.
Except as otherwise expressly provided by this Agreement, upon
any application or request by the Company to the Agent to take any action under
any provision of this Agreement, the Company shall furnish to the Agent an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Agreement relating to the proposed action have been complied with
and, if requested by the Agent, an Opinion of Counsel stating that, in the
opinion of such counsel, all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Agreement relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement shall include:
(a) a statement that the individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such individual, he or
she has made such examination or investigation as is necessary to
enable such individual to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of such
individual, such condition or covenant has been complied with.
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SECTION 1.3 FORM OF DOCUMENTS DELIVERED TO AGENT.
(a) In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person, it is
not necessary that all such matters be certified by, or covered by the
opinion of, only one such Person, or that they be so certified or
covered by only one document, but one such Person may certify or give
an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.
(b) Any certificate or opinion of an officer of the Company
may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such
officer knows, or in the exercise of reasonable care should know, that
the certificate or opinion or representations with respect to the
matters upon which his certificate or opinion is based are erroneous.
Any such certificate or Opinion of Counsel may be based, insofar as it
relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that
the information with respect to such factual matters is in the
possession of the Company unless such counsel knows, or in the exercise
of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Agreement, they may, but need not, be consolidated
and form one instrument.
SECTION 1.4 ACTS OF HOLDERS; RECORD DATES.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given
or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in
person or by an agent duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Agent and, where it
is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "Act" of the Holders signing such
instrument or instruments. Proof of execution of any such instrument or
of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and (subject to Section 7.1) conclusive in
favor of the Agent and the Company, if made in the manner provided in
this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved in any manner which the Agent
deems sufficient.
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(c) The ownership of Units shall be proved by the Normal Units
Register or the Stripped Units Register, as the case may be.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Certificate shall
bind every future Holder of the same Certificate and the Holder of
every Certificate issued upon the registration of transfer thereof or
in exchange therefor or in lieu thereof in respect of anything done,
omitted or suffered to be done by the Agent or the Company in reliance
thereon, whether or not notation of such action is made upon such
Certificate.
(e) The Company may set any day as a record date for the
purpose of determining the Holders of Outstanding Units entitled to
give, make or take any request, demand, authorization, direction,
notice, consent, waiver or other action provided or permitted by this
Agreement to be given, made or taken by Holders of Units. If any record
date is set pursuant to this paragraph, the Holders of the Outstanding
Normal Units and the Outstanding Stripped Units, as the case may be, on
such record date, and no other Holders, shall be entitled to take the
relevant action with respect to the Normal Units or the Stripped Units,
as the case may be, whether or not such Holders remain Holders after
such record date; provided that no such action shall be effective
hereunder unless taken on or prior to the applicable Expiration Date by
Holders of the requisite number of Outstanding Units on such record
date. Nothing in this paragraph shall be construed to prevent the
Company from setting a new record date for any action for which a
record date has previously been set pursuant to this paragraph
(whereupon the record date previously set shall automatically and with
no action by any Person be cancelled and of no effect), and nothing in
this paragraph shall be construed to render ineffective any action
taken by Holders of the requisite number of Outstanding Units on the
date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Company, at its own expense, shall
cause notice of such record date, the proposed action by Holders and
the applicable Expiration Date to be given to the Agent in writing and
to each Holder of Units in the manner set forth in Section 1.6.
(f) With respect to any record date set pursuant to this
Section, the Company may designate any date as the "Expiration Date"
and from time to time may change the Expiration Date to any earlier or
later day; provided that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the Agent in
writing, and to each Holder of Units in the manner set forth in Section
1.6, on or prior to the existing Expiration Date. If an Expiration Date
is not designated with respect to any record date set pursuant to this
Section, the Company shall be deemed to have initially designated the
180th day after such record date as the Expiration Date with respect
thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the
14
foregoing, no Expiration Date shall be later than the 180th day after
the applicable record date.
SECTION 1.5 NOTICES.
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or permitted by
this Agreement to be made upon, given or furnished to, or filed with:
(a) the Agent by any Holder or by the Company shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing and
personally delivered, mailed, first-class postage prepaid, telecopied
or delivered by overnight air courier guaranteeing next day delivery,
addressed to and received by the Agent at 0 Xxxx Xxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust Administration,
telecopy: (000) 000-0000, or at any other address furnished in writing
by the Agent to the Holders and the Company; or
(b) the Company by the Agent or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing and
personally delivered, mailed, first-class postage prepaid, telecopied
or delivered by overnight air courier guaranteeing next day delivery,
addressed to and received by the Company at Anthem, Inc., 000 Xxxxxxxx
Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000, Attention: Xxxxx X. Xxxxx,
telecopy: (000) 000-0000, or at any other address furnished in writing
to the Agent by the Company; or
(c) the Collateral Agent by the Agent, the Company or any
Holder shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided) if made, given, furnished or filed
in writing and personally delivered, mailed, first-class postage
prepaid, telecopied or delivered by overnight air courier guaranteeing
next day delivery, addressed to and received by the Collateral Agent at
The Chase Manhattan Bank, Clearance & Collateral Management, 000 Xxxx
00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxxxxxx Xxxxxxxx, telecopy: (000) 000-0000, or at any other address
furnished in writing by the Collateral Agent to the Agent, the Company
and the Holders; or
(d) the Trustee by the Company shall be sufficient for every
purpose hereunder (unless otherwise herein expressly provided) if made,
given, furnished or filed in writing and personally delivered, mailed,
first-class postage prepaid, telecopied or delivered by overnight air
courier guaranteeing next day delivery, addressed to and received by
the Trustee at 0 Xxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Corporate Trust Administration, telecopy: (000) 000-0000, or
at any other address furnished in writing by the Trustee to the
Company.
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SECTION 1.6 NOTICE TO HOLDERS; WAIVER.
(a) Where this Agreement provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to each Holder affected by such event, at its address as it
appears in the applicable Register, not later than the latest date, and
not earlier than the earliest date, prescribed for the giving of such
notice. In any case where notice to Holders is given by mail, neither
the failure to mail such notice, nor any defect in any notice so mailed
to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders. Where this Agreement provides for notice
in any manner, such notice may be waived in writing by the Person
entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice
by Holders shall be filed with the Agent, but such filing shall not be
a condition precedent to the validity of any action taken in reliance
upon such waiver.
(b) In case by reason of the suspension of regular mail
service or by reason of any other cause it shall be impracticable to
give such notice by mail, then such notification as shall be made with
the approval of the Agent shall constitute a sufficient notification
for every purpose hereunder.
SECTION 1.7 EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.
SECTION 1.8 SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Agreement by the Company
shall bind its successors and assigns, whether so expressed or not.
SECTION 1.9 SEPARABILITY CLAUSE.
In case any provision in this Agreement or in the securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof and thereof shall not in any
way be affected or impaired thereby.
SECTION 1.10 BENEFITS OF AGREEMENT.
Nothing in this Agreement or in the Units, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and, to the extent provided hereby, the Holders, any benefits or any
legal or equitable right, remedy or claim under this Agreement. The Holders from
time to time shall be beneficiaries of this Agreement and shall be bound by all
of the terms and conditions hereof and of the Units evidenced by their
Certificates by their acceptance of delivery of such Certificates.
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SECTION 1.11 GOVERNING LAW.
This Agreement and the Units shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 1.12 LEGAL HOLIDAYS.
(a) In any case where any Payment Date shall not be a Business
Day, then (notwithstanding any other provision of this Agreement or the
Normal Units Certificates) payments on the Debentures shall not be made
on such date, but such payments shall be made on the next succeeding
Business Day with the same force and effect as if made on such Payment
Date, provided that no interest shall accrue or be payable by the
Company for the period from and after any such Payment Date, except
that if such next succeeding Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding
Business Day with the same force and effect as if made on such Payment
Date.
(b) If any date on which Contract Fee Payments are to be made
on the Purchase Contracts is not a Business Day, then payment of the
Contract Fee Payments payable on that date will be made on the next
succeeding day which is a Business Day, and no interest or additional
payment will be paid in respect of the delay. However, if that Business
Day is in the next succeeding calendar year, the payment will be made
on the immediately preceding Business Day with the same force and
effect as if made on that Payment Date.
(c) In any case where the Stock Purchase Date shall not be a
Business Day, then (notwithstanding any other provision of this
Agreement or the Certificates), the Purchase Contracts shall not be
performed on such date, but the Purchase Contracts shall be performed
on the immediately following Business Day with the same force and
effect as if performed on the Stock Purchase Date.
SECTION 1.13 COUNTERPARTS.
This Agreement may be executed in any number of counterparts
by the parties hereto, each of which, when so executed and delivered, shall be
deemed an original, but all such counterparts shall together constitute one and
the same instrument.
SECTION 1.14 INSPECTION OF AGREEMENT.
A copy of this Agreement shall be available at all reasonable
times during normal business hours at the Corporate Trust Office for inspection
by any Holder.
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ARTICLE II
CERTIFICATE FORMS
SECTION 2.1 FORMS OF CERTIFICATES GENERALLY.
(a) The Normal Units Certificates (including the form of
Purchase Contract forming part of the Normal Units evidenced thereby)
shall be in substantially the form set forth in Exhibit A hereto, with
such letters, numbers or other marks of identification or designation
and such legends or endorsements printed, lithographed or engraved
thereon as may be required by the rules of any securities exchange or
quotation system on which the Normal Units are listed or quoted for
trading or any depositary therefor, or as may, consistently herewith,
be determined by the officers of the Company executing such Normal
Units Certificates, as evidenced by their execution of the Normal Units
Certificates.
(b) The definitive Normal Units Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced
in any other manner, all as determined by the officers of the Company
executing such Normal Units Certificates, consistent with the
provisions of this Agreement, as evidenced by their execution thereof.
(c) The Stripped Units Certificates (including the form of
Purchase Contracts forming part of the Stripped Units evidenced
thereby) shall be in substantially the form set forth in Exhibit B
hereto, with such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or
engraved thereon as may be required by the rules of any securities
exchange or the quotation system on which the Stripped Units may be
listed or quoted for trading or any depositary therefor, or as may,
consistently herewith, be determined by the officers of the Company
executing such Stripped Units Certificates, as evidenced by their
execution of the Stripped Units Certificates.
(d) The definitive Stripped Units Certificates shall be
printed, lithographed or engraved on steel engraved borders or may be
produced in any other manner, all as determined by the officers of the
Company executing such Stripped Units Certificates, consistent with the
provisions of this Agreement, as evidenced by their execution thereof.
(e) Every Global Certificate authenticated, executed on behalf
of the Holders and delivered hereunder shall bear a legend in
substantially the following form:
"THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING
OF THE PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED)
AND IS REGISTERED IN THE NAME OF
18
THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY
NOT BE EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE
REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN
PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN
SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT
AGREEMENT."
SECTION 2.2 FORM OF AGENT'S CERTIFICATE OF AUTHENTICATION.
(a) The form of the Agent's certificate of authentication of
the Normal Units shall be in substantially the form set forth on the
form of the Normal Units Certificates.
(b) The form of the Agent's certificate of authentication of
the Stripped Units shall be in substantially the form set forth on the
form of the Stripped Units Certificates.
ARTICLE III
THE UNITS
SECTION 3.1 TITLE AND TERMS; DENOMINATIONS.
(a) The aggregate number of Normal Units and Stripped Units,
if any, evidenced by Certificates authenticated, executed on behalf of
the Holders and delivered hereunder is limited to 4,000,000 (4,600,000
if the Underwriters' over-allotment option pursuant to the Underwriting
Agreement is exercised in full), except for Certificates authenticated,
executed and delivered upon registration of transfer of, in exchange
for, or in lieu of, other Certificates pursuant to Section 3.4, 3.5,
3.10, 3.13, 3.14, 5.9 or 8.5.
(b) The Certificates shall be issuable only in registered form
and only in denominations of a single Unit and any integral multiple
thereof.
SECTION 3.2 RIGHTS AND OBLIGATIONS EVIDENCED BY THE
CERTIFICATES.
(a) Each Normal Units Certificate shall evidence the number of
Normal Units specified therein, with each such Normal Unit representing
the ownership by the Holder thereof of a beneficial interest in a
Debenture or the appropriate Treasury Consideration, as the case may
be, subject to the Pledge of such Debenture or such Treasury
Consideration, as the case may be, by such Holder pursuant to the
Pledge Agreement, and the rights and obligations of the
19
Holder thereof and the Company under one Purchase Contract. The Agent
as attorney-in-fact for, and on behalf of, the Holder of each Normal
Unit shall pledge, pursuant to the Pledge Agreement, the Debenture or
the appropriate Treasury Consideration, as the case may be, forming a
part of such Normal Unit, to the Collateral Agent and grant to the
Collateral Agent a security interest in the right, title, and interest
of such Holder in such Debenture or such Treasury Consideration, as the
case may be, for the benefit of the Company, to secure the obligation
of such Holder under the related Purchase Contract to purchase the
Common Stock of the Company. Prior to the purchase of shares of Common
Stock under each Purchase Contract, such Purchase Contract shall not
entitle the Holder of the related Normal Units Certificates to any of
the rights of a holder of shares of Common Stock, including, without
limitation, the right to vote or receive any dividends or other
payments or to consent or to receive notice as stockholders in respect
of the meetings of stockholders or for the election of directors of the
Company or for any other matter, or any other rights whatsoever as
stockholders of the Company.
(b) Each Stripped Units Certificate shall evidence the number
of Stripped Units specified therein, with each such Stripped Unit
representing the ownership by the Holder thereof of a 1/20 undivided
beneficial interest in a Treasury Security, subject to the Pledge of
such interest in such Treasury Security by such Holder pursuant to the
Pledge Agreement, and the rights and obligations of the Holder thereof
and the Company under one Purchase Contract. Prior to the purchase of
shares of Common Stock under each Purchase Contract, such Purchase
Contract shall not entitle the Holder of the related Stripped Units
Certificates to any of the rights of a holder of shares of Common
Stock, including, without limitation, the right to vote or receive any
dividends or other payments or to consent or to receive notice as
stockholders in respect of the meetings of stockholders or for the
election of directors of the Company or for any other matter, or any
other rights whatsoever as stockholders of the Company.
SECTION 3.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
(a) Subject to the provisions of Sections 3.13 and 3.14, upon
the execution and delivery of this Agreement, and at any time and from
time to time thereafter, the Company may deliver Certificates executed
by the Company to the Agent for authentication, execution on behalf of
the Holders and delivery, together with its Issuer Order for
authentication of such Certificates, and the Agent in accordance with
such Issuer Order shall authenticate, execute on behalf of the Holders
and deliver such Certificates.
(b) The Certificates shall be executed on behalf of the
Company by the Chief Executive Officer, the Chief Financial Officer,
the President, any Vice-President, the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant
20
Secretary (or other officer performing similar functions) of the
Company and delivered to the Agent. The signature of any of these
officers on the Certificates may be manual or facsimile.
(c) Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company
shall bind the Company, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication and
delivery of such Certificates or did not hold such offices at the date
of such Certificates.
(d) No Purchase Contract evidenced by a Certificate shall be
valid until such Certificate has been executed on behalf of the Holder
by the manual signature of an authorized signatory of the Agent, as
such Holder's attorney-in-fact. Such signature by an authorized
signatory of the Agent shall be conclusive evidence that the Holder of
such Certificate has entered into the Purchase Contract or Purchase
Contracts evidenced by such Certificate.
(e) Each Certificate shall be dated the date of its
authentication.
(f) No Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose unless there
appears on such Certificate a certificate of authentication
substantially in the form provided for herein executed by an authorized
signatory of the Agent by manual signature, and such certificate upon
any Certificate shall be conclusive evidence, and the only evidence,
that such Certificate has been duly authenticated and delivered
hereunder.
SECTION 3.4 TEMPORARY CERTIFICATES.
(a) Pending the preparation of definitive Certificates, the
Company shall execute and deliver to the Agent, and the Agent shall
authenticate, execute on behalf of the Holders, and deliver, in lieu of
such definitive Certificates, temporary Certificates which are in
substantially the form set forth in Exhibit A or Exhibit B hereto, as
the case may be, with such letters, numbers or other marks of
identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Normal Units or Stripped Units, as the
case may be, are listed, or as may, consistent herewith, be determined
by the officers of the Company executing such Certificates, as
evidenced by their execution of the Certificates.
(b) If temporary Certificates are issued, the Company will
cause definitive Certificates to be prepared without unreasonable
delay. After the preparation of definitive Certificates, the temporary
Certificates shall be exchangeable for definitive Certificates upon
surrender of the temporary Certificates at the Corporate Trust Office,
at the expense of the Company and
21
without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Certificates, the Company shall execute and
deliver to the Agent, and the Agent shall authenticate, execute on
behalf of the Holder, and deliver in exchange therefor, one or more
definitive Certificates of like tenor and denominations and evidencing
a like number of Normal Units or Stripped Units, as the case may be, as
the temporary Certificate or Certificates so surrendered. Until so
exchanged, the temporary Certificates shall in all respects evidence
the same benefits and the same obligations with respect to the Normal
Units or Stripped Units, as the case may be, evidenced thereby as
definitive Certificates.
SECTION 3.5 REGISTRATION; REGISTRATION OF TRANSFER AND
EXCHANGE.
(a) The Agent shall keep at the Corporate Trust Office a
register (the "Normal Units Register") in which, subject to such
reasonable regulations as it may prescribe, the Agent shall provide for
the registration of Normal Units Certificates and of transfers of
Normal Units Certificates (the Agent, in such capacity, the "Normal
Units Registrar") and a register (the "Stripped Units Register") in
which, subject to such reasonable regulations as it may prescribe, the
Agent shall provide for the registration of the Stripped Units
Certificates and transfers of Stripped Units Certificates (the Agent,
in such capacity, the "Stripped Units Registrar").
(b) Upon surrender for registration of transfer of any
Certificate at the Corporate Trust Office, the Company shall execute
and deliver to the Agent, and the Agent shall authenticate, execute on
behalf of the designated transferee or transferees, and deliver, in the
name of the designated transferee or transferees, one or more new
Certificates of like tenor and denominations, and evidencing a like
number of Normal Units or Stripped Units, as the case may be.
(c) At the option of the Holder, Certificates may be exchanged
for other Certificates, of like tenor and denominations and evidencing
a like number of Normal Units or Stripped Units, as the case may be,
upon surrender of the Certificates to be exchanged at the Corporate
Trust Office. Whenever any Certificates are so surrendered for
exchange, the Company shall execute and deliver to the Agent, and the
Agent shall authenticate, execute on behalf of the Holder, and deliver
the Certificates which the Holder making the exchange is entitled to
receive.
(d) All Certificates issued upon any registration of transfer
or exchange of a Certificate shall evidence the ownership of the same
number of Normal Units or Stripped Units, as the case may be, and be
entitled to the same benefits and subject to the same obligations,
under this Agreement as the Normal Units or Stripped Units, as the case
may be, evidenced by the Certificate surrendered upon such registration
of transfer or exchange.
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(e) Every Certificate presented or surrendered for
registration of transfer or for exchange shall (if so required by the
Agent) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Agent duly
executed, by the Holder thereof or its attorney duly authorized in
writing.
(f) No service charge shall be made for any registration of
transfer or exchange of a Certificate, but the Company and the Agent
may require payment from the Holder of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with
any registration of transfer or exchange of Certificates, other than
any exchanges pursuant to Sections 3.6, 3.9 and 8.5 not involving any
transfer.
(g) Notwithstanding the foregoing, the Company shall not be
obligated to execute and deliver to the Agent, and the Agent shall not
be obligated to authenticate, execute on behalf of the Holder and
deliver any Certificate presented or surrendered for registration of
transfer or for exchange on or after the Business Day immediately
preceding the earlier of the Stock Purchase Date or the Termination
Date. In lieu of delivery of a new Certificate, upon satisfaction of
the applicable conditions specified above in this Section and receipt
of appropriate registration or transfer instructions from such Holder,
the Agent shall,
(i) if the Stock Purchase Date has occurred, deliver the
shares of Common Stock issuable in respect of the Purchase
Contracts forming a part of the Units evidenced by such
Certificate,
(ii) in the case of Normal Units, if a Termination Event
shall have occurred prior to the Stock Purchase Date, transfer
the Debentures or the appropriate Treasury Consideration, as
applicable, relating to such Normal Units, or
(iii) in the case of Stripped Units, if a Termination
Event shall have occurred prior to the Stock Purchase Date,
transfer the Treasury Securities relating to such Stripped
Units, in each case subject to the applicable conditions and
in accordance with the applicable provisions of Article Five.
