EXHIBIT 4.8
PRUDENTIAL FINANCIAL, INC.
AND
JPMORGAN CHASE BANK,
AS PURCHASE CONTRACT AGENT
PURCHASE CONTRACT AGREEMENT
Dated as of ___, 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............................................ 13
SECTION 1.3 Form of Documents Delivered to Agent............................................ 14
SECTION 1.4 Acts of Holders; Record Dates................................................... 15
SECTION 1.5 Notices......................................................................... 16
SECTION 1.6 Notice to Holders; Waiver....................................................... 17
SECTION 1.7 Effect of Headings and Table of Contents........................................ 18
SECTION 1.8 Successors and Assigns.......................................................... 18
SECTION 1.9 Separability Clause............................................................. 18
SECTION 1.10 Benefits of Agreement........................................................... 18
SECTION 1.11 Governing Law................................................................... 18
SECTION 1.12 Legal Holidays.................................................................. 18
SECTION 1.13 Counterparts.................................................................... 19
SECTION 1.14 Inspection of Agreement......................................................... 19
ARTICLE II
CERTIFICATE FORMS
SECTION 2.1 Forms of Certificates Generally................................................. 19
SECTION 2.2 Form of Agent's Certificate of Authentication................................... 20
ARTICLE III
THE UNITS
SECTION 3.1 Title and Terms; Denominations.................................................. 21
SECTION 3.2 Rights and Obligations Evidenced by the Certificates............................ 21
SECTION 3.3 Execution, Authentication, Delivery and Dating.................................. 22
SECTION 3.4 Temporary Certificates.......................................................... 23
SECTION 3.5 Registration; Registration of Transfer and Exchange............................. 23
SECTION 3.6 Book-Entry Interests............................................................ 25
SECTION 3.7 Notices to Holders.............................................................. 26
SECTION 3.8 Appointment of Successor Clearing Agency........................................ 26
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SECTION 3.9 Definitive Certificates......................................................... 26
SECTION 3.10 Mutilated, Destroyed, Lost and Stolen Certificates.............................. 27
SECTION 3.11 Persons Deemed Owners........................................................... 28
SECTION 3.12 Cancellation.................................................................... 28
SECTION 3.13 Establishment of Stripped Units................................................. 29
SECTION 3.14 Reestablishment of Normal Units................................................. 31
SECTION 3.15 Transfer of Collateral upon Occurrence of Termination Event..................... 32
SECTION 3.16 No Consent to Assumption........................................................ 33
ARTICLE IV
THE CAPITAL SECURITIES
SECTION 4.1 Payment of Distributions; Rights to Distributions Preserved; Notice............. 33
SECTION 4.2 Notice and Voting............................................................... 34
SECTION 4.3 Distribution of Debentures...................................................... 35
ARTICLE V
THE PURCHASE CONTRACTS; THE REMARKETING
SECTION 5.1 Purchase of Shares of Common Stock.............................................. 35
SECTION 5.2 Contract Fee Payments........................................................... 37
SECTION 5.3 Deferral of Contract Fee Payments............................................... 38
SECTION 5.4 Payment of Purchase Price: Remarketing.......................................... 40
SECTION 5.5 Issuance of Shares of Common Stock.............................................. 45
SECTION 5.6 Adjustment of Settlement Rate................................................... 46
SECTION 5.7 Notice of Adjustments and Certain Other Events.................................. 53
SECTION 5.8 Termination Event; Notice....................................................... 53
SECTION 5.9 Early Settlement................................................................ 54
SECTION 5.10 Early Settlement Upon Merger.................................................... 55
SECTION 5.11 Charges and Taxes............................................................... 57
SECTION 5.12 No Fractional Shares............................................................ 58
ARTICLE VI
REMEDIES
SECTION 6.1 Unconditional Right of Holders to Purchase Common Stock......................... 58
SECTION 6.2 Restoration of Rights and Remedies.............................................. 58
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SECTION 6.3 Rights and Remedies Cumulative.................................................. 59
SECTION 6.4 Delay or Omission Not Waiver.................................................... 59
SECTION 6.5 Undertaking for Costs........................................................... 59
SECTION 6.6 Waiver of Stay or Extension Laws................................................ 59
ARTICLE VII
THE AGENT
SECTION 7.1 Certain Duties and Responsibilities............................................. 60
SECTION 7.2 Notice of Default............................................................... 61
SECTION 7.3 Certain Rights of Agent......................................................... 61
SECTION 7.4 Not Responsible for Recitals or Issuance of Units............................... 62
SECTION 7.5 May Hold Units.................................................................. 62
SECTION 7.6 Money Held in Custody........................................................... 62
SECTION 7.7 Compensation and Reimbursement.................................................. 62
SECTION 7.8 Corporate Agent Required; Eligibility........................................... 63
SECTION 7.9 Resignation and Removal; Appointment of Successor............................... 63
SECTION 7.10 Acceptance of Appointment by Successor.......................................... 65
SECTION 7.11 Merger, Conversion, Consolidation or Succession to Business..................... 65
SECTION 7.12 Preservation of Information; Communications to Holders.......................... 66
SECTION 7.13 No Obligations of Agent......................................................... 66
SECTION 7.14 Tax Compliance.................................................................. 66
ARTICLE VIII
SUPPLEMENTAL AGREEMENTS
SECTION 8.1 Supplemental Agreements Without Consent of Holders.............................. 67
SECTION 8.2 Supplemental Agreements With Consent of Holders................................. 67
SECTION 8.3 Execution of Supplemental Agreements............................................ 69
SECTION 8.4 Effect of Supplemental Agreements............................................... 69
SECTION 8.5 Reference to Supplemental Agreements............................................ 69
ARTICLE IX
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1 Covenant Not to Merge, Consolidate, Sell or Convey Property Except Under
Certain Conditions.............................................................. 69
SECTION 9.2 Rights and Duties of Successor Corporation...................................... 70
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SECTION 9.3 Opinion of Counsel Given to Agent................................................ 71
ARTICLE X
COVENANTS
SECTION 10.1 Performance Under Purchase Contracts............................................ 71
SECTION 10.2 Maintenance of Office or Agency................................................. 71
SECTION 10.3 Company to Reserve Common Stock................................................. 72
SECTION 10.4 Covenants as to Common Stock.................................................... 72
SECTION 10.5 Statements of Officer of the Company as to Default.............................. 72
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 ___, 2001, between Prudential
Financial, Inc., a New Jersey corporation (the "Company"), and JPMorgan Chase
Bank, 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;
(d) the following terms have the meanings given to them in the
Declaration: (i) Capital Securities Guarantee; (ii) Indenture and (iii)
Liquidation Distribution; and
(e) the following terms have the meanings given to them in this
Section 1.1(e):
"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(c).
"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 any committee of such Board duly authorized to act generally or
in any particular respect for such Board hereunder or any officer of the
Company to whom such authority has been duly delegated by such Board or
such committee, it being understood that any action taken by such officer
pursuant to the authority so delegated shall, for all purposes hereunder,
be deemed to have the same validity and effect as if it had been taken by
such Board or such committee, as the case may be.
"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
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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.
"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 Securities" means the ___ % Capital Securities of the Trust,
each having a stated liquidation amount of $50, representing, together with
the Common Securities, undivided beneficial interests in the assets of the
Trust.
