SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
RULE 13d-101
AMENDMENT NO. 2
GENESEE & WYOMING, INC.
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(Name of Issuer)
Class A Common Stock, par value $.01 per share
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(Title of Class of Securities)
371559105
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(CUSIP Number)
Mortimer B. Fuller, III
Genesee & Wyoming, Inc.
66 Field Point Road
Greenwich, Connecticut 06830
(203) 629-3722
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(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications
March 8, 2004
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(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box [ ]
Note: Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See Rule 13d-7 for
other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
SCHEDULE 13D
13D
CUSIP No. 371559105
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1. Names of Reporting Persons Mortimer B. Fuller, III
I.R.S. Identification Nos. of Above Persons (Entities
Only)
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2. Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [ ]
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3. SEC Use Only
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4. Source of Funds* Not Applicable
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5. Check Box if Disclosure of Legal Proceedings is [ ]
Required Pursuant to Item
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6. Citizenship or Place of Organization United States
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Number of Shares Beneficially Owned by Each 7. Sole Voting Power: 2,223,479
Reporting Person With
8. Shared Voting Power: 0
9. Sole Dispositive Power: 2,223,479
10. Shared Dispositive Power: 0
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11. Aggregate Amount Beneficially Owned by Each 2,229,872
Reporting Person
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12. Check box if the Aggregate Amount in Row (11) [ ]
Excludes Certain Shares*
13. Percent of Class Represented by Amount in Row (11) 8.3%
(11)
14. Type of Reporting Person IN
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*See Instructions before filling out!
This Amendment No. 2 ("Amendment No. 2") to Schedule 13D amends the
statement of beneficial ownership on Schedule 13D filed on December 21, 2000
(the "Schedule 13D") by and on behalf of Mortimer B. Fuller, III (the "Reporting
Person") with respect to the Class A Common Stock, par value $.01 per share (the
"Class A Common Stock"), of Genesee & Wyoming, Inc., a Delaware corporation (the
"Company"), beneficially owned by the Reporting Person as subsequently amended
by Amendment No. 1 on December 21, 2001, and reflects the execution by the
Reporting Person of a Prepaid Variable Forward Agreement relating to 225,000
shares of Class B Common Stock. Capitalized terms used, but not defined, herein
have the meanings ascribed thereto in the Schedule 13D. All numbers regarding
shares of Class A Common Stock and Class B Common Stock and all prices per
share have been adjusted to reflect the three-for-two split described in Item 4.
Item 1. Security and Issuer
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No change.
Item 2. Identity and Background
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No change.
Item 3. Source and Amount of Funds or Other Consideration
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As previously reported, pursuant to a Stock Purchase Agreement by and
between the Company and the 1818 Fund III, L.P., a Delaware Limited Partnership
(the "Fund") dated October 19, 2000 (the "Stock Purchase Agreement") on December
12, 2000, the Company issued, and the Fund acquired from the Company 20,000
shares of Preferred Stock.
The consideration paid by the Fund for such shares of Preferred Stock
it purchased under the stock Purchase Agreement on December 12, 2000 was
$20,000,000 in cash, which was obtained by the Fund from capital contributions
made by its partners pursuant to pre-exiting capital commitments.
On December 11, 2001, in accordance with Section 2.1(b)(ii) of the
Stock Purchase Agreement, the Company issued, and the Fund acquired from the
Company an additional 5,000 shares of Preferred Stock.
The consideration paid by the Fund for such shares of Preferred Stock
was $5,000,000 in cash, which, to the knowledge of the Reporting Person, was
obtained by the Fund from capital contributions made by its partners pursuant to
pre-existing capital commitments.
As previously reported in the Reporting Person's Schedule 13D, as a
condition to the Fund acquiring the 20,000 shares of Preferred Stock on December
12, 2000, the Reporting Person, the Company and the Fund were required to enter
into the Letter Agreement. Pursuant to the Letter Agreement, the Reporting
Person has agreed, so long as the Fund continues to own at least 20% of the
shares of Class A Common Stock issued or issuable upon conversion of the
Preferred Stock, to vote all shares of the capital stock of the Company (whether
now or hereafter acquired) owned (whether jointly or severally) or, to the
extent permitted by law, controlled (including shares held by the Estate of
Frances A. Fuller until distributed in accordance with Section 2(f) of the
Letter Agreement, but excluding shares held by the Overlook Estate Foundation,
Inc. or the Frances A. Fuller Family Trust) by him in order to (i) cause the
election to the Board of Directors of the Company the designee of the Fund, (ii)
cause the removal from the Board of Directors (with or without cause) of any
director elected in accordance with clause (i) upon the written request of the
Fund, and upon the vacancy in the Board of Directors as a result of any
individual designated as provided in accordance with clause (i) above ceasing to
be a member of the Board of Directors, whether by resignation or otherwise, the
election to the Board of Directors as promptly as possible of any individual
designated by the Fund that is reasonably acceptable to the Company.
Additionally, the Fund is granted tag-along rights, subject to certain
exceptions, in the event the Reporting Person transfers 15% or more, in the
aggregate, of the shares of Class A Common Stock or Class B Common Stock, par
value $.01 per share (the "Class B Common Stock") directly owned by him which,
for purposes of the tag-along rights, include shares owned by the Estate of
Frances A. Fuller (until distributed in accordance with Section 2(f) of the
Letter Agreement), but exclude shares owned by the Overlook Estate Foundation,
Inc. or the Frances A. Fuller Family Trust, in a single or series of related
private transactions.
As previously reported, the Fund has also entered into a Registration
Rights Agreement between the Company and the Fund, dated December 12, 2000 (the
"Registration Rights Agreement"), pursuant to which the Company has agreed,
under the terms and conditions set forth therein, to register under the
Securities act of 1933, as amended, the Class A Common Stock issuable upon the
conversion of the shares of Preferred Stock held by the Fund and all other
shares of Class A Common Stock held by the Fund.
Copies of the Letter Agreement, the Stock Purchase Agreement, the
Registration Rights Agreement and the Certificate of Designation of 4.0% Senior
Redeemable Convertible Preferred Stock, Series A have previously been filed with
the Securities and Exchange Commission ("SEC") as exhibits to a Current Report
on Form 8-K filed by the Company on December 30, 2000 and are incorporated
herein by reference.