SECTION 3.6 BOOK-ENTRY INTERESTS.
The Certificates, on original issuance, will be issued in the
form of one or more, fully registered Global Certificates, to be delivered to
the Depositary by, or on behalf of, the Company. Such Global Certificate shall
initially be registered on the books and records of the Company in the name of
Cede & Co., the nominee of the Depositary, and no Beneficial Owner will receive
a definitive Certificate representing such Beneficial Owner's interest in such
Global Certificate, except as provided in Section 3.9. The Agent shall enter
into an agreement with the Depositary if so requested by the Company. Unless
23
and until definitive, fully registered Certificates have been issued to
Beneficial Owners pursuant to Section 3.9:
(a) the provisions of this Section 3.6 shall be in full force
and effect;
(b) the Company and the Agent shall be entitled to deal with
the Clearing Agency for all purposes of this Agreement (including
receiving approvals, votes or consents hereunder) as the Holder of the
Units and the sole holder of the Global Certificate(s) and shall have
no obligation to the Beneficial Owners;
(c) to the extent that the provisions of this Section 3.6
conflict with any other provisions of this Agreement, the provisions of
this Section 3.6 shall control; and
(d) the rights of the Beneficial Owners shall be exercised
only through the Clearing Agency and shall be limited to those
established by law and agreements between such Beneficial Owners and
the Clearing Agency and/or the Clearing Agency Participants. The
Clearing Agency will make book-entry transfers among Clearing Agency
Participants.
SECTION 3.7 NOTICES TO HOLDERS.
Whenever a notice or other communication to the Holders is
required to be given under this Agreement, the Company or the Company's agent
shall give such notices and communications to the Holders and, with respect to
any Units registered in the name of a Clearing Agency or the nominee of a
Clearing Agency, the Company or the Company's agent shall, except as set forth
herein, have no obligations to the Beneficial Owners.
SECTION 3.8 APPOINTMENT OF SUCCESSOR CLEARING AGENCY.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Units, the Company may, in its sole
discretion, appoint a successor Clearing Agency with respect to the Units.
SECTION 3.9 DEFINITIVE CERTIFICATES.
If
(i) a Clearing Agency elects to discontinue its services
as securities depositary with respect to the Units and a
successor Clearing Agency is not appointed within 90 days
after such discontinuance pursuant to Section 3.8,
24
(ii) the Company elects to terminate the book-entry
system arrangements through the Clearing Agency with respect
to the Units, or
(iii) there shall have occurred and be continuing a
default by the Company in respect of its obligations under one
or more Purchase Contracts,
then upon surrender of the Global Certificates representing
the Book-Entry Interests with respect to the Units by the
Clearing Agency, accompanied by registration instructions, the
Company shall cause definitive Certificates to be delivered to
Beneficial Owners in accordance with the instructions of the
Clearing Agency. The Company shall not be liable for any delay
in delivery of such instructions and may conclusively rely on
and shall be protected in relying on, such instructions.
SECTION 3.10 MUTILATED, DESTROYED, LOST AND STOLEN
CERTIFICATES.
(a) If any mutilated Certificate is surrendered to the Agent,
the Company shall execute and deliver to the Agent, and the Agent shall
authenticate, execute on behalf of the Holder, and deliver in exchange
therefor, a new Certificate at the cost of the Holder, evidencing the
same number of Normal Units or Stripped Units, as the case may be, and
bearing a Certificate number not contemporaneously outstanding.
(b) If there shall be delivered to the Company and the Agent
(i) evidence to their satisfaction of the destruction, loss or theft of
any Certificate, and (ii) such security or indemnity at the cost of the
Holder as may be required by them to hold each of them and any agent of
any of them harmless, then, in the absence of notice to the Company or
to a Responsible Officer of the Agent that such Certificate has been
acquired by a bona fide purchaser, the Company shall execute and
deliver to the Agent, and the Agent shall authenticate, execute on
behalf of the Holder, and deliver to the Holder, in lieu of any such
destroyed, lost or stolen Certificate, a new Certificate, evidencing
the same number of Normal Units or Stripped Units, as the case may be,
and bearing a Certificate number not contemporaneously outstanding.
(c) Notwithstanding the foregoing, the Company shall not be
obligated to execute and deliver to the Agent, and the Agent shall not
be obligated to authenticate, execute on behalf of the Holder, and
deliver to the Holder, a Certificate on or after the Business Day
immediately preceding the earlier of the Stock Purchase Date or the
Termination Date. In lieu of delivery of a new Certificate, upon
satisfaction of the applicable conditions specified above in this
Section and receipt of appropriate registration or transfer
instructions from such Holder, the Agent shall (i) if the Stock
Purchase Date has occurred, deliver the shares of Common Stock issuable
in respect of the Purchase Contracts forming a
25
part of the Units evidenced by such Certificate, or (ii) if a
Termination Event shall have occurred prior to the Stock Purchase Date,
transfer the Debentures, the appropriate Treasury Consideration or the
Treasury Securities, as the case may be, evidenced thereby, in each
case subject to the applicable conditions and in accordance with the
applicable provisions of Article Five.
(d) Upon the issuance of any new Certificate under this
Section, the Company and the Agent may require the payment by the
Holder of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Agent) connected therewith.
(e) Every new Certificate issued pursuant to this Section in
lieu of any destroyed, lost or stolen Certificate shall constitute an
original additional contractual obligation of the Company and of the
Holder in respect of the Unit evidenced thereby, whether or not the
destroyed, lost or stolen Certificate (and the Units evidenced thereby)
shall be at any time enforceable by anyone, and shall be entitled to
all the benefits and be subject to all the obligations of this
Agreement equally and proportionately with any and all other
Certificates delivered hereunder.
(f) The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with
respect to the replacement or payment of mutilated, destroyed, lost or
stolen Certificates.
SECTION 3.11 PERSONS DEEMED OWNERS.
(a) Prior to due presentment of a Certificate for registration
of transfer, the Company and the Agent, and any agent of the Company or
the Agent, may treat the Person in whose name such Certificate is
registered as the owner of the Units evidenced thereby, for the purpose
of receiving interest payments on the Debentures, receiving payment of
Contract Fee Payments, performance of the Purchase Contracts and for
all other purposes whatsoever, whether or not any such payments shall
be overdue and notwithstanding any notice to the contrary, and neither
the Company nor the Agent, nor any agent of the Company or the Agent,
shall be affected by notice to the contrary.
(b) Notwithstanding the foregoing, with respect to any Global
Certificate, nothing herein shall prevent the Company, the Agent or any
agent of the Company or the Agent, from giving effect to any written
certification, proxy or other authorization furnished by any Clearing
Agency (or its nominee), as a Holder, with respect to such Global
Certificate or impair, as between such Clearing Agency and owners of
beneficial interests in such Global Certificate, the operation of
customary practices governing the exercise of rights of such Clearing
Agency (or its nominee) as Holder of such Global Certificate.
26
SECTION 3.12 CANCELLATION.
(a) All Certificates surrendered (i) for delivery of shares of
Common Stock on or after any Settlement Date; (ii) upon the transfer of
Debentures, the appropriate Treasury Consideration or Treasury
Securities, as the case may be, after the occurrence of a Termination
Event or pursuant to an Early Settlement or Merger Early Settlement, or
a Collateral Substitution or an establishment or re-establishment of a
Normal Unit; or (iii) upon the registration of a transfer or exchange
of a Unit shall, if surrendered to any Person other than the Agent, be
delivered to the Agent and, if not already cancelled, shall be promptly
cancelled by it. The Company may at any time deliver to the Agent for
cancellation any Certificates previously authenticated, executed and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Certificates so delivered shall, upon Issuer Order,
be promptly cancelled by the Agent. No Certificates shall be
authenticated, executed on behalf of the Holder and delivered in lieu
of or in exchange for any Certificates cancelled as provided in this
Section, except as expressly permitted by this Agreement. All cancelled
Certificates held by the Agent shall be disposed of by the Agent in
accordance with its then customary procedures.
(b) If the Company or any Affiliate of the Company shall
acquire any Certificate, such acquisition shall not operate as a
cancellation of such Certificate unless and until such Certificate is
delivered to the Agent cancelled or for cancellation.
SECTION 3.13 ESTABLISHMENT OF STRIPPED UNITS.
(a) A Holder may separate the Pledged Debentures or Pledged
Treasury Consideration, as applicable, from the related Purchase
Contracts in respect of the Normal Units held by such Holder by
substituting for such Pledged Debentures or Pledged Treasury
Consideration, as the case may be, Treasury Securities that will pay at
maturity an amount equal to the aggregate Stated Amount of such Normal
Units (a "Collateral Substitution"), at any time from and after the
date of this Agreement and on or prior to the second Business Day
immediately preceding the Stock Purchase Date, by (i) depositing with
the Collateral Agent Treasury Securities having an aggregate principal
amount equal to the aggregate Stated Amount of such Normal Units, and
(ii) transferring the related Normal Units to the Agent accompanied by
a notice to the Agent, substantially in the form of Exhibit D hereto,
stating that the Holder has transferred the relevant amount of Treasury
Securities to the Collateral Agent and requesting that the Agent
instruct the Collateral Agent to release the Pledged Debentures or
Pledged Treasury Consideration, as the case may be, underlying such
Normal Units, whereupon the Agent shall promptly give such instruction
to the Collateral Agent, substantially in the form of Exhibit C hereto.
Notwithstanding the foregoing, a Holder may not separate the Pledged
27
Debentures or Pledged Treasury Consideration, as the case may be, from
the related Purchase Contracts in respect of the Normal Units held by
such Holder during the periods beginning on the fourth Business Day
prior to the Remarketing Date or any Subsequent Remarketing Date, as
the case may be, and ending on the third business day following such
dates. Upon receipt of the Treasury Securities described in clause (i)
above and the instruction described in clause (ii) above, in accordance
with the terms of the Pledge Agreement, the Collateral Agent will
release to the Agent, on behalf of the Holder, such Pledged Debentures
or Pledged Treasury Consideration, as the case may be, from the Pledge,
free and clear of the Company's security interest therein, and upon
receipt thereof the Agent shall promptly:
(x) cancel the related Normal Units;
(y) transfer the Pledged Debentures or Pledged Treasury
Consideration, as the case may be, to the Holder; and
(z) authenticate, execute on behalf of such Holder and
deliver a Stripped Units Certificate executed by the Company
in accordance with Section 3.3 evidencing the same number of
Purchase Contracts as were evidenced by the cancelled Normal
Units.
(b) Holders who elect to separate the Pledged Debentures or
Pledged Treasury Consideration, as the case may be, from the related
Purchase Contract and to substitute Treasury Securities for such
Pledged Debentures or Pledged Treasury Consideration, as the case may
be, shall be responsible for any fees or expenses payable to the
Collateral Agent for its services as Collateral Agent in respect of the
substitution, and the Company shall not be responsible for any such
fees or expenses.
(c) Holders may make Collateral Substitutions (i) if Treasury
Securities are being substituted for Pledged Debentures, only in
integral multiples of 20 Normal Units, or (ii) if the Collateral
Substitutions occur after the Remarketing Date or any Subsequent
Remarketing Date, as the case may be, only in integral multiples of
Normal Units such that the Treasury Securities to be deposited and the
Treasury Consideration to be released are in integral multiples of
$1,000.
(d) In the event a Holder making a Collateral Substitution
pursuant to this Section 3.13 fails to effect a book-entry transfer of
the Normal Units or fails to deliver a Normal Units Certificate to the
Agent after depositing Treasury Securities with the Collateral Agent,
the Pledged Debentures or Pledged Treasury Consideration, as the case
may be, constituting a part of such Normal Units, and any distributions
on such Pledged Debentures or Pledged Treasury Consideration, as the
case may be, shall be held in the name of the Agent or its nominee in
trust for the benefit of such Holder, until such Normal Units are so
transferred or the
28
Normal Units Certificate is so delivered, as the case may be, or, with
respect to a Normal Units Certificate, such Holder provides evidence
satisfactory to the Company and the Agent that such Normal Units
Certificate has been destroyed, lost or stolen, together with any
indemnity that may be required by the Agent and the Company.
(e) Except as described in this Section 3.13, for so long as
the Purchase Contract underlying a Normal Unit remains in effect, such
Normal Unit shall not be separable into its constituent parts, and the
rights and obligations of the Holder of such Normal Unit in respect of
the Debenture or the appropriate Treasury Consideration, as the case
may be, and the Purchase Contract comprising such Normal Unit may be
acquired, and may be transferred and exchanged, only as a Normal Unit.
SECTION 3.14 REESTABLISHMENT OF NORMAL UNITS.
(a) A Holder of Stripped Units may reestablish Normal Units at
any time from and after the date of this Agreement and on or prior to
the second Business Day immediately preceding the Stock Purchase Date,
by (i) depositing with the Collateral Agent the Debentures or the
appropriate Treasury Consideration (identified and calculated by
reference to the Treasury Consideration then comprising Normal Units),
as the case may be, then comprising such number of Normal Units as is
equal to the number of such Stripped Units and (ii) transferring such
Stripped Units to the Agent accompanied by a notice to the Agent,
substantially in the form of Exhibit D hereto, stating that the Holder
has transferred the relevant amount of Debentures or the appropriate
Treasury Consideration, as the case may be, to the Collateral Agent and
requesting that the Agent instruct the Collateral Agent to release the
Pledged Treasury Securities underlying such Stripped Unit, whereupon
the Agent shall promptly give such instruction to the Collateral Agent,
substantially in the form of Exhibit C hereto. Notwithstanding the
foregoing, a Holder may not reestablish Normal Units during the periods
beginning on the fourth Business Day prior to the Remarketing Date or
any Subsequent Remarketing Date, as the case may be, and ending on the
third business day following such dates. Upon receipt of the Debentures
or the appropriate Treasury Consideration, as the case may be,
described in clause (i) above and the instruction described in clause
(ii) above, in accordance with the terms of the Pledge Agreement, the
Collateral Agent will release to the Agent, on behalf of the Holder,
such Pledged Treasury Securities from the Pledge, free and clear of the
Company's security interest therein, and upon receipt thereof the Agent
shall promptly:
(x) cancel the related Stripped Units;
(y) transfer the Pledged Treasury Securities to the
Holder; and
29
(z) authenticate, execute on behalf of such Holder and
deliver a Normal Units Certificate executed by the Company in
accordance with Section 3.3 evidencing the same number of
Purchase Contracts as were evidenced by the cancelled Stripped
Units.
(b) Holders of Stripped Units may reestablish Normal Units (i)
only in integral multiples of 20 Stripped Units for 20 Normal Units or
(ii) if the reestablishment occurs after the Remarketing Date or any
Subsequent Remarketing Date, only in integral multiples of Stripped
Units such that the Treasury Consideration to be deposited and the
Treasury Securities to be released are in integral multiples of $1,000.
(c) Except as provided in this Section 3.14, for so long as
the Purchase Contract underlying a Stripped Unit remains in effect,
such Stripped Unit shall not be separable into its constituent parts,
and the rights and obligations of the Holder of such Stripped Unit in
respect of the Treasury Security and Purchase Contract comprising such
Stripped Unit may be acquired, and may be transferred and exchanged,
only as a Stripped Unit.
SECTION 3.15 TRANSFER OF COLLATERAL UPON OCCURRENCE OF
TERMINATION EVENT.
Upon the occurrence of a Termination Event and the transfer to
the Agent of the Debentures, the appropriate Treasury Consideration or the
Treasury Securities, as the case may be, underlying the Normal Units and the
Stripped Units pursuant to the terms of the Pledge Agreement, the Agent shall
request transfer instructions with respect to such Debentures or the appropriate
Treasury Consideration or Treasury Securities, as the case may be, from each
Holder by written request mailed to such Holder at its address as it appears in
the Normal Units Register or the Stripped Units Register, as the case may be.
Upon book-entry transfer of the Normal Units or Stripped Units or delivery of a
Normal Units Certificate or Stripped Units Certificate to the Agent with such
transfer instructions, the Agent shall transfer the Debentures, the appropriate
Treasury Consideration or Treasury Securities, as the case may be, underlying
such Normal Units or Stripped Units, as the case may be, to such Holder by
book-entry transfer, or other appropriate procedures, in accordance with such
instructions. In the event a Holder of Normal Units or Stripped Units fails to
effect such transfer or delivery, the Debentures, the appropriate Treasury
Consideration or Treasury Securities, as the case may be, underlying such Normal
Units or Stripped Units, as the case may be, and any distributions thereon,
shall be held in the name of the Agent or its nominee in trust for the benefit
of such Holder, until such Normal Units or Stripped Units are transferred or the
Normal Units Certificate or Stripped Units Certificate is surrendered or such
Holder provides satisfactory evidence that such Normal Units Certificate or
Stripped Units Certificate has been destroyed, lost or stolen, together with any
indemnity that may be required by the Agent and the Company.
30
SECTION 3.16 NO CONSENT TO ASSUMPTION.
Each Holder of a Unit, by acceptance thereof, shall be deemed
expressly to have withheld any consent to the assumption, under Section 365 of
the Bankruptcy Code or otherwise, of the Purchase Contract by the Company, any
receiver, liquidator or person or entity performing similar functions or its
trustee in the event that the Company becomes the debtor under the Bankruptcy
Code or subject to other similar state or federal law providing for
reorganization or liquidation.
ARTICLE IV
THE DEBENTURES
SECTION 4.1 PAYMENT OF INTEREST; RIGHTS TO INTEREST PAYMENTS
PRESERVED; NOTICE.
(a) A payment on any Debenture or Treasury Consideration, as
the case may be, which is paid on any Payment Date shall, subject to
receipt thereof by the Agent from the Collateral Agent as provided by
the terms of the Pledge Agreement, be paid to the Person in whose name
the Normal Units Certificate (or one or more Predecessor Normal Units
Certificates) of which such Debenture or the appropriate Treasury
Consideration, as the case may be, is a part is registered at the close
of business on the Record Date for such Payment Date.
(b) Each Normal Units Certificate evidencing Debentures
delivered under this Agreement upon registration of transfer of or in
exchange for or in lieu of any other Normal Units Certificate shall
carry the rights to interest accrued and unpaid, which were carried by
the Debentures underlying such other Normal Units Certificate.
(c) In the case of any Normal Unit with respect to which Early
Settlement of the underlying Purchase Contract is effected on an Early
Settlement Date, or with respect to which Merger Early Settlement of
the underlying Purchase Contract is effected on a Merger Early
Settlement Date, or with respect to which a Collateral Substitution is
effected, in each case on a date that is after any Record Date and on
or prior to the next succeeding Payment Date, payments on the Debenture
or the appropriate Treasury Consideration, as the case may be,
underlying such Normal Unit otherwise payable on such Payment Date
shall be payable on such Payment Date notwithstanding such Early
Settlement, Merger Early Settlement or Collateral Substitution, as the
case may be, and such payments shall, subject to receipt thereof by the
Agent, be payable to the Person in whose name the Normal Units
Certificate (or one or more Predecessor Normal Unit Certificates) was
registered at the close of business on such Record Date. Except as
otherwise expressly provided in the immediately preceding sentence, in
the case of any Normal Unit with respect to which Early Settlement or
Merger Early Settlement of the underlying Purchase Contract is
effected, or with respect
31
to which a Collateral Substitution has been effected, payments on the
related Debentures or payments on the appropriate Treasury
Consideration, as the case may be, that would otherwise be payable
after the applicable Settlement Date or after such Collateral
Substitution, as the case may be, shall not be payable hereunder to the
Holder of such Normal Unit; provided, that to the extent that such
Holder continues to hold the separated Debentures that formerly
comprised a part of such Holder's Normal Units, such Holder shall be
entitled to receive any payments on such separated Debentures.
SECTION 4.2 NOTICE AND VOTING.
Under the terms of the Pledge Agreement, the Agent will be
entitled to exercise the voting and any other consensual rights pertaining to
the Pledged Debentures but only to the extent instructed by the Holders as
described below. Upon receipt of notice of any meeting at which holders of
Debentures are entitled to vote or upon any solicitation of consents, waivers or
proxies of holders of Debentures, the Agent shall, as soon as practicable
thereafter, mail to the Holders of Normal Units a notice (a) containing such
information as is contained in the notice or solicitation, (b) stating that each
Holder on the record date set by the Agent therefor (which, to the extent
possible, shall be the same date as the record date for determining the holders
of Debentures entitled to vote) shall be entitled to instruct the Agent as to
the exercise of the voting rights pertaining to the Pledged Debentures
underlying their Normal Units and (c) stating the manner in which such
instructions may be given. Upon the written request of the Holders of Normal
Units on such record date, the Agent shall endeavor insofar as practicable to
vote or cause to be voted, in accordance with the instructions set forth in such
requests, the maximum number of Pledged Debentures as to which any particular
voting instructions are received. In the absence of specific instructions from
the Holder of a Normal Unit, the Agent shall abstain from voting the Pledged
Debenture underlying such Normal Unit. The Company hereby agrees, if applicable,
to solicit Holders of Normal Units to timely instruct the Agent in order to
enable the Agent to vote such Pledged Debentures.
