CALCULATION AGENCY AGREEMENT
CALCULATION AGENCY AGREEMENT, dated as of July 2, 2002 (the "Agreement"),
between Xxxxxx Brothers Holdings Inc. (the "Company") and Xxxxxx Brothers Inc.,
as Calculation Agent.
WHEREAS, the Company has authorized the issuance of up to $4,600,000
aggregate principal amount of 10 Uncommon Values(R) Index SUNS(R), Stock Upside
Note Securities(R) Notes Due July 2, 2005* (the "Securities");
WHEREAS, the Securities will be issued under an Indenture dated as of
September 1, 1987, between the Company and Citibank, N.A., as Trustee (the
"Trustee"), as supplemented and amended by supplemental indentures dated as of
November 25, 1987, November 27, 1990, September 13, 1991, October 4, 1993,
October 1, 1995, and June 26, 1997, and incorporating Standard Multiple Series
Indenture Provisions dated July 30, 1987, as amended November 16, 1987
(collectively, the "Indenture"); and
WHEREAS, the Company requests the Calculation Agent to perform certain
services described herein in connection with the Securities;
NOW THEREFORE, the Company and the Calculation Agent agree as follows:
1. Appointment of Agent. The Company hereby appoints Xxxxxx Brothers Inc. as
Calculation Agent and Xxxxxx Brothers Inc. hereby accepts such appointment
as the Company's agent for the purpose of performing the services
hereinafter described upon the terms and subject to the conditions
hereinafter mentioned.
2. Calculations and Information Provided. In response to a request made by the
Trustee for a determination of the Maturity Payment Amount due at Stated
Maturity of the Securities, the Calculation Agent shall determine such
Maturity Payment Amount and notify the Trustee of its determination. The
Calculation Agent shall also be responsible for (a) the determination of
the Index Level on each Measurement Date, (b) the determination of the
Capped Annual Returns for each Measurement Date, (c) the determination of
the Rollover Closing Level of the 10 Uncommon Values Index for each
Measurement Period, (d) determining if any adjustments to the 10 Uncommon
Values Index and/or the Multipliers should be made and (e) whether a Market
Disruption Event has occurred. The Calculation Agent shall notify the
Trustee of any such adjustment or if a Market Disruption Event has
occurred. In addition, the Calculation Agent shall provide information to
the American Stock Exchange ("AMEX") that is necessary for the AMEX's daily
calculation and dissemination of the level of the 10 Uncommon Values Index
if the AMEX is unable to obtain such information. Annex A hereto sets forth
the procedures the Calculation Agent will use to determine the information
described in this Section 2.
* "10 Uncommon Values", "Stock Upside Note Securities" and "SUNS" are registered
trademarks of Xxxxxx Brothers Inc.
2
3. Calculations. Any calculation or determination by the Calculation Agent
pursuant hereto shall (in the absence of manifest error) be final and
binding. Any calculation made by the Calculation Agent hereunder shall, at
the Trustee's request, be made available at the Corporate Trust Office.
4. Fees and Expenses. The Calculation Agent shall be entitled to reasonable
compensation for all services rendered by it as agreed to between the
Calculation Agent and the Company.
5. Terms and Conditions. The Calculation Agent accepts its obligations herein
set out upon the terms and conditions hereof, including the following, to
all of which the Company agrees:
(a) in acting under this Agreement, the Calculation Agent is acting solely as
an independent expert of the Company and does not assume any obligation
toward, or any relationship of agency or trust for or with, any of the
holders of the Securities;
(b) unless otherwise specifically provided herein, any order, certificate,
notice, request, direction or other communication from the Company or the
Trustee made or given under any provision of this Agreement shall be
sufficient if signed by any person who the Calculation Agent reasonably
believes to be a duly authorized officer or attorney-in-fact of the Company
or the Trustee, as the case may be;
(c) the Calculation Agent shall be obliged to perform only such duties as are
set out specifically herein and any duties necessarily incidental thereto;
(d) the Calculation Agent, whether acting for itself or in any other capacity,
may become the owner or pledgee of Securities with the same rights as it
would have had if it were not acting hereunder as Calculation Agent; and
(e) the Calculation Agent shall incur no liability hereunder except for loss
sustained by reason of its gross negligence or wilful misconduct.
