Exhibit 4.02
CALCULATION AGENCY AGREEMENT
CALCULATION AGENCY AGREEMENT, dated as of April 29, 2003
(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
$8,452,500 aggregate principal amount of The Dow Xxxxx Industrial AverageSM
SUNS(R), Stock Upside Note Securities Due April 29, 2010 (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 Maturity Payment Amount, (b) the
determination of whether adjustments to the Closing Level should be
made, (c) the determination of the Adjusted Final Index Level, (d) the
determination of the Successor Index if publication of the Index is
discontinued and (e) the determination of whether a Market Disruption
Event has occurred. The Calculation Agent shall notify the Trustee of
all such determinations and any such adjustment or if a Market
Disruption Event has occurred. Annex A hereto sets forth the procedures
the Calculation Agent will use to determine the information described
in this Section 2.
* "Dow Xxxxx" and "Dow Xxxxx Industrial Average" are servicemarks of Dow
Xxxxx & Company, Inc. and have been licensed for use by Xxxxxx Brothers
Holdings Inc. The Securities, based on the performance of the Dow Xxxxx
Industrial Average, are not sponsored, endorsed, sold or promoted by
Dow Xxxxx, and Dow Xxxxx makes no representation regarding the
advisability of investing in the Securities.
"Stock Upside Note Securities" and "SUNS" are trademarks of Xxxxxx
Brothers Inc.
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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.
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(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: (212)
526-7000), Attention: Treasurer, with a copy to 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 (facsimile: (000) 000-0000) (telephone: (212)
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526-7000), Attention: Corporate Secretary, (b) in the case of the
Calculation Agent, to it at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (facsimile: (000) 000-0000) (telephone: (000) 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.
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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/ Xxxxx Corrigan_______
Name: Xxxxx Xxxxxxxx
Title: Vice President
XXXXXX BROTHERS INC.,
as Calculation Agent
By:_/s/ Xxxxx Corrigan_______
Name: Xxxxx Xxxxxxxx
Title: Vice President
ANNEX A
1. The Index.
The Index is the Dow Xxxxx Industrial AverageSM, as calculated
by Dow Xxxxx & Company, Inc. (the "Index").
The Index is a price-weighted index of 30 common stocks chosen by the
editors of The Wall Street Journal as representative of a broad cross-section of
U.S. industry. As of April 24, 2003, the component companies of the Dow Xxxxx
Industrial Average were as follows: 3M Company, Alcoa Inc., Altria Group, Inc.,
American Express Company, AT&T Corp., The Boeing Company, Caterpillar Inc.,
Citigroup Inc., The Coca-Cola Company, E.I. du Pont de Nemours and Company,
Xxxxxxx Kodak Company, Exxon Mobil Corporation, General Electric Company,
General Motors Corporation, Hewlett-Packard Company, The Home Depot, Inc.,
Honeywell International Inc., Intel Corporation, International Business Machines
Corporation, International Paper Company, X.X. Xxxxxx Xxxxx & Co., Xxxxxxx &
Xxxxxxx, XxXxxxxx'x Corporation, Merck & Co., Inc., Microsoft Corporation, The
Procter & Xxxxxx Company, SBC Communications Inc., United Technologies
Corporation, Wal-Mart Stores, Inc. and The Xxxx Disney Company.
2. Determination of the Maturity Payment Amount.
The Calculation Agent shall determine (i) the Adjusted Final
Index Level and (ii) the amount payable on the Stated Maturity Date for each
$1,000 principal amount of Securities (the "Maturity Payment Amount").
The Maturity Payment Amount, for each $1,000 principal amount
of Securities, shall be equal to the greater of (a) $1,000 and (b) the
Alternative Redemption Amount
3. Discontinuance of the Index.
(a) If Dow Xxxxx & Company, Inc. ("Dow Xxxxx") discontinues publication of the
Index and Dow Xxxxx or another entity publishes a successor or substitute index
(the "Successor Index") that the Calculation Agent determines, in its sole
discretion, to be comparable to the discontinued Index, then the Calculation
Agent shall calculate the Maturity Payment Amount pursuant to Section 2 hereof
by reference to the index level of such Successor Index at the Close of Trading
on the NYSE, AMEX, Nasdaq or the relevant exchange or market for the Successor
Index on the date that any subsequent Closing Level is to be determined.
(b) Upon any selection by the Calculation Agent of a Successor Index, the
Company shall promptly give notice to the holders of the Securities.
(c) If Dow Xxxxx discontinues publication of the Index prior to, and such
discontinuance is continuing on, any date that a Closing Level is to be
determined and the Calculation Agent determines that no Successor Index is
available at such time, then, on such date, the Calculation Agent shall
determine the Closing Level to be used in computing the Adjusted Final Index
Level and the Maturity Payment Amount. Each such Closing Level shall be computed
by the Calculation Agent in accordance with the formula for and method of
calculating the Index last in effect prior to such discontinuance, using the
Closing Level (or, if trading in the relevant securities has been materially
suspended or materially limited, its good faith estimate of the Closing Level
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that would have prevailed but for such suspension or limitation) at the close of
the principal trading session on such date of each security most recently
comprising the Index on the primary organized U.S. exchange or trading system on
which such securities trade.