"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 of the Company, but does not include the Class B Stock of the Company
unless expressly otherwise stated.
"Cash Merger" has the meaning set forth in Section 5.10.
"Certificate" means a Normal Units Certificate or a Stripped Units
Certificate.
"Class B Stock" means the Class B Stock, par value $0.01 per share, of
the Company.
"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(c).
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"Collateral" has the meaning specified in Section 2.1 of the Pledge
Agreement.
"Collateral Agent" means JPMorgan Chase Bank, 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 Securities" has the meaning specified in Section 7.1 of the
Declaration.
"Common Stock" means the Common Stock, par value $0.01 per share, of
the Company but does not include the Class B Stock of the Company unless
expressly otherwise stated.
"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 __% 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 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 000 Xxxx 00xx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Institutional
Trust Services.
"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 JPMorgan Chase Bank, 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.
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"Debentures" means the series of senior debt securities of the Company
designated the ___ % Debentures due 2006, to be issued under the First
Supplemental Indenture, dated as of the date hereof, between the Company
and JPMorgan Chase Bank, as trustee.
"Declaration" means the Amended and Restated Declaration of Trust,
dated ___, 2001, of Prudential Financial Capital Trust I, among the
Company, as the sponsor, the trustees named therein and the holders from
time to time of undivided beneficial interests in the assets of the Trust.
"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).
"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 ___, 2001, between the Company and JPMorgan Chase Bank, as
trustee.
"Global Capital Security Certificate" means a certificate evidencing
the rights and obligations of a Holder in respect of the number of Capital
Securities specified on such certificate and which is registered in the
name of a Clearing Agency or a nominee thereof.
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"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 ___, 2001, between the
Company and JPMorgan Chase Bank, as trustee.
"Indenture Trustee" means JPMorgan Chase Bank, a New York banking
corporation, as trustee under the Indenture and the First Supplemental
Indenture, or any successor thereto.
"Initial Remarketing Date" means ___, 2004.
"Initial Remarketing Period" means the five Business-Day period ending
on the third Business Day prior to the Initial Remarketing Date.
"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)(iii).
"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).
"Normal Unit" means the collective rights and obligations of a Holder
of a Normal Units Certificate in respect of a Capital Security 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.
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"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(c).
"Officer's Certificate" means a certificate signed 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, containing the information specified in
Section 1.2, if applicable.
"Opinion of Counsel" means a written opinion of legal counsel, who may
be an employee of the Company, or any other legal counsel who shall be
reasonably acceptable to the Agent and provided that the General Counsel or
any Vice President and Corporate Counsel of the Company shall be deemed to
be reasonably acceptable to the Agent, containing the information specified
in Section 1.2, if applicable.
"Opt-out Treasury Consideration" has meaning specified in Section
5.4(b)(v).
"Outstanding" or "Outstanding Securities" 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 Capital Security or the
appropriate Treasury Consideration, or a Liquidation Distribution in
respect of such Capital Security, 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 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;
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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 (i) the Company or (ii) any
Affiliate of the Company holding Normal Units or Stripped Units for the
benefit and account of the Company, any other Affiliate thereof or for its
own benefit and account shall be disregarded and deemed not to be
outstanding, provided 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 Securities 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 ___, ___, ___ and ___, commencing ___, 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 Capital
Securities, 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 Agent, the Debentures delivered to the Collateral Agent upon
liquidation of the Trust, 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 Capital Securities" 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.
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"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.
"Property Trustee" means JPMorgan Chase Bank, as property trustee
under the Declaration, or any successor thereto that is a financial
institution unaffiliated with the Company.
"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(a).
"Purchased Shares" has the meaning specified in Section 5.6(a)(6).
"Quarterly Payment Date" means each ___, ___, ___, and ___ commencing
___, 2002.
"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.
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"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).
"Remarketing Agreement" means the Remarketing Agreement to be entered
into by and among the Company, the Trust, the Remarketing Agent and the
Agent.
"Remarketing Fee" has the meaning specified in Section 5.4(b)(i).
"Remarketing Value" means the sum of:
(i) the value at the Initial Remarketing Date or any Subsequent
Remarketing Date, as the case may be, of U.S. Treasury securities that
will pay, on or prior to the Quarterly 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 Quarterly
Payment Date, on (1) the Capital Securities which are included in
Normal Units and (2) the Separate Capital Securities, in each case,
which are participating in the remarketing, assuming for that purpose
that (x) no distribution payment on the Capital Securities will then
have been deferred and (y) the distribution rate on the Capital
Securities is equal to the Coupon Rate,
(ii) the value at the Initial Remarketing Date or any
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 Capital
Securities that are included in Normal Units and (2) the Separate
Capital Securities, in each case, which are participating in the
remarketing, and
(iii) if distribution payments on the Capital Securities are
then being deferred, the amount equal to the aggregate unpaid
distribution payments on (1) the Capital Securities that are included
in Normal Units and (2) the Separate Capital Securities, in each case,
which are participating in the remarketing accrued to the Initial
Remarketing Date or any 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
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based on the ask-side price of the 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, during the Initial Remarketing Period or Subsequent
Remarketing Period, as the case may be, as determined by a reasonable and
customary means selected in good faith by the Remarketing Agent, plus
accrued interest to that date.
"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 department of the Agent (or any
successor of the Agent), including any Vice President, any assistant Vice
President, any assistant secretary, the treasurer, any assistant treasurer,
any trust officer, any senior trust officer or any other officer of the
Agent who customarily performs functions similar to those performed by the
Persons who at the time shall be such officers, respectively, or to whom
any corporate trust matter is referred because of such person's knowledge
of and familiarity with the particular subject and who, in each of the
above cases, shall have direct responsibility for the administration of
this Agreement.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Intermediary" means JPMorgan Chase Bank, in its capacity
as Securities Intermediary under the Pledge Agreement, together with its
successors in such capacity.
"Separate Capital Securities" 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 Capital Security,
Normal Unit or Stripped Unit, $50.
"Stock Purchase Date" means ___, 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.
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"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, provided there has been one or
more Failed Remarketings, the date on which the Remarketing Agent has
consummated a successful remarketing in accordance with Section 5.4 hereof,
such date in no event hereby later than one Business Day immediately
preceding the Stock Purchase Date. The Subsequent Remarketing Dates are
________, ________, ________, ________, ________ and ________, 2004.
"Subsequent Remarketing Period" means the five Business-Day period
ending three Business Days prior to any Subsequent Remarketing Date.
"Termination Date" means the date, if any, on which a Termination
Event occurs.
"Termination Event" means the occurrence of any of the following
events at any time on or prior to the Stock Purchase Date:
(i) 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) 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
12
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(a)(i).
"TIA" means the Trust Indenture Act of 1939, as amended.
"Trading Day" has the meaning specified in Section 5.1(c).
"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 ___) maturing on ___, 2004 [Insert stock purchase date] that will
pay $1,000 on such maturity date.
"Trust" means Prudential Financial Capital Trust I, a statutory
business trust formed under the laws of the State of Delaware, or any
successor thereto by merger or consolidation.
"Underwriting Agreement" means the Underwriting Agreement dated ___,
2001 among the Company, The Prudential Insurance Company of America, the
Trust 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.
(a) 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 Officer's 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.