ARTICLE V
THE PURCHASE CONTRACTS; THE REMARKETING
SECTION 5.1 PURCHASE OF SHARES OF COMMON STOCK.
(a) Each Purchase Contract shall, unless an Early Settlement
has occurred in accordance with Section 5.9, or a Merger Early
Settlement has occurred in accordance with Section 5.10, obligate the
Holder of the related Unit to purchase, and the Company to sell, on the
Stock Purchase Date at a price equal to $50 (the "Purchase Price"), a
number of newly issued shares of Common Stock equal to the Settlement
Rate unless, on or prior to the Stock Purchase Date, there shall have
occurred a Termination Event with respect to the Unit of which such
Purchase Contract is a part. The "Settlement Rate" is equal to,
32
(i) if the Applicable Market Value (as defined below) is
greater than $43.92 (the "Threshold Appreciation Price"), 1.14
shares of Common Stock per Purchase Contract,
(ii) if the Applicable Market Value is less than the
Threshold Appreciation Price, but is greater than $36.00, the
number of shares of Common Stock per Purchase Contract equal
to the Stated Amount of the related Unit divided by the
Applicable Market Value, and
(iii) if the Applicable Market Value is equal to or less
than $36.00, 1.39 shares of Common Stock per Purchase
Contract,
in each case subject to adjustment as provided in Section 5.6 (and in
each case rounded upward or downward to the nearest 1/10,000th of a
share).
(b) No fractional shares of Common Stock will be issued by the
Company with respect to the payment of Contract Fee Payments on the
Stock Purchase Date. In lieu of fractional shares otherwise issuable
with respect to such payment of Contract Fee Payments, the Holder will
be entitled to receive an amount in cash as provided in Section 5.12.
(c) The "Applicable Market Value" means the average of the
Closing Price per share of Common Stock on each of the 20 consecutive
Trading Days ending on the third Trading Day immediately preceding the
Stock Purchase Date. The "Closing Price" of the Common Stock on any
date of determination means the closing sale price (or, if no closing
price is reported, the last reported sale price) of the Common Stock on
the New York Stock Exchange (the "NYSE") on such date or, if the Common
Stock is not listed for trading on the NYSE on any such date, as
reported in the composite transactions for the principal United States
securities exchange on which the Common Stock is so listed, or if the
Common Stock is not so listed on a United States national or regional
securities exchange, as reported by The Nasdaq Stock Market, or, if the
Common Stock is not so reported, the last quoted bid price for the
Common Stock in the over-the-counter market as reported by the National
Quotation Bureau or similar organization, or, if such bid price is not
available, the market value of the Common Stock on such date as
determined by a nationally recognized independent investment banking
firm retained for this purpose by the Company. A "Trading Day" means a
day on which the Common Stock (A) is not suspended from trading on any
national or regional securities exchange or association or
over-the-counter market at the close of business and (B) has traded at
least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for
the trading of the Common Stock.
(d) Each Holder of a Unit, by its acceptance thereof,
irrevocably authorizes the Agent to enter into and perform the related
Purchase Contract on its behalf as its attorney-in-fact (including the
execution of Certificates on behalf of
33
such Holder), agrees to be bound by the terms and provisions thereof,
covenants and agrees to perform its obligations under such Purchase
Contracts, and consents to the provisions hereof, irrevocably
authorizes the Agent as its attorney-in-fact to enter into and perform
the Pledge Agreement on its behalf as its attorney-in-fact, and
consents to and agrees to be bound by the Pledge of the Debentures, the
appropriate Treasury Consideration or the Treasury Securities pursuant
to the Pledge Agreement; provided that upon a Termination Event, the
rights of the Holder of such Unit under the Purchase Contract may be
enforced without regard to any other rights or obligations. Each Holder
of a Unit, by its acceptance thereof, further covenants and agrees,
that, to the extent and in the manner provided in Section 5.4 and the
Pledge Agreement, but subject to the terms thereof, payments in respect
of the Debentures, the appropriate Treasury Consideration or the
Treasury Securities to be paid upon settlement of such Holder's
obligations to purchase Common Stock under the Purchase Contract, shall
be paid on the Stock Purchase Date by the Collateral Agent to the
Company in satisfaction of such Holder's obligations under such
Purchase Contract.
(e) Upon registration of transfer of a Certificate, the
transferee shall be bound (without the necessity of any other action on
the part of such transferee) under the terms of this Agreement, the
Purchase Contracts underlying such Certificate and the Pledge
Agreement, and the transferor shall be released from the obligations
under this Agreement, the Purchase Contracts underlying the
Certificates so transferred and the Pledge Agreement. The Company
covenants and agrees, and each Holder of a Certificate, by its
acceptance thereof, likewise covenants and agrees, to be bound by the
provisions of this paragraph.
SECTION 5.2 CONTRACT FEE PAYMENTS.
(a) Subject to Section 5.3 herein, the Company shall pay, on
each Payment Date, the Contract Fee Payments, if any, payable in
respect of each Purchase Contract to the Person in whose name a
Certificate (or one or more Predecessor Certificates) is registered at
the close of business on the Record Date next preceding such Payment
Date in such coin or currency of the United States as at the time of
payment shall be legal tender for payments. The Contract Fee Payments,
if any, will be payable at the New York Office maintained for that
purpose or, at the option of the Company, by check mailed to the
address of the Person entitled thereto at such Person's address as it
appears on the Register or by wire transfer to the account designated
by a prior written notice by such Person.
(b) Upon the occurrence of a Termination Event, the Company's
obligation to pay Contract Fee Payments (including any accrued Deferred
Contract Fee Payments), if any, shall cease.
(c) Each Certificate delivered under this Agreement upon
registration of transfer of or in exchange for or in lieu of (including
as a result of a Collateral
34
Substitution or the re-establishment of a Normal Unit) any other
Certificate shall carry the rights to Contract Fee Payments, if any,
accrued and unpaid, and to accrue Contract Fee Payments, if any, which
were carried by the Purchase Contracts underlying such other
Certificates.
(d) Subject to Sections 5.9 and 5.10, in the case of any Unit
with respect to which Early Settlement or Merger Early Settlement of
the underlying Purchase Contract is effected on an Early Settlement
Date or a Merger Early Settlement Date, respectively, or with respect
to which a Collateral Substitution or an establishment or
re-establishment of a Normal Unit pursuant to Section 3.14 is effected,
in each case on a date that is after any Record Date and on or prior to
the next succeeding Payment Date, Contract Fee Payments on the Purchase
Contract underlying such Unit otherwise payable on such Payment Date
shall be payable on such Payment Date notwithstanding such Early
Settlement, Merger Early Settlement, Collateral Substitution or
establishment or re-establishment of Normal Units, and such Contract
Fee Payments shall be paid to the Person in whose name the Certificate
evidencing such Unit (or one or more Predecessor Certificates) is
registered at the close of business on such Record Date. Except as
otherwise expressly provided in the immediately preceding sentence, in
the case of any Unit with respect to which Early Settlement or Merger
Early Settlement of the underlying Purchase Contract is effected on an
Early Settlement Date or a Merger Early Settlement Date, as the case
may be, or with respect to which a Collateral Substitution or an
establishment or re-establishment of a Normal Unit has been effected,
Contract Fee Payments, if any, that would otherwise be payable after
the Early Settlement Date, or Merger Early Settlement Date, Collateral
Substitution or such establishment or re-establishment with respect to
such Purchase Contract shall not be payable.
SECTION 5.3 DEFERRAL OF CONTRACT FEE PAYMENTS.
(a) The Company shall have the right, at any time prior to the
Stock Purchase Date, to defer the payment of any or all of the Contract
Fee Payments otherwise payable on any Payment Date, but only if the
Company shall give the Holders and the Agent written notice of its
election to defer each such deferred Contract Fee Payment (specifying
the amount to be deferred) at least ten Business Days prior to the
earlier of (i) the next succeeding Payment Date or (ii) the date the
Company is required to give notice of the Record Date or Payment Date
with respect to payment of such Contract Fee Payments to the NYSE or
other applicable self-regulatory organization or to Holders of the
Units, but in any event not less than one Business Day prior to such
Record Date. Any Contract Fee Payments so deferred shall, to the extent
permitted by law, bear additional Contract Fee Payments thereon at the
rate of 6.00% per year (computed on the basis of a 360-day year of
twelve 30-day months), compounding on each succeeding Payment Date,
until paid in full (such deferred installments of Contract Fee
Payments, if any, together with the additional Contract Fee
35
Payments accrued thereon, being referred to herein as the "Deferred
Contract Fee Payments"). Deferred Contract Fee Payments, if any, shall
be due on the next succeeding Payment Date except to the extent that
payment is deferred pursuant to this Section 5.3. No Contract Fee
Payments may be deferred to a date that is after the Purchase Contract
Settlement Date and no such deferral period may end other than on a
Payment Date. If the Purchase Contracts are terminated upon the
occurrence of a Termination Event, the Holder's right to receive
Contract Fee Payments, if any, and Deferred Contract Fee Payments, will
terminate.
(b) In the event that the Company elects to defer the payment
of Contract Fee Payments on the Purchase Contracts until a Payment Date
prior to the Stock Purchase Date, then all Deferred Contract Fee
Payments, if any, shall be payable to the registered Holders as of the
close of business on the Record Date immediately preceding such Payment
Date.
(c) In the event that the Company elects to defer the payment
of Contract Fee Payments on the Purchase Contracts until the Stock
Purchase Date, each Holder will receive on the Stock Purchase Date in
lieu of a cash payment a number of shares of Common Stock (in addition
to a number of shares of Common Stock equal to the Settlement Rate)
equal to (A) the aggregate amount of Deferred Contract Fee Payments
payable to such Holder (net of any required tax withholding on such
Deferred Contract Fee Payment, which shall be remitted to the
appropriate taxing jurisdiction) divided by (B) the Applicable Market
Value.
(d) No fractional shares of Common Stock will be issued by the
Company with respect to the payment of Deferred Contract Fee Payments
on the Stock Purchase Date. In lieu of fractional shares otherwise
issuable with respect to such payment of Deferred Contract Fee
Payments, the Holder will be entitled to receive an amount in cash as
provided in Section 5.12.
(e) In the event the Company exercises its option to defer the
payment of Contract Fee Payments then, until the Deferred Contract Fee
Payments have been paid, the Company shall not declare or pay dividends
on, make distributions with respect to, or redeem, purchase or acquire,
or make a liquidation payment with respect to, any of the Company's
Capital Stock other than:
(i) purchases, redemptions or acquisitions of shares of
Capital Stock of the Company in connection with any employment
contract, benefit plan or other similar arrangement with or
for the benefit of employees, officers or directors or a stock
purchase or dividend reinvestment plan, or the satisfaction by
the Company of its obligations pursuant to any contract or
security outstanding on the date the Company exercises its
right to defer the Contract Fee Payments;
36
(ii) as a result of a reclassification of the Company's
Capital Stock or the exchange or conversion of one class or
series of the Company's Capital Stock for another class or
series of the Company's Capital Stock;
(iii) the purchase of fractional interests of the
Company's Capital Stock pursuant to the conversion or exchange
provisions of such Capital Stock or the security being
converted or exchanged;
(iv) dividends or distributions in Capital Stock (or
rights to acquire Capital Stock) or repurchases, acquisitions
or redemptions of Capital Stock in exchange for or out of the
net cash proceeds of the sale of the Company's Capital Stock
(or securities convertible into or exchangeable for shares of
the Company's Capital Stock); or
(v) redemptions, exchanges or repurchases of any rights
outstanding under a shareholder rights plan or the declaration
or payment thereunder of a dividend or distribution of or with
respect to rights in the future.
SECTION 5.4 PAYMENT OF PURCHASE PRICE; REMARKETING.
(a) Unless a Termination Event has occurred or a Holder of a
Unit has settled the underlying Purchase Contract through an Early
Settlement pursuant to Section 5.9 or a Merger Early Settlement
pursuant to Section 5.10, the settlement of the Purchase Contract
underlying a Unit will be made in accordance with this Section 5.4.
(b) The Company shall engage a nationally recognized
investment bank (the "Remarketing Agent") pursuant to a Remarketing
Agreement to be mutually agreed on by the Company, the Agent and the
Remarketing Agent, but providing for remarketing procedures
substantially as set forth below to sell the Debentures of Holders of
Normal Units, other than Holders that have elected not to participate
in the remarketing pursuant to clause (iv) below, and holders of
Separate Debentures that have elected to participate in the
remarketing. On the seventh day prior to August 15, 2004, the Company
shall give Holders of Normal Units and holders of Separate Debentures
notice of the remarketing in a daily newspaper in the English language
of general circulation in The City of New York (which shall be The Wall
Street Journal, if such newspaper is then so published) including the
specific U.S. Treasury security or securities (including the CUSIP
number and/or the principal terms of such Treasury security or
securities) described in clause (iv) below, that must be delivered by
Holders of Normal Units that elect not to participate in the
remarketing pursuant to clause (iv) below no later than 10:00 a.m. on
the fourth Business Day preceding the Remarketing Date. The Agent shall
notify, by 10:00 a.m., New York City time, on the third Business Day
preceding the Remarketing Date, the Remarketing
37
Agent and the Collateral Agent of the aggregate number of Debentures of
Normal Unit Holders to be remarketed. On the third Business Day
preceding the Remarketing Date, no later than by 10:00 a.m. New York
City time, pursuant to the terms of the Pledge Agreement, the Custodial
Agent will notify the Remarketing Agent of the aggregate number of
Separate Debentures to be remarketed. On the Business Day immediately
preceding the Remarketing Date, the Collateral Agent and the Custodial
Agent, pursuant to the terms of the Pledge Agreement, will deliver for
remarketing to the Remarketing Agent all Debentures to be remarketed.
Upon receipt of such notice from the Agent and the Custodial Agent and
such Debentures from the Collateral Agent and the Custodial Agent, the
Remarketing Agent will, on the third Business Day following the
Remarketing Date, use its reasonable best efforts to sell such
Debentures on such date at a price equal to 100.5% of the Remarketing
Value. The Remarketing Agent will use the proceeds from a successful
remarketing to purchase the appropriate U.S. Treasury securities (the
"Agent-purchased Treasury Consideration") with the CUSIP numbers, if
any, selected by the Remarketing Agent, described in clauses (i)(1) and
(ii)(1) of the definition of Remarketing Value related to the
Debentures of Holders of Normal Units that were remarketed. On or prior
to the third Business Day following the Remarketing Date, the
Remarketing Agent shall deliver such Agent-purchased Treasury
Consideration to the Agent, which shall thereupon deliver such
Agent-purchased Treasury Consideration to the Collateral Agent. The
Collateral Agent, for the benefit of the Company, will thereupon apply
such Agent-purchased Treasury Consideration, in accordance with the
Pledge Agreement, to secure such Holders' obligations under the
Purchase Contracts. The Remarketing Agent will deduct as a remarketing
fee an amount not exceeding 25 basis points (.25%) of the total
proceeds from the remarketing (the "Remarketing Fee"). The Remarketing
Agent will remit (1) the portion of the proceeds from the remarketing
attributable to the Separate Debentures to the holders of Separate
Debentures that were remarketed and (2) the remaining portion of the
proceeds, less those proceeds used to purchase the Agent-purchased
Treasury Consideration, to the Agent for the benefit of the Holders of
the Normal Units that were remarketed, all determined on a pro rata
basis, in each case, on or prior to the third Business Day following
the Remarketing Date. Holders whose Debentures are so remarketed will
not otherwise be responsible for the payment of any Remarketing Fee in
connection therewith.
(ii) If, in spite of using its commercially reasonable
best efforts, the Remarketing Agent cannot remarket the
Debentures included in the remarketing at a price equal to at
least 100.5% of the Remarketing Value, the remarketing will be
deemed to have failed (a "Failed Remarketing"). If a Failed
Remarketing occurs, within three Business Days following the
Remarketing Date, the Remarketing Agent shall return any
Debentures delivered to it to the Collateral Agent and the
Custodial Agent, as applicable. The Remarketing Agent may make
one or more attempts to remarket the Debentures (each a
"Subsequent Remarketing")
38
in accordance with the procedures set forth in this Section
5.4(b) and the Remarketing Agreement, provided that (i) the
notice of any Subsequent Remarketing cannot be given until the
Failed Remarketing notice (referred to below) has been
published in respect of any immediately preceding Failed
Remarketing and (ii) the settlement date in respect of any
Subsequent Remarketing must fall no later than on the Business
Day immediately preceding the Stock Purchase Date. If by 4:00
p.m., New York City time, on the Business Day immediately
preceding the Stock Purchase Date, the Remarketing Agent, in
spite of using its commercially reasonable best efforts, has
failed to remarket the Debentures at 100.5% of the Remarketing
Value in accordance with the terms of the Pledge Agreement,
the "Last Failed Remarketing" will be deemed to have occurred.
In this case, within three Business Days following the date of
the Last Failed Remarketing, the Remarketing Agent shall
return any Debentures delivered to it to the Collateral Agent.
The Collateral Agent, for the benefit of the Company, may
exercise its rights as a secured party with respect to such
Debentures, including those actions specified in (b) (iii)
below; provided, that if upon the Last Failed Remarketing, the
Collateral Agent exercises such rights for the benefit of the
Company with respect to such Debentures, any accumulated and
unpaid interest on such Debentures will become payable by the
Company to the Agent for payment to the Holders of the Normal
Units to which such Debentures relate. Such payment will be
made by the Company on or prior to 11:00 a.m., New York City
time, on the Stock Purchase Date in lawful money of the United
States by certified or cashier's check or wire transfer in
immediately available funds payable to or upon the order of
the Agent. The Company will cause a notice of any Failed
Remarketing and of the Last Failed Remarketing to be published
on the second Business Day following the Remarketing Date, any
Subsequent Remarketing Date and the date of the Last Failed
Remarketing, as the case may be, in a daily newspaper in the
English language of general circulation in The City of New
York, which shall be The Wall Street Journal, if such
newspaper is then so published.
(iii) With respect to any Debentures which constitute part
of Normal Units which are subject to the Last Failed
Remarketing, the Collateral Agent for the benefit of the
Company reserves all of its rights as a secured party with
respect thereto and, subject to applicable law and Section 5.4
(e) below, may, among other things, (A) retain such Debentures
in full satisfaction of the Holders' obligations under the
Purchase Contracts or (B) sell such Debentures in one or more
public or private sales.
(iv) A Holder of Normal Units may elect not to
participate in the remarketing and retain the Debentures
underlying such
Units by
39
notifying the Agent of such election and delivering the
specific U.S. Treasury security or securities (including the
CUSIP number and/or the principal terms of such security or
securities) identified by the Agent (as having been based
solely on the identification that the Remarketing Agent shall
have advised the Agent) that constitute the U.S. Treasury
securities described in clauses (i) and (ii) of the definition
of Remarketing Value relating to the retained Debentures (as
if only such Debentures were being remarketed) (the "Opt-out
Treasury Consideration") to the Agent not later than 10:00
a.m. on the fourth Business Day prior to the Remarketing Date
(or, in the case of a Failed Remarketing, not later than 10:00
a.m. on the Business Day immediately prior to the Subsequent
Remarketing Date). Upon receipt thereof by the Agent, the
Agent shall deliver such Opt-out Treasury Consideration to the
Collateral Agent, which will, for the benefit of the Company,
thereupon apply such Opt-out Treasury Consideration to secure
such Holder's obligations under the Purchase Contracts. On the
first Business Day immediately preceding the Remarketing Date,
the Collateral Agent, pursuant to the terms of the Pledge
Agreement, will deliver the Pledged Debentures of such Holder
to the Agent. Within three Business Days following the
Remarketing Date, (A) if the remarketing was successful, the
Agent shall distribute such Debentures to the Holders thereof,
and (B) if there was a Failed Remarketing on such date, the
Agent will deliver such Debentures to the Collateral Agent,
which will, for the benefit of the Company, thereupon apply
such Debentures to secure such Holders' obligations under the
Purchase Contract and return the Opt-out Treasury
Consideration delivered by such Holders to such Holders. A
Holder that does not so deliver the Opt-out Treasury
Consideration pursuant to this clause (iv) shall be deemed to
have elected to participate in the remarketing.