Item 4. Purpose of Transaction
----------------------
To the knowledge of the Reporting Person, the Fund acquired the
securities of the Company for investment purposes only. The Reporting Person may
from time to time acquire additional shares of Class A Common Stock in the open
market or in privately negotiated transactions, subject to the availability of
shares of Class A Common Stock at prices deemed favorable, the Company's
business or financial condition and to other factors and conditions the
Reporting Person deems appropriate. Alternatively, the Reporting Person may sell
all or a portion of the shares of Class A Common Stock or Class B Common Stock
in open market or in privately negotiated transactions, subject to the factors
and conditions referred to above and compliance with applicable laws. Pursuant
to the Letter Agreement, the Company agreed to cause the Fund's nominee to be
appointed to the Company's Board of Directors on or prior to January 11, 2001,
and such nominee currently is T. Michael Long, a co-manager of the Fund.
Except as set forth in this Item 4, the Reporting Person does not have
any present plans or proposals which would relate to or would result in: (a) the
acquisition by any person of additional securities of the issuer or the
disposition of securities of the issuer; (b) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, involving the
company or any of its subsidiaries; (d) any change in the present Board of
Directors or management of the Company, including any plans or proposals to
change the number or term of directors or to fill any existing vacancies on the
Board; (e) any material change in the present capitalization or dividend policy
of the Company; (f) any other material change in the Company's business or
corporate structure; (g) changes in the Company's charter, bylaws or instruments
corresponding thereto or other actions which may impede the acquisition or
control of the Company by any person; (h) causing a class of securities of the
Company to be delisted from a national securities exchange or to cease to be
authorized to be quoted in an inter-dealer quotation system of a registered
national securities association; (i) a class of equity securities of the Company
become eligible for termination of registration pursuant to Section 12(g) (4) of
the Securities Exchange Act of 1934, as amended; or (j) any action similar to
any of those enumerated above.
On February 11, 2004, the Company announced that its Board of Directors
had approved a three-for-two split of the Company's common stock, to be effected
in the form of a 50% stock dividend payable March 18, 2004 to stockholders of
record as of February 27, 2004. The payment date of the stock dividend was
subsequently changed to March 15, 2004.
On February 23, 2004, the Company filed a definitive information
statement on Form 14C with the SEC disclosing its intent to file an amendment to
its Restated Certificate of Incorporation increasing its authorized shares of
Class A Common Stock to 90,000,000, its authorized shares of Class B Common
Stock to 15,000,000, and its authorized shares of Preferred Stock to 3,000,000.
The Company filed that amendment with the Secretary of State of the State of
Delaware on March 15, 2004.
On March 8, 2004, the Reporting Person entered into a prepaid variable
forward agreement (the "PVF Agreement") with Credit Suisse First Boston Capital
LLC relating to 225,000 shares of Class B Common Stock, which agreement expires
on March 8, 2007, and for which the Recording Person received net proceeds of
$4,707,937.00. Under the terms of the PVF Agreement, the Recording Person has
agreed to deliver shares of Class B Common Stock (which are immediately
convertible into shares of Class A Common Stock on a one-for-one basis) or
shares of Class A Common Stock on the expiration date of the PVF Agreement (or
on an earlier date if that Agreement is terminated early) as follows: (i) if the
Final Price is less than or equal to the Floor Price ($23.91 per share), 225,000
shares; (ii) if the Final Price is less than or equal to the Cap Price
($29.8917 per share), but greater than the Floor Price, then a number of shares
equal to 225,000 times the Floor Price divided by the Final Price; (iii) if
the Final Price is greater than the Cap Price, then the number of shares equal
to 225,000 shares multiplied by a
fraction, the numerator of which is the sum of the Floor Price and the
difference between the Final Price and the Cap Price and the denominator of
which is the Final Price.
In connection with the PVF Agreement, the Reporting Person has pledged
225,000 shares of his Class B Common Stock to secure his obligations under that
Agreement. Under the PVF Agreement, in lieu of delivery of shares, the Reporting
Person may, at his option, settle the Agreement by delivering cash.
Item 5. Interests in Securities of the Issuer
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(a) - (c) The beneficial ownership of the Company's Class A Common
Stock by the Reporting Person is as follows:
The Reporting Person beneficially owns 2,229,872 shares of Class A
Common Stock, 1,480,654 of which are represented by shares of Class B Common
Stock that are convertible into shares of Class A Common Stock at any time,
6,393 of which are represented by shares owned by the Reporting Person's wife,
as to which shares the Reporting Person disclaims beneficial ownership, 7,500 of
which are represented by shares owned by Overlook Estate Foundation, Inc., of
which the Reporting Person is President, 76,087 of which are represented by
presently exercisable options to purchase shares of Class A Common Stock, and
595,605 of which are represented by presently exercisable third-party options to
purchase shares of Class B Common Stock. Such beneficial ownership represents an
8.3% of the outstanding shares of Class A Common Stock (assuming the conversion
of outstanding shares of Class B Common stock to Class A Common Stock and the
conversion of the Preferred Stock into 3,668,478 shares of Class A Common
Stock).
The Reporting Person's beneficial ownership set forth above excludes
the 3,686,328 shares of Class A Common Stock beneficially owned by the Fund
Group which he may be deemed to beneficially own pursuant to Rule 13d-5(b)(1).
The Fund Group beneficially owns 3,686,328 shares of Class A Common
Stock, excluding the 2,229,872 shares beneficially owned by the Reporting
Person, which they may be deemed to own pursuant to Rule 13d-5(b)(1),
representing 13.8% of the outstanding shares of Class A Common Stock (assuming
the conversion of outstanding shares of the Class B Common Stock to Class A
Common Stock and the conversion of the Preferred Stock into 3,668,478 shares of
Class A Common Stock). Therefore, for purposes of Rule 13d-5(b)(1), the group
comprised of the Fund Group and the Reporting Person beneficially own 5,916,200
shares of Class A Common Stock, representing 22.1% of the outstanding shares of
Class A Common Stock.
The Reporting Person has sole power to vote and dispose of 2,223,479
shares of Class A Common Stock, 1,450,654 of which are represented by shares of
Class B Common Stock that are convertible into shares of Class A Common Stock at
any time, 7,500 of which are represented by shares owned by Overlook Estate
Foundation, Inc., of which the Reporting Person is President, 76,087 of which
are represented by presently exercisable options to purchase shares of Class A
Common Stock, and 595,605 of which are represented by presently exercisable
options to purchase shares of Class B Common Stock. The Fund Group has sole
power to vote and dispose of 3,668,478 shares of Class A Common Stock.