(b) Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement (other than the
Officer's Certificate provided in Section 10.5) shall include:
13
(i) a statement that the individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(ii) 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;
(iii) 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
(iv) a statement as to whether, in the opinion of such
individual, such condition or covenant has been complied with.
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.
(c) 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.
14
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 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.
(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 Securities 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
Securities 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
15
(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 Securities 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
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, to the Agent at 000 Xxxx 00xx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Institutional
Trust Services, 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, to the Company at Prudential
Financial, Inc., 000 Xxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxx 00000, telecopy:
(000) 000-0000, Attention: Treasurer, or at any other address furnished in
writing to the Agent by the Company; or
16
(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 the Collateral Agent at 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Institutional Trust Services, 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 Property 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 the Property Trustee
at 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Institutional Trust Services, telecopy: (000) 000-0000, or at any other
address furnished in writing by the Property Trustee to the Company; or
(e) the Indenture 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 or
mailed, first-class postage prepaid, telecopied or delivered by overnight
air courier guaranteeing next day delivery, addressed to the Indenture
Trustee at 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Institutional Trust Services, telecopy: (000) 000-0000, or at
any other address furnished in writing by the Indenture Trustee to the
Company.
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.
17
(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 Units 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.
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, without regard to its
principles of conflicts of laws.
SECTION 1.12 LEGAL HOLIDAYS.
(a) In any case where any Payment Date, Initial Remarketing Date or
Subsequent Remarketing Date, as the case may be, is not a Business Day,
then (notwithstanding any other provision of this Agreement or the Normal
Units Certificates) payments on, or the remarketing of, the Capital
Securities shall not occur on such date, but such payments, or such
remarketing date, as the case may be, shall occur on the next succeeding
Business Day with the same force and effect as if made on such date,
provided that no interest or distributions shall
18
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 month or calendar year, as applicable, such
payment, or such remarketing date, as the case may be, shall occur on the
immediately preceding Business Day with the same force and effect as if
made on such 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 payment will be paid in respect of
the delay. However, if that Business Day is in the next succeeding calendar
month or calendar year, as applicable, the payment will be made on the
immediately preceding Business Day, in each case 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.
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
19
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 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.
20
(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 10,000,000 (11,500,000 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,
5.10 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 Capital
Security or the appropriate Treasury Consideration, as the case may be,
subject to the Pledge of such Capital Security or such Treasury
Consideration, as the case may be, by such Holder pursuant to the Pledge
Agreement, and the rights and obligations of the 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 Capital Security 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 Capital Security
or such Treasury Consideration, as the case may be, for the benefit of the
Company, to secure the obligation of the Holder under each 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
Contracts shall not entitle the Holders of 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.
21
(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 Contracts shall not entitle the
Holders of 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 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 officer of the Agent, as such Holder's
attorney-in-fact. Such signature by an authorized officer of the Agent
shall be conclusive evidence that the Holder of such Certificate has
entered into the Purchase Contracts evidenced by such Certificate.
(e) Each Certificate shall be dated the date of its authentication.
22
(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 officer 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 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
23
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.
(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 3.4, 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
24
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 Capital
Securities 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 or its custodian by, or on behalf of, the Company. Such Global
Certificate shall initially be registered in the applicable Register 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 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 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
25
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,
(ii) the Company elects to terminate the book-entry system
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 and the Agent 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.
26
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 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 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 Capital Securities,
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
27
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
distributions on the Capital Securities, receiving payment of Contract Fee
Payments, performance of the Purchase Contracts and for all other purposes
whatsoever (subject to Sections 4.1(a) and 5.2(a), whether or not any such
distributions 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. None of the Company, the
Agent nor any agent of the Company or the Agent will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of a Global
Certificate or maintaining, supervising or reviewing any records relating
to such beneficial ownership interests.
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 Capital
Securities, the appropriate Treasury Consideration or Treasury Securities,
as the case may be, after the occurrence of a Termination Event; 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
28
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
customary procedures unless otherwise directed by Issuer Order.
(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 Capital Securities or Pledged
Treasury Consideration, as applicable, from the related Purchase Contracts
in respect of the Normal Units held by such Holder at any time from and
after the date of this Agreement and on or prior to the second Business Day
preceding the Stock Purchase Date by substituting for such Pledged Capital
Securities or Pledged Treasury Consideration, as the case may be, Treasury
Securities that will pay an amount equal to the aggregate Stated Amount of
such Normal Units (a "Collateral Substitution"), 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 Capital Securities 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 Capital Securities 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 second Business Day prior to the
Initial Remarketing Period or any Subsequent Remarketing Period, as the
case may be, and ending, if there is a Failed Remarketing, on the second
Business Day following the Initial Remarketing Period or any Subsequent
Remarketing Period, as the case may be. If the remarketing is successful,
the Holder may not substitute Treasury Securities until the Business Day
following the Initial Remarketing Date or any Subsequent Remarketing Date,
as the case may be. 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
29
the Pledge Agreement, the Collateral Agent will release to the Agent, on
behalf of the Holder, such Pledged Capital Securities 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:
(i) cancel the related Normal Units;
(ii) transfer the Pledged Capital Securities or Pledged
Treasury Consideration, as the case may be, to the Holder; and
(iii) 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 Capital Securities or
Pledged Treasury Consideration, as the case may be, from the related
Purchase Contract and to substitute Treasury Securities for such Pledged
Capital Securities 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 Capital Securities, only in
integral multiples of 20 Normal Units, or (ii) if the Collateral
Substitutions occur after a successful remarketing 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
Capital Securities or Pledged Treasury Consideration, as the case may be,
constituting a part of such Normal Units, and any distributions on such
Pledged Capital Securities 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 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
30
shall not be separable into its constituent parts, and the rights and
obligations of the Holder of such Normal Unit in respect of the Capital
Security 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 Capital Securities or the
appropriate Treasury Consideration (and identified 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 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 Capital
Securities 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 second Business Day prior to the
Initial Remarketing Period or any Subsequent Remarketing Period, as the
case may be, and ending, if there is a Failed Remarketing, on the second
Business Day following the Initial Remarketing Period or any Subsequent
Remarketing Period, as the case may be. If the remarketing is successful,
the Holder may not reestablish Normal Units until the Business Day
following the Initial Remarketing Date or any Subsequent Remarketing Date,
as the case may be. Upon receipt of the Capital Securities 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:
(i) cancel the related Stripped Units;
(ii) transfer the Pledged Treasury Securities to the Holder;
and
(iii) 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.
31
(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 a successful remarketing, 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.
(d) Holders who elect to reestablish Normal Units in accordance with
this Section 3.14 shall be responsible for any fees or expenses payable to
the Collateral Agent for its services as Collateral Agent in respect of
such reestablishment, and the Company shall not be responsible for any such
fees or expenses.
(e) In the event a Holder reestablishing Normal Units pursuant to
this Section 3.14 fails to effect a book-entry transfer of the Stripped
Units or fails to deliver a Stripped Units Certificate to the Agent after
depositing Capital Securities or the appropriate Treasury Consideration
with the Collateral Agent, the Pledged Treasury Securities constituting a
part of such Stripped Units, and any distributions on such Pledged Treasury
Securities, shall be held in the name of the Agent or its nominee in trust
for the benefit of such Holder, until such Stripped Units are so
transferred or the Stripped Units Certificate is so delivered, as the case
may be, or, with respect to a Stripped Units Certificate, such Holder
provides evidence satisfactory to the Company and the Agent that such
Stripped Units Certificate has been destroyed, lost or stolen, together
with any indemnity that may be required by the Agent and the Company.
