EXHIBIT (4)
THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE THEREOF.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION ("DTC"), TO A NOMINEE OF DTC OR BY DTC OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITORY. UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
TO XXXXXXX XXXXX & CO., INC. OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. R- $42,000,000 aggregate principal amount
CUSIP 59021J AA 7
XXXXXXX XXXXX & CO., INC.
1% Convertible Securities
Exchangeable into XxXxxxxx'x Corporation common stock
due May 28, 2009 (the "Notes")
Xxxxxxx Xxxxx & Co., Inc., a Delaware corporation (hereinafter referred to
as the "Company", which term includes any successor corporation under the
Indenture herein referred to), for value received, hereby promises to pay to
CEDE & CO., or its registered assigns, on May 28, 2009 (the "Stated Maturity"),
if not called or exchanged on or prior to the Stated Maturity, for each $1,000
principal amount of Notes, an amount in cash equal to the greater of:
1. the product of the Exchange Ratio (as defined below) and the average
Closing Market Price of McDonald's Corporation ("McDonald's) common
stock on the first five Calculation Days (as defined below) during the
Calculation Period, as defined below; provided, however, that
. if there are fewer than five Calculation Days during the
Calculation Period, then the amount payable shall be
calculated using the average on those Calculation Days,
. if there is only one Calculation Day during the Calculation
Period, then the amount payable shall be calculated using the
Closing Market Price of McDonald's common stock on that
Calculation Day and
. if no Calculation Days occur during the Calculation Period
with respect to McDonald's common stock, then the amount
payable shall be calculated using the Closing Market Price on
the last scheduled Calculation Day in the Calculation Period
regardless of whether a Market Disruption Event (as defined
below) occurs on that date,
and provided further that if the amount payable is based on this
formula, a Holder shall not be entitled to receive accrued
interest from and including the immediately preceding Interest
Payment Date (as defined below) through the Stated Maturity, or
2. $1,000 plus accrued and unpaid interest on the Notes to but
excluding the Stated Maturity.
If the Stated Maturity is not a Business Day (as defined below), the
Company shall pay the cash amount due at the Stated Maturity on the first
Business Day following the Stated Maturity and no additional interest will
accrue to such payment date.
All determinations made by the Calculation Agent (as defined below)
shall be at the sole discretion of the Calculation Agent and, absent a
determination by the Calculation Agent of a manifest error, shall be conclusive
for all purposes and binding on the Company, the Holder hereof and the
beneficial owners of the Notes.
"Exchange Ratio" initially equals 26.8528, but is subject to adjustment
for certain events described below under "Exchange Ratio adjustments" and
"Alternative Dilution and Reorganization Adjustments".
"Calculation Period" means the period from and including the seventh
scheduled Calculation Day immediately preceding the Stated Maturity to and
including the second scheduled Calculation Day before the Stated Maturity.
"Calculation Day" means any Trading Day during the Calculation Period
on which a Market Disruption Event has not occurred.
"Trading Day" means a day on which The New York Stock Exchange, the
American Stock Exchange and the Nasdaq Stock Market are open for trading as
determined by the Calculation Agent.
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"Closing Market Price" means:
If McDonald's common stock (or any other security for which a Closing
Market Price must be determined for purposes of the Notes) is listed on a
national securities exchange in the United States, is a Nasdaq National Market
System ("Nasdaq NMS") security or is included in the OTC Bulletin Board Service
("OTC Bulletin Board") operated by the National Association of Securities
Dealers, Inc. (the "NASD"), then the "Closing Market Price" for any date of
determination on any Trading Day means for one share of McDonald's common stock
(or any other security for which a Closing Market Price must be determined for
purposes of the Notes):
. the last reported sale price, regular way, on that day on the principal
United States securities exchange registered under the Securities
Exchange Act of 1934, as amended, on which that security is listed or
admitted to trading (without taking into account any extended or
after-hours trading session), or
. if not listed or admitted to trading on any such securities exchange or
if the last reported sale price is not obtainable, the last reported
sale price on the over-the-counter market as reported on the Nasdaq NMS
or OTC Bulletin Board on that day (without taking into account any
extended or after-hours trading session), or
. if the last reported sale price is not available for any reason,
including, without limitation, the occurrence of a Market Disruption
Event, the mean of the last reported bid and offer price of the
principal trading session on the over-the-counter market as reported on
the Nasdaq Stock Market or OTC Bulletin Board on that day as determined
by the Calculation Agent or from as many dealers in such security, but
not exceeding three, as have made the bid prices available to the
Calculation Agent after 3:00 p.m., local time in the principal market,
on that date (without taking into account any extended or after-hours
trading session).