6. Resignation; Removal; Successor. (a) The Calculation Agent may at any time
resign by giving written notice to the Company of such intention on its
part, specifying the date on which its desired resignation shall become
effective, subject to the appointment of a successor Calculation Agent and
acceptance of such appointment by such successor Calculation Agent, as
hereinafter provided. The Calculation Agent hereunder may be removed at any
time by the filing with it of an instrument in writing signed by or on
behalf of the Company and specifying such removal and the date when it
shall become effective. Such resignation or removal shall take effect upon
the appointment by the Company, as hereinafter provided, of a successor
Calculation Agent and the acceptance of such appointment by such successor
Calculation Agent. In the event a successor Calculation Agent has not been
appointed and has not accepted its duties within 90 days of the Calculation
Agent's notice of resignation, the Calculation Agent may apply to any court
of competent jurisdiction for the designation of a successor Calculation
Agent.
3
(b) In case at any time the Calculation Agent shall resign, or shall be removed,
or shall become incapable of acting, or shall be adjudged bankrupt or insolvent,
or make an assignment for the benefit of its creditors or consent to the
appointment of a receiver or custodian of all or any substantial part of its
property, or shall admit in writing its inability to pay or meet its debts as
they mature, or if a receiver or custodian of it or all or any substantial part
of its property shall be appointed, or if any public officer shall have taken
charge or control of the Calculation Agent or of its property or affairs, for
the purpose of rehabilitation, conservation or liquidation, a successor
Calculation Agent shall be appointed by the Company by an instrument in writing,
filed with the successor Calculation Agent. Upon the appointment as aforesaid of
a successor Calculation Agent and acceptance by the latter of such appointment,
the Calculation Agent so superseded shall cease to be Calculation Agent
hereunder.
(c) Any successor Calculation Agent appointed hereunder shall execute,
acknowledge and deliver to its predecessor, to the Company and to the Trustee an
instrument accepting such appointment hereunder and agreeing to be bound by the
terms hereof, and thereupon such successor Calculation Agent, without any
further act, deed or conveyance, shall become vested with all the authority,
rights, powers, trusts, immunities, duties and obligations of such predecessor
with like effect as if originally named as Calculation Agent hereunder, and such
predecessor, upon payment of its charges and disbursements then unpaid, shall
thereupon become obligated to transfer, deliver and pay over, and such successor
Calculation Agent shall be entitled to receive, all moneys, securities and other
property on deposit with or held by such predecessor, as Calculation Agent
hereunder.
(d) Any corporation into which the Calculation Agent hereunder may be merged or
converted or any corporation with which the Calculation Agent may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Calculation Agent shall be a party, or any
corporation to which the Calculation Agent shall sell or otherwise transfer all
or substantially all of the assets and business of the Calculation Agent shall
be the successor Calculation Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto.
7. Certain Definitions. Terms not otherwise defined herein or in Annex A
hereto are used herein as defined in the Indenture or the Securities.
8. Indemnification. The Company will indemnify the Calculation Agent against
any losses or liability which it may incur or sustain in connection with
its appointment or the exercise of its powers and duties hereunder except
such as may result from the gross negligence or wilful misconduct of the
Calculation Agent or any of its agents or employees. The Calculation Agent
shall incur no liability and shall be indemnified and held harmless by the
Company for or in respect of any action taken or suffered to be taken in
good faith by the Calculation Agent in reliance upon written instructions
from the Company.
9. Notices. Any notice required to be given hereunder shall be delivered in
person, sent (unless otherwise specified in this Agreement) by letter,
telex or facsimile transmission or communicated by telephone (confirmed in
a writing dispatched within two Business Days), (a) in the case of the
Company, to it at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (facsimile:
(000) 000-0000) (telephone: (000) 000-0000), Attention: Treasurer, with a
copy to 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (facsimile: (212)
000-0000) (telephone: (000) 000-0000), Attention: Corporate Secretary, (b)
in the case of the Calculation Agent, to it at 000 Xxxxxxx Xxxxxx, Xxx
0
Xxxx, Xxx Xxxx 00000 (facsimile: (000) 000-0000) (telephone: (212)
000-0000), Attention: Equity Derivatives Trading and (c) in the case of the
Trustee, to it at 000 Xxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000
(facsimile: (000) 000-0000) (telephone: (000) 000-0000), Attention:
Corporate Trust Department or, in any case, to any other address or number
of which the party receiving notice shall have notified the party giving
such notice in writing. Any notice hereunder given by telex, facsimile or
letter shall be deemed to be served when in the ordinary course of
transmission or post, as the case may be, it would be received.