4. Alteration of Method of Calculation.
If at any time the method of calculating the Index or a
Successor Index, or the Closing Level to be used in computing the Alternative
Redemption Amount, is changed in a material respect, or if the Index or a
Successor Index is in any other way modified so that such Index does not, in the
opinion of the Calculation Agent, fairly represent the value of the Index or
such Successor Index had such changes or modifications not been made, then, from
and after such time, the Calculation Agent will, at the Close of Trading in New
York City on the date that the Final Index Level to be used in computing the
Alternative Redemption Amount is to be determined, make such calculations and
adjustments as, in the good faith judgment of the Calculation Agent, may be
necessary in order to arrive at a level of a stock index comparable to the Index
or such Successor Index, as the case may be, as if such changes or modifications
had not been made, and calculate the Closing Level and the Maturity Payment
Amount with reference to the Index or such Successor Index, as adjusted.
Accordingly, if the method of calculating the Index or a Successor Index is
modified so that the level of such index is a fraction of what it would have
been if it had not been modified (e.g., due to a split in the index), then the
Calculation Agent shall adjust such index in order to arrive at a level of the
Index or such Successor Index as if it had not been modified (e.g., if such
split had not occurred).
5. Definitions.
Set forth below are the terms used in the Agreement and in
this Annex A.
"Adjusted Final Index Level" shall mean the product of (a) .868 and (b)
the Final Index Level.
"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 (a) $1,000 and (b) the Adjusted
Final Index Level, divided by the Initial Index Level.
"AMEX" shall mean the American Stock Exchange LLC.
"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 Adjusted Final Index Level and 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.
"Close of Trading" shall mean 4:00 p.m., New York City time.
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"Closing Level" shall mean, with respect to any day, the last reported
level of the Index, the Successor Index or any security which is a component of
either such index, as the case may be, at 4:00 p.m., New York City time, as
reported by Dow Xxxxx & Company, Inc., the publisher of the Successor Index or
the primary exchange on which any such security then trades, as the case may be,
on such day; provided, that if any such day is not a Business Day, the last
reported level on the next following Business Day will be used; provided
further, that if a Market Disruption Event occurs on any such date, the
Calculation Agent will determine the Closing Level by reference to the last
reported level on the next following Business Day on which no Market Disruption
Event occurs.
"Company" shall have the meaning set forth in the preamble to this
Agreement.
"Dow Xxxxx" shall have the meaning set forth in Section 3(a) of this
Annex A.
"Final Index Level" shall mean the Closing Level on the Valuation Date.
"Indenture" shall have the meaning set forth in the preamble to this
Agreement.
"Index" shall have the meaning set forth in Section 1 of this Annex A.
"Initial Index Level" shall mean 8440.04, the Closing Level on April
24, 2003.
"Market Disruption Event", on any day, shall mean any of the following
events as determined by the Calculation Agent:
(i) A suspension, absence or material limitation of trading in
20% or more of the underlying stocks which then comprise the Index or
any Successor Index, as the case may be, 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 securities are traded or,
in the case of a common stock not listed or quoted in the United
States, on the primary exchange, trading system or market for such
security. Limitations on trading during significant market fluctuations
imposed pursuant to the rules of any primary organized U.S. exchange or
trading system similar 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 a
security traded on a bulletin board means a suspension, absence or
material limitation of trading of such security for more than two hours
or during the one-hour period preceding the Close of Trading.
(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 the Index or any Successor Index, as the case may
be, whether by reason of movements in price exceeding levels permitted
by an exchange, trading system or market on which such options
contracts related to the Index, or any Successor Index, are traded or
otherwise.
(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
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information in respect of 20% or more of the underlying stocks which
then comprise the Index or any Successor Index, as the case may be, or
in respect of options contracts related to the Index or any Successor
Index, as the case may be, in each case traded on any major U.S.
exchange or trading system or, in the case of 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 the
Index or any Successor Index, as the case may be, 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 system" includes bulletin board services.
"Maturity Payment Amount" shall have the meaning set forth in Section 2
of this Annex A.
"Nasdaq" shall mean The Nasdaq Stock Market, Inc.
"NYSE" shall mean The New York Stock Exchange, Inc.
"Securities" shall have the meaning set forth in the preamble to this
Agreement.
"Stated Maturity Date" shall mean April 29, 2010 (or if April 29, 2010
is not a Business Day, on the next Business Day); provided, that if a Market
Disruption Event occurs on the Valuation Date, the Stated Maturity Date shall be
the third Business Day following the date that the Final Index Level is
determined.
"Successor Index" shall have the meaning set forth in Section 3(a) of
this Annex A.
"Trustee" shall have the meaning set forth in the preamble to this
Agreement.
"Valuation Date" shall mean April 26, 2010; provided, that if such day
is not a Business Day, the Valuation Date shall mean the next following Business
Day; provided further, that if a Market Disruption Event occurs on such date,
the Valuation Date will be the next following Business Day on which no Market
Disruption Event occurs.