Except as set forth above, no party described in this Schedule 13D
beneficially owns any shares of Class A Common Stock or has effected any
transaction in shares of Class A Common Stock during the preceding 60 days.
Paragraphs (d) and (e) of Item 5 of Schedule 13D are not applicable to
this filing.
Item 6. Contracts, Arrangements, Understanding or Relationships with
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Respect to Securities of the Issuer.
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Copies of the documents relating to the PVF Agreement are attached as
exhibits to this Amendment No. 2.
Copies of the Letter Agreement, the Stock Purchase Agreement, the
Registration Rights Agreement and the Certificate of Designation of 4.0% Senior
Redeemable Convertible Preferred Stock, Series A, have previously been filed
with the SEC as exhibits to a Current Report on Form 8-K filed by the Company on
December 30, 2000 and are incorporated herein by reference.
Item 7. Material to be Filed as Exhibits
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Included as an exhibit to this Amendment No. 2 is the following:
1. Confirmation and Prepaid Variable Forward Agreement between the
Reporting Person and Credit Suisse Boston Capital, LLC.
SIGNATURE
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After reasonable inquiry and to the best of his knowledge and belief,
the undersigned certifies that the information set forth in this Statement on
Amendment No. 2 to Schedule 13D is true, complete and correct.
/s/ Mortimer B. Fuller, III
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Mortimer B. Fuller, III
Dated: March 19, 2004
EXHIBIT 1
CREDIT SUISSE FIRST BOSTON CAPITAL LLC
CREDIT SUISSE FIRST BOSTON LLC
11 Madison Avenue
New York, NY 10010
VARIABLE PREPAID FORWARD CONFIRMATION
Date: March 8, 2004
To: Mr. Mortimer B. Fuller, III
66 Field Point Road
Greenwich, Connecticut, 06830
From: Credit Suisse First Boston Capital LLC
Re: Variable Prepaid Forward
Transaction ID: GWR#01A
External ID: 7006695
Dear Mr. Fuller:
The purpose of this letter agreement (this "Confirmation") is
to confirm the terms and conditions of the transaction (the "Transaction")
entered into between us on the Trade Date specified below. This Confirmation
constitutes a "Confirmation" as referred to in the Variable Prepaid Forward
Agreement (the "Agreement") between you ("Counterparty") and Credit Suisse First
Boston Capital LLC, a Delaware limited liability company, ("CSFB Capital") dated
as of March 8, 2004, with respect to certain Transactions as defined therein.
This Confirmation supplements, forms part of, and is subject
to the Agreement. All provisions contained in the Agreement govern this
Confirmation except as expressly modified below.
1
GENERAL TERMS:
Trade Date: March 8, 2004
Scheduled Valuation Date: March 8, 2007 (unless such date is not an Exchange
Business Day, in which case the Scheduled Valuation
Date shall be the next succeeding Exchange Business Day).
Selling Shareholder: Counterparty
Forward Purchaser: CSFB Capital
Issuer: Genesee & Wyoming Inc.
Shares: Class B common stock, par value $0.01 per share, of the
Issuer (the "Class B Common Stock"), which is
convertible on a one-to-one basis into share of Class A
common stock, par value $0.01 per share, of the Issuer
(Ticker symbol: GWR) (the "Class A Common Stock").
Exchange of the Class A Common Stock: New York Stock Exchange. For the avoidance of doubt,
all references herein to the "Exchange" shall be
deemed to refer to the Exchange of the Class A Common
Stock
Base Number of Shares: Initially 150,000 shares of Class B Common Stock,
subject to adjustment.
Floor: Initially 100% of Initial Price = $35.8700, subject to
adjustment.
Cap: Initially 125% of Initial Price = $44.8375, subject to
adjustment.
Participation above Cap: 0%
Initial Price: $35.8700
Prepaid Percentage: 87.5%
Purchase Price: $4,707,937.50 (Initial Price x Base Number of Shares x
Prepaid Percentage).
Payment Date: Three (3) Business Days after the later of (i) the day
on which (A) Transaction Documents executed by
Counterparty, (B) the Notice of Conversion executed by
the Counterparty and the Issuer, (C) the Issuer
Acknowledgement executed by the Counterparty and the
Issuer (and all attachments thereto, including an
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executed opinion of counsel) are received by CSFB
Capital, (D) the waiver of the Class B Stockholders
Agreement dated as of May 20, 1996 among the Executive
Officers of Company (as defined therein), the
Counterparty and certain Class B Common Stock
shareholders, as amended and supplemented from time to
time, and (E) the waiver of the Letter Agreement dated
as of December 12, 2000 among the Company, the
Counterparty and The 1818 Fund III, L.P., as amended
and supplemented from time to time, each of (A) - (E)
in a form satisfactory to CSFB Capital, and (ii) the
day on which CSFB Capital receives from Counterparty a
number of shares of Class B Common Stock as Collateral
equal to the number of Shares specified in the Pledge
of Collateral provision below.
VALUATION:
Averaging Date Final Price: The arithmetic mean of the Volume Weighted Average
Prices per share of Class A Common Stock, as displayed
on Bloomberg Page "AQR" for the Issuer, on each
Averaging Date in respect of the period from 9:30 a.m.
to 4:00 p.m. (New York City time) on such Averaging
Dates, or if such Volume Weighted Average Price is not
available, the arithmetic mean of the market values of
one (1) share of Class A Common Stock on each such
date as determined by the Calculation Agent.
Valuation Date: Scheduled Valuation Date, subject to extension upon
the occurrence of an Averaging Date Market Disruption.
Averaging Period: A period consisting of (the "Averaging Dates,") ten
(10) Exchange Business Days prior to and including the
Scheduled Valuation Date.
Averaging Date Market Disruption: If (i) a Market Disruption Event occurs on an
Averaging Date during the Averaging Period, then, for
each such Averaging Date on which such an impairment
occurs, Calculation Agent shall extend the Averaging
Period and the Valuation Date by one (1) Exchange
Business Day or (ii) a Blackout Period or a Suspension
Period commences on an Averaging Date during the
Averaging Period, then the Averaging Period shall be
tolled until the end of such Blackout Period or
Suspension Period, as applicable, and the Valuation
Date shall be extended accordingly.