10. Governing Law. This Agreement shall be governed by and continued in
accordance with the laws of the State of New York.
11. Counterparts. This Agreement may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
12. Benefit of Agreement. This Agreement is solely for the benefit of the
parties hereto and their successors and assigns, and no other person shall
acquire or have any rights under or by virtue hereof.
5
IN WITNESS WHEREOF, this Calculation Agency Agreement has been
entered into as of the day and year first above written.
XXXXXX BROTHERS HOLDINGS INC.
By:_/s/ Xxxxxx Xxxxx
Name: Xxxxxx Xxxxx
Title: Vice President
XXXXXX BROTHERS INC.,
as Calculation Agent
By:/s/ Xxxxxx Xxxxx
Name: Xxxxxx Xxxxx
Title: Vice President
ANNEX A
1. Uncommon Values Index.
Each year, the Investment Policy Committee of Xxxxxx Brothers Inc.,
with the assistance of its Equity Research Department, selects a portfolio of 10
common stocks or other equity securities that it believes are attractive
investments over the year for which they are chosen (the "10 Uncommon Values").
The "10 Uncommon Values Index" represents an equal dollar-weighted
portfolio of the common stocks or other equity securities of the ten companies
underlying the 10 Uncommon Values for each Measurement Period during the period
beginning on the date of announcement of the 10 Uncommon Values in 2002 and
ending on the Stated Maturity, as adjusted by certain extraordinary corporate
events involving the issuers of the Index Securities as described herein. The
announcement of the ten common stocks that shall make up the 10 Uncommon Values
Index shall be made on or about July 1 (such date of announcement, the
"Announcement Day") of each year preceding the initial issuance of and during
the term of the Securities. Except as set forth below, the Index Securities in
the 10 Uncommon Values Index shall remain constant for each Measurement Period.
2. Determination of the Maturity Payment Amount.
The Calculation Agent shall determine the Capped Annual Returns for
each of the Measurement Dates, the Index Level on each Measurement Date and the
Maturity Payment Amount payable for each Security.
The amount payable at Stated Maturity for each $1,000 principal amount
of Securities (the "Maturity Payment Amount") shall equal the greater of (a)
$1,000 and (b) the Alternative Redemption Amount.
3. Determination of the Rollover Closing Level of the 10 Uncommon Values
Index.
The Calculation Agent shall determine the Rollover Closing Level of the
10 Uncommon Values Index for each Measurement Period after the Close of Trading
on the Trading Date prior to each Announcement Day (the "Rollover Determination
Date"). The "Rollover Closing Level" shall equal the sum of (a) the sum of the
products of the Closing Prices and the applicable Multipliers for each Index
Security and (b) the Cash Included in the 10 Uncommon Values Index at the
Closing of Trading, in each case on the Rollover Determination Date. The
Rollover Closing Level shall then be assumed to be used to buy, on the ensuing
Announcement Day, equal dollar amounts of the ten common stocks that shall
initially be the Index Securities for the next Measurement Period at each Index
Security's Average Execution Price.
4. Multipliers.
The Multiplier relating to each Index Security is the number of shares
(including fractional shares, expressed as a decimal) of such Index Security
included in the 10 Uncommon Values Index. The Multipliers shall be determined by
the Calculation Agent and shall be based
A-1
on each Index Security's Average Execution Price. The number of shares of an
Index Security constituting the "Multiplier" for such Index Security shall equal
the number of shares (or fraction of one share) of such Index Security that,
when multiplied by the Average Execution Price for such Index Security, results
in the Index Security initially accounting on the Announcement Day for 10% of
the level of 10 Uncommon Values Index on an equal dollar-weighted basis. The
Multipliers with respect to each Index Security shall remain constant for the
Measurement Period that such Index Security is part of the 10 Uncommon Values
Index unless adjusted for certain extraordinary corporate events as described
below. Each Multiplier shall be rounded at the Calculation Agent's discretion.