If McDonald's common stock (or any other security for which a Closing
Market Price must be determined for purposes of the Notes) is not listed on a
national securities exchange in the United States, is not a Nasdaq NMS security
or included in the OTC Bulletin Board Service operated by the NASD, then the
Closing Market Price for any date of determination on any Trading Day means for
one share of McDonald's common stock (or any other security for which a Closing
Market Price must be determined for purposes of the Notes) the last reported
sale price on that day on the securities exchange on which that security is
listed or admitted to trading with the greatest volume of trading for the
calendar month preceding such Trading Day as determined by the Calculation
Agent; provided that if the last reported sale price is for a transaction which
occurred more than four hours prior to the close of that exchange, then the
Closing Market Price shall mean the average (mean) of the last available bid and
offer price on that exchange.
If McDonald's common stock (or any other security for which a Closing
Market Price must be determined for purposes of the Notes) is not listed or
admitted to trading on any such securities exchange or if such last reported
sale price or bid and offer are not obtainable, then the
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Closing Market Price shall mean the average (mean) of the last available bid and
offer prices in such market of the three dealers which have the highest volume
of transactions in that security in the immediately preceding calendar month as
determined by the Calculation Agent based on information that is reasonably
available to it.
"Market Disruption Event" means:
1. a suspension of, absence of, including the absence of an official
closing price, or material limitation on trading of McDonald's
common stock on the primary market for McDonald's common stock for
more than two hours of trading or during the one-half hour period
preceding the close of trading, as determined by the Calculation
Agent in its sole discretion, or the suspension or material
limitation on the primary market for trading in options contracts
related to McDonald's common stock, if available, during the
one-half hour period preceding the close of trading in the
applicable market, in each case as determined by the Calculation
Agent in its sole discretion, and
2. a determination by the Calculation Agent in its sole discretion
that the event described in clause (1) above materially interfered
with the ability of the Company, Xxxxxxx Lynch, Xxxxxx, Xxxxxx &
Xxxxx Incorporated or any of their affiliates to unwind all or a
material portion of the hedge with respect to the Notes.
For purposes of determining whether a Market Disruption Event has
occurred:
. a limitation on the hours or number of days of trading will not constitute
a Market Disruption Event if it results from an announced change in the
regular business hours of the relevant exchange,
. a decision to permanently discontinue trading in the relevant options
contracts related to McDonald's common stock will not constitute a Market
Disruption Event,
. limitations pursuant to any rule or regulation enacted or promulgated by
The New York Stock Exchange or the Nasdaq Stock Market or other regulatory
organization with jurisdiction over The New York Stock Exchange or the
Nasdaq Stock Market on trading during significant market fluctuations will
constitute a suspension or material limitation of trading in McDonald's
common stock,
. a suspension of trading in an options contract on McDonald's common stock
by the primary securities market trading in the options contracts related
to McDonald's common stock, if available, by reason of:
. a price change exceeding limits set by the securities exchange or
market,
. an imbalance of orders relating to options contracts on McDonald's
common stock, or
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. a disparity in bid and ask quotes relating to options contracts on
McDonald's common stock
will constitute a suspension or material limitation of trading in options
contracts related to McDonald's common stock, and
. a suspension, absence or material limitation of trading on the
primary securities market on which options contracts related to
McDonald's common stock are traded will not include any time when
that securities market is itself closed for trading under ordinary
circumstances.
Interest
The Notes will bear interest at a rate of 1% per year on the principal
amount of each Note from May 28, 2002 or from the most recent Interest Payment
Date for which interest has been paid or provided for, to but excluding the
Stated Maturity or the earlier Call Date (as defined below), if applicable.
Notwithstanding the foregoing, in the event that the Call Amount (as defined
below) or the amount payable at Stated Maturity is a result of the product of
the Exchange Ratio and the average Closing Market Price of McDonald's common
stock being greater than $1,000 plus accrued and unpaid interest, or in the
event shares of McDonald's common stock are to be delivered upon an exchange at
a Holder's election, the Notes shall cease bearing interest after the
immediately preceding Interest Payment Date.