Blackout Period: Any period during which the Counterparty would be
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precluded from purchasing or selling shares of Class A
Common Stock or Class B Common Stock by reason of
possession of material non-public information
concerning the Issuer within the meaning of Rule 10b-5
under the Securities Exchange Act.
Immediately upon becoming aware of a Blackout Period,
Counterparty shall notify CSFB Capital by telephone and
in writing thereof. Such notice shall not specify, and
the Counterparty shall not otherwise communicate to
CSFB Capital, the reason for the Counterparty's
declaration of a Blackout Period.
Suspension Period: Any period during which CSFB Capital concludes, in its
sole discretion, that it is appropriate with respect
to any legal, regulatory or self-regulatory
requirements or related policies and procedures
(whether or not such requirements, policies or
procedures are imposed by law or have been voluntarily
adopted by CSFB Capital), for it to refrain from
purchasing or selling shares of Class A Common Stock
or Class B Common Stock.
CSFB Capital shall notify the Counterparty upon
designating a Suspension Period and shall subsequently
notify the Counterparty on the day CSFB Capital
believes that it may resume purchasing shares of Class
A Common Stock or Class B Common Stock. CSFB Capital
need not communicate to the Counterparty the reason for
CSFB Capital's exercise of its rights pursuant to this
provision.
SETTLEMENT TERMS:
SETTLEMENT:
Total Deliverable Number of Shares: A number of Shares or shares of Class A Common Stock
equal to the lesser of (a) the Base Number of Shares
and (b) the Base Number of Shares multiplied by (x)
the sum, determined as of the Valuation Date, of (i)
the Floor (expressed as an amount) and (ii) the
product of (a) one minus the Participation Above Cap
and (b) any amount by which the Final Price exceeds
the Cap (expressed as an amount); divided by (y) the
Averaging Date Final Price.
Notice of Settlement: CSFB will send written notice of expiration of the
Transaction to the Counterparty on or before the 35th
Business Day prior to the Scheduled Valuation Date.
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Net Stock Settlement: Counterparty will deliver the Total Deliverable Number
of Shares to CSFB Capital on the Share Delivery Date,
unless Counterparty elects the Cash Settlement Option,
in which case, in lieu of delivering Shares or shares
of Class A Common Stock, Counterparty will pay the
Cash Settlement Amount on the Cash Settlement Payment
Date.
Share Delivery Date: The third Exchange Business Day following the
Valuation Date.
Cash Settlement Option; Eligible Contract Counterparty will have the right to cash settle the
Participant: Transaction; on the third Business Day following the
Valuation Date (the "Cash Settlement Payment Date")
Counterparty shall pay to CSFB Capital an amount equal
to the applicable Cash Settlement Amount; provided that
Counterparty shall not have the right to cash settle
the Transaction unless CSFB Capital has received
written notice of Counterparty's intention to cash
settle the Transaction on or before the 30th Business
Day prior to the Scheduled Valuation Date.
Counterparty represents and warrants as of the date
hereof and as of the date of any amendment or
modification to this Transaction or the Agreement that
that (i) it is an "eligible contract participant" as
defined in Commodity Exchange Act, as amended; and (ii)
Counterparty is entering into this Transaction in order
to manage the risk associated with an asset owned or a
liability incurred, or reasonably likely to be owned or
incurred, by Counterparty.
Cash Settlement Amount: In respect of the Cash Settlement Payment Date, an
amount in U.S. dollars, determined as of the Valuation
Date, equal to the product of (i) the Total
Deliverable Number of Shares multiplied by (ii) the
Averaging Date Final Price.
Net Stock Settlement and If Counterparty elects the Net Stock Settlement and/or
Supplemental Share Delivery Requirements: Supplemental Share Delivery, Counterparty covenants,
represents and warrants that (i) it will deliver to
CSFB Capital only shares of Class A Common Stock or
Class B Common Stock that are eligible for immediate
resale by Counterparty under Rule 144 or Rule 145 and
(ii) it (and each person whose sales of shares of Class
A Common Stock or Class B Common Stock would be
aggregated with Counterparty's sales under Rule
144(e)(3)) will not sell any shares of Class A Common
Stock or Class B Common Stock during the three-month
period ending on the third Exchange Business Day
following the Scheduled Valuation Date.
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ADJUSTMENTS:
Total Return Option Inapplicable
Fixed Dividend Level: USD 0.00 (zero) per share of Class A Common Stock
Dividend Pass-Through: If as of the earlier of (x) the last Exchange Business
Day of any calendar quarter during the term of this
Transaction and (y) the Scheduled Valuation Date, as
determined by the Calculation Agent, there has been a
dividend paid by the Issuer in respect of the Class A
Common Stock consisting of cash in U.S. dollars per share
or the value of any non-cash assets (other than
additional shares of Class A Common Stock), as determined
by the Calculation Agent (the "Actual Dividend"), and
such Actual Dividend is greater than the Fixed Dividend
Level, Seller agrees to pay to Buyer within two (2)
Business Days an amount in U.S. Dollars in immediately
available funds by wire transfer equal to the product of
the Base Number of Shares multiplied by the difference
between the Actual Dividend and the Fixed Dividend Level
(the "Excess Pass-Through Amount").
If the Actual Dividend is received from the Issuer by
Seller, Seller shall pay the Excess Pass-Through
Amount, if any, to Buyer within two (2) Business Days
after receipt of the Actual Dividend.
If the Actual Dividend is received from the Issuer by
the Buyer, (a) in the event that the Actual Dividend is
greater than the Fixed Dividend, the Seller agrees that
in fulfillment of Seller's obligation hereunder, Buyer
may retain the Excess Pass-Through Amount from any
dividend payment received by Buyer from the Issuer and
shall pay to Seller the remainder of such dividend
payment (if any), and (b) in the event that the Fixed
Dividend is greater than the Actual Dividend, the Buyer
agrees to pay the Actual Dividend to Seller within two
Business Days after receipt of the Actual Dividend.
For the avoidance of doubt:
(a) in making the determination for a period ending on the
Scheduled Valuation Date, the Calculation Agent shall
treat the ex dividend date of any cash dividend
declared during such period but not yet paid as the
payment date of such cash dividend; and
(b) Buyer shall have no payment obligation
6
pursuant to this Dividend Pass-Through provision for a
period ending on the Scheduled Valuation Date unless an
ex dividend date occurred during such period for an
Actual Dividend.
Method of Adjustment: Calculation Agent Adjustment.