5. Adjustments to the Multipliers and the 10 Uncommon Values Index.
Adjustments to a Multiplier and the 10 Uncommon Values Index shall be
made in the following circumstances. For purposes of these adjustments, except
as noted below, American Depository Receipts ("ADRs") are treated like common
stock if a comparable adjustment to the foreign shares underlying the ADRs is
made pursuant to the terms of the depository agreement for the ADRs or if the
holders of ADRs are entitled to receive property in respect of the underlying
foreign share.
(a) If an Index Security is subject to a stock split or reverse stock
split, then once the split has become effective, the Multiplier relating to the
Index Security shall be adjusted. The Multiplier shall be adjusted to equal the
product of the number of shares outstanding of the Index Security after the
split with respect to each share of such Index Security immediately prior to
effectiveness of the split and the prior Multiplier.
(b) If an Index Security is subject to an extraordinary stock dividend or
extraordinary stock distribution that is given equally to all holders of shares,
then once the Index Security is trading ex-dividend, the Multiplier for such
Index Security shall be increased by the product of the number of shares of such
Index Security issued with respect to one share of such Index Security and the
prior Multiplier.
(c) If the issuer of an Index Security, or if an Index Security is an ADR,
the issuer of the underlying foreign share is being liquidated or dissolved or
is subject to a proceeding under any applicable bankruptcy, insolvency or other
similar law, such Index Security shall continue to be included in the 10
Uncommon Values Index so long as the primary exchange, trading system or market
is reporting a market price for the Index Security. If a market price, including
a price on a bulletin board service, is no longer available for an Index
Security, then the value of the Index Security shall equal zero for so long as
no market price is available, and no attempt shall be made to find a replacement
stock or increase the level of the 10 Uncommon Values Index to compensate for
the deletion of such Index Security.
(d) If the issuer of an Index Security, or if an Index Security is an ADR,
the issuer of the underlying foreign share, has been subject to a merger or
consolidation and is not the surviving entity and holders of the Index Security
are entitled to receive cash, securities, other property or a combination
thereof in exchange for the Index Security, then the following shall be included
in the 10 Uncommon Values Index:
A-2
(i) To the extent cash is received, the 10 Uncommon Values Index shall include
the amount of the cash consideration at the time holders are entitled to
receive the cash consideration (the "M&A Cash Component"), plus accrued
interest. Interest shall accrue beginning the first London Business Day
after the day that holders are entitled to receive the cash consideration
until the next Announcement Day (the "M&A Cash Component Interest Accrual
Period"). Interest shall accrue on the M&A Cash Component at a rate equal
to the London Interbank Offered Rate ("LIBOR") with a term corresponding to
the M&A Cash Component Interest Accrual Period.
(ii) To the extent that equity securities that are traded or listed on an
exchange, trading system or market are received, once the exchange for the
new securities has become effective, the former Index Security shall be
removed from the 10 Uncommon Values Index and the new security shall be
added to the 10 Uncommon Values Index as a new Index Security. The
Multiplier for the new Index Security shall equal the product of the last
value of the Multiplier of the original Index Security and the number of
securities of the new Index Security exchanged with respect to one share of
the original Index Security.
(iii)To the extent that equity securities that are not traded or listed on an
exchange, trading system or market or non-equity securities or other
property (other than cash) are received, the Calculation Agent shall
determine the "Fair Market Value" of the securities or other property
received based on the Average Execution Price. The 10 Uncommon Values Index
shall include an amount of cash equal to the product of the Multiplier of
the Index Security and the Fair Market Value (the "M&A Sale Component").
The 10 Uncommon Values Index shall also include accrued interest on the M&A
Sale Component. Interest shall accrue beginning the first London Business
Day after the day that an affiliate of Holdings sells the securities or
other property used to hedge Holdings' obligations under the Securities
until the next Announcement Day (the "M&A Sale Component Interest Accrual
Period"). Interest shall accrue at a rate equal to LIBOR with a term
corresponding to the M&A Sale Component Interest Accrual Period.