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 Capital Securities, 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 Capital Securities 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
32
Capital Securities, 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
Capital Securities, 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.
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 CAPITAL SECURITIES
SECTION 4.1 PAYMENT OF DISTRIBUTIONS; RIGHTS TO DISTRIBUTIONS
PRESERVED; NOTICE.
(a) A distribution on any Capital Security or a payment on any
Treasury Consideration, as the case may be, which is paid on any Payment
Date shall, subject to receipt thereof by the 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 Capital Security 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 Capital Securities or
Treasury Consideration, as applicable, 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 distributions
accumulated and unpaid, and to accumulate distributions, which were carried
by the Capital Securities or Treasury Consideration, as applicable,
underlying such other Normal Units Certificate.
33
(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, distributions on the Capital Security or payments
on 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
distributions 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 the 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 to which a Collateral
Substitution has been effected, distributions on the related Capital
Securities 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 Capital
Securities that formerly comprised a part of such Holder's Normal Units,
such Holder shall be entitled to receive the distributions on such
separated Capital Securities.
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
Capital Securities but only to the extent instructed by the Holders as described
below. Upon receipt of notice of any meeting at which holders of Capital
Securities are entitled to vote or upon any solicitation of consents, waivers or
proxies of holders of Capital Securities, 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 Capital Securities entitled to vote) shall be entitled to
instruct the Agent as to the exercise of the voting rights pertaining to the
Pledged Capital Securities 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 Capital Securities 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
34
Capital Security 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 Capital Securities and the Trust
shall covenant to such effect in the Declaration.
SECTION 4.3 DISTRIBUTION OF DEBENTURES.
Upon a voluntary or involuntary dissolution of the Trust in accordance
with the Declaration, the Liquidation Distribution shall be delivered to the
Collateral Agent in exchange for the Pledged Capital Securities. Thereafter, the
applicable part of the Liquidation Distribution (as defined in the Declaration)
will be substituted for the Pledged Capital Securities, and will be held by the
Collateral Agent in accordance with the terms of the Pledge Agreement to secure
the obligations of each Holder of Normal Units to purchase the Common Stock of
the Company under the Purchase Contracts constituting a part of such Normal
Units. The remaining portion of the Liquidation Distribution shall be
distributed to the Holders of Separate Capital Securities (as defined in the
Pledge Agreement). Following a voluntary or involuntary dissolution of the
Trust, the Holders and the Collateral Agent shall have such security interests,
rights and obligations with respect to the Liquidation Distribution as the
Holders and the Collateral Agent had in respect of the Pledged Capital
Securities as provided in Articles II, III, IV, V and VI of the Pledge
Agreement, and, unless the context otherwise requires, any reference herein to
the Capital Securities or Pledged Capital Securities shall be deemed to be a
reference to such Debentures. The Company may cause to be made in any Normal
Units Certificates thereafter to be issued such change in phraseology and form
(but not in substance) as may be appropriate to reflect the liquidation of the
Trust and the substitution of Debentures for Capital Securities as Collateral.
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,
(i) if the Applicable Market Value (as defined below) is equal
to or greater than $___ (the "Threshold Appreciation Price"), ___
shares of Common Stock per Purchase Contract,
35
(ii) if the Applicable Market Value is less than the Threshold
Appreciation Price, but is greater than $___ [Insert Common Stock IPO
price], 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
$___ [Insert Common Stock IPO price], ___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). As provided in Section 5.12, no
fractional shares of Common Stock will be issued upon settlement of
Purchase Contracts.
(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 such Holder), agrees to be bound by the terms and
provisions thereof, covenants
36
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 Capital Securities, 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 Capital Securities, 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
Corporate Trust Office 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 in immediately available funds
to the account designated to the Agent by a written notice by such Person
at least five Business Days prior to the applicable Payment Date.
(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.
37
(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 Substitution or the reestablishment 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 Section 5.9, 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 reestablishment of a Normal Unit
pursuant to Sections 3.13 or 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 Contracts underlying such Units
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 reestablishment of 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 Merger Early Settlement Date, as the case may be, or
with respect to which a Collateral Substitution or an establishment or
reestablishment of a 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
reestablishment 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 __% [Insert sum of contract fee payment
rate and applicable capital securities distribution rate.] per year
38
(computed on the basis of a 360-day year of 12 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, 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 Stock Purchase 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, then 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 (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's Capital Stock,
(ii) make any payment of principal, interest or premium, if any, on or
repay or repurchase or redeem or make any other payment in respect of any
debt securities of the Company that rank pari passu with or junior in
interest to the Debentures or (iii) make any guarantee payments with
respect to any guarantee by the Company of the debt securities of any
subsidiary of the Company if such guarantee ranks pari passu with or junior
in interest to the Debentures. Restrictions referred to in clauses (i)
through (iii) of
39
this Section 4.2 shall not apply to: (A) dividends or distributions in
shares of, or warrants or rights to subscribe for or purchase shares of,
the Company's Capital Stock, (B) any declaration of a dividend in
connection with the implementation of a stockholders' rights plan, or the
issuance of stock, other securities, cash or other assets, under any such
plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, (C) payments under any guarantee, (D) 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, (E) 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, or (F) purchases or acquisitions of shares of
the Common Stock in connection with the satisfaction by the Company of its
obligations under any employee benefit plan or any other contractual
obligation of the Company (other than a contractual obligation ranking
expressly by its terms pari passu with or junior in interest to the
Debentures).
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) (i) 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 Trust, the Agent and the
Remarketing Agent, but substantially as set forth in Exhibit C to the
Declaration, to sell the Capital Securities of Holders of Normal
Units, other than Holders thereof which have elected not to
participate in the remarketing pursuant to clause (v) below, and
holders of Separate Capital Securities which have elected pursuant to
clause (b)(vi) of this Section 5.4 to participate in the remarketing.
On the twelfth Business Day prior to the Initial Remarketing Date, the
Agent shall give Holders of Normal Units and holders of Separate
Capital Securities notice of the remarketing (the form of which notice
to be provided by the Company) in a daily newspaper in the English
language of general circulation in The City of New York, which is
expected to be The Wall Street Journal, 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 (v) below, that must be delivered by Holders of Normal Units
that elect not to participate in the remarketing pursuant to clause
(v) below, no later than 10:00 a.m. on the eighth Business Day
preceding the Initial Remarketing Date or any Subsequent Remarketing
40
Date, as the case may be. The Agent shall notify, by 4:00 p.m., New
York City time, on the eighth Business Day preceding the Initial
Remarketing Date or any Subsequent Remarketing Date, as the case may
be, the Remarketing Agent and the Collateral Agent of the aggregate
number of Capital Securities of Normal Unit Holders to be remarketed.
On the eighth Business Day preceding the Initial Remarketing Date or
any Subsequent Remarketing Date, as the case may be, no later than by
4:00 p.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 Capital Securities to be remarketed.