EXTRAORDINARY EVENTS:
Consequences of Merger Events:
(a) Share-for-Share Additional Termination Event, Counterparty will be the
Affected Party, provided that, upon mutual agreement
between CSFB Capital and Counterparty, this
Transaction may be amended or recalculated in terms of
New Shares and shall otherwise continue in accordance
with the terms hereof.
(b) Share-for-Other Additional Termination Event, Counterparty will be the
Affected Party.
(c) Share-for-Combined Additional Termination Event, Counterparty will be the
Affected Party.
ADDITIONAL TERMINATION EVENTS:
Loss of Economic Stock-Borrow: Additional Termination Event, Counterparty will be the
Affected Party; provided that "economic stock-borrow"
shall mean the availability of sufficient shares of
Class A Common Stock in the stock-borrow market at a
cost of 50 basis points per annum; provided, further,
that if Counterparty reimburses (on a current basis)
CSFB Capital for any cost of stock-borrow in excess of
50 basis points per annum, such event shall not be an
Additional Termination Event.
Hedging Impairment: An Additional Termination Event will occur if, in
connection with CSFB Capital's hedge, CSFB Capital's
ability to purchase or sell shares of Class A Common
Stock is significantly impaired; Counterparty will be
the Affected Party.
Optional Termination by Counterparty: At any time, Counterparty may terminate the Transaction
in whole upon 35 Business Days' prior written notice to
CSFB Capital specifying the date of the Optional
Termination.
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COLLATERAL:
Pledge of Collateral: On the Trade Date, Counterparty will pledge a quantity
of Shares or shares of Class A Common Stock to CSFB
Capital in accordance with Section 10 of the
Agreement. Throughout the term of the Transaction the
Counterparty shall maintain a number of Shares or
shares of Class A Common Stock in the Collateral
Account equal to the Base Number of Shares, as
adjusted.
Release of Pledged Collateral: On the Share Delivery Date, CSFB Capital will release
the Collateral to Counterparty against receipt from
Counterparty of the Total Deliverable Number of
Shares; provided that, if Counterparty elects the Cash
Settlement Option, the Pledged Securities will be
released to Counterparty against payment to CSFB
Capital of the Cash Settlement Amount.
ADDITIONAL REPRESENTATIONS, WARRANTIES AND
COVENANTS:
Insider: Because Counterparty is an "affiliate" (as defined in
Rule 144 of the Securities Act of 1933, as amended) of
the Issuer, the Pledged Securities are restricted stock
that can only be offered and sold pursuant to an
effective registration statement, Rule 144 or other
applicable exemption.
Holding Period; Restrictions Counterparty represents and warrants to CSFB Capital
on Transfer: that (i) Counterparty's "holding period" for the
Shares pledged hereunder, determined in accordance with
Rule 144, commenced more than two years prior to the
date hereof, and the Issuer is in compliance with Rule
144(c)(1) and (ii) other than the restrictions under
Rule 144 and restrictions on transfer imposed by the
provisions of the Issuer's Restated Certificate of
Incorporation, such Shares are free of any contractual
or legal restrictions on transfer. Counterparty
represents and warrants that the restrictions on
transfer imposed by the Class B Stockholders Agreement
dated as of May 20, 1996 among the Executive Officers
of
8
Company (as defined therein), the Counterparty and
certain Class B Common Stock shareholders, as amended
and supplemented from time to time, and the Letter
Agreement dated as of December 12, 2000 among the
Company, the Counterparty and The 1818 Fund III, L.P.,
as amended and supplemented from time to time, have
been waived (each a "Waiver") by the parties to such
agreements.
Manner of Hedging: CSFB Capital represents that it will execute any
initial hedging in shares of Class A Common Stock in a
manner consistent with paragraph (e) of Rule 144.
Consistent with the foregoing, Counterparty agrees and
covenants with CSFB Capital that it (x) will not sell
any shares of Class A Common Stock or Class B Common
Stock pursuant to Rule 144 and (y) will cause each
person whose sales of shares of Class A Common Stock
or Class B Common Stock would be aggregated with
Counterparty's sales under Rule 144(e)(3) not to sell
any shares of Class A Common Stock or Class B Common
Stock, in each case, without the written consent of
CSFB Capital.
OTHER PROVISIONS:
Calculation Agent: CSFB Capital, whose determinations and calculations
shall be binding absent manifest error.
Default Rate: Cost of funding plus 2.00%.
ADDITIONAL PROVISIONS
The date and time of this Transaction will be furnished
by CSFB Capital to Counterparty upon written request
CSFB LLC will furnish to Counterparty upon written
request a statement as to the source and amount of any
remuneration received or to be received by CSFB LLC in
connection with any transaction
CSFB Capital is not a member of SIPC (Securities
Investor Protection Corporation).
MATTERS RELATING TO CSFB LLC:
(a) CSFB LLC has no obligation, by guaranty,
endorsement or otherwise, with respect to performance
of CSFB Capital's and Counterparty's obligations.
9
(b) CSFB Capital represents that it is an "OTC
derivatives dealer" as such term is defined in the
Securities Exchange Act and is an affiliate of a
broker-dealer, CSFB LLC, that is registered with and
fully-regulated by the Securities and Exchange
Commission ("SEC"). CSFB LLC acted as CSFB Capital's
agent in effecting this Transaction.
ACCOUNT DETAILS:
Payments to Counterparty: To be advised in writing
Payments to CSFB Capital: PAY TO: Citibank N.A., New York
ABA NUMBER: 021-000-089
FOR A/C OF: Credit Suisse First Boston Capital LLC
ACCOUNT #: 30459883
Credit Suisse First Boston LLC
Deliveries to CSFB Capital: DTC: 355
Ref a/c: 2H3KG
REGULATORY DISCLOSURE REPRESENTATION:
The Counterparty represents that it has received from
CSFB Capital the "Risk Disclosure Statement regarding
OTC Derivative Products and Notice of Regulatory
Treatment" and has reviewed, signed and returned a copy
of such document to CSFB Capital.
10
Please confirm that the foregoing correctly sets forth the
terms of our agreement by executing the copy of this Confirmation enclosed for
that purpose and returning it to us.