Subject to the preceding paragraph, the Company shall pay interest on
the Notes in cash semi-annually in arrears on May 28 and November 28 of each
year and on the Stated Maturity or the Call Date (each an "Interest Payment
Date"), as applicable, beginning November 28, 2002. The Company shall pay this
interest to the persons in whose names the Notes are registered at the close of
business on the immediately preceding May 13, and November 13, respectively,
whether or not that date is a Business Day, as defined below. Notwithstanding
the foregoing, in the event that the Notes are called at the option of the
Company, the final payment of interest, if any, will be paid to the person to
whom the Call Amount shall be paid. Interest on the Notes will be computed on
the basis of a 360-day year of twelve 30-day months. If an Interest Payment Date
falls on a day that is not a Business Day, that interest payment will be made on
the next Business Day and no additional interest shall accrue as a result of the
delayed payment.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in The City of New York
are authorized or obligated by law to close.
Call at the option of the Company
The Company, in its sole discretion, may call the Notes, in whole but
not in part, on any Business Day beginning on May 31, 2005, to and including the
Stated Maturity (the date on which the call, if any, occurs being the "Call
Date") by giving notice to the Trustee (as defined below) on any Business Day at
least ten scheduled Business Days prior to the Call Date. The
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date on which the Company gives notice to the Trustee that it is calling the
Notes is referred to as the "Call Notice Date". The notice to the Trustee shall
specify the Call Date.
If the Company calls the Notes, for each $1,000 principal amount of the
Notes, the Company will pay on the Call Date an amount in cash (the "Call
Amount") equal to the greater of:
1. the product of the Exchange Ratio and the average Closing Market
Price of McDonald's common stock on the first five Calculation
Days during the Call Calculation Period, as defined below;
provided, however, that
. if there are fewer than five Calculation Days during the Call
Calculation Period, then the amount payable shall be calculated
using the average on those Calculation Days,
. if there is only one Calculation Day during the Call Calculation
Period, then the amount payable upon such call shall be calculated
using the Closing Market Price of McDonald's common stock on that
Calculation Day, and
. if no Calculation Days occur during the Call Calculation Period
with respect to McDonald's common stock, then the amount payable
upon such call shall be calculated using the Closing Market Price
on the last scheduled Calculation Day in the Call Calculation
Period regardless of whether a Market Disruption Event occurs on
that date,
and provided further that if the amount to be paid is based on
this formula, the Company will not be obligated to pay accrued
interest from and including the immediately preceding Interest
Payment Date through the Call Date, or
2. $1,000 plus accrued and unpaid interest on the Notes to but
excluding the Call Date.
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"Call Calculation Period" means the period from and including the
seventh scheduled Calculation Day immediately preceding the Call Date to and
including the second scheduled Calculation Day before the Call Date.
The "Calculation Agent" for all purposes related to the Notes shall be
Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx Incorporated. All determinations made by
the Calculation Agent shall be at the sole discretion of the Calculation Agent
and, absent a determination by the Calculation Agent of a manifest error, shall
be conclusive for all purposes and binding on the Company and the Holders and
beneficial owners of the Notes.
Payment or delivery of interest, McDonald's common stock, the Call
Amount and any interest on any overdue amount thereof with respect to this
Security shall be made at the office or agency of the Company maintained for
that purpose in the Borough of Manhattan, The City of New York, in such coin or
currency of the United States of America, if applicable, as at the time of
payment is legal tender for payment of public and private debts.
Early exchange at Xxxxxx's election
A Holder may elect to exchange all or a portion of the Notes by giving
notice as described below on any Business Day which is also a Trading Day during
the period beginning on May 28, 2002 and ending on the earlier of (i) eight
scheduled Business Days before the Stated Maturity, or (ii) the Business Day
before the Call Notice Date. Unless written notice shall have been given to the
Calculation Agent and the Trustee by 3:00 p.m., New York City time on any
Trading Day, such notice will be deemed to have been given on the following
Trading Day. Any date on which such notice shall have been given or deemed to
have been given, is referred to as the "Exchange Notice Date".
If a Holder exercises the exchange right, then as of the applicable
Exchange Notice Date, the Company may no longer call the Notes.