(c) Upon the maturity of the Pledged Treasury Securities
underlying the Stripped Units and the Pledged Treasury Consideration
underlying the Normal Units, on the Stock Purchase Date, the Collateral
Agent shall remit to the Company an amount equal to the aggregate
Purchase Price applicable to such Units, as payment for the Common
Stock issuable upon settlement thereof without needing to receive any
instructions from the Holders of such Units. In the event the payments
in respect of the Pledged Treasury Securities or the Pledged Treasury
Consideration underlying a Unit is in excess of the Purchase Price of
the Purchase Contract being settled thereby, the Collateral Agent will
distribute such excess to the Agent for the benefit of the Holder of
such Unit when received.
(d) Any distribution to Holders of excess funds and interest
described in Section 5.4 (b) and (c) above shall be payable at the
office of the Agent in The City of New York maintained for that purpose
or, at the option of the Holder or the holder of Separate Debentures,
as applicable, by check mailed to the address of the Person entitled
thereto at such address as it appears on the Register or by
40
wire transfer to an account specified by the Holder or the holder of
Separate Debentures, as applicable.
(e) The obligations of each Holder to pay the Purchase Price
are non-recourse obligations and except to the extent paid by Early
Settlement or Merger Early Settlement, are payable solely out of the
proceeds of any Collateral pledged to secure the obligations of the
Holders and in no event will Holders be liable for any deficiency
between such payments and the Purchase Price.
(f) Notwithstanding anything to the contrary herein, the
Company shall not be obligated to issue any Common Stock in respect of
a Purchase Contract or deliver any certificates therefor to the Holder
of the related Unit unless the Company shall have received payment in
full of the aggregate Purchase Price for the shares of Common Stock to
be purchased thereunder by such Holder in the manner herein set forth.
SECTION 5.5 ISSUANCE OF SHARES OF COMMON STOCK.
Unless a Termination Event shall have occurred on or prior to
the Stock Purchase Date or an Early Settlement or a Merger Early Settlement
shall have occurred, on the Stock Purchase Date, upon its receipt of payment in
full of the Purchase Price for the shares of Common Stock purchased by the
Holders pursuant to the foregoing provisions of this Article and subject to
Section 5.6(b), the Company shall issue and deposit with the Agent, for the
benefit of the Holders of the Outstanding Units, one or more certificates
representing the newly issued shares of Common Stock, registered in the name of
the Agent (or its nominee) as custodian for the Holders (such certificates for
shares of Common Stock, together with any dividends or distributions for which a
record date and payment date for such dividend or distribution has occurred
after the Stock Purchase Date, being hereinafter referred to as the "Purchase
Contract Settlement Fund"), to which the Holders are entitled hereunder. Subject
to the foregoing, upon surrender of a Certificate to the Agent on or after the
Stock Purchase Date, together with settlement instructions thereon duly
completed and executed, the Holder of such Certificate shall be entitled to
receive in exchange therefor a certificate representing that number of whole
shares of Common Stock which such Holder is entitled to receive pursuant to the
provisions of this Article V (after taking into account all Units then held by
such Holder) together with cash in lieu of fractional shares as provided in
Section 5.12 and any dividends or distributions with respect to such shares
constituting part of the Purchase Contract Settlement Fund, but without any
interest thereon, and the Certificate so surrendered shall forthwith be
cancelled. Such shares shall be registered in the name of the Holder or the
Holder's designee as specified in the settlement instructions provided by the
Holder to the Agent. If any shares of Common Stock issued in respect of a
Purchase Contract are to be registered to a Person other than the Person in
whose name the Certificate evidencing such Purchase Contract is registered, no
such registration shall be made unless the Person requesting such registration
has paid any transfer and other taxes required by reason of such registration in
a name other than that of the registered
41
Holder of such Certificate or has established to the satisfaction of the Company
that such tax either has been paid or is not payable.
SECTION 5.6 ADJUSTMENT OF SETTLEMENT RATE.
(a) Adjustments for Dividends, Distributions, Stock Splits,
Etc.
(1) Stock Dividends. In case the Company shall pay or make
---------------
a dividend or other distribution on the Common Stock in Common
Stock, the Settlement Rate, as in effect at the opening of
business on the day following the date fixed for the
determination of stockholders entitled to receive such
dividend or other distribution shall be increased by dividing
such Settlement Rate by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding at
the close of business on the date fixed for such determination
and the denominator shall be the sum of such number of shares
and the total number of shares constituting such dividend or
other distribution, such increase to become effective
immediately after the opening of business on the day following
the date fixed for such determination. For the purposes of
this paragraph (1), the number of shares of Common Stock at
the time outstanding shall not include shares held in the
treasury of the Company but shall include any shares issuable
in respect of any scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company will not pay
any dividend or make any distribution on shares of Common
Stock held in the treasury of the Company.
(2) Stock Purchase Rights. In case the Company shall issue
---------------------
rights, options or warrants to all holders of its Common Stock
(not being available on an equivalent basis to Holders of the
Units upon settlement of the Purchase Contracts underlying
such Units) entitling them, for a period expiring within 45
days after the record date for the determination of
stockholders entitled to receive such rights, options or
warrants, to subscribe for or purchase shares of Common Stock
at a price per share less than the Current Market Price per
share of the Common Stock on the date fixed for the
determination of stockholders entitled to receive such rights,
options or warrants (other than pursuant to a dividend
reinvestment plan), the Settlement Rate in effect at the
opening of business on the day following the date fixed for
such determination shall be increased by dividing such
Settlement Rate by a fraction, the numerator of which shall be
the number of shares of Common Stock outstanding at the close
of business on the date fixed for such determination plus the
number of shares of Common Stock which the aggregate of the
offering price of the total number of shares of Common Stock
so offered for subscription or purchase would purchase at such
Current Market Price and the denominator of which shall be the
number of shares of Common Stock
42
outstanding at the close of business on the date fixed for
such determination plus the number of shares of Common Stock
so offered for subscription or purchase, such increase to
become effective immediately after the opening of business on
the day following the date fixed for such determination. For
the purposes of this paragraph (2), the number of shares of
Common Stock at any time outstanding shall not include shares
held in the treasury of the Company but shall include any
shares issuable in respect of any scrip certificates issued in
lieu of fractions of shares of Common Stock. The Company shall
not issue any such rights, options or warrants in respect of
shares of Common Stock held in the treasury of the Company.
(3) Stock Splits; Reverse Splits. In case outstanding
----------------------------
shares of Common Stock shall be subdivided or split into a
greater number of shares of Common Stock, the Settlement Rate
in effect at the opening of business on the day following the
day upon which such subdivision or split becomes effective
shall be proportionately increased, and, conversely, in case
outstanding shares of Common Stock shall each be combined into
a smaller number of shares of Common Stock, the Settlement
Rate in effect at the opening of business on the day following
the day upon which such combination becomes effective shall be
proportionately reduced, such increase or reduction, as the
case may be, to become effective immediately after the opening
of business on the day following the day upon which such
subdivision, split or combination becomes effective.
(4) Debt or Asset Distributions. In case the Company
---------------------------
shall, by dividend or otherwise, distribute to all holders of
its Common Stock evidences of its indebtedness or assets
(including securities, but excluding any rights or warrants
referred to in paragraph (2) of this Section, any dividend or
distribution paid exclusively in cash and any dividend or
distribution referred to in paragraph (1) of this Section),
the Settlement Rate shall be adjusted so that the same shall
equal the rate determined by dividing the Settlement Rate in
effect immediately prior to the close of business on the date
fixed for the determination of stockholders entitled to
receive such distribution by a fraction, the numerator of
which shall be the Current Market Price per share of the
Common Stock on the date fixed for such determination less the
then fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and
described in a Board Resolution filed with the Agent) of the
portion of the assets or evidences of indebtedness so
distributed applicable to one share of Common Stock and the
denominator of which shall be such Current Market Price per
share of the Common Stock, such adjustment to become effective
immediately prior to the opening of business on the day
following the date fixed for the determination of stockholders
entitled to
43
receive such distribution. In any case in which this paragraph
(4) is applicable, paragraph (2) of this Section shall not be
applicable.
(5) Cash Distributions. In case the Company shall, (i)
------------------
by dividend or otherwise, distribute to all holders of its
Common Stock cash (excluding any cash that is distributed in a
Reorganization Event to which Section 5.6(b) applies or as
part of a distribution referred to in paragraph (4) of this
Section) in an aggregate amount that, combined together with
(ii) the aggregate amount of any other distributions to all
holders of its Common Stock made exclusively in cash within
the 12 months preceding the date of payment of such
distribution and in respect of which no adjustment pursuant to
this paragraph (5) or paragraph (6) of this Section has been
made and (iii) the aggregate of any cash plus the fair market
value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board
Resolution filed with the Agent) of consideration payable in
respect of any tender or exchange offer by the Company or any
of its subsidiaries for all or any portion of the Common Stock
concluded within the 12 months preceding the date of payment
of the distribution described in clause (i) above and in
respect of which no adjustment pursuant to this paragraph (5)
or paragraph (6) of this Section has been made, exceeds 15% of
the product of the Current Market Price per share of the
Common Stock on the date for the determination of holders of
shares of Common Stock entitled to receive such distribution
times the number of shares of Common Stock outstanding on such
date, then, and in each such case, immediately after the close
of business on such date for determination, the Settlement
Rate shall be increased so that the same shall equal the rate
determined by dividing the Settlement Rate in effect
immediately prior to the close of business on the date fixed
for determination of the stockholders entitled to receive such
distribution by a fraction (A) the numerator of which shall be
equal to the Current Market Price per share of the Common
Stock on the date fixed for such determination less an amount
equal to the quotient of (x) the combined amount distributed
or payable in the transactions described in clauses (i), (ii)
and (iii) above and (y) the number of shares of Common Stock
outstanding on such date for determination and (B) the
denominator of which shall be equal to the Current Market
Price per share of the Common Stock on such date for
determination.
(6) Tender Offers. In case (i) a tender or exchange offer
-------------
made by the Company or any subsidiary of the Company for all
or any portion of the Common Stock shall expire and such
tender or exchange offer (as amended upon the expiration
thereof) shall require the payment to stockholders (based on
the acceptance (up to any maximum specified in the terms of
the tender or exchange offer) of Purchased Shares) of an
aggregate consideration having a fair market value (as
determined by the
44
Board of Directors, whose determination shall be conclusive
and described in a Board Resolution filed with the Agent) that
combined together with (ii) the aggregate of the cash plus the
fair market value (as determined by the Board of Directors,
whose determination shall be conclusive and described in a
Board Resolution filed with the Agent), as of the expiration
of such tender or exchange offer, of consideration payable in
respect of any other tender or exchange offer, by the Company
or any subsidiary of the Company for all or any portion of the
Common Stock expiring within the 12 months preceding the
expiration of such tender or exchange offer and in respect of
which no adjustment pursuant to paragraph (5) of this Section
or this paragraph (6) has been made and (iii) the aggregate
amount of any distributions to all holders of the Company's
Common Stock made exclusively in cash within the 12 months
preceding the expiration of such tender or exchange offer and
in respect of which no adjustment pursuant to paragraph (5) of
this Section or this paragraph (6) has been made, exceeds 15%
of the product of the Current Market Price per share of the
Common Stock as of the last time (the "Expiration Time")
tenders could have been made pursuant to such tender or
exchange offer (as it may be amended) times the number of
shares of Common Stock outstanding (including any tendered
shares) on the Expiration Time, then, and in each such case,
immediately prior to the opening of business on the day after
the date of the Expiration Time, the Settlement Rate shall be
adjusted so that the same shall equal the rate determined by
dividing the Settlement Rate immediately prior to the close of
business on the date of the Expiration Time by a fraction (A)
the numerator of which shall be equal to (x) the product of
(I) the Current Market Price per share of the Common Stock on
the date of the Expiration Time and (II) the number of shares
of Common Stock outstanding (including any tendered shares) on
the Expiration Time less (y) the amount of cash plus the fair
market value (determined as aforesaid) of the aggregate
consideration payable to stockholders based on the
transactions described in clauses (i), (ii) and (iii) above
(assuming in the case of clause (i) the acceptance, up to any
maximum specified in the terms of the tender or exchange
offer, of Purchased Shares), and (B) the denominator of which
shall be equal to the product of (x) the Current Market Price
per share of the Common Stock as of the Expiration Time and
(y) the number of shares of Common Stock outstanding
(including any tendered shares) as of the Expiration Time less
the number of all shares validly tendered and not withdrawn as
of the Expiration Time (the shares deemed so accepted, up to
any such maximum, being referred to as the "Purchased
Shares").
(7) Reclassification. The reclassification of Common Stock
----------------
into securities including securities other than Common Stock
(other than any reclassification upon a Reorganization Event
to which Section 5.6(b) applies) shall be deemed to involve
(i) a distribution of such securities
45
other than Common Stock to all holders of Common Stock (and
the effective date of such reclassification shall be deemed to
be "the date fixed for the determination of stockholders
entitled to receive such distribution" and the "date fixed for
such determination" within the meaning of paragraph (4) of
this Section), and (ii) a subdivision, split or combination,
as the case may be, of the number of shares of Common Stock
outstanding immediately prior to such reclassification into
the number of shares of Common Stock outstanding immediately
thereafter (and the effective date of such reclassification
shall be deemed to be "the day upon which such subdivision or
split becomes effective" or "the day upon which such
combination becomes effective," as the case may be, and "the
day upon which such subdivision, split or combination becomes
effective" within the meaning of paragraph (3) of this
Section).
(8) "Current Market Price". The "Current Market Price"
--------------------
per share of Common Stock on any day means the average of the
daily Closing Prices for the five consecutive Trading Days
selected by the Company commencing not more than 30 Trading
Days before, and ending not later than, the earlier of the day
in question and the day before the "ex date" with respect to
the issuance or distribution requiring such computation. For
purposes of this paragraph, the term "ex date," when used with
respect to any issuance or distribution, shall mean the first
date on which the Common Stock trades regular way on such
exchange or in such market without the right to receive such
issuance or distribution.
(9) Calculation of Adjustments. All adjustments to the
--------------------------
Settlement Rate shall be calculated to the nearest 1/10,000th
of a share of Common Stock (or if there is not a nearest
1/10,000th of a share to the next lower 1/10,000th of a
share). No adjustment in the Settlement Rate shall be required
unless such adjustment would require an increase or decrease
of at least one percent therein; provided, that any
adjustments which by reason of this subparagraph are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment. If an adjustment is made
to the Settlement Rate pursuant to paragraph (1), (2), (3),
(4), (5), (6), (7) or (10) of this Section 5.6(a), an
adjustment shall also be made to the Applicable Market Value
solely to determine which of clauses (i), (ii) or (iii) of the
definition of Settlement Rate in Section 5.1(a) will apply on
the Stock Purchase Date. Such adjustment shall be made by
multiplying the Applicable Market Value by a fraction, the
numerator of which shall be the Settlement Rate immediately
after such adjustment pursuant to paragraph (1), (2), (3),
(4), (5), (6), (7) or (10) of this Section 5.6(a) and the
denominator of which shall be the Settlement Rate immediately
before such adjustment; provided, that if such adjustment to
the Settlement Rate is required to be made pursuant to the
occurrence of any of the events contemplated by paragraph (1),
(2), (3), (4), (5), (7) or
46
(10) of this Section 5.6(a) during the period taken into
consideration for determining the Applicable Market Value,
appropriate and customary adjustments shall be made to the
Settlement Rate.
(10) Increase of Settlement Rate. The Company may make
---------------------------
such increases in the Settlement Rate, in addition to those
required by this Section, as it considers to be advisable in
order to avoid or diminish any income tax to any holders of
shares of Common Stock resulting from any dividend or
distribution of stock or issuance of rights or warrants to
purchase or subscribe for stock or from any event treated as
such for income tax purposes or for any other reasons.
(b) Adjustment for Consolidation, Merger or Other
Reorganization Event.
In the event of
(1) any consolidation or merger of the Company with or
into another Person (other than a merger or consolidation in
which the Company is the continuing corporation and in which
the Common Stock outstanding immediately prior to the merger
or consolidation is not exchanged for cash, securities or
other property of the Company or another corporation),
(2) any sale, transfer, lease or conveyance to another
Person of the property of the Company as an entirety or
substantially as an entirety,
(3) any statutory exchange of securities of the Company
with another Person (other than in connection with a merger or
acquisition), or
(4) any liquidation, dissolution or winding up of the
Company other than as a result of or after the occurrence of a
Termination Event (any such event, a "Reorganization Event"),
the Settlement Rate will be adjusted to provide that each Holder of Units will
receive on the Stock Purchase Date with respect to each Purchase Contract
forming a part thereof, the kind and amount of securities, cash and other
property receivable upon such Reorganization Event (without any interest
thereon, and without any right to dividends or distribution thereon which have a
record date that is prior to the Stock Purchase Date) by a Holder of the number
of shares of Common Stock issuable on account of each Purchase Contract if the
Stock Purchase Date had occurred immediately prior to such Reorganization Event
assuming such Holder of Common Stock is not a Person with which the Company
consolidated or into which the Company merged or which merged into the Company
or to which such sale or transfer was made, as the case may be (any such Person,
a "Constituent Person"), or an Affiliate of a Constituent Person to the extent
such Reorganization Event provides for different treatment of Common Stock held
by
47
Affiliates of the Company and non-Affiliates, and such Holder failed to exercise
his rights of election, if any, as to the kind or amount of securities, cash and
other property receivable upon such Reorganization Event (provided that if the
kind or amount of securities, cash and other property receivable upon such
Reorganization Event is not the same for each share of Common Stock held
immediately prior to such Reorganization Event by other than a Constituent
Person or an Affiliate thereof and in respect of which such rights of election
shall not have been exercised ("Non-electing Share"), then for the purpose of
this Section the kind and amount of securities, cash and other property
receivable upon such Reorganization Event by each Non-electing Share shall be
deemed to be the kind and amount so receivable per share by a plurality of the
Non-electing Shares).
In the event of such a Reorganization Event, the Person formed by such
consolidation, merger or exchange or the Person which acquires the assets of the
Company or, in the event of a liquidation or dissolution of the Company, the
Company or a liquidating trust created in connection therewith, shall execute
and deliver to the Agent an agreement supplemental hereto providing that the
Holder of each Outstanding Unit shall have the rights provided by this Section
5.6. Such supplemental agreement shall provide for adjustments which, for events
subsequent to the effective date of such supplemental agreement, shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Section. The above provisions of this Section shall similarly apply to
successive Reorganization Events.
SECTION 5.7 NOTICE OF ADJUSTMENTS AND CERTAIN OTHER EVENTS.
(a) Whenever the Settlement Rate is adjusted as herein provided, the
Company shall:
(i) forthwith compute the Settlement Rate in accordance with
Section 5.6 and prepare and transmit to the Agent an Officers'
Certificate setting forth the Settlement Rate, the method of
calculation thereof in reasonable detail, and the facts requiring such
adjustment and upon which such adjustment is based; and
(ii) within 10 Business Days following the occurrence of an event
that requires an adjustment to the Settlement Rate pursuant to Section
5.6 (or if the Company is not aware of such occurrence, as soon as
practicable after becoming so aware), provide a written notice to the
Holders of the Units of the occurrence of such event and a statement
in reasonable detail setting forth the method by which the adjustment
to the Settlement Rate was determined and setting forth the adjusted
Settlement Rate.
(b) The Agent shall not at any time be under any duty or
responsibility to any Holder of Units to determine whether any facts exist
which may require
48
any adjustment of the Settlement Rate, or with respect to the nature or
extent or calculation of any such adjustment when made, or with respect
to the method employed in making the same. The Agent shall not be
accountable with respect to the validity or value (or the kind or
amount) of any shares of Common Stock, or of any securities or
property, which may at the time be issued or delivered with respect to
any Purchase Contract; and the Agent makes no representation with
respect thereto. The Agent shall not be responsible for any failure of
the Company to issue, transfer or deliver any shares of Common Stock
pursuant to a Purchase Contract or to comply with any of the duties,
responsibilities or covenants of the Company contained in this Article.
SECTION 5.8 TERMINATION EVENT; NOTICE.
The Purchase Contracts and all obligations and rights of the
Company and the Holders thereunder, including the rights and obligations of
Holders to purchase Common Stock, shall immediately and automatically terminate,
without the necessity of any notice or action by any Holder, the Agent or the
Company, if, on or prior to the Stock Purchase Date, a Termination Event shall
have occurred. Upon and after the occurrence of a Termination Event, the Normal
Units shall thereafter represent the right to receive the Debentures or the
appropriate Treasury Consideration, as the case may be, forming a part of such
Normal Units, and the Stripped Units shall thereafter represent the right to
receive the Treasury Securities forming a part of such Stripped Units, in each
case in accordance with the provisions of Section 4.3 of the Pledge Agreement.