Upon receipt of such notice from the Agent and the Custodial Agent,
the Remarketing Agent will, during the Initial Remarketing Period, or
any Subsequent Remarketing Period, as the case may be, use its
reasonable best efforts to sell such Capital Securities during such
period at a price equal to 100.5% of the Remarketing Value. If there
is a successful Remarketing, by approximately 4:30 p.m., New York City
time, on the day of the successful Remarketing within the Initial
Remarketing Period or the applicable Subsequent Remarketing Period, as
the case may be, the Reset Agent shall promptly notify by telephone
(promptly confirmed in writing) the Company, the Trust, the Purchase
Contract Agent, the Collateral Agent, the Custodial Agent, the
Property Trustee, the Depositary and the Indenture Trustee of the
Reset Rate determined in the Remarketing. On the second Business Day
preceding the Initial Remarketing Date or any Subsequent Remarketing
Date, as the case may be, the Collateral Agent and the Custodial
Agent, pursuant to the terms of the Pledge Agreement, will deliver for
the settlement of the remarketing to the Remarketing Agent all Capital
Securities to be remarketed. The sale of the Capital Securities will
be settled on the Initial Remarketing Date, or any Subsequent
Remarketing Date, as the case may be. 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 Capital Securities of
Holders of Normal Units that were remarketed. In the event of a
successful remarketing, on the Initial Remarketing Date or any
Subsequent Remarketing Date, as the case may be, 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 ("Remarketing Fee")
an amount not exceeding 25 basis points (.25%) of the total proceeds
from the
41
remarketing. The Remarketing Agent will remit (1) the portion of the
proceeds from the remarketing attributable to the Separate Capital
Securities to the holders of Separate Capital Securities 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 Initial Remarketing Date or any Subsequent
Remarketing Date, as the case may be. Holders whose Capital Securities
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 Capital Securities
included in the remarketing at a price equal to at least 100.5% of the
Remarketing Value, settling on the Initial Remarketing Date, the
remarketing will be deemed to have failed (a "Failed Remarketing").
The Remarketing Agent shall make further attempts (each, a "Subsequent
Remarketing") to remarket the Capital Securities in accordance with
the initial remarketing 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 (as described in (b)(iii) below) has been published in respect
of any immediately preceding Failed Remarketing, (ii) any Subsequent
Remarketing must settle on one of the Subsequent Remarketing Dates and
(iii) the last Subsequent Remarketing Date must settle no later than
on the Business Day immediately preceding the Stock Purchase Date.
(iii) 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 Capital Securities included in the remarketing
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. The Collateral Agent, for the benefit of the Company, may
exercise its rights as a secured party with respect to such Capital
Securities, including those actions specified in (b)(iv) below;
provided, that if upon the occurrence of the Last Failed Remarketing,
the Collateral Agent exercises such rights for the benefit of the
Company with respect to such Capital Securities, any accumulated and
unpaid distributions on such Capital Securities will become payable by
the Company to the Agent for payment to the Holder of the Normal Units
to which such Capital Securities relates. Such payment will be made by
the Company on or prior to 11 a.m., New York City time, on the Stock
Purchase Date in lawful money of the United States by certified or
cashiers' check or wire transfer
42
in immediately available funds payable to or upon the order of the
Agent. The Company will cause a notice of any Failed Remarketing to be
published on the second Business Day prior to the Initial Remarketing
Date or any Subsequent Remarketing Date, as applicable, and the
Company will cause a notice of the Last Failed Remarketing, if
applicable, to be published on the second Business Day following the
Stock Purchase Date. Any such notice of a Failed Remarketing or Last
Failed Remarketing will be published in a daily newspaper in the
English language of general circulation in The City of New York, which
is expected to be The Wall Street Journal.
(iv) With respect to any Capital Securities 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 Capital Securities in full satisfaction of the Holders'
obligations under the Purchase Contracts or (B) sell such Capital
Securities in one or more public or private sales.
(v) A Holder of Normal Units may elect not to participate
in the remarketing and retain the Capital Securities underlying such
Units by 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) to
be identified by the Remarketing Agent that constitute the U.S.
Treasury securities described in clauses (i) and (ii) of the
definition of Remarketing Value relating to the retained Capital
Securities (as if only such Capital Securities were being remarketed)
(the "Opt-out Treasury Consideration") to the Agent not later than
10:00 a.m. on the eighth Business Day prior to the Initial Remarketing
Date (or, in the case of a Failed Remarketing, not later than 10:00
a.m. on the eighth Business Day 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 second Business Day preceding the Initial
Remarketing Date or any Subsequent Remarketing Date, as the case may
be, the Collateral Agent, pursuant to the terms of the Pledge
Agreement, will deliver the Pledged Capital Securities of such Holder
to the Agent. On the Initial Remarketing Date or any Subsequent
Remarketing Date, as the case may be, if the remarketing was
successful, the Agent shall distribute such Capital Securities to the
Holders thereof and if the Last Failed Remarketing has occurred, the
Agent will deliver such Capital Securities to the Collateral Agent,
which will, for the benefit of the Company,
43
thereupon apply such Capital Securities 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 (v) shall be deemed to have elected to
participate in the remarketing.
(vi) Holders of Separate Capital Securities may elect to
have their Separate Capital Securities remarketed by delivering their
Separate Capital Securities, together with a notice of such election,
to the Custodial Agent on or prior to the ninth Business Day preceding
the Initial Remarketing Date, but no earlier than the Payment Date
immediately preceding the Initial Remarketing Date. On the eighth
Business Day prior to the Initial Remarketing Date or any Subsequent
Remarketing Date, as the case may be, by 4:00 p.m., New York City
time, the Custodial Agent shall notify the Remarketing Agent of the
number of such Separate Capital Securities to be remarketed. The
Custodial Agent will hold such Separate Capital Securities in an
account separate from the Collateral Account. A holder of Separate
Capital Securities electing to have its Separate Capital Securities
remarketed will also have the right to withdraw such election by
written notice to the Custodial Agent, to be received at or prior to
10:00 a.m., New York City time, on the eighth Business Day preceding
the Initial Remarketing Date and any Subsequent Remarketing Date, as
the case may be, upon which notice the Custodial Agent will return
such Separate Capital Securities to such holder. The Custodial Agent
shall, by 10:00 a.m., New York City time, on the second Business Day
preceding the Initial Remarketing Date or any Subsequent Remarketing
Date, as the case may be, deliver to the Remarketing Agent all
Separate Capital Securities delivered to the Custodial Agent in
accordance with Section 4.5 (d) of the Pledge Agreement. If there is a
Failed Remarketing, the Remarketing Agent shall on the date of such
Failed Remarketing, so promptly notify by telephone (promptly
confirmed in writing) the Custodial Agent. In the case of the Last
Failed Remarketing, the Remarketing Agent shall promptly so notify by
telephone (promptly confirmed in writing) the Custodial Agent, upon
which notice the Custodial Agent shall return the Separate Capital
Securities to their holders.
(vii) Each Holder of a Unit, by its acceptance thereof, and
each party to this Agreement hereby irrevocably agrees, and the
Remarketing Agent will irrevocably so agree in the Remarketing
Agreement, that any remarketing of the Capital Securities and, if
applicable, of the Separate Capital Securities may settle later than
in a three Business-Day cycle, but in no event later than on the third
Business Day after the end of the Initial
44
Remarketing Period or any Subsequent Remarketing Period, as the case
may be.
(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 receiving 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 Capital Securities, as
applicable, by check mailed to the address of the Person entitled thereto
at such address as it appears on the Register or by wire transfer in
immediately available funds to an account specified by the Holder or the
holder of Separate Capital Securities, 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 Securities, 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
45
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 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.