For each $1,000 principal amount of the Notes for which an exchange
notice shall have been duly given, the Company shall deliver to the Holder a
number of shares of McDonald's common stock equal to the Exchange Ratio (subject
to adjustment for Reorganization Events, as described below), as determined on
the Exchange Notice Date.
Upon an exchange, the Holder shall not be entitled to receive accrued
interest from and including the immediately preceding Interest Payment Date
through the Exchange Date. The Company shall deliver the shares of McDonald's
common stock no more than five Business Days after the Exchange Notice Date
(such date of delivery, the "Exchange Date").
Fractional Shares
The Company shall not distribute any fractional shares of McDonald's
common stock. The Company shall aggregate all amounts due on any delivery date,
and in lieu of delivering a
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fractional share of McDonald's common stock, the Company shall pay the cash
value of the fractional share based on the Closing Market Price.
Exchange Ratio adjustments
No adjustments to the Exchange Ratio will be required unless the
Exchange Ratio adjustment would require a change of at least 0.1% in the
Exchange Ratio then in effect. The Exchange Ratio resulting from any of the
adjustments specified in this section will be rounded to the nearest one
thousandth with five ten-thousandths being rounded upward. The Calculation Agent
will not be required to make any adjustments to the Exchange Ratio after the
close of business on the eighth scheduled Business Day immediately prior to the
Stated Maturity, the Call Date or the Exchange Date, as applicable.
No adjustments to the Exchange Ratio will be required other than those
specified below. However, the Company may, at its sole discretion, cause the
Calculation Agent to make additional adjustments to the Exchange Ratio to
reflect changes occurring in relation to McDonald's common stock or any other
security received in a reorganization event in other circumstances where the
Company determines that it is appropriate to reflect those changes.
The Calculation Agent shall be solely responsible for the determination
and calculation of any adjustments to the Exchange Ratio and of any related
determinations and calculations with respect to any distributions of stock,
other securities or other property or assets, including cash, in connection with
any corporate event described in this section, and its determinations and
calculations shall be conclusive absent manifest error.
No adjustments will be made for certain other events, such as offerings
of common stock by McDonald's for cash or in connection with acquisitions or the
occurrence of a partial tender or exchange offer for McDonald's common stock by
McDonald's or any third party.
The Company will, within ten Business Days following the occurrence of
an event that requires an adjustment to the Exchange Ratio, or if the Company is
not aware of this occurrence, as soon as practicable after becoming so aware,
provide written notice to the Trustee, which shall provide notice to the Holders
of the Notes of the occurrence of this event and, if applicable, a statement in
reasonable detail setting forth the adjusted Exchange Ratio.
Stock splits and reverse stock splits
If McDonald's common stock is subject to a stock split or reverse stock
split, then once any split has become effective, the Exchange Ratio relating to
McDonald's common stock will be adjusted to equal the product of the prior
Exchange Ratio and the number of shares which a holder of one share of
McDonald's common stock before the effective date of that stock split or reverse
stock split would have owned or been entitled to receive immediately following
the applicable effective date.
Stock dividends
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If McDonald's common stock is subject to a (i) stock dividend, i.e.,
issuance of additional shares of McDonald's common stock, that is given ratably
to all holders of shares of McDonald's common stock, or (ii) distribution of
shares of McDonald's common stock as a result of the triggering of any provision
of the corporate charter of McDonald's, then, once the dividend has become
effective and the shares are trading ex-dividend, the Exchange Ratio will be
adjusted so that the new Exchange Ratio shall equal the prior Exchange Ratio
plus the product of:
. the number of shares of McDonald's common stock issued with respect to
one share of McDonald's common stock, and
. the prior Exchange Ratio.
Extraordinary Dividends
There will be no adjustments to the Exchange Ratio to reflect any cash
dividends or cash distributions paid with respect to McDonald's common stock
other than Extraordinary Dividends, as defined below, and distributions
described under the section entitled "--Reorganization Events" below.