(e) If all of an Index Security of an issuer is converted into or exchanged
for the same or a different number of shares of any class or classes of common
stock other than the Index Security, whether by capital reorganization,
recapitalization or reclassification or otherwise, then, once the conversion has
become effective, the former Index Security shall be removed from the 10
Uncommon Values Index and the new common stock shall be added to the 10 Uncommon
Values Index as a new Index Security. The Multiplier for each new Index Security
shall equal the product of the last value of the Multiplier of the original
Index Security and the number of shares of the new Index Security issued with
respect to one share of the original Index Security.
(f) If the issuer of an Index Security issues to all of its shareholders
common stock or another equity security that is traded or listed on an exchange,
trading system or market of an issuer other than itself, then the new common
stock or other equity security shall be added to the 10 Uncommon Values Index as
a new Index Security. The multiplier for the new Index Security shall equal the
product of the last value of the Multiplier with respect to the original
A-3
Index Security and the number of shares of the new Index Security with respect
to one share of the original Index Security.
(g) If an ADR is no longer listed or admitted to trading on a United States
securities exchange or trading system registered under the Securities Exchange
Act or is no longer a security quoted on the Nasdaq then the foreign share
underlying the ADR shall be deemed added to the 10 Uncommon Values Index as a
new Index Security. The initial Multiplier for that new Index Security shall
equal the last value of the Multiplier for the ADR multiplied by the number of
underlying foreign shares represented by a single ADR.
(h) If an Index Security is subject to an extraordinary dividend or an
extraordinary distribution, including upon liquidation or dissolution, of cash,
equity securities that are not traded or listed on an exchange, trading system
or market, non-equity securities or other property of any kind which is received
equally by all holders of such Index Security, then the 10 Uncommon Values Index
shall include the following:
(i) To the extent cash is entitled to be received, the 10 Uncommon
Values Index shall include on each day after the time that the Index
Security trades ex-dividend until the date the cash consideration is
entitled to be received, the present value of the cash to be received,
discounted at a rate equal to LIBOR, with a term beginning that day and
ending on the date that the cash is entitled to be received (the "PV
Extraordinary Cash Component"). When the cash consideration is received,
the PV Extraordinary Cash Component will be deleted from the 10 Uncommon
Values Index and the 10 Uncommon Values Index shall include the amount of
the cash consideration (the "Extraordinary Cash Component"), plus accrued
interest. Interest shall accrue on the Extraordinary Cash Component
beginning the first London Business Day after the day that holders are
entitled to receive the Extraordinary Cash Component until the next
Announcement Day (the "Extraordinary Cash Component Interest Accrual
Period"). Interest shall accrue at a rate equal to LIBOR with a term
corresponding to the Extraordinary Cash Component Interest Accrual Period.
(ii) To the extent that equity securities that are not traded or
listed on an exchange, trading system or market or non-equity securities or
other property (other than cash) is received, the Calculation Agent shall
determine the fair market value of the securities or other property
received based on the Average Execution Price and the 10 Uncommon Values
Index shall include an amount of cash equal to the product of the
Multiplier of the Index Security and the fair market value (the
"Extraordinary Sale Component"). The 10 Uncommon Values Index shall also
include accrued interest on the Extraordinary Sale Component. Interest
shall accrue beginning the first London Business Day after the day that an
affiliate of Holdings sells the securities or other property used to hedge
Holdings' obligations under the Securities until the next Announcement Day
(the "Extraordinary Sale Component Interest Accrual Period"). Interest
shall accrue at a rate equal to LIBOR with a term corresponding to
Extraordinary Sale Component Interest Accrual Period.
A-4
(iii) If similar corporate events occur with respect to the issuer of
an equity security other than common stock that is included in the 10
Uncommon Values Index, adjustments similar to the above will be made for
that equity security.
The payment of an ordinary cash dividend by an issuer of an Index
Security from current income or retained earnings shall not result in an
adjustment to the Multiplier.