Upon the occurrence of a Termination Event, the Company shall promptly but in no
event later than two Business Days thereafter give written notice to the Agent,
the Collateral Agent and to the Holders, at their addresses as they appear in
the Register.
SECTION 5.9 EARLY SETTLEMENT.
(a) Subject to and upon compliance with the provisions of this
Section 5.9, Purchase Contracts underlying Units having an aggregate
Stated Amount equal to $1,000 or an integral multiple thereof may, at
the option of the Holder thereof, be settled early ("Early Settlement")
on or prior to the seventh Business Day immediately preceding the
Remarketing Date or any Subsequent Remarketing Date. In order to
exercise the right to effect Early Settlement with respect to any
Purchase Contracts, the Holder of the Certificate evidencing the
related Units shall deliver such Certificate to the Agent at the
Corporate Trust Office duly endorsed for transfer to the Company or in
blank with the form of Election to Settle Early on the reverse thereof
duly completed and accompanied by payment payable to the Company in
immediately available funds in an amount (the "Early Settlement
Amount") equal to (A) the product of (i) the Stated Amount of such
Units multiplied by (ii) the number of Purchase Contracts with respect
to which the Holder has elected to effect Early Settlement, plus (B) if
such delivery is made with respect to any Purchase Contracts during the
period from the close of business on any Record Date next preceding any
Payment Date to the
49
opening of business on such Payment Date, an amount equal to the
Contract Fee Payments, if any, payable on such Payment Date with
respect to such Purchase Contracts; provided that no payment shall be
required pursuant to clause (B) of this sentence if the Company shall
have elected to defer the Contract Fee Payments which would otherwise
be payable on such Payment Date. Except as provided in the immediately
preceding sentence and subject to Section 5.2(d), no payment or
adjustment shall be made upon Early Settlement of any Purchase Contract
on any Contract Fee Payments accrued on such Purchase Contract or on
account of any dividends on the Common Stock issued upon such Early
Settlement. If the foregoing requirements are first satisfied with
respect to Purchase Contracts underlying any Unit at or prior to 5:00
p.m., New York City time, on a Business Day, such day shall be the
"Early Settlement Date" with respect to such Unit and if such
requirements are first satisfied after 5:00 p.m., New York City time,
on a Business Day or on a day that is not a Business Day, the "Early
Settlement Date" with respect to such Units shall be the next
succeeding Business Day.
(b) Upon Early Settlement of any Purchase Contract by the Holder of
the related Units, the Company shall issue, and the Holder shall be
entitled to receive, 1.14 shares of Common Stock on account of such
Purchase Contract (the "Early Settlement Rate"). The Early Settlement
Rate shall be adjusted in the same manner and at the same time as the
Settlement Rate is adjusted pursuant to Section 5.6. As promptly as
practicable after Early Settlement of Purchase Contracts in accordance
with the provisions of this Section 5.9, the Company shall issue and
shall deliver to the Agent at the Corporate Trust Office a certificate
or certificates for the full number of shares of Common Stock issuable
upon such Early Settlement together with payment in lieu of any
fraction of a share, as provided in Section 5.12.
(c) No later than the third Business Day after the applicable Early
Settlement Date the Company shall cause (i) the shares of Common Stock
issuable upon Early Settlement of Purchase Contracts to be issued and
delivered, and (ii) the related Pledged Debentures or Pledged Treasury
Consideration, in the case of Normal Units, or the related Pledged
Treasury Securities, in the case of Stripped Units, to be released from
the Pledge by the Collateral Agent and transferred, in each case, to
the Agent for delivery to the Holder thereof or the Holder's designee.
(d) Upon Early Settlement of any Purchase Contracts, and subject to
receipt of shares of Common Stock from the Company and the Pledged
Debentures, Pledged Treasury Consideration or Pledged Treasury
Securities, as the case may be, from the Collateral Agent, as
applicable, the Agent shall, in accordance with the instructions
provided by the Holder thereof on the applicable form of Election to
Settle Early on the reverse of the Certificate evidencing the related
Units, (i) transfer to the Holder the Pledged Debentures, Pledged
Treasury
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Consideration or Pledged Treasury Securities, as the case may be, forming a
part of such Units, and (ii) deliver to the Holder a certificate or
certificates for the full number of shares of Common Stock issuable upon
such Early Settlement together with payment in lieu of any fraction of a
share, as provided in Section 5.12.
(e) In the event that Early Settlement is effected with respect
to Purchase Contracts underlying less than all the Units evidenced by a
Certificate, upon such Early Settlement the Company shall execute and the
Agent shall authenticate, countersign and deliver to the Holder thereof, at
the expense of the Company, a Certificate evidencing the Units as to which
Early Settlement was not effected.
SECTION 5.10 EARLY SETTLEMENT UPON MERGER.
(a) In the event of a merger or consolidation of the Company of
the type described in clause (1) of Section 5.6(b) in which the Common
Stock outstanding immediately prior to such merger or consolidation is
exchanged for consideration consisting of at least 30% cash or cash
equivalents (any such event a "Cash Merger"), then the Company (or the
successor to the Company hereunder) shall be required to offer the Holder
of each Unit the right to settle the Purchase Contract underlying such Unit
prior to the Stock Purchase Date ("Merger Early Settlement") as provided
herein. On or before the fifth Business Day after the consummation of a
Cash Merger, the Company or, at the request and expense of the Company, the
Agent, shall give all Holders notice of the occurrence of the Cash Merger
and of the right of Merger Early Settlement arising as a result thereof.
The Company shall also deliver a copy of such notice to the Agent and the
Collateral Agent.
Each such notice shall contain:
(i) the date, which shall be not less than 20 nor more
than 30 calendar days after the date of such notice, on which the
Merger Early Settlement will be effected (the "Merger Early
Settlement Date");
(ii) the date, which shall be three Business Days prior to
the Merger Early Settlement Date, by which the Merger Early
Settlement right must be exercised;
(iii) the Settlement Rate in effect as a result of such Cash
Merger and the kind and amount of securities, cash and other
property receivable by the Holder upon settlement of each
Purchase Contract pursuant to Section 5.6(b);
(iv) a statement to the effect that all or a portion of the
Purchase Price payable by the Holder to settle the Purchase
Contract will be offset
51
against the amount of cash so receivable upon exercise of Merger
Early Settlement, as applicable; and
(v) the instructions a Holder must follow to exercise the
Merger Early Settlement right.
(b) To exercise a Merger Early Settlement right, a Holder shall
deliver to the Agent at the Corporate Trust Office on or before 5:00 p.m.,
New York City time on the date specified in the notice the Certificate(s)
evidencing the Units with respect to which the Merger Early Settlement
right is being exercised duly endorsed for transfer to the Company or in
blank with the form of Election to Settle Early on the reverse thereof duly
completed and accompanied by payment payable to the Company in immediately
available funds in an amount equal to the Early Settlement Amount less the
amount of cash that otherwise would be deliverable by the Company or its
successor upon settlement of the Purchase Contract in lieu of Common Stock
pursuant to Section 5.6(b) and as described in the notice to Holders (the
"Merger Early Settlement Amount").
(c) On the Merger Early Settlement Date, the Company shall
deliver or cause to be delivered (i) the net cash, securities and other
property to be received by such exercising Holder, equal to the Settlement
Rate as adjusted pursuant to Section 5.6, in respect of the number of
Purchase Contracts for which such Merger Early Settlement right was
exercised, and (ii) the related Pledged Debentures or Pledged Treasury
Consideration, in the case of Normal Units, or Pledged Treasury Securities,
in the case of Stripped Units, to be released from the Pledge by the
Collateral Agent and transferred, in each case, to the Agent for delivery
to the Holder thereof or its designee. In the event a Merger Early
Settlement right shall be exercised by a Holder in accordance with the
terms hereof, all references herein to Stock Purchase Date shall be deemed
to refer to such Merger Early Settlement Date.
(d) Upon Merger Early Settlement of any Purchase Contracts, and
subject to receipt of such net cash, securities or other property from the
Company and the Pledged Debentures, Pledged Treasury Consideration or
Pledged Treasury Securities, as the case may be, from the Collateral Agent,
as applicable, the Agent shall, in accordance with the instructions
provided by the Holder thereof on the applicable form of Election to Settle
Early on the reverse of the Certificate evidencing the related Units, (i)
transfer to the Holder the Pledged Debentures, Pledged Treasury
Consideration or Pledged Treasury Securities, as the case may be, forming a
part of such Units, and (ii) deliver to the Holder such net cash,
securities or other property issuable upon such Merger Early Settlement
together with payment in lieu of any fraction of a share, as provided in
Section 5.12.
(e) In the event that Merger Early Settlement is effected with
respect to Purchase Contracts underlying less than all the Units evidenced
by a
52
Certificate, upon such Merger Early Settlement the Company (or the
successor to the Company hereunder) shall execute and the Agent shall
authenticate, countersign and deliver to the Holder thereof, at the
expense of the Company, a Certificate evidencing the Units as to which
Merger Early Settlement was not effected.
SECTION 5.11 CHARGES AND TAXES.
The Company will pay all stock transfer and similar taxes
attributable to the initial issuance and delivery of the shares of Common Stock
pursuant to the Purchase Contracts and in payment of any Deferred Contract Fee
Payments; provided, that the Company shall not be required to pay any such tax
or taxes which may be payable in respect of any exchange of or substitution for
a Certificate evidencing a Unit or any issuance of a share of Common Stock in a
name other than that of the registered Holder of a Certificate surrendered in
respect of the Units evidenced thereby, other than in the name of the Agent, as
custodian for such Holder, and the Company shall not be required to issue or
deliver such share certificates or certificates unless and until the Person or
Persons requesting the transfer or issuance thereof shall have paid to the
Company the amount of such tax or shall have established to the satisfaction of
the Company that such tax has been paid.
SECTION 5.12 NO FRACTIONAL SHARES.
No fractional shares or scrip representing fractional shares of
Common Stock shall be issued or delivered upon settlement on the Stock Purchase
Date or upon Early Settlement or Merger Early Settlement of any Purchase
Contracts. If Certificates evidencing more than one Purchase Contract shall be
surrendered for settlement at one time by the same Holder, the number of full
shares of Common Stock which shall be delivered upon settlement shall be
computed on the basis of the aggregate number of Purchase Contracts evidenced by
the Certificates so surrendered. Instead of any fractional share of Common Stock
which would otherwise be deliverable upon settlement of any Purchase Contracts
on the applicable Settlement Date or upon Early Settlement or Merger Early
Settlement, the Company, through the Agent, shall make a cash payment in respect
of such fractional shares in an amount equal to the value of such fractional
shares times the Applicable Market Value. The Company shall provide the Agent
from time to time with sufficient funds to permit the Agent to make all cash
payments required by this Section 5.12 in a timely manner.
53
ARTICLE VI
REMEDIES
SECTION 6.1 UNCONDITIONAL RIGHT OF HOLDERS TO PURCHASE COMMON
STOCK.
The Holder of any Unit shall have the right, which is absolute
and unconditional,
(a) subject to the right of the Company to defer payment thereof
pursuant to Section 5.3, and to the forfeiture of any Deferred
Contract Fee Payments upon Early Settlement pursuant to Section 5.9(c)
or upon Merger Early Settlement pursuant to Section 5.10(c) or upon
the occurrence of a Termination Event, to receive payment of each
installment of the Contract Fee Payments, if any, with respect to the
Purchase Contract constituting a part of such Unit on the respective
Payment Date for such Unit, and
(b) to purchase Common Stock pursuant to the Purchase Contract
constituting a part of such Unit and to institute suit for the
enforcement of any such right to purchase Common Stock, and such
rights shall not be impaired without the consent of such Holder.
SECTION 6.2 RESTORATION OF RIGHTS AND REMEDIES.
If any Holder has instituted any proceeding to enforce any right
or remedy under this Agreement and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to such Holder, then
and in every such case, subject to any determination in such proceeding, the
Company and such Holder shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of such Holder
shall continue as though no such proceeding had been instituted.
SECTION 6.3 RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Certificates in the last
paragraph of Section 3.10, no right or remedy herein conferred upon or reserved
to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
54
SECTION 6.4 DELAY OR OMISSION NOT WAIVER.
No delay or omission of any Holder to exercise any right or
remedy upon a default shall impair any such right or remedy or constitute a
waiver of any such right. Every right and remedy given by this Article or by law
to the Holders may be exercised from time to time, and as often as may be deemed
expedient, by such Holders.
SECTION 6.5 UNDERTAKING FOR COSTS.
All parties to this Agreement agree, and each Holder of a Unit,
by its acceptance of such Unit shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Agreement, or in any suit against the Agent for any action
taken, suffered or omitted by it as Agent, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; provided
that the provisions of this Section shall not apply to any suit instituted by
the Company, to any suit instituted by the Agent, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% of the
Outstanding Units, or to any suit instituted by any Holder for the enforcement
of interest on any Debentures or Contract Fee Payments, if any, on any Purchase
Contract on or after the respective Payment Date therefor in respect of any Unit
held by such Holder, or for enforcement of the right to purchase shares of
Common Stock under the Purchase Contract constituting part of any Unit held by
such Holder.
SECTION 6.6 WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Agreement; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, but will suffer and permit the execution of every such power as though no
such law had been enacted.
ARTICLE VII
THE AGENT
SECTION 7.1 CERTAIN DUTIES AND RESPONSIBILITIES.
(a) (1) The Agent undertakes to perform, with respect to the
Units and Separate Debentures, such duties and only such duties as are
specifically set forth in this Agreement and the Pledge Agreement, and no
implied covenants or obligations shall be read into this Agreement against
the Agent; and
55
(2) in the absence of bad faith on its part, the Agent may,
with respect to the Units and Separate Debentures, conclusively
rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions
furnished to the Agent and conforming to the requirements of this
Agreement, but in the case of any certificates or opinions which
by any provision hereof are specifically required to be furnished
to the Agent, the Agent shall be under a duty to examine the same
to determine whether or not they conform to the requirements of
this Agreement (but need not confirm or investigate the accuracy
of the mathematical calculations or other facts stated therein).
(b) No provision of this Agreement shall be construed to relieve
the Agent from liability for its own grossly negligent action, its own
grossly negligent failure to act, or its own willful misconduct, except
that:
(1) this paragraph (b) shall not be construed to limit the
effect of paragraph (a) of this Section;
(2) the Agent shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be
proved that the Agent was grossly negligent in ascertaining the
pertinent facts; and
(3) no provision of this Agreement shall require the Agent to
expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or
in the exercise of any of its rights or powers.
(c) Whether or not therein expressly so provided, every provision
of this Agreement relating to the conduct or affecting the liability of
or affording protection to the Agent shall be subject to the provisions
of this Section.
(d) The Agent is authorized to execute and deliver the Pledge
Agreement in its capacity as Agent. The Agent shall be entitled to all
of the rights, privileges, immunities and indemnities contained in this
Agreement with respect to any duties of the Agent under, or actions
taken, omitted to be taken or suffered by the Agent pursuant to the
Pledge Agreement.
SECTION 7.2 NOTICE OF DEFAULT.
Within 30 days after the occurrence of any default by the Company
hereunder of which a Responsible Officer of the Agent has actual knowledge, the
Agent shall transmit by mail to the Company and the Holders of Units, as their
names and addresses appear in the Register, notice of such default hereunder,
unless such default shall have been cured or waived.
56
SECTION 7.3 CERTAIN RIGHTS OF AGENT.
Subject to the provisions of Section 7.1:
(a) the Agent may conclusively rely and shall be fully protected
in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document reasonably believed by it to be genuine and
to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by an Officers' Certificate, Issuer
Order or Issuer Request, and any resolution of the Board of Directors
of the Company may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Agreement the Agent
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Agent (unless
other evidence be herein specifically prescribed) may, in the absence
of bad faith on its part, rely upon an Officers' Certificate of the
Company;
(d) the Agent may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;
(e) the Agent shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document, but the Agent, in its discretion, may make
reasonable further inquiry or investigation into such facts or matters
related to the execution, delivery and performance of the Purchase
Contracts as it may see fit, and, if the Agent shall determine to make
such further inquiry or investigation, it shall be given a reasonable
opportunity to examine the books, records and premises of the Company,
personally or by agent or attorney;
(f) the Agent may execute any of the powers hereunder or perform
any duties hereunder either directly or by or through agents or
attorneys or an Affiliate of the Agent and the Agent shall not be
responsible for any misconduct or negligence on the part of any agent
or attorney or an Affiliate appointed with due care by it hereunder;
(g) the rights, privileges, protections, immunities and benefits
given to the Agent, including, but not limited to, its right to be
indemnified, are extended
57
to, and shall be enforceable by, the Agent in each of its capacities
hereunder, and to each agent, custodian and other Person employed to
act hereunder;
(h) the Agent shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Agreement;
(i) the Agent shall not be charged with knowledge of any default
by the Company hereunder unless a Responsible Officer shall have
obtained written notice of such default;
(j) in no event shall the Agent be liable for any consequential,
punitive, indirect or special loss or damages of any kind whatsoever
(including but not limited to lost profit), even if the Agent has been
advised of the likelihood of such loss or damage and regardless of the
form of action;
(k) the Agent shall not be responsible or liable for any failure
or delay in the performance of its obligations under this Agreement
arising out of or caused, directly or indirectly, by circumstances
beyond its reasonable control, including without limitation, acts of
God; earthquakes; fires; floods; wars; civil or military disturbances;
terrorist acts; sabotage; epidemics; riots; interruptions, loss or
malfunctions of utilities, computer (hardware or software) or
communications service; accidents; labor disputes; and acts of civil or
military authority or governmental actions; it being understood that
the Agent shall use reasonable efforts which are consistent with
accepted practices in the banking industry to resume performance as
soon as practicable under the circumstances; and
(l) the Agent may request that the Company deliver a certificate
setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this
Agreement, which certificate may be signed by any person authorized to
sign an Officers' Certificate, including any person specified as so
authorized in any such certificate previously delivered and not
superseded.
SECTION 7.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF UNITS.
The recitals contained herein and in the Certificates shall be
taken as the statements of the Company and the Agent assumes no responsibility
for their accuracy. The Agent makes no representations as to the validity or
sufficiency of either this Agreement or of the Units, or of the Pledge Agreement
or the Pledge. The Agent shall not be accountable for the use or application by
the Company of the Units or the proceeds therefrom or in respect of the Purchase
Contracts.
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SECTION 7.5 MAY HOLD UNITS.
Any Registrar or any other agent of the Company, or the Agent and
its Affiliates, in their individual or any other capacity, may become the owner
or pledgee of Units and may otherwise deal with the Company, the Collateral
Agent or any other Person with the same rights it would have if it were not
Registrar or such other agent, or the Agent.
SECTION 7.6 MONEY HELD IN CUSTODY.
Money held by the Agent in custody hereunder need not be
segregated from the Agent's other funds except to the extent required by law or
provided herein. The Agent shall be under no obligation to invest or pay
interest on any money received by it hereunder except as otherwise agreed in
writing with the Company.
SECTION 7.7 COMPENSATION AND REIMBURSEMENT.
The Company agrees:
(a) to pay to the Agent from time to time reasonable compensation
for all services rendered by it hereunder;
(b) except as otherwise expressly provided herein, to reimburse
the Agent upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Agent in accordance with any
provision of this Agreement (including the reasonable compensation and
the reasonable expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable
to its gross negligence or willful misconduct; and
(c) to indemnify the Agent and any predecessor Agent for, and to
hold it harmless against, any loss, liability or expense incurred
without gross negligence or willful misconduct on its part, arising out
of or in connection with the acceptance or administration of its duties
hereunder, including the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance
of any of its powers or duties hereunder.
For purposes of this Section 7.7, "Agent" shall include any
predecessor Agent; provided, however, that the negligence, bad faith or willful
misconduct of any Agent hereunder shall not affect the rights of any other Agent
hereunder.
The provisions of this Section 7.7 shall survive the termination
of this Agreement, the satisfaction or discharge of the Units and/or the
Separate Debentures and/or the resignation or removal of the Agent.
59
SECTION 7.8 CORPORATE AGENT REQUIRED; ELIGIBILITY.