An "Extraordinary Dividend" means, with respect to a cash dividend or
other distribution with respect to McDonald's common stock, a dividend or other
distribution which exceeds the immediately preceding non-Extraordinary Dividend
for McDonald's common stock (as adjusted for any subsequent corporate event
requiring an adjustment as described herein) by an amount equal to at least 10%
of the Closing Market Price of McDonald's common stock on the Trading Day
preceding the ex-dividend date with respect to the Extraordinary Dividend (the
"ex-dividend date"). If an Extraordinary Dividend occurs with respect to
McDonald's common stock, the Exchange Ratio will be adjusted on the ex-dividend
date with respect to the Extraordinary Dividend so that the new Exchange Ratio
will equal the product of:
. the prior Exchange Ratio, and
. a fraction, the numerator of which is the Closing Market Price per
share of McDonald's common stock on the Trading Day preceding the
ex-dividend date, and the denominator of which is the amount by which
the Closing Market Price on the Trading Day preceding the ex-dividend
date exceeds the Extraordinary Dividend Amount.
The "Extraordinary Dividend Amount" with respect to an Extraordinary
Dividend for McDonald's common stock will equal:
. in the case of cash dividends or other distributions that constitute
quarterly dividends, the amount per share of that Extraordinary
Dividend minus the amount per share of the immediately preceding
non-Extraordinary Dividend for those shares of McDonald's common stock,
or
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. in the case of cash dividends or other distributions that do not
constitute quarterly dividends, the amount per share of that
Extraordinary Dividend.
To the extent an Extraordinary Dividend is not paid in cash, the value
of the non-cash component will be determined by the Calculation Agent, whose
determination shall be conclusive. A distribution on McDonald's common stock
described in clause (a), (d) or (e) of the section entitled "Reorganization
Events" below that also constitutes an Extraordinary Dividend shall only cause
an adjustment pursuant to clause (a), (d) or (e) under the section entitled
"Reorganization Events". A distribution on McDonald's common stock described in
the section entitled "Issuance of transferable rights or warrants" that also
constitutes an Extraordinary Dividend shall only cause an adjustment pursuant to
that section.
Issuance of transferable rights or warrants
If McDonald's issues transferable rights or warrants to all holders of
McDonald's common stock to subscribe for or purchase McDonald's common stock,
including new or existing rights to purchase McDonald's common stock pursuant to
a shareholder's rights plan or arrangement, then the Exchange Ratio will be
adjusted on the Business Day immediately following the issuance of such
transferable rights or warrants so that the new Exchange Ratio shall equal the
prior Exchange Ratio plus the product of:
. the prior Exchange Ratio, and
. the number of shares of McDonald's common stock that can be purchased
with the cash value of such warrants or rights distributed on a single
share of McDonald's common stock.
The number of shares that can be purchased will be based on the Closing
Market Price of McDonald's common stock on the date the new Exchange Ratio is
determined. The cash value of such warrants or rights, if the warrants or rights
are traded on a national securities exchange, will equal the closing price of
such warrant or right, or, if the warrants or rights are not traded on a
national securities exchange, will be determined by the Calculation Agent and
will equal the average (mean) of the bid prices obtained from three dealers at
3:00 p.m., New York City time, on the date the new Exchange Ratio is determined,
provided that if only two such bid prices are available, then the cash value of
such warrants or rights will equal the average (mean) of such bids and if only
one such bid is available, then the cash value of such warrants or rights will
equal such bid.
Reorganization Events
If prior to the Stated Maturity of the Notes,
(a) there occurs any reclassification or change of McDonald's common
stock, including, without limitation, as a result of the issuance
of tracking stock by McDonald's,
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(b) McDonald's, or any surviving entity or subsequent surviving entity
of McDonald's (a "Successor Entity"), has been subject to a
merger, combination or consolidation and is not the surviving
entity,
(c) any statutory exchange of securities of McDonald's or any
Successor Entity with another corporation occurs, other than
pursuant to clause (b) above,
(d) McDonald's is liquidated or is subject to a proceeding under any
applicable bankruptcy, insolvency or other similar law,
(e) McDonald's issues to all of its shareholders equity securities of
an issuer other than McDonald's, other than in a transaction
described in clauses (b), (c) or (d) above (a "Spin-off Event"),
or
(f) a tender or exchange offer or going-private transaction is
consummated for all the outstanding shares of McDonald's (an event
in clauses (a) through (f), a "Reorganization Event"),
then the method of determining the amount payable or deliverable on each Note
will be adjusted as set forth below.