46
(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
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.
47
(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 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 have, by
------------------
dividend orotherwise, distributed 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 (i) 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 (ii)
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) 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 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
48
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) and (ii) 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 Board of Directors, whose determination shall be conclusive and
described in a Board Resolution) 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), 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
49
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 (a) a distribution of such
securities 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 (b) 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 5 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
50
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 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 (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,
51
(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 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 Security 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.
52
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 and the Applicable
Market Value in accordance with Section 5.6 and prepare and transmit
to the Agent an Officer's Certificate setting forth the Settlement
Rate and the Applicable Market Value, 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 and the Applicable Market Value was determined
and setting forth the adjusted Settlement Rate and the Applicable
Market Value.
(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 any adjustment of the Settlement Rate or the Applicable
Market Value, 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 Capital Securities 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
53
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 eighth Business Day preceding the Initial 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 the product of (i) the Stated Amount of such Units
multiplied by (ii) the number (A) 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 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, ___ shares of Common Stock on account of such Purchase
Contract (the "Early Settlement Rate"). The Early Settlement Rate shall be
adjusted in the same
54
manner and at the same time as the Settlement Rate is adjusted. 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 Capital Securities 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 Capital
Securities, 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 Capital Securities, Pledged Treasury 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, execute 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
55
("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 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
56
such Merger Early Settlement right was exercised, and (ii) the related
Pledged Capital Securities 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 Capital Securities, 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 Capital Securities, 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 Certificate, upon such Merger Early Settlement the Company (or the
successor to the Company hereunder) shall execute and the Agent shall
authenticate, execute 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.
57
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.
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 or upon Merger Early
Settlement pursuant to Section 5.10 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
58
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.
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 Securities, or to any suit instituted by any Holder for the
enforcement of distributions on any Capital Securities 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;
59
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) (i) The Agent undertakes to perform, with respect to the Units
and Separate Capital Securities, 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
(ii) in the absence of bad faith, willful misconduct or
negligence on its part, the Agent may, with respect to the Units and
Separate Capital Securities, 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.
(b) No provision of this Agreement shall be construed to relieve the
Agent from liability for its own negligent action, its own negligent
failure to act, its own bad faith, or its own willful misconduct, except
that:
(i) this paragraph (b) shall not be construed to limit the
effect of paragraph (a) of this Section;
(ii) 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 negligent in ascertaining the pertinent facts; and
(iii) 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, if adequate indemnity is not
provided to it.
(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.
60
(d) The Agent is authorized to execute and deliver the Pledge
Agreement and the Remarketing Agreement in its capacity as Agent.
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.
SECTION 7.3 CERTAIN RIGHTS OF AGENT.
Subject to the provisions of Section 7.1:
(a) the Agent may, in the absence of bad faith, 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 Officer's 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 Officer's Certificate of the Company;
(d) the Agent may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete 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
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books, records and premises of the Company, personally or by agent or
attorney; and
(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.
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 proceeds in respect of the Purchase Contracts. In no event
shall the Agent be responsible for the preparation or filing of any financing or
continuation statements in the appropriate jurisdictions or responsible for
maintenance or perfection of any security interest granted by it under the
Pledge Agreement.
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. The parties to this Agreement hereby agree
that the same Person may act as Agent hereunder and as Collateral Agent under
the Pledge Agreement.
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 such compensation for all
services rendered by it hereunder as shall be agreed in writing between the
Company and the Agent;
(b) except as otherwise expressly provided herein, to reimburse the
Agent upon its request for all reasonable expenses, disbursements and
advances
62
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 negligence,
willful misconduct or bad faith; and
(c) to indemnify the Agent and any predecessor Agent for, and to hold
it harmless against, any loss, liability or expense incurred without
negligence, willful misconduct or bad faith 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.
The provisions of this Section 7.7 shall survive the termination of this
Agreement.
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 60 days after the giving
of such notice of
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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 Securities 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
(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
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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
duly assign, transfer and deliver to such successor Agent all property and
money held by such retiring Agent hereunder.
(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 by merger, conversion or consolidation 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.
65
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.
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 on it as
paying agent by applicable tax laws, regulations or administrative practice
with respect to any payments made with respect to 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 application of such
requirements to particular payments or Holders or in other particular
66
circumstances, and may for purposes of this Agreement rely on any such
direction in accordance with the provisions of Section 7.1(a)(ii).
(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 a 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
67
by a Board Resolution, and the Agent may enter into an agreement or
agreements supplemental hereto, in a form satisfactory to the Company and
the Agent, 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 Security 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 Capital Securities or Pledged Treasury Consideration or the
rights of holders of Stripped Units to substitute Capital Securities
or appropriate Treasury Consideration for the Pledged Treasury
Securities) or otherwise materially adversely affect the Holder's
rights in or to such Collateral;
(3) reduce any Contract Fee Payments, if any, 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, if any, 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 materially 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 or 100% of such class, as the case
may be.
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(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.
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
69
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, the Capital Securities Guarantee, the Declaration,
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.
Notwithstanding anything herein to the contrary, a direct or indirect
wholly-owned subsidiary of the Company to whom the Company has sold, assigned,
transferred, leased or conveyed all or substantially all of its properties and
assets shall be required to expressly assume by a supplemental agreement,
executed and delivered to the Agent, in form satisfactory to the Agent, all the
obligations of the Company under Section 7.7.
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 but, in the case of a sale,
assignment, transfer, lease or conveyance of all or substantially all of
the properties and assets of the Company, the predecessor Company will not
be released from its obligation to pay the Contract Fee Payments. 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.
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(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.
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
71
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 Securities will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable.
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 Officer's
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.
PRUDENTIAL FINANCIAL, INC.
By: ___________________________________
Name:
Title:
JPMORGAN CHASE BANK,
as Purchase Contract Agent
By: ___________________________________
Name:
Title:
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EXHIBIT A
FORM OF NORMAL UNITS CERTIFICATE
[FOR INCLUSION IN GLOBAL CERTIFICATES ONLY -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. ___
Number of Normal Units________
This Normal Units Certificate certifies that [FOR INCLUSION IN GLOBAL
CERTIFICATES ONLY - Cede & Co.] is the registered Holder of the number of Normal
Units set forth above [FOR INCLUSION IN GLOBAL CERTIFICATES ONLY - or such other
number of Normal Units reflected in the Schedule of Increases or Decreases in
Global Certificate attached hereto]. Each Normal Unit represents (i) either (a)
beneficial ownership by the Holder of one ___ % Capital Security (the "Capital
Security") of Prudential Financial Capital Trust I, a Delaware statutory
business trust (the "Trust"), having a stated liquidation amount of $50, subject
to the Pledge of such Capital Security by such Holder pursuant to the Pledge
Agreement, or (b) if the Capital Security has been remarketed by the Remarketing
Agent (or if the Holder has elected not to have the Capital Security 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 Prudential Financial, Inc., a New Jersey corporation (the
"Company"). All capitalized terms used herein which are defined in the Purchase
Contract Agreement have the meaning set forth therein.