CREDIT SUISSE FIRST BOSTON CAPITAL LLC
By: /s/ Samantha Waddell
------------------------------
Name: Samantha Waddell
Title: Vice President Operations
CREDIT SUISSE FIRST BOSTON LLC,
solely in its capacity as Agent
By: /s/ Thomas Decker
------------------------------
Name: Thomas Decker
Title: Vice President Operations
MORTIMER B. FULLER, III
/s/ Mortimer B. Fuller, III
----------------------------
11
CREDIT SUISSE FIRST BOSTON CAPITAL LLC
CREDIT SUISSE FIRST BOSTON LLC
11 Madison Avenue
New York, NY 10010
VARIABLE PREPAID FORWARD AGREEMENT
Date: March 8, 2004
To: Mr. Mortimer B. Fuller, III
66 Field Point Road
Greenwich, Connecticut, 06830
From: Credit Suisse First Boston Capital LLC
Re: Variable Prepaid Forward Transactions
Transaction ID: GWR#01
Dear Mr. Fuller:
The purpose of this letter agreement (the "Agreement") is to state the terms and
conditions of the Variable Prepaid Forward transactions, together with any other
derivative transactions that may be entered into, between you ("Counterparty")
and Credit Suisse First Boston Capital LLC, a Delaware limited liability
company, ("CSFB Capital") either on the date hereof or subsequent hereto.
It is contemplated that Counterparty and CSFB Capital shall enter into one or
more Variable Prepaid Forward transactions (each, a "Transaction") (as more
fully described in one or more confirmation(s) in substantially the form
attached hereto). Each confirmation and any amendments or modifications thereof,
which amendments or modifications shall be set forth in an amended and restated
Variable Prepaid Forward confirmation, shall be attached as a Schedule hereto
and shall become a part hereof (each, a "Confirmation").
The terms of this agreement shall remain in full force and effect and shall be
operative with respect to all Transactions, except as the specific terms set
forth in any Confirmation shall vary the terms hereof.
1
TABLE OF CONTENTS
1. NOTICE INFORMATION.............................................................................................3
2. REPRESENTATIONS AND WARRANTIES.................................................................................3
3. ADJUSTMENT EVENTS..............................................................................................6
4. TERMINATION EVENTS.............................................................................................6
5. TERMINATION OF TRANSACTION.....................................................................................8
6. PAYMENT UPON MERGER EVENTS.....................................................................................9
7. EXPENSES.......................................................................................................9
8. SET-OFF........................................................................................................9
9. TAXES.........................................................................................................10
10. SECURITY AGREEMENT...........................................................................................10
11. REMEDIES UPON SECURITY AGREEMENT DEFAULT.....................................................................12
12. NOTICES......................................................................................................13
13. FURNISHING OF SPECIFIED INFORMATION..........................................................................14
14. MISCELLANEOUS................................................................................................14
15. DEFINITIONS..................................................................................................15
1. NOTICE INFORMATION
CSFB Capital: Credit Suisse First Boston Capital LLC
c/o Credit Suisse First Boston LLC
11 Madison Avenue
New York, NY 10010
Tel: (212) 538 4488
Fax: (212) 325 4585
Credit Suisse First Boston LLC
With a copy to: 11 Madison Avenue, 3rd Floor
New York, New York 10010
For payments and deliveries:
Attn.: Ricardo Harewood
Tel: (212) 325-8678
Fax: (212) 325- 8175
For all other communications:
Attn.: Joe Belnome/John Ryan
Tel.: (212) 538 1277 / (212) 325 8681
Fax.: (212) 538 8898
Mortimer B. Fuller, III
Counterparty: 5 Martin Road
Rye, NY 10580
Tel: 914-967-1355
Fax: 914-967-1486
Adam B. Frankel
With a copy to: Senior Vice President, General Counsel
and Secretary
Genesee & Wyoming Inc.
66 Field Point Road, 2nd Floor
Greenwich, CT 06830
Tel: 203-629-3722
Fax: 203-661-4106
2. REPRESENTATIONS AND WARRANTIES
(A) GENERAL REPRESENTATIONS. Each party makes the following
representations, and such representations shall be deemed to be repeated and in
full force and effect whenever such party enters into a Transaction or any
amendment thereto:
(i) NON-RELIANCE. It is acting for its own account, and it has
made its own independent decisions to enter into this Transaction and the
Transaction Documents, and as to whether a Transaction under the Transaction
Documents is appropriate or proper for it based upon its own judgment and upon
advice from its
professional advisers. It is not relying, and has not relied, upon any
communication (written or oral) of the other party, or any affiliate, employee
or agent of the other party, as investment advice, tax advice or as a
recommendation to enter into a Transaction under the Transaction Documents; it
has conducted its own analyses of the legal, accounting, tax or other
implications of any Transaction and the Transaction Documents; it is understood
that information and explanations related to the terms and conditions of a
Transaction under the Transaction Documents shall not be considered investment
advice, tax advice or a recommendation to enter into a Transaction under the
Transaction Documents. It is entering into each Transaction and the Transaction
Documents with a full understanding of all of the terms and risks thereof
(economic and otherwise) and it is capable of evaluating and understanding (on
its own behalf or through independent professional advice), and understands and
accepts, the terms, conditions and risks. It is also capable of assuming
(financially and otherwise), and assumes, those risks. No communication (written
or oral) received from the other party shall be deemed to be an assurance or
guarantee as to the expected results of a Transaction under the Transaction
Documents;
(ii) STATUS OF PARTIES. Neither the other party, nor any
affiliate, employee, or agent of the other party, is acting as a fiduciary for
or an advisor to it in respect of any Transaction or any Transaction Document.