There shall at all times be an Agent hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having (or being a member of a bank
holding company having) a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by federal or state authority and having a
Corporate Trust Office in the Borough of Manhattan, The City of New York, if
there be such a corporation, qualified and eligible under this Article and
willing to act on reasonable terms. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Agent shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
SECTION 7.9 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Agent and no appointment of
a successor Agent pursuant to this Article shall become effective until
the acceptance of appointment by the successor Agent in accordance with
the applicable requirements of Section 7.10.
(b) The Agent may resign at any time by giving written notice
thereof to the Company 60 days prior to the effective date of such
resignation. If the instrument of acceptance by a successor Agent
required by Section 7.10 shall not have been delivered to the Agent
within 30 days after the giving of such notice of resignation, the
resigning Agent may petition any court of competent jurisdiction for
the appointment of a successor Agent.
(c) The Agent may be removed at any time by Act of the Holders of
a majority in number of the Outstanding Units delivered to the Agent
and the Company.
(d) If at any time:
(1) the Agent fails to comply with Section 310(b) of the TIA,
as if the Agent were an indenture trustee under an indenture
qualified under the TIA, after written request therefor by the
Company or by any Holder who has been a bona fide Holder of a
Unit for at least six months; or
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(2) the Agent shall cease to be eligible under Section 7.8 and
shall fail to resign after written request therefor by the Company or
by any such Holder; or
(3) the Agent shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Agent or of its
property shall be appointed or any public officer shall take charge or
control of the Agent or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
then, in any such case, (x) the Company by a Board Resolution may remove
the Agent, or (y) any Holder who has been a bona fide Holder of a Unit for
at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of
the Agent and the appointment of a successor Agent.
(e) If the Agent shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Agent for any cause,
the Company, by a Board Resolution, shall promptly appoint a successor
Agent and shall comply with the applicable requirements of Section 7.10. If
no successor Agent shall have been so appointed by the Company and accepted
appointment in the manner required by Section 7.10, any Holder who has been
a bona fide Holder of a Unit for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Agent.
(f) The Company shall give, or shall cause such successor Agent to
give, notice of each resignation and each removal of the Agent and each
appointment of a successor Agent by mailing written notice of such event by
first-class mail, postage prepaid, to all Holders as their names and
addresses appear in the applicable Register. Each notice shall include the
name of the successor Agent and the address of its Corporate Trust Office.
SECTION 7.10 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Agent, every
such successor Agent so appointed shall execute, acknowledge and deliver to
the Company and to the retiring Agent an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Agent
shall become effective and such successor Agent, without any further act,
deed or conveyance, shall become vested with all the rights, powers,
agencies and duties of the retiring Agent; but, on the request of the
Company or the successor Agent, such retiring Agent shall, upon payment of
its charges, execute and deliver an instrument transferring to such
successor Agent all the rights, powers and trusts of the retiring Agent and
shall duly assign, transfer and deliver to such successor Agent all
property and money held by such retiring Agent hereunder.
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(b) Upon request of any such successor Agent, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Agent all such rights, powers and agencies
referred to in paragraph (a) of this Section.
(c) No successor Agent shall accept its appointment unless at the time
of such acceptance such successor Agent shall be qualified and eligible
under this Article.
SECTION 7.11 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS.
Any corporation into which the Agent may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Agent shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Agent, shall be the successor of the Agent hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Certificates shall have been
authenticated and executed on behalf of the Holders, but not delivered, by the
Agent then in office, any successor to such Agent shall adopt such
authentication and execution and deliver the Certificates so authenticated and
executed with the same effect as if such successor Agent had itself
authenticated and executed such Units.
SECTION 7.12 PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
(a) The Agent shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders received by the Agent in
its capacity as Registrar.
(b) If three or more Holders (herein referred to as "Applicants")
apply in writing to the Agent, and furnish to the Agent reasonable proof
that each such applicant has owned a Unit for a period of at least six
months preceding the date of such application, and such application states
that the applicants desire to communicate with other Holders with respect
to their rights under this Agreement or under the Units and is accompanied
by a copy of the form of proxy or other communication which such applicants
propose to transmit, then the Agent shall mail to all the Holders copies of
the form of proxy or other communication which is specified in such
request, with reasonable promptness after a tender to the Agent of the
materials to be mailed and of payment, or provision, in the absence of bad
faith, satisfactory to the Agent for the payment, of the reasonable
expenses of such mailing.
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SECTION 7.13 NO OBLIGATIONS OF AGENT.
Except to the extent otherwise provided in this Agreement, the Agent
assumes no obligation and shall not be subject to any liability under this
Agreement, the Pledge Agreement or any Purchase Contract in respect of the
obligations of the Holder of any Unit thereunder. The Company agrees, and each
Holder of a Certificate, by such Holder's acceptance thereof, shall be deemed to
have agreed, that the Agent's execution of the Certificates on behalf of the
Holders shall be solely as agent and attorney-in-fact for the Holders, and that
the Agent shall have no obligation to perform such Purchase Contracts on behalf
of the Holders, except to the extent expressly provided in Article Five.
SECTION 7.14 TAX COMPLIANCE.
(a) The Agent, on its own behalf and on behalf of the Company, will
comply with all applicable certification, information reporting and
withholding (including "backup" withholding) requirements imposed by
applicable tax laws, regulations or administrative practice with respect to
(i) any payments made with respect to the Units or (ii) the issuance,
delivery, holding, transfer, redemption or exercise of rights under the
Units. Such compliance shall include, without limitation, the preparation
and timely filing of required returns and the timely payment of all amounts
required to be withheld to the appropriate taxing authority or its
designated agent.
(b) The Agent shall comply with any reasonable written direction
timely received from the Company with respect to the execution or
certification of any required documentation and the application of such
requirements to particular payments or Holders or in other particular
circumstances, and may for purposes of this Agreement conclusively rely on
any such direction in accordance with the provisions of Section 7.1(a)(2).
(c) The Agent shall maintain all appropriate records documenting
compliance with such requirements, and shall make such records available,
on written request, to the Company or its authorized representative within
a reasonable period of time after receipt of such request.
ARTICLE VIII
SUPPLEMENTAL AGREEMENTS
SECTION 8.1 SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company and the Agent, at any time
and from time to time, may enter into one or more agreements supplemental
hereto, in
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form satisfactory to the Company and the Agent, for any of the following
purposes:
(a) to evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company herein
and in the Certificates; or
(b) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company; or
(c) to evidence and provide for the acceptance of appointment
hereunder by a successor Agent; or
(d) to make provision with respect to the rights of Holders pursuant
to the requirements of Section 5.6(b) or 5.10; or
(e) to cure any ambiguity, to correct or supplement any provisions
herein which may be inconsistent with any other provisions herein, or to
make any other provisions with respect to such matters or questions arising
under this Agreement, provided such action shall not adversely affect the
interests of the Holders.
SECTION 8.2 SUPPLEMENTAL AGREEMENTS WITH CONSENT OF HOLDERS.
(a) With the consent of the Holders of not less than a majority of the
outstanding Purchase Contracts voting together as one class, by Act of said
Holders delivered to the Company and the Agent, the Company, when
authorized by a Board Resolution, and the Agent may enter into an agreement
or agreements supplemental hereto for the purpose of modifying in any
manner the terms of the Purchase Contracts, or the provisions of this
Agreement or the rights of the Holders in respect of the Units; provided,
that, except as contemplated herein, no such supplemental agreement shall,
without the consent of the Holder of each Outstanding Unit affected
thereby:
(1) change any Payment Date;
(2) change the amount or the type of Collateral required to be
Pledged to secure a Holder's Obligations under the Purchase Contract,
impair the right of the Holder of any Purchase Contract to receive
distributions on the related Collateral (except for the rights of
Holders of Normal Units to substitute the Treasury Securities for the
Pledged Debentures or Pledged Treasury Consideration or the rights of
holders of Stripped Units to substitute Debentures or appropriate
Treasury Consideration for the Pledged Treasury Securities) or
otherwise adversely
64
affect the Holder's rights in or to such Collateral or materially
adversely alter the rights in or to such Collateral;
(3) reduce any Contract Fee Payments or any Deferred
Contract Fee Payment, or change any place where, or the coin or
currency in which, any Contract Fee Payment is payable;
(4) impair the right to institute suit for the enforcement
of any Purchase Contract, any Contract Fee Payment or any
Deferred Contract Fee Payment, if any;
(5) reduce the number of shares of Common Stock to be
purchased pursuant to any Purchase Contract, increase the price
to purchase shares of Common Stock upon settlement of any
Purchase Contract, change the Stock Purchase Date or otherwise
adversely affect the Holder's rights under any Purchase Contract;
or
(6) reduce the percentage of the outstanding Purchase
Contracts the consent of whose Holders is required for any such
supplemental agreement;
provided, that if any amendment or proposal referred to above would
adversely affect only the Normal Units or the Stripped Units, then only
the affected class of Holder as of the record date for the Holders
entitled to vote thereon will be entitled to vote on such amendment or
proposal, and such amendment or proposal shall not be effective except
with the consent of Holders of not less than a majority of such class.
(b) It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental
agreement, but it shall be sufficient if such Act shall approve the
substance thereof.
SECTION 8.3 EXECUTION OF SUPPLEMENTAL AGREEMENTS.
In executing, or accepting the additional agencies created by,
any supplemental agreement permitted by this Article or the modifications
thereby of the agencies created by this Agreement, the Agent shall be provided
and (subject to Section 7.1) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental agreement is
authorized or permitted by this Agreement. The Agent may, but shall not be
obligated to, enter into any such supplemental agreement which affects the
Agent's own rights, duties or immunities under this Agreement or otherwise.
65
SECTION 8.4 EFFECT OF SUPPLEMENTAL AGREEMENTS.
Upon the execution of any supplemental agreement under this
Article, this Agreement shall be modified in accordance therewith, and such
supplemental agreement shall form a part of this Agreement for all purposes; and
every Holder of Certificates theretofore or thereafter authenticated, executed
on behalf of the Holders and delivered hereunder shall be bound thereby.
SECTION 8.5 REFERENCE TO SUPPLEMENTAL AGREEMENTS.
Certificates authenticated, executed on behalf of the Holders
and delivered after the execution of any supplemental agreement pursuant to this
Article may, and shall if required by the Agent, bear a notation in form
approved by the Agent as to any matter provided for in such supplemental
agreement. If the Company shall so determine, new Certificates so modified as to
conform, in the opinion of the Agent and the Company, to any such supplemental
agreement may be prepared and executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Agent in exchange for
Outstanding Certificates.
ARTICLE IX
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1 COVENANT NOT TO MERGE, CONSOLIDATE, SELL
OR CONVEY PROPERTY EXCEPT UNDER CERTAIN CONDITIONS.
The Company covenants that it will not (a) merge or consolidate
with any other Person or (b) sell, assign, transfer, lease or convey all or
substantially all of its properties and assets to any Person or group of
affiliated Persons in one transaction or a series of related transactions other
than, with respect to clause (b), a direct or indirect wholly-owned subsidiary
of the Company, unless (i) either the Company shall be the continuing
corporation, or the successor (if other than the Company) shall be a corporation
organized and existing under the laws of the United States of America or a State
thereof or the District of Columbia and such corporation shall expressly assume
all the obligations of the Company under the Purchase Contracts, the Debentures,
this Agreement, the Remarketing Agreement and the Pledge Agreement by one or
more supplemental agreements in form reasonably satisfactory to the Agent and
the Collateral Agent, executed and delivered to the Agent and the Collateral
Agent by such corporation, and (ii) the Company or such successor corporation,
as the case may be, shall not, immediately after such merger or consolidation,
or such sale, assignment, transfer, lease or conveyance, be in default in the
performance of any covenant or condition hereunder, under any of the Units or
under the Pledge Agreement.
66
SECTION 9.2 RIGHTS AND DUTIES OF SUCCESSOR CORPORATION.
(a) In case of any such consolidation, merger, sale, assignment,
transfer, lease or conveyance and upon any such assumption by a successor
corporation in accordance with Section 9.1, such successor corporation
shall succeed to and be substituted for the Company with the same effect
as if it had been named herein as the Company. Such successor corporation
thereupon may cause to be signed, and may issue either in its own name or
in the name of the Company, any or all of the Certificates evidencing
Units issuable hereunder which theretofore shall not have been signed by
the Company and delivered to the Agent; and, upon the order of such
successor corporation, instead of the Company, and subject to all the
terms, conditions and limitations in this Agreement prescribed, the Agent
shall authenticate and execute on behalf of the Holders and deliver any
Certificates which previously shall have been signed and delivered by the
officers of the Company to the Agent for authentication and execution, and
any Certificate evidencing Units which such successor corporation
thereafter shall cause to be signed and delivered to the Agent for that
purpose. All the Certificates so issued shall in all respects have the
same legal rank and benefit under this Agreement as the Certificates
theretofore or thereafter issued in accordance with the terms of this
Agreement as though all of such Certificates had been issued at the date
of the execution hereof.
(b) In case of any such consolidation, merger, sale, assignment,
transfer, lease or conveyance such change in phraseology and form (but not
in substance) may be made in the Certificates evidencing Units thereafter
to be issued as may be appropriate.
SECTION 9.3 OPINION OF COUNSEL GIVEN TO AGENT.
The Agent, subject to Sections 7.1 and 7.3, shall receive an
Opinion of Counsel as conclusive evidence that any such consolidation, merger,
sale, assignment, transfer, lease or conveyance, and any such assumption,
complies with the provisions of this Article and that all conditions precedent
to the consummation of any such consolidation, merger, sale, assignment,
transfer, lease or conveyance have been met.
ARTICLE X
COVENANTS
SECTION 10.1 PERFORMANCE UNDER PURCHASE CONTRACTS.
The Company covenants and agrees for the benefit of the Holders
from time to time of the Units that it will duly and punctually perform its
obligations under the Purchase Contracts in accordance with the terms of the
Purchase Contracts and this Agreement.
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SECTION 10.2 MAINTENANCE OF OFFICE OR AGENCY.
(a) The Company will maintain in the Borough of Manhattan, The
City of New York an office or agency where Certificates may be
presented or surrendered for acquisition of shares of Common Stock upon
settlement of the Purchase Contracts on any Settlement Date and for
transfer of Collateral upon occurrence of a Termination Event, where
Certificates may be surrendered for registration of transfer or
exchange, for a Collateral Substitution or reestablishment of Normal
Units and where notices and demands to or upon the Company in respect
of the Units and this Agreement may be served. The Company will give
prompt written notice to the Agent of the location, and any change in
the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail
to furnish the Agent with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate
Trust Office, and the Company hereby appoints the Agent as its agent to
receive all such presentations, surrenders, notices and demands.
(b) The Company may also from time to time designate one or
more other offices or agencies where Certificates may be presented or
surrendered for any or all such purposes and may from time to time
rescind such designations; provided, that no such designation or
rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in the Borough of Manhattan, The City of
New York for such purposes. The Company will give prompt written notice
to the Agent of any such designation or rescission and of any change in
the location of any such other office or agency. The Company hereby
designates as the place of payment for the Units the Corporate Trust
Office and appoints the Agent at its Corporate Trust Office as paying
agent in such city.
SECTION 10.3 COMPANY TO RESERVE COMMON STOCK.
The Company shall at all times prior to the Stock Purchase
Date reserve and keep available, free from preemptive rights, out of its
authorized but unissued Common Stock the full number of shares of Common Stock
issuable against tender of payment in respect of all Purchase Contracts
constituting a part of the Units evidenced by Outstanding Certificates.
SECTION 10.4 COVENANTS AS TO COMMON STOCK.
The Company covenants that all shares of Common Stock which
may be issued against tender of payment in respect of any Purchase Contract
constituting a part of the Outstanding Units will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable.
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SECTION 10.5 STATEMENTS OF OFFICER OF THE COMPANY AS TO DEFAULT.
The Company will deliver to the Agent, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signer thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions hereof, and if the Company shall be in default,
specifying all such defaults and the nature and status thereof of which such
Officer may have knowledge.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
ANTHEM, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: President and Chief Executive Officer
THE BANK OF NEW YORK,
as Purchase Contract Agent
By: /s/ Xxxxxx X. Xxxxxxxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Vice President
EXHIBIT A
FORM OF NORMAL UNITS CERTIFICATE
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
Unless this Certificate is presented by an authorized representative
of The Depository Trust Company (55 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx) to the
Company or its agent for registration of transfer, exchange or payment, and any
Certificate issued is registered in the name of Cede & Co., or such other name
as requested by an authorized representative of The Depository Trust Company,
and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.
(Form of Face of Normal Units Certificate)
No.____________________ CUSIP No. 00000X000
Number of Normal Units______________________
This Normal Units Certificate certifies that Cede & Co. is the
registered Holder of the number of Normal Units set forth above. Each Normal
Unit represents (i) either (a) beneficial ownership by the Holder of one 5.95%
Subordinated Debenture due 2006 (the "Debenture") of Anthem, Inc., an Indiana
corporation (the "Company"). having a principal amount of $50, subject to the
Pledge of such Debenture by such Holder pursuant to the Pledge Agreement, or (b)
if the Debenture has been remarketed by the Remarketing Agent (or if the Holder
has elected not to have the Debenture remarketed by delivering the appropriate
Treasury Consideration specified by the Remarketing Agent), the appropriate
Treasury Consideration, subject to the Pledge of such Treasury Consideration by
such Holder pursuant to the Pledge Agreement, and (ii) the rights and
obligations of the Holder under one Purchase Contract with the Company. All
capitalized terms used herein which are defined in the Purchase Contract
Agreement have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Debenture or the appropriate
Treasury Consideration, as the case may be, constituting part of each Normal
Unit evidenced hereby has been pledged to the Collateral Agent, for the benefit
of the
A-1
Company, to secure the obligations of the Holder under the Purchase Contract
comprising a part of such Normal Unit.
The Pledge Agreement provides that all payments in respect of the
Pledged Debentures or Pledged Treasury Consideration received by the Collateral
Agent shall be paid by the Collateral Agent by wire transfer in same day funds
(i) in the case of (A) quarterly cash distributions on Normal Units which
include Pledged Debentures or Pledged Treasury Consideration and (B) any
payments in respect of the Debentures or Treasury Consideration, as the case may
be, that have been released from the Pledge pursuant to the Pledge Agreement, to
the Agent to the account designated by the Agent, no later than 12:00 p.m., New
York City time, on the Business Day such payment is received by the Collateral
Agent (provided that in the event such payment is received by the Collateral
Agent on a day that is not a Business Day or after 9:00 a.m., New York City
time, on a Business Day, then such payment shall be made no later than 9:30
a.m., New York City time, on the next succeeding Business Day) and (ii) in the
case of payments in respect of any Pledged Debentures or Pledged Treasury
Consideration, as the case may be, to be paid upon settlement of such Holder's
obligations to purchase Common Stock under the Purchase Contract, to the Company
on the Stock Purchase Date (as defined herein) in accordance with the terms of
the Pledge Agreement, in full satisfaction of the respective obligations of the
Holders of the Normal Units of which such Pledged Debentures or Pledged Treasury
Consideration, as the case may be, are a part under the Purchase Contracts
forming a part of such Normal Units. Quarterly distributions on Normal Units
which include Pledged Debentures or Pledged Treasury Consideration, as the case
may be, which are payable quarterly in arrears on February 15, May 15, August
15, and November 15 each year, commencing February 15, 2002 (a "Payment Date"),
shall, subject to receipt thereof by the Agent from the Collateral Agent, be
paid to the Person in whose name this Normal Units Certificate (or a Predecessor
Normal Units Certificate) is registered at the close of business on the Record
Date for such Payment Date.
Each Purchase Contract evidenced hereby obligates the Holder of this
Normal Units Certificate to purchase, and the Company to sell, on November 15,
2004 (the "Stock Purchase Date"), at a price equal to $50 (the "Stated Amount"),
a number of shares of Common Stock, $0.01 par value per share ("Common Stock"),
of the Company, equal to the Settlement Rate, unless on or prior to the Stock
Purchase Date there shall have occurred a Termination Event or an Early
Settlement or Merger Early Settlement with respect to the Normal Units of which
such Purchase Contract is a part, all as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof. The Purchase Price (as
defined herein) for the shares of Common Stock purchased pursuant to each
Purchase Contract evidenced hereby, if not paid earlier, shall be paid on the
Stock Purchase Date by application of payments received in respect of the
Pledged Debentures or the Pledged Treasury Consideration, as the case may be,
pledged to secure the obligations of the Holder under such Purchase Contract.
A-2
Payments on the Debentures or the appropriate Treasury Consideration,
as the case may be, will be payable at the office of the Agent in The City of
New York or, at the option of the Company, by check mailed to the address of the
Person entitled thereto as such address appears on the Normal Units Register or
by wire transfer to an account specified by the Company.