No adjustments of any Multiplier of an Index Security shall be required
unless the adjustment would require a change of at least .1% (.001) in the
Multiplier then in effect. The Multiplier resulting from any of the adjustments
specified above shall be rounded at the Calculation Agent's discretion.
6. Determination of Daily Level of the 10 Uncommon Values.
If the AMEX is unable to obtain certain information necessary for its
daily calculation and dissemination of the level of the 10 Uncommon Values
Index, the Calculation Agent shall provide the necessary information as follows
below.
In order to determine the value of an Index Security that is listed on
a non-United States exchange, trading system or market (the "Foreign Value"),
the Calculation Agent shall, once per Trading Day, value the Index Security
using the most recent sales price of such Index Security available from the
primary exchange, trading system or market in the Index Security's home market,
quoted as of the Close of Trading.
In order to convert the Foreign Value into U.S. dollars, the Calculation
Agent shall use the Official X.X. Reuters Spot Closing Rate. If there are
several quotes for the Official X.X. Reuters Spot Closing Rate, the first quoted
rate starting at 11:00 A.M. shall be the rate used. If there is no such Official
X.X. Reuters Spot Closing Rate for a country's currency at 11:00 A.M., New York
City time, the Foreign Value shall be determined using the last available U.S.
dollar cross-rate quote before 11:00 A.M., New York City time.
In order to determine the value of an Index Security that is listed or
quoted on a bulletin board service, the Calculation Agent shall use the average
of the midpoint of the bid and ask prices provided by three market makers in
that Index Security. The Calculation Agent shall obtain the bid and ask prices
promptly upon the opening of trading on that Trading Day at 9:30 A.M., New York
City time or at such other time as the Calculation Agent determines.
The Calculation Agent shall provide AMEX with the value of the M&A Cash
Component, the M&A Sale Component, the PV Extraordinary Cash Component, the
Extraordinary Cash Component and the Extraordinary Sale Component as soon as
such values are available. The Calculation Agent shall, once per Trading Day,
provide AMEX with the interest accrued on the Cash Included in the 10 Uncommon
Values Index.
7. Definitions.
Set forth below are the terms used in the Agreement and in this Annex
A.
A-5
"ADRs" shall have the meaning assigned thereto in paragraph 5.
"Agreement" shall have the meaning set forth in the preamble
to this Agreement.
"Alternative Redemption Amount" shall mean, with respect to
each $1,000 principal amount of Securities, the product of:
(1) $1,000; and
(2) 1 + the sum of the Capped Annual Returns for three annual Measurement
Periods.
"AMEX" shall mean the American Stock Exchange.
"Announcement Day" shall have the meaning assigned thereto in
paragraph 1.
"Average Execution Price" for a security or other property
shall mean the average execution price that an affiliate of the Company receives
or pays for such security or property, as the case may be, to hedge the
Company's obligations under the Securities.
"Business Day", notwithstanding any provision in the
Indenture, shall mean any day that is not a Saturday, a Sunday or a day on which
the NYSE, the Nasdaq or the AMEX is not open for trading or banking institutions
or trust companies in the City of New York are authorized or obligated by law or
executive order to close.
"Calculation Agent" shall mean the person that has entered
into an agreement with the Company providing for, among other things, the
determination of the Maturity Payment Amount, which term shall, unless the
context otherwise requires, include its successors and assigns. The initial
Calculation Agent shall be Xxxxxx Brothers Inc.
"Capped Annual Return", when used with respect to any
Measurement Period, shall mean the lesser
of:
(x) Ending Index Level - Starting Index Level; and
Starting Index Level
(y) 11%.
"Cash Included in the 10 Uncommon Values Index" shall mean the
M&A Cash Component, the M&A Sale Component, the PV Extraordinary Cash Component,
the Extraordinary Cash Component, the Extraordinary Sale Component, and interest
accrued thereon as provided for herein.
"Close of Trading" shall mean 4:00 p.m., New York City time.
"Closing Price" means the following, determined by the
Calculation Agent based on information reasonably available to it:
A-6
(i) If the Index Security is listed on a United States national securities
exchange, trading system or is a Nasdaq security, the last reported
sale price at the Close of Trading, regular way, on such day, on the
primary securities exchange or trading system registered under the
Securities Exchange Act of 1934 on which such Index Security is listed
or admitted to trading or Nasdaq, as the case may be.