Each party is entering into each Transaction and each Transaction Document as a
principal on its own behalf as an arm's-length commercial transaction;
(iii) NO VIOLATION OR CONFLICT. The execution, delivery and
performance of the Transaction Documents and any Transaction thereunder does not
violate or conflict with any law applicable to it, any provision of its
constitutive documents, any order or judgment of any court or other agency of
government applicable to it or any of its assets or any contractual restriction
binding on or affecting it or any of its assets;
(iv) CONSENTS. All governmental and other consents that are
required to have been obtained by it or made by it with respect to the
Transaction Documents and any Transaction thereunder to which it is a party have
been obtained or made and are in full force and effect and all conditions of any
such consents have been complied with;
(v) OBLIGATIONS BINDING. Its obligations under the Transaction
Documents and any Transaction constitute its legal, valid and binding
obligations, enforceable in accordance with their respective terms (subject to
applicable bankruptcy, reorganization, insolvency, moratorium or similar laws
affecting creditors' rights generally, and subject, as to enforceability, to
equitable principles of general application regardless of whether enforcement is
sought in a proceeding in equity or at law);
(vi) NO WITHHOLDING. Subject to compliance with Section 13(A)
(Furnishing of Specified Information -- Tax Information), it is not required by
any applicable law, as modified by the practice of any relevant governmental
revenue authority, of any jurisdiction to make any deduction or withholding for
or on account of any tax from any payment (other than default interest) to be
made by it to the other party under the Transaction Documents and any
Transaction thereunder;
(vii) RESIDENCE. Counterparty hereby represents that the
address set forth in Section 1 hereof is Counterparty's current residence and
agrees to provide CSFB Capital 30 calendar days' prior written notice of any
change of residence or domicile;
(viii) SECURITIES CONTRACT. It intends and acknowledges that
this Agreement, including all Transactions hereunder, shall constitute a
"securities contract" as defined in 11 U.S.C.ss.741(7) (as in effect on the date
of this Agreement) (or any successor provision of similar import); and
(ix) HEDGING. Counterparty hereby represents that this
Agreement and each Transaction have been, and will be, entered into not for the
purpose of speculation but solely in connection with the portfolio management,
asset, risk, and liability management and hedging activities of Counterparty.
(B) SECURITIES LAW AND DELIVERY REPRESENTATIONS: Each party
makes the following representations, warranties and covenants, and such
representations, warranties and covenants shall be deemed to be
repeated and in full force and effect whenever such party shall make a payment
relating to a Transaction or any Transaction Document:
(i) NO AGENCY. Each party is entering into the Transaction
Documents and any Transaction thereunder for its own account as principal, for
investment purposes only, and not with a view to, or for, resale, distribution
or fractionalization thereof, in whole or in part, and no other person has a
direct or indirect beneficial interest under any Transaction Document or in any
Transaction entered into by such party thereunder;
(ii) EXEMPTION FROM REGISTRATION. Each party acknowledges its
understanding that the offer and the sale of any Transaction is intended to be
exempt from registration under the Securities Act, by virtue of Section 4(2) of
the Securities Act and Regulation D thereunder. In furtherance thereof, each
party represents and warrants that (1) it has the financial ability to bear the
economic risk of its investment, and (2) it qualified as an "accredited
investor" as that term is defined under Regulation D;
(iii) INDEPENDENT EVALUATION OF RISK AND SUITABILITY. Each
party has been given the opportunity to ask questions of, and receive answers
from, the other party concerning the terms and conditions of the Transaction
Documents and any Transaction thereunder and has been given the opportunity to
obtain such additional information necessary in order for it to evaluate the
merits and risks of the Transaction Documents and any Transaction thereunder (it
being understood that CSFB Capital has provided information only in regard to
the Transaction Documents and any Transaction thereunder and not in regard to
the shares of Class A Common Stock or Class B Common Stock, which have been
selected by Counterparty without any advice from CSFB Capital), and Counterparty
has determined that the Transactions contemplated by the Transaction Documents
are a suitable investment for it;
(iv) NO MATERIAL NON-PUBLIC INFORMATION. Each party represents
and warrants that, in effecting the Transaction Documents and any Transaction
thereunder, it will not be in possession of any material non-public information
with respect to the Issuer that, under the U.S. federal securities laws, it
would have to disclose in advance to a party effecting a purchase or sale of the
shares of Class A Common Stock or Class B Common Stock;
(v) NO DISPOSITIONS. Each party fully understands and agrees
that it must bear the economic risk of each Transaction for the entire term of
each Transaction; and each party understands and agrees that disposition of a
Transaction is restricted under the Transaction Documents, the Securities Act
and state securities laws. Each party understands that no Transaction has been,
or is intended to be, registered under the Securities Act or under the
securities laws of certain states and, therefore, no Transaction can be resold,
pledged, assigned or otherwise disposed of unless registered under the
Securities Act and under the applicable laws of such states, or an exemption
from such registration is available. Each party understands and agrees that,
except as provided herein, the other party is not obliged to register any
Transaction on its behalf or to assist it in complying with any exemption from
registration under the Securities Act or state securities laws;
(vi) BENEFICIAL OWNERSHIP, POWER AND AUTHORITY. Counterparty
represents and warrants upon Counterparty's delivery of the Pledged Securities
and Contract Rights that (1) it is the absolute beneficial owner of the Pledged
Securities and Contract Rights and the Pledged Securities and Contract Rights
are free from all security interests, howsoever created or arising,
encumbrances, equities and claims whatsoever (save under Section 10 hereof) and
contractual restrictions on transfer (except as disclosed to CSFB Capital in
writing) and (2) it has the power to grant the security interest in the
Collateral purported to be granted by it hereunder; and
(vii) SHARES FULLY PAID, NON-ASSESSABLE; NO LIENS.
Counterparty represents and warrants that: (1) the Shares are duly authorized
and validly issued, (2) the Shares are fully paid and non-assessable, (3) the
Shares are free and clear of any encumbrance, equity, loan, pledge, charge,
claim or security interest, howsoever created or arising (except the security
interest granted under Section 10 hereof), (4) Counterparty is the sole owner of
the Shares with full right to transfer the Shares in accordance with the terms
of this Agreement and the related Confirmation and (5) upon delivery of the
Shares in accordance with the terms of this Agreement and the related
Confirmation, CSFB Capital will be the sole owner of the Shares, free and clear
of any encumbrance, equity, loan, pledge, charge, claim or security interest.
3. ADJUSTMENT EVENTS.
(A) POTENTIAL ADJUSTMENT EVENTS. Following the declaration by
the Issuer of the terms of any Potential Adjustment Event, the Calculation Agent
may make adjustments in accordance with the Method of Adjustment specified in
the Confirmation.
(B) CALCULATION AGENT ADJUSTMENT. If "Calculation Agent
Adjustment" is specified as the Method of Adjustment in the Confirmation (or if
no Method of Adjustment is specified in the Confirmation of such Transaction),
then following the declaration by the Issuer of the terms of any Potential
Adjustment Event, the Calculation Agent will determine whether such Potential
Adjustment Event has a diluting or concentrative effect on the theoretical value
of the relevant shares of Class A Common Stock or Class B Common Stock and, if
so, will (i) make the corresponding adjustment(s), if any, to any one or more of
the Initial Price, Base Number of Shares, and any other variable relevant to the
exercise, settlement or payment terms of that Transaction as the Calculation
Agent determines appropriate to account for that diluting or concentrative
effect and (ii) determine the effective date(s) of the adjustment(s). The
Calculation Agent may (but need not) determine the appropriate adjustment(s) by
reference to the adjustment(s) in respect of such Potential Adjustment Event
made by an options exchange to options on the relevant shares of Class A Common
Stock traded on that options exchange.