"Exchange Property" will consist of any McDonald's common stock
continued to be held by the holders of McDonald's common stock, and any
securities, cash or any other assets distributed to the holders of McDonald's
common stock in or as a result of the Reorganization Event. No interest will
accrue on any Exchange Property.
For the purpose of all relevant calculations to be made under the Notes
after the occurrence of a Reorganization Event, the Exchange Ratio shall be
applied to an amount of Exchange Property equal to the amount of Exchange
Property delivered with respect to one share of McDonald's common stock at the
time of the Reorganization Event.
If the Exchange Property consists solely of securities (including
without limitation, securities of McDonald's or securities of foreign issuers
represented by American depositary receipts) traded on the New York Stock
Exchange, American Stock Exchange or Nasdaq National Market ("Exchange Traded
Securities"), then the method of determining the amount payable or deliverable
on each Note upon any call or exchange, or at the Stated Maturity, shall be
unchanged except that the Exchange Ratio shall be applied to Exchange Property
rather than to shares of McDonald's common stock.
If the Exchange Property consists of cash, other property that is not
Exchange Traded Securities or a combination thereof, the Calculation Agent shall
liquidate all non-cash Exchange Property upon terms that it deems commercially
reasonable, and the Exchange Property shall, after such liquidation, equal the
aggregate cash amount, including the amount resulting from that liquidation. The
aggregate cash amount attributable to Exchange Property delivered with respect
to one share of McDonald's common stock is the "Per Share Liquidation Value".
Following a
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Reorganization Event of this sort, the method of determining the amount payable
or deliverable on each Note upon any call or exchange, or at the Stated
Maturity, shall be unchanged except that the Exchange Ratio shall be applied to
the Per Share Liquidation Value rather than to shares of McDonald's common
stock.
If the Exchange Property consists of any other combination of Exchange
Traded Securities, cash or other property that is not Exchange Traded
Securities, the Calculation Agent shall liquidate all non-cash property that is
not Exchange Traded Securities upon terms that it deems commercially reasonable.
Following a Reorganization Event of this sort, the method of determining the
amount payable or deliverable on each Note upon any call or exchange, or at the
Stated Maturity, shall be unchanged except that the Exchange Ratio shall be
applied to the sum of the Per Share Liquidation Value and the Exchange Traded
Securities rather than to shares of McDonald's common stock.
In the event Exchange Property consists of securities, those securities
will, in turn, be subject to the antidilution adjustments contained herein.
In the case of a consummated tender or exchange offer or going-private
transaction involving Exchange Property of a particular type, Exchange Property
shall be deemed to include the amount of cash or other property paid by the
offer or in the tender or exchange offer with respect to such Exchange Property
(in an amount determined on the basis of the rate of exchange in such tender or
exchange offer or going-private transaction). In the event of a tender or
exchange offer or a going-private transaction with respect to Exchange Property
in which an offeree may elect to receive cash or other property, Exchange
Property shall be deemed to include the kind and amount of cash and other
property received by offerees who elect to receive cash.
The Calculation Agent shall be solely responsible for determination and
calculation of the Exchange Property if a Reorganization Event occurs and the
cash amount due upon exchange, including the determination of the cash value of
any Exchange Property and the Per Share Liquidation Value, if necessary. Its
determinations and calculations shall be conclusive absent manifest error.
Alternative Dilution and Reorganization Adjustments
The Calculation Agent may elect at its discretion to not make any of
the adjustments to the Exchange Ratio or to the method of determining the amount
payable on each Note described above under "Exchange Ratio adjustments" and
"Reorganization Events", but may instead make adjustments in its discretion to
the Exchange Ratio or the method of determining the amount payable on each Note
that will reflect the adjustments to the extent practicable made by the Options
Clearing Corporation on option contracts on McDonald's common stock or any
successor common stock. The Company will provide notice of any such election to
the Trustee not more than two Business Days following the date that the Options
Clearing Corporation publishes notice of its adjustments relating to McDonald's
common stock and will detail in such
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notice the actual adjustment made to the Exchange Ratio or to the method of
determining the amount payable on each Note.
General
This Note is one of a duly authorized issue of Securities of the
Company, issued and to be issued under an Indenture, dated as of April 1, 1983,
as amended and restated (herein referred to as the "Indenture"), between the
Company and JPMorgan Chase Bank, as Trustee (herein referred to as the
"Trustee", which term includes any successor Trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights thereunder of the Company, the Trustee
and the Holders of the Notes, and the terms upon which the Notes are, and are to
be, authenticated and delivered.