A-1
Pursuant to the Pledge Agreement, the Capital Security 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 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 Capital Securities 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 Capital Securities or Pledged Treasury Consideration and
(B) any payments of the Capital Securities 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
10:00 a.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 Capital Securities 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 Capital
Securities 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 Capital Securities or
Pledged Treasury Consideration, as the case may be, which are payable quarterly
in arrears on ___, ___, ___, and ___ each year, commencing ___, 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 ___, 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 Capital
A-2
Securities or the Pledged Treasury Consideration, as the case may be, pledged to
secure the obligations of the Holder under such Purchase Contract.
Distributions on the Capital Securities or payments on 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 in immediately available funds to the
bank account designated to the Agent by such Person in writing at least five
Business Days prior to the applicable Payment Date and entered on the Normal
Units Register.
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 ___% per year of the Stated Amount, computed on the
basis of a 360-day year of 12 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 month or calendar year, as applicable,
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 or by wire transfer in immediately available funds to the bank
account designated to the Agent by such Person in writing at least five Business
Days prior to the applicable Payment Date and entered on the Normal Units
Register.
All payments with respect to the Normal Units shall be payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for the payment of public and private debts.
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.
PRUDENTIAL FINANCIAL, INC.
By: __________________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to obligations of such
Holder under the Purchase Contracts evidenced hereby)
By: JPMORGAN CHASE BANK, not individually but solely
as Attorney-in-Fact of such Holder
By: __________________________________
Authorized Officer
A-4
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Normal Units Certificates referred to in the within
mentioned Purchase Contract Agreement.
JPMORGAN CHASE BANK,
as Purchase Contract Agent
Dated: By:__________________________________
Authorized Officer
A-5
(FORM OF REVERSE OF NORMAL UNITS CERTIFICATE)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of ___, 2001 (as may be supplemented from time to
time, the "Purchase Contract Agreement"), between the Company and JPMorgan Chase
Bank, 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 equal to or greater than $___ (the
"Threshold Appreciation Price"), ___ shares of Common Stock per Purchase
Contract, (b) if the Applicable Market Value is less than the Threshold
Appreciation Price but is greater than $___, 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 less than $___, ___
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
Capital Securities 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 the Last Failed Remarketing, the Collateral Agent, for the benefit
of the Company, exercises its rights as a secured creditor with respect to the
Pledged Capital Securities related to this Normal Units Certificate, any
accumulated and unpaid distributions on such Pledged Capital Securities 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
Capital Securities. Upon receipt of notice of any meeting at which holders of
Capital Securities are entitled to vote or upon the solicitation of consents,
waivers or proxies of holders of Capital Securities, 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 Capital Securities entitled to vote) shall be
entitled to instruct the Agent as to the exercise of the voting rights
pertaining to the Pledged Capital Securities 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 Capital Securities as to which any particular voting
instructions are
A-7
received. In the absence of specific instructions from the Holder of a Normal
Unit, the Agent shall abstain from voting the Pledged Capital Security evidenced
by such Normal Unit.
Upon a voluntary or involuntary dissolution of the Trust, a principal
amount of the Debentures constituting the assets of the Trust and underlying the
Pledged Capital Securities equal to the aggregate Stated Amount of the Pledged
Capital Securities shall be delivered to the Collateral Agent in exchange for
Pledged Capital Securities. Thereafter, the Debentures shall be held by the
Collateral Agent to secure the obligations of each Holder of Normal Units to
purchase shares of Common Stock under the Purchase Contracts constituting a part
of such Normal Units. Following a voluntary or involuntary dissolution of the
Trust, the Holders and the Collateral Agent shall have such security interests,
rights and obligations with respect to the Debentures as the Holders and the
Collateral Agent had in respect of the Pledged Capital Securities, and any
reference in the Purchase Contract Agreement or Pledge Agreement to the Capital
Securities or Pledged Capital Securities shall be deemed to be a reference to
the Debentures.
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 Capital Securities 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 Capital Securities 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 Capital Security 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 Capital Securities 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.
A-8
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 in
immediately available funds to the bank account designated to the Agent by such
Person in writing at least five Business Days prior to the applicable Payment
Date and entered on the Normal 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 __% [Insert sum of purchase
contract rate and applicable capital securities rate.] per year (computed on the
basis of a 360-day year of 12 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 (i) declare or pay any dividends or distributions
on, or redeem, purchase, acquire or make a liquidation payment with respect to,
any of the Company's Capital Stock, (ii) make any payment of principal, interest
or premium, if any, on or
A-9
repay or repurchase or redeem or make any other payment in respect of any debt
securities of the Company that rank pari passu with or junior in interest to the
Debentures or (iii) make any guarantee payments with respect to any guarantee by
the Company of the debt securities of any subsidiary of the Company if such
guarantee ranks pari passu with or junior in interest to the Debentures.
Restrictions referred to in clauses (i) through (iii) of this paragraph shall
not apply to: (A) dividends or distributions in shares of, or warrants or rights
to subscribe for or purchase shares of, the Company's Capital Stock, (B) any
declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock, other securities, cash or
other assets, under any such plan in the future, or the redemption or repurchase
of any such rights pursuant thereto, (C) payments under any guarantee, (D) 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, (E) 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 or (F) purchases or acquisitions of shares of the Common Stock in
connection with the satisfaction by the Company of its obligations under any
employee benefit plan or any other contractual obligation of the Company (other
than a contractual obligation ranking expressly by its terms pari passu with or
junior in interest to the Debentures).
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 Capital
Securities 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
A-10
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 Capital Securities 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
Capital Securities 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.
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 Capital Securities, 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, without regard
to its principles of conflicts of laws.
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 payments of distributions payable quarterly on the Capital Securities
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
(subject to Section 4.1(a) and 5.2(a) of the Purchase Contract Agreement,
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-11
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent.
A-12
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-13
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 Prudential Financial,
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-14
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 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
A-15
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 Capital Securities 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 or certificates 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 or REGISTERED HOLDER
Certificates are to be registered in
the name of and delivered to and Please print name and address of
Pledged Capital Securities, or Registered Holder:
Pledged Treasury Consideration, as
the case may be, are to be
transferred to a 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 Capital Securities, or Pledged Treasury
Consideration, as the case may be, transferable upon Early Settlement or a
Termination Event:
A-16
[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:
Amount of Amount of Stated Amount of the Signature of
Decrease in Stated Increase in Stated Global Certificate Authorized Officer
Amount of the Amount of the Following Such of Trustee or Units
Date Global Certificate Global Certificate Decrease or Increase Custodian
----------- --------------------- -------------------- ---------------------- -------------------
A-17
EXHIBIT B
FORM OF STRIPPED UNITS CERTIFICATE
[FOR INCLUSION IN GLOBAL CERTIFICATES ONLY - 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. ___
Number of Stripped Units
This Stripped Units Certificate certifies that [FOR INCLUSION IN
GLOBAL CERTIFICATES - Cede & Co.] is the registered Holder of the number of
Stripped Units set forth above [FOR INCLUSION IN GLOBAL CERTIFICATES ONLY - or
such other number of Stripped Units reflected in the Schedule of Increases or
Decreases in Global Certificate attached hereto]. 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 Prudential Financial, Inc., a Delaware
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.
B-1
Each Purchase Contract evidenced hereby obligates the Holder of this
Stripped Units Certificate to purchase, and the Company to sell, on ___, 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 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 ___% per year of the Stated Amount, computed
on the basis of a 360-day year of 12 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 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 month or calendar
year, as applicable, 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 Stripped
Units Register or by wire transfer in immediately available funds to an account
designated to the Agent by such Person in writing at least five Business Days
prior to the applicable Payment Date and entered on the Stripped Units Register.