(ii) If the Index Security is listed on a non-United States securities
exchange, trading system (other than a bulletin board) or market, the
last reported sale price at the Close of Trading, regular way, on such
day, on the primary exchange, trading system or market on which such
Index Security is listed or admitted to trading, as the case may be.
The Closing Price will then be converted into U.S. dollars using the
Official X.X. Reuters Spot Closing Rate.
(iii) If the Index Security is not listed on a national securities exchange
or trading system or is not a Nasdaq security, and is listed or traded
on a bulletin board, the Average Execution Price of the Index Security.
If such Index Security is listed or traded on a non-United States
bulletin board, the Closing Price will then be converted into U.S.
dollars using the Official X.X. Reuters Spot Closing Rate.
(iv) If a Market Disruption Event has occurred for an Index Security on any
Measurement Date, the Closing Price for such Index Security shall
initially be determined using the Closing Price for such Index Security
on the next preceding Trading Day on which a Market Disruption Event
did not occur. Once the Market Disruption Event has ceased, the Closing
Price of such Index Security shall then be adjusted to equal the
Average Execution Price of the Index Security. The Rollover Closing
Level and the resulting Multipliers shall then be recalculated and
adjusted accordingly.
"Company" shall have the meaning set forth in the preamble to
this Agreement.
"Ending Index Level" shall mean, for any Measurement Period,
the Index Level on the Measurement Date at the end of that Measurement Period.
"Extraordinary Cash Component" shall have the meaning assigned
thereto in paragraph 5(h)(i).
"Extraordinary Cash Component Interest Accrual Period" shall
have the meaning assigned thereto in paragraph 5(h)(i).
"Extraordinary Sale Component" shall have the meaning assigned
thereto in paragraph 5(h)(ii).
"Extraordinary Sale Component Interest Accrual Period" shall
have the meaning assigned thereto in paragraph 5(h)(ii).
"Foreign Value" shall have the meaning assigned thereto in
paragraph 6.
"Indenture" shall have the meaning set forth in the preamble
to this Agreement.
A-7
"Index Level", when used with respect to any Measurement Date,
shall equal the sum of (a) the sum of the products of the Closing Prices and the
applicable Multipliers for each Index Security for which a Market Disruption
Event does not occur on such Measurement Date, (b) if a Market Disruption Event
occurs for an Index Security on such Measurement Date, the product of the
Closing Price for such Index Security and the Multiplier for such Index Security
and (c) any cash included in the 10 Uncommon Values Index on such Measurement
Date.
"Index Securities" shall mean the securities included in the
10 Uncommon Values Index from time to time.
"M&A Cash Component" shall have the meaning assigned thereto
in paragraph 5(d)(i).
"M&A Cash Component Interest Accrual Period" shall have the
meaning assigned thereto in paragraph 5(d)(i).
"M&A Sale Component" shall have the meaning assigned thereto
in paragraph 5(d)(ii).
"M&A Sale Component Interest Accrual Period" shall have the
meaning assigned thereto in paragraph 5(d)(ii).
"Market Disruption Event", with respect to an Index Security,
means any of the following events as determined by the Calculation Agent:
(i) A suspension, absence or material limitation of trading of such Index
Security has occurred on that day, in each case, for more than two hours of
trading or during the one-half hour period preceding the Close of Trading
on the primary organized U.S. exchange or trading system on which such
Index Security is traded or, in the case of an Index Security not listed or
quoted in the United States, on the primary exchange, trading system or
market for such Index Security. Limitations on trading during significant
market fluctuations imposed pursuant to NYSE Rule 80B or any applicable
rule or regulation enacted or promulgated by the NYSE, any other exchange,
trading system, or market, any other self regulatory organization or the
Securities and Exchange Commission of similar scope or as a replacement for
Rule 80B, may be considered material. Notwithstanding the first sentence of
this paragraph, a Market Disruption Event for an Index Security traded on a
bulletin board means a suspension, absence or material limitation of
trading of such Index Security for more than two hours or during the one
hour period preceding 4:00 p.m., New York City time.