The Company shall pay on each Payment Date in respect of each Purchase
Contract forming part of a Normal Unit evidenced hereby an amount (the "Contract
Fee Payments") equal to 0.05% per year of the Stated Amount, computed on the
basis of a 360-day year of twelve 30-day months, subject to deferral at the
option of the Company as provided in the Purchase Contract Agreement and more
fully described on the reverse hereof (provided that if on any date on which
Contract Fee Payments are to be made on the Purchase Contracts is not a Business
Day, then payment of the Contract Fee Payments payable on that date will be made
on the next succeeding day which is a Business Day, and no interest or payment
will be paid in respect of the delay, except that if such next succeeding
Business Day is in the next succeeding calendar year, such payment will be made
on the immediately preceding Business Day). Such Contract Fee Payments shall be
payable to the Person in whose name this Normal Units Certificate (or a
Predecessor Normal Units Certificate) is registered at the close of business on
the Record Date for such Payment Date.
Contract Fee Payments will be payable at the office of the Agent in
The City of New York or, at the option of the Company, by check mailed to the
address of the Person entitled thereto as such address appears on the Normal
Units Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Normal Units Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
A-3
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
ANTHEM, INC.
By: __________________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to obligations
of such Holder under the Purchase Contracts
evidenced hereby)
By: THE BANK OF NEW YORK,
not individually but solely as
Attorney-in-Fact of such Holder
By:_______________________________
Name:
Title:
A-4
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Normal Units Certificates referred to in the within
mentioned Purchase Contract Agreement.
THE BANK OF NEW YORK,
as Purchase Contract Agent
Dated: _______________________________ By:_______________________________
Authorized Signatory
A-5
(Form of Reverse of Normal Units Certificate)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of November 2, 2001 (as may be supplemented from
time to time, the "Purchase Contract Agreement"), between the Company and The
Bank of New York, as Purchase Contract Agent (including its successors
thereunder, herein called the "Agent"), to which Purchase Contract Agreement and
supplemental agreements thereto reference is hereby made for a description of
the respective rights, limitations of rights, obligations, duties and immunities
thereunder of the Agent, the Company, and the Holders and of the terms upon
which the Normal Units Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Normal Units Certificate to purchase, and the Company to sell, on the Stock
Purchase Date at a price equal to $50 (the "Purchase Price"), a number of shares
of Common Stock of the Company equal to the Settlement Rate, unless, on or prior
to the Stock Purchase Date, there shall have occurred a Termination Event or an
Early Settlement or Merger Early Settlement with respect to the Unit of which
such Purchase Contract is a part. The "Settlement Rate" is equal to (a) if the
Applicable Market Value (as defined below) is greater than $43.92 (the
"Threshold Appreciation Price"), 1.14 shares of Common Stock per Purchase
Contract, (b) if the Applicable Market Value is less than the Threshold
Appreciation Price but is greater than $36.00, the number of shares of Common
Stock per Purchase Contract equal to the Stated Amount divided by the Applicable
Market Value and (c) if the Applicable Market Value is equal to or less than
$36.00, 1.39 shares of Common Stock per Purchase Contract, in each case subject
to adjustment as provided in the Purchase Contract Agreement. No fractional
shares of Common Stock will be issued upon settlement of Purchase Contracts, as
provided in the Purchase Contract Agreement.
The "Applicable Market Value" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Stock Purchase Date.
The "Closing Price" of the Common Stock on any date of determination
means the closing sale price (or, if no closing price is reported, the last
reported sale price) of the Common Stock on the New York Stock Exchange (the
"NYSE") on such date or, if the Common Stock is not listed for trading on the
NYSE on any such date, as reported in the composite transactions for the
principal United States securities exchange on which the Common Stock is so
listed, or if the Common Stock is not so listed on a United States national or
regional securities exchange, as reported by The Nasdaq Stock Market, or, if the
Common Stock is not so reported, the last quoted bid price for the Common Stock
in the over-the-counter market as reported by the National Quotation Bureau or
similar organization, or, if such bid price is not available, the market value
of the Common Stock on such date as determined by a nationally recognized
independent investment banking firm retained for this purpose by the Company.
A-6
A "Trading Day" means a day on which the Common Stock (A) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
Each Purchase Contract evidenced hereby may be settled prior to the
Stock Purchase Date through Early Settlement or Merger Early Settlement, in
accordance with the terms of the Purchase Contract Agreement.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Normal Units Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby (i) by effecting an Early Settlement or Merger Early Settlement, (ii) by
application of payments received in respect of the Pledged Treasury
Consideration acquired from the proceeds of a remarketing of the related Pledged
Debentures underlying the Normal Units represented by this Normal Units
Certificate or (iii) if the Holder has elected not to participate in the
remarketing, by application of payments received in respect of the Pledged
Treasury Consideration deposited by such Holder in respect of such Purchase
Contract. If, as provided in the Purchase Contract Agreement, upon the
occurrence of a Last Failed Remarketing the Collateral Agent, for the benefit of
the Company, exercises its rights as a secured creditor with respect to the
Pledged Debentures related to this Normal Units Certificate, any accrued and
unpaid interest on such Pledged Debentures will become payable by the Company to
the Holder of this Normal Units Certificate in the manner provided for in the
Purchase Contract Agreement.
The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate Purchase
Price for the shares of Common Stock to be purchased thereunder in the manner
herein set forth.
Under the terms of the Pledge Agreement, the Agent will be entitled to
exercise the voting and any other consensual rights pertaining to the Pledged
Debentures. Upon receipt of notice of any meeting at which holders of Debentures
are entitled to vote or upon the solicitation of consents, waivers or proxies of
holders of Debentures, the Agent shall, as soon as practicable thereafter, mail
to the Holders of Normal Units a notice (a) containing such information as is
contained in the notice or solicitation, (b) stating that each such Holder on
the record date set by the Agent therefor (which, to the extent possible, shall
be the same date as the record date for determining the holders of Debentures
entitled to vote) shall be entitled to instruct the Agent as to the exercise of
the voting rights pertaining to the Pledged Debentures constituting a part of
such Holder's Normal Units and (c) stating the manner in which such instructions
may be given. Upon the written request of the Holders of Normal Units on such
record date, the Agent shall endeavor insofar as practicable to vote or cause to
be voted, in accordance with the instructions set forth in such requests, the
maximum number of Pledged Debentures as to which any particular voting
instructions are received. In the absence of specific
A-7
instructions from the Holder of a Normal Unit, the Agent shall abstain from
voting the Pledged Debenture evidenced by such Normal Unit.
The Normal Units Certificates are issuable only in registered form and
only in denominations of a single Normal Unit and any integral multiple thereof.
The transfer of any Normal Units Certificate will be registered and Normal Units
Certificates may be exchanged as provided in the Purchase Contract Agreement.
The Normal Units Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents permitted by the Purchase
Contract Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the Agent may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. The Holder of a Normal Unit may substitute for
the Pledged Debentures or Pledged Treasury Consideration securing its
obligations under the related Purchase Contract Treasury Securities in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement. From and after such Collateral Substitution, the Unit for which such
Pledged Treasury Securities secures the Holder's obligation under the Purchase
Contract shall be referred to as a "Stripped Unit." A Holder that elects to
substitute a Treasury Security for Pledged Debentures or Pledged Treasury
Consideration, thereby creating Stripped Units, shall be responsible for any
fees or expenses payable in connection therewith. Except as provided in the
Purchase Contract Agreement, for so long as the Purchase Contract underlying a
Normal Unit remains in effect, such Normal Unit shall not be separable into its
constituent parts, and the rights and obligations of the Holder of such Normal
Units in respect of the Pledged Debenture or Pledged Treasury Consideration, as
the case may be, and Purchase Contract constituting such Normal Unit may be
transferred and exchanged only as a Normal Unit.
A Holder of Stripped Units may reestablish Normal Units by delivering
to the Collateral Agent Debentures or the appropriate Treasury Consideration in
exchange for the release of the Pledged Treasury Securities in accordance with
the terms of the Purchase Contract Agreement and the Pledge Agreement.
Subject to the next succeeding paragraph, the Company shall pay, on
each Payment Date, the Contract Fee Payments, if any, payable in respect of each
Purchase Contract to the Person in whose name the Normal Units Certificate
evidencing such Purchase Contract is registered at the close of business on the
Record Date for such Payment Date. Contract Fee Payments, if any, will be
payable at the office of the Agent in the City of New York or, at the option of
the Company, by check mailed to the address of the Person entitled thereto at
such address as it appears on the Normal Units Register or by wire transfer to
the account designated by such Person in writing.
The Company shall have the right, at any time prior to the Stock
Purchase Date, to defer the payment of any or all of the Contract Fee Payments
otherwise payable on any Payment Date, but only if the Company shall give the
Holders and the Agent written notice of its election to defer Contract Fee
Payments as provided in the Purchase Contract Agreement. Any Contract Fee
Payments so deferred shall, to the extent permitted by law, bear additional
Contract Fee Payments thereon at the rate of 6.00% per
A-8
year (computed on the basis of a 360-day year of twelve 30-day months),
compounding on each succeeding Payment Date, until paid in full (such deferred
installments of Contract Fee Payments, if any, together with the additional
Contract Fee Payments, if any, accrued thereon, are referred to herein as the
"Deferred Contract Fee Payments"). Deferred Contract Fee Payments, if any, shall
be due on the next succeeding Payment Date except to the extent that payment is
deferred pursuant to the Purchase Contract Agreement. No Contract Fee Payments
may be deferred to a date that is after the Stock Purchase Date and no such
deferral period may end other than on a Payment Date.
In the event that the Company elects to defer the payment of Contract
Fee Payments on the Purchase Contracts until a Payment Date prior to the Stock
Purchase Date, then all Deferred Contract Fee Payments, if any, shall be payable
to the registered Holders as of the close of business on the Record Date
immediately preceding such Payment Date.
In the event that the Company elects to defer the payment of Contract
Fee Payments on the Purchase Contracts until the Stock Purchase Date, the Holder
of this Normal Units Certificate will receive on the Stock Purchase Date, in
lieu of a cash payment, a number of shares of Common Stock (in addition to the
number of shares of Common Stock equal to the Settlement Rate) equal to (i) the
aggregate amount of Deferred Contract Fee Payments payable to the Holder of this
Normal Units Certificate divided by (ii) the Applicable Market Value.
In the event the Company exercises its option to defer the payment of
Contract Fee Payments, then, until the Deferred Contract Fee Payments have been
paid, the Company shall not declare or pay dividends on, make distributions with
respect to, or redeem, purchase or acquire, or make a liquidation payment with
respect to, any of its Capital Stock other than (i) purchases, redemptions or
acquisitions of shares of Capital Stock in connection with any employment
contract, benefit plan or other similar arrangement with or for the benefit of
employees, officers or directors or a stock purchase or dividend reinvestment
plan, or the satisfaction by the Company of its obligations pursuant to any
contract or security outstanding on the date the Company exercises its rights to
defer the Contract Fee Payments; (ii) as a result of a reclassification of the
Company's Capital Stock or the exchange or conversion of one class or series of
for another class or series of the Company's Capital Stock; (iii) the purchase
of fractional interests in shares of any series of the Company's Capital Stock
pursuant to the conversion or exchange provisions of such Capital Stock or the
security being converted or exchanged; (iv) dividends or distributions in any
series of the Company's Capital Stock (or rights to acquire Capital Stock) or
repurchases, acquisitions or redemptions of Capital Stock in connection with the
issuance or exchange of any series of Capital Stock (or securities convertible
into or exchangeable for shares of our Capital Stock; or (v) redemptions,
exchanges or repurchases of any rights outstanding under a shareholder rights
plan or the declaration or payment thereunder of a dividend or distribution of
or with respect to rights in the future.
A-9
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay Contract Fee
Payments, if any, or any Deferred Contract Fee Payments, and the rights of the
Holders to purchase Common Stock, shall immediately and automatically terminate,
without the necessity of any notice or action by any Holder, the Agent or the
Company, if, on or prior to the Stock Purchase Date, a Termination Event shall
have occurred. Upon the occurrence of a Termination Event, the Company shall
promptly but in no event later than two Business Days thereafter give written
notice to the Agent, the Collateral Agent and to the Holders, at their addresses
as they appear in the Normal Units Register. Upon and after the occurrence of a
Termination Event, the Collateral Agent shall release the Pledged Debentures or
Pledged Treasury Consideration, as the case may be, from the Pledge in
accordance with the provisions of the Pledge Agreement.
Upon registration of transfer of this Normal Units Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase Contract Agreement
and the Purchase Contracts evidenced hereby and the transferor shall be released
from the obligations under the Purchase Contracts evidenced by this Normal Units
Certificate. The Company covenants and agrees, and the Holder, by its acceptance
hereof, likewise covenants and agrees, to be bound by the provisions of this
paragraph.
The Holder of this Normal Units Certificate, by its acceptance hereof,
authorizes the Agent to enter into and perform the related Purchase Contracts
forming part of the Normal Units evidenced hereby on his behalf as his
attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its trustee in the event
that the Company becomes the subject of a case under the Bankruptcy Code, agrees
to be bound by the terms and provisions thereof, covenants and agrees to perform
such Holder's obligations under such Purchase Contracts, consents to the
provisions of the Purchase Contract Agreement, authorizes the Agent to enter
into and perform the Pledge Agreement on such Holder's behalf as
attorney-in-fact, and consents to the Pledge of the Debentures or the
appropriate Treasury Consideration, as the case may be, underlying this Normal
Units Certificate pursuant to the Pledge Agreement. The Holder further covenants
and agrees, that, to the extent and in the manner provided in the Purchase
Contract Agreement and the Pledge Agreement, but subject to the terms thereof,
payments in respect of the Pledged Debentures or the Pledged Treasury
Consideration, as the case may be, to be paid upon settlement of such Holder's
obligations to purchase Common Stock under the Purchase Contract, shall be paid
on the Stock Purchase Date by the Collateral Agent to the Company in
satisfaction of such Holder's obligations under such Purchase Contract and such
Holder shall acquire no right, title or interest in such payments. The
obligations of each Holder to pay the Purchase Price are non-recourse
obligations and except to the extent paid by Early Settlement or Merger Early
Settlement, are payable solely out of the proceeds of any
A-10
Collateral pledged to secure the obligations of the Holders and in no event will
Holders be liable for any deficiency between such payments and the Purchase
Price.
Each Holder of any Unit, and each Beneficial Owner thereof, by its
acceptance thereof or of its interest therein, further agrees to treat (i)
itself as the owner of the related Debentures, Treasury Consideration or
Treasury Securities, as the case may be, and (ii) the Debentures as indebtedness
of the Company, in each case, for United States federal, state and local income
and franchise tax purposes.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
The Company, the Agent and its Affiliates and any agent of the Company
or the Agent may treat the Person in whose name this Normal Units Certificate is
registered as the owner of the Normal Units evidenced hereby for the purpose of
receiving quarterly payments Consideration on the Debentures or the Treasury
Consideration, as the case may be, receiving payments of Contract Fee Payments,
if any, and any Deferred Contract Fee Payments, performance of the Purchase
Contracts and for all other purposes whatsoever, whether or not any payments in
respect thereof be overdue and notwithstanding any notice to the contrary, and
neither the Company, the Agent, such Affiliates nor any such agent shall be
affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent.
A-11
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - Custodian
--------------------------------
(cust) (minor)
Under Uniform Gifts to Minors Act
--------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as
tenants in common
Additional abbreviations may also be used though not in the above list.
A-12
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
________________________________________________________________________________
________________________________________________________________________________
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Normal Units Certificates and all rights thereunder, hereby
irrevocably constituting and appointing _______________________________ attorney
to transfer said Normal Units Certificates on the books of Anthem, Inc. with
full power of substitution in the premises.
Dated: _____________________________ Signature: ______________________________
NOTICE: The signature to this
assignment must correspond with the
name as it appears upon the face of
the within Normal Units Certificates
in every particular, without
alteration or enlargement or any
change whatsoever.
Signature Guarantee: ___________________________________________________________
A-13
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Stock Purchase Date of the
Purchase Contracts underlying the number of Normal Units evidenced by this
Normal Units Certificate be registered in the name of, and delivered, together
with a check in payment for any fractional share, to the undersigned at the
address indicated below unless a different name and address have been indicated
below. If shares are to be registered in the name of a Person other than the
undersigned, the undersigned will pay any transfer tax payable incident thereto.
Dated: _____________________________ Signature: ______________________________
Signature Guarantee: ____________________
(if assigned to another person)
If shares are to be registered in the name of and REGISTERED HOLDER
delivered to a Person other than the Holder, please
(i) print such Person's name and address and (ii) Please print name and provide a
guarantee of your signature: address of Registered Holder:
____________________________________________________ _____________________________________
Name Name
_____________________________________________________ _______________________________________
Address Address
Social Security or other Taxpayer Identification
Number, if any
A-14
ELECTION TO SETTLE EARLY
The undersigned Holder of this Normal Units Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Normal Units evidenced by this Normal Units
Certificate specified below. The option to effect Early Settlement may be
exercised only with respect to Purchase Contracts underlying Normal Units with
an aggregate Stated Amount equal to $1,000 or an integral multiple thereof. The
undersigned Holder directs that a certificate for shares of Common Stock
deliverable upon such Early Settlement be registered in the name of, and
delivered, together with a check in payment for any fractional share and any
Normal Units Certificate representing any Normal Units evidenced hereby as to
which Early Settlement of the related Purchase Contracts is not effected, to the
undersigned at the address indicated below unless a different name and address
have been indicated below. Pledged Debentures or Pledged Treasury Consideration,
as the case may be, deliverable upon such Early Settlement will be transferred
in accordance with the transfer instructions set forth below. If shares are to
be registered in the name of a Person other than the undersigned, the
undersigned will pay any transfer tax payable incident thereto.
Dated: ____________________ Signature: _______________________________
Signature Guarantee: _______________________ Signature Guarantee: _____________________
Number of Units evidenced hereby as to which Early Settlement of the
related Purchase Contracts is being elected:
If shares of Common Stock are to be registered in REGISTERED HOLDER
the name of and delivered to and Pledged
Debentures, or Pledged Treasury Consideration, as Please print name and address of Registered the
the case may be, are to be transferred to a Person Holder
Person other than the Holder, please print such
Person's name and address:
_____________________________________________________ __________________________________________________
Name Name
_____________________________________________________ __________________________________________________
Address Address
Social Security or other Taxpayer Identification
Number, if any
Transfer instructions for Pledged Debentures, or Pledged Treasury Consideration,
as the case may be, transferable upon Early Settlement or a Termination Event:
A-15
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have
been made:
Stated Amount
Amount of Amount of of the Global
Decrease in Increase in Certificate Signature of
Stated Amount Stated Amount Following Authorized
of the Global of the Global Such Decrease Signatory
Date Certificate Certificate or Increase of Agent
-------------- ------------- ------------- ------------- -------------
A-16
EXHIBIT B
FORM OF STRIPPED UNITS CERTIFICATE
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF A CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company (55 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx) to the
Company or its agent for registration of transfer, exchange or payment, and any
Certificate issued is registered in the name of Cede & Co., or such other name
as requested by an authorized representative of The Depository Trust Company,
and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.
Form of Face of Stripped Units Certificate
No. CUSIP No. 00000X000
Number of Stripped Units
This Stripped Units Certificate certifies that Cede & Co. is the
registered Holder of the number of Stripped Units set forth above. Each Stripped
Unit represents (i) a 1/20 undivided beneficial ownership interest in a Treasury
Security, subject to the Pledge of such interest in such Treasury Security by
such Holder pursuant to the Pledge Agreement, and (ii) the rights and
obligations of the Holder under one Purchase Contract with Anthem, Inc., an
Indiana corporation (the "Company"). All capitalized terms used herein which are
defined in the Purchase Contract Agreement have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Treasury Security constituting
part of each Stripped Unit evidenced hereby has been pledged to the Collateral
Agent, for the benefit of the Company, to secure the obligations of the Holder
under the Purchase Contract comprising a part of such Stripped Unit.
Each Purchase Contract evidenced hereby obligates the Holder of this
Stripped Units Certificate to purchase, and the Company to sell, on November 15,
2004 (the "Stock Purchase Date"), at a price equal to $50 (the "Stated Amount"),
a number of
B-1
shares of Common Stock, $0.01 par value per share ("Common Stock"), of the
Company, equal to the Settlement Rate, unless on or prior to the Stock Purchase
Date there shall have occurred a Termination Event or an Early Settlement or
Merger Early Settlement with respect to the Stripped Units of which such
Purchase Contract is a part, all as provided in the Purchase Contract Agreement
and more fully described on the reverse hereof. The Purchase Price (as defined
herein) for the shares of Common Stock purchased pursuant to each Purchase
Contract evidenced hereby, if not paid earlier, shall be paid on the Stock
Purchase Date by application of payments received in respect of the Pledged
Treasury Securities pledged to secure the obligations under such Purchase
Contract in accordance with the terms of the Pledge Agreement.