All payments with respect to the Stripped Units shall be payable in
such coin or currency of the United States of America as at the time of payment
is legal tender for the payment of public and private debts.
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.
B-2
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-3
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
PRUDENTIAL FINANCIAL, INC.
By: ____________________________________
Name:
Title:
By: ____________________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to obligations of
such Holder under the Purchase Contracts)
By: JPMORGAN CHASE BANK, not individually but
solely as Attorney-in-Fact of such Holder
By: ___________________________________
Authorized Officer
B-4
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Stripped Units referred to in the within-mentioned
Purchase Contract Agreement.
JPMORGAN CHASE BANK,
as Purchase Contract Agent
Dated: By:_______________________________
Authorized Officer
B-5
(FORM OF REVERSE OF STRIPPED UNITS CERTIFICATE)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of ___, 2001 (as may be supplemented from time to
time, the "Purchase Contract Agreement"), between the Company and JPMorgan Chase
Bank, 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 the Stated Amount (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 equal to or
greater than $___(the "Threshold Appreciation Price"),___shares of Common Stock
per Purchase Contract, (b) if the Applicable Market Value is less than the
Threshold Appreciation Price but is greater than $______, 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 less than
$___, ___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 Prices
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-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 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 Capital Securities 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 Capital Securities 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 Capital Securities 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-7
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 or by wire transfer in
immediately available funds to an account designated to the Agent by such Person
in writing at least five Business Days prior to the applicable Payment Date and
entered 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 __%[Insert sum of purchase contract
rate and applicable capital securities rate] per year (computed on the basis of
a 360-day year of 12 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 (i) declare or pay any dividends or distributions
on, or redeem, purchase, acquire or make a liquidation payment with respect to,
any of the Company's
B-8
Capital Stock, (ii) make any payment of principal, interest or premium, if any,
on or repay or repurchase or redeem or make any other payment in respect of any
debt securities of the Company that rank pari passu with or junior in interest
to the Debentures or (iii) make any guarantee payments with respect to any
guarantee by the Company of the debt securities of any subsidiary of the Company
if such guarantee ranks pari passu with or junior in interest to the Debentures.
Restrictions referred to in clauses (i) through (iii) of this paragraph shall
not apply to: (A) dividends or distributions in shares of, or warrants or rights
to subscribe for or purchase shares of, the Company's Capital Stock, (B) any
declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock, other securities, cash or
other assets, under any such plan in the future, or the redemption or repurchase
of any such rights pursuant thereto, (C) payments under any guarantee, (D) 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, (E) 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 or (F) purchases or acquisitions of shares of the Common Stock in
connection with the satisfaction by the Company of its obligations under any
employee benefit plan or any other contractual obligation of the Company (other
than a contractual obligation ranking expressly by its terms pari passu with or
junior in interest to the Debentures).
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 Capital
Securities 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.
B-9
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 Capital Securities 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 Capital Securities 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.
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 Capital Securities, 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, without regard
to its principles of conflicts of laws.
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 payments of distributions payable quarterly on the Capital Securities
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
(subject to Section 4.1(a) and 5.2(a) of the Purchase Contract Agreement,
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.
B-10
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent.
B-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.
B-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 Prudential
Financial, 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: ___________________________________________________________
B-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 REGISTERED HOLDER
and delivered to a Person other than the
Holder, please (i) print such Person's name Please print name and
and address and (ii) provide a guarantee of address of Registered
your signature: Holder:
______________________________________________ _______________________________
Name Name
_______________________________________________ _______________________________
Address Address
Social Security or other Taxpayer Identification
Number, if any
B-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 Capital Securities 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 or certificates 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 or REGISTERED HOLDER
Certificates are to be registered in
the name of and delivered to and Please print name and address of
Pledged Capital Securities, or Registered Holder:
Pledged Treasury Consideration, as
the case may be, are to be
transferred to a 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 Capital Securities, or Pledged Treasury
Consideration, as the case may be, transferable upon Early Settlement or a
Termination Event:
B-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:
Amount of Decrease Amount of Increase Stated Amount of the Signature of
in Stated Amount of in Stated Amount of Global Certificate Authorized Officer
the Global the Global Following Such of Trustee or Units
Date Certificate Certificate Decrease or Increase Custodian
------------- --------------------- --------------------- ----------------------- ----------------------
B-16
EXHIBIT C
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO
COLLATERAL AGENT
JPMorgan Chase Bank
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Institutional Trust Services
Re: Equity Security Units of Prudential Financial, Inc. (the "Company"),
and Prudential Financial Capital Trust I
--------------------------------------------------------------------
We hereby notify you in accordance with Section [4.1] [4.2] of the
Pledge Agreement, dated as of ___, 2001 (the "Pledge Agreement"), 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. _____)] [$_______ stated
liquidation amount of Capital Securities or $_______ principal amount of
Treasury Consideration, as the case may be,] in exchange for the related
[Pledged Capital Securities or Pledged Treasury Consideration (CUSIP No. ____),]
[Pledged Treasury Securities] held by you in accordance with the Pledge
Agreement and has delivered to us a notice stating that the Holder has
transferred [Treasury Securities] [Capital Securities or the appropriate
Treasury Consideration, as the case may be,] to you, as Collateral Agent. We
hereby instruct you, upon receipt of such [Pledged Treasury Securities] [Pledged
Capital Securities or Pledged Treasury Consideration, as the case may be], and
upon the payment by such Holder of any applicable fees, to release the [Capital
Securities or Treasury Consideration, as the case may be,] [Treasury Securities]
related to such [Normal Units] [Stripped Units] to us in accordance with the
Holder's instructions.
Date: _______________
JPMORGAN CHASE BANK
By: __________________________
Name:
Title:
C-1
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Capital Securities or Pledged Treasury Consideration, as
the case may be,] for the [Pledged Capital Securities or Pledged Treasury
Consideration, as the case may be,] [Pledged Treasury Securities]:
Name
Address
Social Security or other Taxpayer
Identification Number, if any
C-2
EXHIBIT D
INSTRUCTION TO PURCHASE CONTRACT AGENT
JPMorgan Chase Bank
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Institutional Trust Services
Re: Equity Security Units of Prudential Financial, Inc. (the "Company")
and Prudential Financial Capital Trust I
-------------------------------------------------------------------
The undersigned Holder hereby notifies you that it has delivered to
___, as Collateral Agent, Custodial Agent and Securities Intermediary
[$_________ aggregate principal amount of Treasury Securities] [$_________
stated liquidation amount of Capital Securities or the appropriate Treasury
Consideration, as the case may be,] in exchange for the related [Pledged Capital
Securities or Pledged Treasury Consideration as the case may be,] [Pledged
Treasury Securities] held by the Collateral Agent, in accordance with Section
[4.1] [4.2] of the Pledge Agreement, dated ___________, 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 Capital Securities or Pledged
Treasury Consideration, as the case may be,] [Pledged Treasury Securities]
related to such [Normal Units] [Stripped Units].
Date: ______________
By: _____________________________
Signature Guarantee: ____________
Please print name and address of
Registered Holder:
Name Social Security or other Taxpayer
Identification Number, if any
Address
D-1