(ii) A suspension, absence or material limitation has occurred on that day, in
each case, for more than two hours of trading or during the one-half hour
period preceding the Close of Trading in options contracts related to such
Index Security, whether by reason of movements in price exceeding levels
permitted by an exchange, trading system or market on which such options
contracts are traded or otherwise.
A-8
(iii)Information is unavailable on that date, through a recognized system of
public dissemination of transaction information, for more than two hours of
trading or during the one-half hour period preceding the Close of Trading,
of accurate price, volume or related information in respect of such Index
Security or in respect of options contracts related to such Index Security,
in each case traded on any major U.S. exchange or trading system or in the
case of Index Securities of a non-U.S. issuer, traded on the primary
non-U.S. exchange, trading system or market.
For purposes of determining whether a Market Disruption Event has
occurred:
(i) a limitation on the hours or number of days of trading shall not constitute
a Market Disruption Event if it results from an announced change in the
regular business hours of the relevant exchange, trading system or market;
(ii) any suspension in trading in an options contract on an Index Security by a
major securities exchange, trading system or market by reason of (a) a
price change violating limits set by such securities market, (b) an
imbalance of orders relating to those contracts, or (c) a disparity in bid
and ask quotes relating to those contracts shall constitute a Market
Disruption Event notwithstanding that the suspension or material limitation
is less than two hours;
(iii)a suspension or material limitation on an exchange, trading system or in a
market shall include a suspension or material limitation of trading by one
class of investors provided that the suspension continues for more than two
hours of trading or during the last one-half hour period preceding the
Close of Trading on the relevant exchange, trading system or market but
shall not include any time when the relevant exchange, trading system or
market is closed for trading as part of that exchange's, trading system's
or market's regularly scheduled business hours; and
(iv) "Trading systems" include bulletin board services.
"Maturity Payment Amount" shall have the meaning set forth in
Section 2 of this Annex A.
"Measurement Date" shall mean, (a) when used with respect to
the first and second annual Measurement Periods, the Trading Day immediately
prior to the Announcement Day occurring in 2003 and 2004, respectively and (b)
when used with respect to the measurement date for the third annual Measurement
Date, June 29, 2005.
"Measurement Period" shall mean each of the following three
periods: (a) the period commencing on June 27, 2002 and ending at the Close of
Trading on the Measurement Date occurring in 2003 (sometimes referred to as the
"first annual Measurement Period"); (b) the period commencing on the
Announcement Day occurring in 2003 and ending at the Close of Trading on the
Measurement Date occurring in 2004 (sometimes referred to as the "second annual
Measurement Period"); and (c) the period commencing on the Announcement Day
A-9
occurring in 2004 and ending at the Close of Trading on June 29, 2005 (sometimes
referred to as the "third annual Measurement Period").
"Multiplier" shall have the meaning assigned thereto in
paragraph 4.
"Nasdaq" shall mean The Nasdaq Stock Market, Inc.
"NYSE" shall mean the New York Stock Exchange.
"Official X.X. Reuters Spot Closing Rates" shall mean the
closing spot rates published on Reuters page "WMRA" relevant for such Index
Security.
"PV Extraordinary Cash Component" shall have the meaning
assigned thereto in paragraph 5(h)(i).
"Rollover Closing Level" shall have the meaning assigned
thereto in paragraph 3.
"Rollover Determination Date" shall have the meaning assigned
thereto in paragraph 3.
"Starting Index Level" shall mean (a) when used with respect
to the first Measurement Period, 100 and (b) when used with respect to any other
Measurement Period, the Ending Index Level for the Measurement Period.
"Stated Maturity" shall mean July 2, 2005, or if a Market
Disruption Event occurs on June 29, 2005, on the third Business Day after the
date that an affiliate of the Company completes the sale of each Index Security
with respect to which a Market Disruption Event occurred to hedge the Company's
obligations under the Securities.
"Trading Day" shall mean a day on which trading generally is
conducted on the NYSE, AMEX and the Nasdaq and in the over-the-counter market
for equity securities as determined by the Calculation Agent.
"Trustee" shall have the meaning set forth in the preamble to
this Agreement.
A-10