The Company shall pay on each Payment Date in respect of each Purchase
Contract forming part of a Stripped Unit evidenced hereby an amount (the
"Contract Fee Payments") equal to 0.05% per year of the Stated Amount, computed
on the basis of a 360-day year of twelve 30-day months, subject to deferral at
the option of the Company as provided in the Purchase Contract Agreement and
more fully described on the reverse hereof (provided that if on any date on
which Contract Fee Payments are to be made on the Purchase Contracts is not a
Business Day, then payment of the Contract Fee Payments payable on that date
will be made on the next succeeding day which is a Business Day, and no interest
or payment will be paid in respect of the delay, except that if such next
succeeding Business Day is in the next succeeding calendar year, such payment
will be made on the immediately preceding Business Day). Such Contract Fee
Payments shall be payable to the Person in whose name this Stripped Units
Certificate (or a Predecessor Stripped Units Certificate) is registered at the
close of business on the Record Date for such Payment Date.
Contract Fee Payments will be payable at the office of the Agent in the
City of New York or, at the option of the Company, by check mailed to the
address of the Person entitled thereto as such address appears on the Normal
Units Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Stripped Units Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
B-2
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
ANTHEM, INC.
By: ________________________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to obligations of
such Holder under the Purchase Contracts)
By: THE BANK OF NEW YORK, not individually
but solely as Attorney-in-Fact of such
Holder
By:_________________________________
Name: Xxxxxx X. Xxxxxxxxxx
Title: Vice President
B-3
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Stripped Units referred to in the within-mentioned
Purchase Contract Agreement.
THE BANK OF NEW YORK,
as Purchase Contract Agent
Dated: ___________________________ By: _________________________________
Authorized Signatory
B-4
(Reverse of Stripped Units Certificate)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of November 2, 2001 (as may be supplemented from
time to time, the "Purchase Contract Agreement"), between the Company and The
Bank of New York, as Purchase Contract Agent (including its successors
thereunder, herein called the "Agent"), to which the Purchase Contract Agreement
and supplemental agreements thereto reference is hereby made for a description
of the respective rights, limitations of rights, obligations, duties and
immunities thereunder of the Agent, the Company and the Holders and of the terms
upon which the Stripped Units Certificates are, and are to be, executed and
delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Stripped Units Certificate to purchase, and the Company to sell, on the Stock
Purchase Date at a price equal to $50 (the "Purchase Price"), a number of shares
of Common Stock of the Company equal to the Settlement Rate, unless, on or prior
to the Stock Purchase Date, there shall have occurred a Termination Event or an
Early Settlement or Merger Early Settlement with respect to the Unit of which
such Purchase Contract is a part. The "Settlement Rate" is equal to (a) if the
Applicable Market Value (as defined below) is greater than $43.92 (the
"Threshold Appreciation Price"), 1.14 shares of Common Stock per Purchase
Contract, (b) if the Applicable Market Value is less than the Threshold
Appreciation Price but is greater than $36.00, the number of shares of Common
Stock per Purchase Contract equal to the Stated Amount divided by the Applicable
Market Value and (c) if the Applicable Market Value is equal to or less than
$36.00, 1.39 shares of Common Stock per Purchase Contract, in each case subject
to adjustment as provided in the Purchase Contract Agreement. No fractional
shares of Common Stock will be issued upon settlement of Purchase Contracts, as
provided in the Purchase Contract Agreement.
The "Applicable Market Value" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Stock Purchase Date.
The "Closing Price" of the Common Stock on any date of determination
means the closing sale price (or, if no closing price is reported, the last
reported sale price) of the Common Stock on the New York Stock Exchange (the
"NYSE") on such date or, if the Common Stock is not listed for trading on the
NYSE on any such date, as reported in the composite transactions for the
principal United States securities exchange on which the Common Stock is so
listed, or if the Common Stock is not so listed on a United States national or
regional securities exchange, as reported by The Nasdaq Stock Market, or, if the
Common Stock is not so reported, the last quoted bid price for the Common Stock
in the over-the-counter market as reported by the National Quotation Bureau or
similar organization, or, if such bid price is not available, the market value
of the Common Stock on such date as determined by a nationally recognized
independent investment banking firm retained for this purpose by the Company.
B-5
A "Trading Day" means a day on which the Common Stock (A) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
Each Purchase Contract evidenced hereby may be settled prior to the
Stock Purchase Date through Early Settlement or Merger Early Settlement, in
accordance with the terms of the Purchase Contract Agreement.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Stripped Units Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby (i) by effecting an Early Settlement or Merger Early Settlement or (ii)
by application of payments received in respect of the Pledged Treasury
Securities underlying the Stripped Units represented by this Stripped Units
Certificate.
The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate Purchase
Price for the shares of Common Stock to be purchased thereunder in the manner
herein set forth.
The Stripped Units Certificates are issuable only in registered form
and only in denominations of a single Stripped Unit and any integral multiple
thereof. The transfer of any Stripped Units Certificate will be registered and
Stripped Units Certificates may be exchanged as provided in the Purchase
Contract Agreement. The Stripped Units Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents
permitted by the Purchase Contract Agreement. No service charge shall be
required for any such registration of transfer or exchange, but the Company and
the Agent may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. The Holder of a Stripped
Unit may substitute for the Pledged Treasury Securities securing its obligations
under the related Purchase Contract Debentures or the appropriate Treasury
Consideration in accordance with the terms of the Purchase Contract Agreement
and the Pledge Agreement. From and after such substitution, the Unit for which
such Pledged Debentures or Pledged Treasury Consideration secures the Holder's
obligation under the Purchase Contract shall be referred to as a "Normal Unit."
A Holder that elects to substitute Debentures or the appropriate Treasury
Consideration, as the case may be, for Pledged Treasury Securities, thereby
reestablishing Normal Units, shall be responsible for any fees or expenses
payable in connection therewith. Except as provided in the Purchase Contract
Agreement, for so long as the Purchase Contract underlying a Stripped Unit
remains in effect, such Stripped Unit shall not be separable into its
constituent parts, and the rights and obligations of the Holder of such Stripped
Unit in respect of the Pledged Treasury Security and the Purchase Contract
constituting such Stripped Unit may be transferred and exchanged only as a
Stripped Unit.
B-6
Subject to the next succeeding paragraph, the Company shall pay, on
each Payment Date, the Contract Fee Payments, payable in respect of each
Purchase Contract to the Person in whose name the Stripped Units Certificate
evidencing such Purchase Contract is registered at the close of business on the
Record Date for such Payment Date. Contract Fee Payments, if any, will be
payable at the office of the Agent in the City of New York or, at the option of
the Company, by check mailed to the address of the Person entitled thereto at
such address as it appears on the Stripped Units Register.
The Company shall have the right, at any time prior to the Stock
Purchase Date, to defer the payment of any or all of the Contract Fee Payments
otherwise payable on any Payment Date, but only if the Company shall give the
Holders and the Agent written notice of its election to defer Contract Fee
Payments as provided in the Purchase Contract Agreement. Any Contract Fee
Payments so deferred shall, to the extent permitted by law, bear additional
Contract Fee Payments thereon at the rate of 6.00% per year (computed on the
basis of a 360-day year of twelve 30-day months), compounding on each succeeding
Payment Date, until paid in full (such deferred installments of Contract Fee
Payments, if any, together with the additional Contract Fee Payments accrued
thereon, are referred to herein as the "Deferred Contract Fee Payments").
Deferred Contract Fee Payments, if any, shall be due on the next succeeding
Payment Date except to the extent that payment is deferred pursuant to the
Purchase Contract Agreement. No Contract Fee Payments may be deferred to a date
that is after the Stock Purchase Date and no such deferral period may end other
than on a Payment Date.
In the event that the Company elects to defer the payment of Contract
Fee Payments on the Purchase Contracts until a Payment Date prior to the Stock
Purchase Date, then all Deferred Contract Fee Payments, if any, shall be payable
to the registered Holders as of the close of business on the Record Date
immediately preceding such Payment Date.
In the event that the Company elects to defer the payment of Contract
Fee Payments on the Purchase Contracts until the Stock Purchase Date, the Holder
of this Stripped Units Certificate will receive on the Stock Purchase Date, in
lieu of a cash payment, a number of shares of Common Stock (in addition to the
number of shares of Common Stock equal to the Settlement Rate) equal to (i) the
aggregate amount of Deferred Contract Fee Payments payable to the Holder of this
Stripped Units Certificate divided by (ii) the Applicable Market Value.
In the event the Company exercises its option to defer the payment of
Contract Fee Payments, then, until the Deferred Contract Fee Payments have been
paid, the Company shall not declare or pay dividends on, make distributions with
respect to, or redeem, purchase or acquire, or make a liquidation payment with
respect to, any of its Capital Stock other than (i) purchases, redemptions or
acquisitions of shares of Capital Stock in connection with any employment
contract, benefit plan or other similar arrangement with or for the benefit of
employees, officers or directors or a stock purchase or dividend reinvestment
plan, or the satisfaction by the Company of its obligations
B-7
pursuant to any contract or security outstanding on the date the Company
exercises its rights to defer the Contract Fee Payments; (ii) as a result of a
reclassification of the Company's Capital Stock or the exchange or conversion of
one class or series of the Company's Capital Stock for another class or series
of the Company's Capital Stock; (iii) the purchase of fractional interests in
shares of the Company's Capital Stock pursuant to the conversion or exchange
provisions of such Capital Stock or the security being converted or exchanged;
(iv) dividends or distributions in Capital Stock (or rights to acquire Capital
Stock) or repurchases, acquisitions or redemptions of Capital Stock in
connection with the issuance or exchange of Capital Stock (or securities
convertible into or exchangeable for shares of our Capital Stock); or (v)
redemptions, exchanges or repurchases of any rights outstanding under a
shareholder rights plan or the declaration or payment thereunder of a dividend
or distribution of or with respect to rights in the future.
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay Contract Fee
Payments, if any, or any Deferred Contract Fee Payments, and the rights and
obligations of Holders to purchase Common Stock, shall immediately and
automatically terminate, without the necessity of any notice or action by any
Holder, the Agent or the Company, if, on or prior to the Stock Purchase Date, a
Termination Event shall have occurred. Upon the occurrence of a Termination
Event, the Company shall promptly but in no event later than two business days
thereafter give written notice to the Agent, the Collateral Agent and to the
Holders, at their addresses as they appear in the Stripped Units Register. Upon
and after the occurrence of a Termination Event, the Collateral Agent shall
release the Pledged Treasury Securities from the Pledge in accordance with the
provisions of the Pledge Agreement.
Upon registration of transfer of this Stripped Units Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase Contract Agreement
and the Purchase Contracts evidenced hereby and the transferor shall be released
from the obligations under the Purchase Contracts evidenced by this Stripped
Units Certificate. The Company covenants and agrees, and the Holder, by his
acceptance hereof, likewise covenants and agrees, to be bound by the provisions
of this paragraph.
The Holder of this Stripped Units Certificate, by his acceptance
hereof, authorizes the Agent to enter into and perform the related Purchase
Contracts forming part of the Stripped Units evidenced hereby on his behalf as
its attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its trustee in the event
that the Company becomes the subject of a case under the Bankruptcy Code, agrees
to be bound by the terms and provisions thereof, covenants and agrees to perform
such Holder's obligations under such Purchase Contracts, consents to the
provisions of the Purchase Contract Agreement, authorizes the Agent to enter
into and perform the Pledge Agreement on such Holder's behalf as
B-8
attorney-in-fact, and consents to the Pledge of the Treasury Securities
underlying this Stripped Units Certificate pursuant to the Pledge Agreement. The
Holder further covenants and agrees, that, to the extent and in the manner
provided in the Purchase Contract Agreement and the Pledge Agreement, but
subject to the terms thereof, payments in respect of the Pledged Treasury
Securities, to be paid upon settlement of such Holder's obligations to purchase
Common Stock under the Purchase Contract, shall be paid on the Stock Purchase
Date by the Collateral Agent to the Company in satisfaction of such Holder's
obligations under such Purchase Contract and such Holder shall acquire no right,
title or interest in such payments. The obligations of each Holder to pay the
Purchase Price are non-recourse obligations and except to the extent paid by
Early Settlement or Merger Early Settlement, are payable solely out of the
proceeds of any Collateral pledged to secure the obligations of the Holders and
in no event will Holders be liable for any deficiency between such payments and
the Purchase Price.
Each Holder of any Unit, and each Beneficial Owner thereof, by its
acceptance thereof or of its interest therein, further agrees to treat (i)
itself as the owner of the related Debentures, Treasury Consideration or
Treasury Securities, as the case may be, and (ii) the Debentures as indebtedness
of the Company, in each case, for United States federal, state and local income
and franchise tax purposes.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
The Company, the Agent and its Affiliates and any agent of the Company
or the Agent may treat the Person in whose name this Stripped Units Certificate
is registered as the owner of the Stripped Units evidenced hereby for the
purpose of receiving any Contract Fee Payments and any Deferred Contract Fee
Payments performance of the Purchase Contracts and for all other purposes
whatsoever, whether or not any payments in respect thereof be overdue and
notwithstanding any notice to the contrary, and neither the Company, the Agent,
such Affiliate, nor any such agent shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent.
B-9
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - Custodian
________________________________
(cust) (minor)
Under Uniform Gifts to Minors Act
________________________________
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as
tenants in common
Additional abbreviations may also be used though not in the above list.
B-10
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
________________________________________________________________________________
________________________________________________________________________________
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)
________________________________________________________________________________
________________________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Stripped Units Certificates and all rights thereunder, hereby
irrevocably constituting and appointing ___________________________________
attorney to transfer said Stripped Units Certificates on the books of Anthem,
Inc. with full power of substitution in the premises.
Dated: ______________________ Signature:_____________________________
NOTICE: The signature to this
assignment must correspond with the
name as it appears upon the face of the
within Stripped Units Certificates in
every particular, without alteration or
enlargement or any change whatsoever.
Signature Guarantee: ___________________________________________________________
B-11
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Stock Purchase Date of the
Purchase Contracts underlying the number of Stripped Units evidenced by this
Stripped Units Certificate be registered in the name of, and delivered, together
with a check in payment for any fractional share, to the undersigned at the
address indicated below unless a different name and address have been indicated
below. If shares are to be registered in the name of a Person other than the
undersigned, the undersigned will pay any transfer tax payable incident thereto.
Dated: ___________________ Signature: _____________________________
Signature Guarantee:____________________
(if assigned to another person)
If shares are to be registered in REGISTERED HOLDER
the name of and delivered to a
Person other than the Holder,
please (i) print such Person's
name and address and (ii) provide Please print name and address of Registered
a guarantee of your signature: Holder:
_________________________________ ____________________________________________
Name Name
_________________________________ ____________________________________________
Address Address
Social Security or other Taxpayer
Identification Number, if any
B-12
ELECTION TO SETTLE EARLY
The undersigned Holder of this Stripped Units Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Stripped Units evidenced by this Stripped
Units Certificate specified below. The option to effect Early Settlement may be
exercised only with respect to Purchase Contracts underlying Stripped Units with
an aggregate Stated Amount equal to $1,000 or an integral multiple thereof. The
undersigned Holder directs that a certificate for shares of Common Stock
deliverable upon such Early Settlement be registered in the name of, and
delivered, together with a check in payment for any fractional share and any
Stripped Units Certificate representing any Stripped Units evidenced hereby as
to which Early Settlement of the related Purchase Contracts is not effected, to
the undersigned at the address indicated below unless a different name and
address have been indicated below. Pledged Treasury Securities deliverable upon
such Early Settlement will be transferred in accordance with the transfer
instructions set forth below. If shares are to be registered in the name of a
Person other than the undersigned, the undersigned will pay any transfer tax
payable incident thereto.
Dated: _________________ Signature:____________________________
Signature Guarantee:__________________
Number of Units evidenced hereby as to which Early Settlement of the
related Purchase Contracts is being elected:
If shares of Common Stock are REGISTERED HOLDER
to be registered in the name of
and delivered to and Pledged
Treasury Securities are to be
transferred to a Person other
than the Holder, please print Please print name and address of Registered
such Person's name and address: Holder:
________________________________ ___________________________________________
Name Name
________________________________ ___________________________________________
Address Address
Social Security or other Taxpayer
Identification Number, if any
Transfer instructions for Pledged Treasury Securities, transferable upon Early
Settlement or a Termination Event:
B-13
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have been
made:
Stated Amount
Amount of Amount of of the Global
Decrease in Increase in Certificate Signature of
Stated Amount Stated Amount Following Authorized
of the Global of the Global Such Decrease Signatory of
Date Certificate Certificate or Increase Agent
----------- ---------------- ------------------ ----------------- --------------
B-14
EXHIBIT C
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO
COLLATERAL AGENT
The Chase Manhattan Bank
Clearance & Collateral Management
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxxxx Xxxxxxxx
Re: Equity Security Units of Anthem, Inc. (the "Company")
We hereby notify you in accordance with Section 4.1 of the Pledge
Agreement, dated as of November 2, 2001, among the Company, you, as Collateral
Agent, Custodial Agent and Securities Intermediary, and us, as Purchase Contract
Agent and as attorney-in-fact for the holders of [Normal Units] [Stripped Units]
from time to time, that the holder of securities listed below (the "Holder") has
elected to substitute [$ _______ aggregate principal amount of Treasury
Securities (CUSIP No. _____)] [$_______ principal amount of Debentures or the
appropriate Treasury Consideration, as the case may be,] in exchange for the
related [Pledged Debentures or Pledged Treasury Consideration, as the case may
be (CUSIP No. ____),] [Pledged Treasury Securities] held by you in accordance
with the Pledge Agreement and has delivered to us a notice stating that the
Holder has transferred [Treasury Securities] [Debentures or the appropriate
Treasury Consideration, as the case may be,] to you, as Collateral Agent. We
hereby instruct you, upon receipt of such [Pledged Treasury Securities] [Pledged
Debentures or Pledged Treasury Consideration, as the case may be], and upon the
payment by such Holder of any applicable fees, to release the [Debentures or
Treasury Consideration, as the case may be,] [Treasury Securities] related to
such [Normal Units] [Stripped Units] to us in accordance with the Holder's
instructions.
Date: ______________________
THE BANK OF NEW YORK,
As Purchase Contract Agent under the Purchase
Contract Agreement, dated as of November 2,
2001, between the Company and the Purchase
Contract Agent
By: _________________________________________
Name:
Title:
C-1
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Debentures or Pledged Treasury Consideration, as the case
may be,] for the [Pledged Debentures or Pledged Treasury Consideration, as the
case may be,] [Pledged Treasury Securities]:
Name
Address
Social Security or other Taxpayer
Identification Number, if any
C-2
EXHIBIT D
INSTRUCTION TO PURCHASE CONTRACT AGENT
The Bank of New York
0 Xxxx Xxxxx, 00/xx/ Xxxxx
Xxx Xxxx, XX 00000
Attn: Corporate Trust Administration
Re: Equity Security Units of Anthem, Inc. (the "Company")
The undersigned Holder hereby notifies you, as Purchase Contract
Agent under the Purchase Contract Agreement, dated as of November 2, 2001,
between the Company and you, that it has delivered to The Chase Manhattan Bank,
as Collateral Agent, Custodial Agent and Securities Intermediary [$_________
aggregate principal amount of Treasury Securities] [$_________ principal amount
of Debentures or the appropriate Treasury Consideration, as the case may be,] in
exchange for the related [Pledged Debentures or Pledged Treasury Consideration
as the case may be,] [Pledged Treasury Securities] held by the Collateral Agent,
in accordance with Section 4.1 of the Pledge Agreement, dated as of November 2,
2001, among you, the Company and the Collateral Agent. The undersigned Holder
has paid the Collateral Agent all applicable fees relating to such exchange. The
undersigned Holder hereby instructs you to instruct the Collateral Agent to
release to you on behalf of the undersigned Holder the [Pledged Debentures or
Pledged Treasury Consideration, as the case may be,] [Pledged Treasury
Securities] related to such [Normal Units] [Stripped Units].
Date:
By:_____________________________________
Signature Guarantee:____________________
Dated:
Please print name and address of
Registered Holder:
Name Social Security or other Taxpayer
Identification Number, if any
Address