The Company hereby covenants for the benefit of the Holders of the
Notes, to the extent permitted by applicable law, not to claim voluntarily the
benefits of any laws concerning usurious rates of interest against a Holder of
the Notes.
As stated above, the Company, in its sole discretion, may call the
Notes, in whole but not in part, on any Business Day beginning on May 31, 2005
to and including the Stated Maturity.
In case an Event of Default with respect to any Notes shall have
occurred and be continuing, the amount payable to a Holder of a Note upon any
acceleration permitted by the Notes, with respect to each such Note, will be
equal to an amount described above under "Call at the option of the Company"
calculated as though the date of default were the Call Notice Date for the
Notes.
In case of default in payment of the Notes, whether at any Interest
Payment Date, the Stated Maturity, the Call Date, the Exchange Date or upon
acceleration, from and after that date the Notes will bear interest, payable
upon demand of their beneficial owners, at the rate of 2.10% per annum (to the
extent that payment of such interest shall be legally enforceable) on the unpaid
amount due and payable on such date in accordance with the terms of the Notes to
the date payment of such amount has been made or duly provided for.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of not less than 66 2/3% in aggregate original public
offering price or principal amount, as the case may be, of the Securities at the
time Outstanding, as defined in the Indenture, of each series affected thereby.
The Indenture also contains provisions permitting the Holders of specified
percentages in aggregate original public offering price or principal amount of
the Securities of each series at the time Outstanding, on behalf of the Holders
of all Notes of each series, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Note shall
be conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon
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the registration of transfer hereof or in exchange herefor or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay any consideration due with respect to this
Note and any interest on any overdue amount thereof at the time, place, and
rate, and in the coin or currency herein prescribed.
As provided in the Indenture and subject to certain limitations set
forth therein and on the first page hereof, the transfer of this Note may be
registered on the Security Register of the Company, upon surrender of this Note
for registration of transfer at the office or agency of the Company in the
Borough of Manhattan, The City of New York, duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Company duly
executed by, the Holder hereof or by his attorney duly authorized in writing,
and thereupon one or more new Notes, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee or
transferees.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and integral multiples of $1,000 thereof. This Note
shall remain in the form of a global security held by a Depository.
Notwithstanding the foregoing, if (x) any Depository is at any time unwilling or
unable to continue as Depository and a successor Depository is not appointed by
the Company within 60 days, (y) the Company executes and delivers to the Trustee
a Company Order to the effect that this Note shall be exchangeable or (z) an
Event of Default has occurred and is continuing with respect to the Notes, this
Note shall be exchangeable for Notes in definitive form of like tenor and of an
equal aggregate principal amount per unit, in denominations of $1,000 and
integral multiples of $1,000 thereof. Such definitive Notes shall be registered
in such name or names as the Depository shall instruct the Trustee.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or governmental charge payable in connection therewith.
The Company and each Holder of a Note by acceptance hereof hereby agree
(in the absence of an administrative determination or judicial ruling to the
contrary) to characterize a Note for all tax purposes as an investment unit
consisting of the following components: (i) a debt instrument of the Company
with a fixed principal amount unconditionally payable on the maturity date equal
to the principal amount of such Note and bearing stated interest at the stated
interest rate for such Note and (ii) a forward contract pursuant to which the
Holder agrees to use the principal payment due on the debt instrument to make a
payment to the Company in exchange for the right to receive one share of
McDonald's common stock at maturity.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
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All terms used in this Note which are defined in the Indenture but not
in this Note shall have the meanings assigned to them in the Indenture.
Unless the certificate of authentication hereon has been executed by
JPMorgan Chase Bank, the Trustee under the Indenture, or its successor
thereunder, by the manual signature of one of its authorized officers, this Note
shall not be entitled to any benefits under the Indenture or be valid or
obligatory for any purpose.
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IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: May 28, 2002
CERTIFICATE OF AUTHENTICATION Xxxxxxx Xxxxx & Co., Inc.
This is one of the Securities of the series
designated therein referred to in the
within-mentioned Indenture.
[Copy of Seal]
JPMorgan Chase Bank, as Trustee: By:
Treasurer
By: Attest:
Authorized Officer Secretary
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