4. TERMINATION EVENTS.
The occurrence at any time of any of the events set forth
herein shall constitute a "Termination Event":
(A) FAILURE TO PAY OR DELIVER. Failure by CSFB Capital or
Counterparty to make, when due, any payment or delivery under any Transaction or
any Transaction Document required to be made by it if such failure is not
remedied on or before the third Business Day after notice of such failure is
given to such party.
(B) BREACH OF AGREEMENT. Failure of CSFB Capital or
Counterparty to comply with or perform any agreement or obligation (other than
an obligation to make any payment or delivery under this Transaction) to be
complied with or performed by the party in accordance with any Transaction
Document or any Transaction thereunder if such failure is not remedied on or
before the tenth day after notice of such failure is given to such party.
(C) MISREPRESENTATION. A representation (other than the "No
Withholding" representation) made or repeated, or deemed to have been made or
repeated, by CSFB Capital or Counterparty in any Transaction Document or any
Transaction thereunder proves to have been incorrect or misleading in any
material respect when made or repeated or deemed to have been made or repeated.
(D) DEFAULT UNDER SPECIFIED TRANSACTION. Counterparty or any
Affiliate of Counterparty (i) defaults under a Specified Transaction and, after
giving effect to any applicable notice requirement or grace period, there occurs
a liquidation of, an acceleration of obligations under, or any early termination
of, that Specified Transaction, (ii) defaults, after giving effect to any
applicable notice requirement or grace period in making any payment or delivery
due on the last payment, delivery or exchange date of, or any payment on early
termination of, a Specified Transaction (or, with respect to payment defaults,
such default continues for at least three Business Days if there is no
applicable notice requirement or grace period or, with respect to delivery
defaults, such default continues for at least one Business Day if there is no
applicable notice requirement or grace period), or (iii) disaffirms, disclaims,
repudiates or rejects, in whole or in part, a Specified Transaction (or such
action is taken by any person or entity appointed or empowered to operate it or
act on its behalf).
(E) BANKRUPTCY. CSFB Capital or Counterparty (i) becomes
insolvent or is unable to pay its debts or fails or admits in writing its
inability generally to pay its debts as they become due, (ii) makes a general
assignment, arrangement or composition with or for the benefit of its creditors,
(iii) institutes or has instituted against it a proceeding seeking a judgment of
insolvency or bankruptcy or any other relief under any bankruptcy or insolvency
law or other similar law affecting creditors' rights, or a petition is presented
for its winding-up or liquidation, and, in the case of any such proceeding or
petition instituted or presented against it, such proceeding or
petition (A) results in a judgment of insolvency or bankruptcy or the entry of
an order for relief or the making of an order for its winding up or liquidation
or (B) is not dismissed, discharged, stayed or restrained in each case within 30
days of institution or presentation thereof; (iv) seeks or becomes subject to
the appointment of an administrator, provisional liquidator, conservator,
receiver, trustee, custodian or other similar official for it or for all or
substantially all its assets; (v) has a secured party take possession of all or
substantially all its assets or has a distress, execution, attachment,
sequestration or other legal process levied, enforced or sued on or against all
or substantially all its assets and such secured party maintains possession, or
any such process is not dismissed, discharged, stayed or restrained, in each
case within 30 days thereafter; (vi) causes or is subject to any event with
respect to it which, under the applicable laws of any jurisdiction, has an
analogous effect to any of the events specified in clauses (i) to (v)
(inclusive); or (vii) takes any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the foregoing acts.
(F) TAX EVENT. Due to (x) any action taken by a taxing
authority, or brought in a court of competent jurisdiction, on or after the date
hereof (regardless of whether such action is taken or brought with respect to a
party hereto) or (y) a Change in Tax Law (either such occurrence constituting a
"Tax Event"), CSFB Capital or Counterparty (which will be the Affected Party)
will, or there is a substantial likelihood that it will, on the next succeeding
scheduled payment date; (1) be required to pay to the other party an additional
amount in respect of an Indemnifiable Tax under Section 9 hereof (except in
respect of default interest or interest on a delayed payment) or (2) receive a
payment from which an amount is required to be deducted or withheld for or on
account of a tax (except in respect of default interest or interest on a delayed
payment); and no additional amount is required to be paid in respect of such tax
under Section 9 hereof (other than by reason of such party's failure to deliver
a tax document pursuant to this Agreement); provided that the Affected Party
will, as a condition to its right to terminate a Transaction as a result of such
event, use all reasonable efforts (which will not require such party to incur a
loss excluding immaterial, incidental expenses) to transfer within 20 days after
it gives notice to the other party of such Tax Event all its rights and
obligations under such Transaction to another of its offices or Affiliates so
that such Tax Event ceases to exist.
If the Affected Party is not able to make such a transfer it
will give notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days after the
notice is given of such Tax Event.
Any such transfer by a party under this provision will be
subject to and conditional upon the prior written consent of the other party,
which consent will not be withheld if such other party's policies in effect at
such time would permit it to enter into transactions with the transferee on the
terms proposed.
(G) SECURITY AGREEMENT DEFAULT. The occurrence of any of the
following shall constitute a "Collateral Agreement Default": (i) Failure by
Counterparty to comply with or perform any agreement or obligation to be
complied with or performed by it in accordance with the Security Agreement set
forth in Section 10 hereof, if such failure is continuing three (3) Exchange
Business Days after notice thereof is given to Counterparty; (ii) failure at any
time of the Collateral in respect of any Transaction to include, as Eligible
Collateral, at least the Base Number of Shares, as adjusted, in respect of that
Transaction; (iii) the failing or ceasing of the Security Agreement set forth in
Section 10 hereof to be in full force and effect for the purposes of a
Transaction (in either case other than in accordance with its terms) prior to
the satisfaction of all obligations of Counterparty under such Transaction,
without the written consent of CSFB Capital; or (iv) Counterparty disaffirms,
disclaims, repudiates or rejects, in whole or in part, or challenges the
validity of the Security Agreement set forth in Section 10 hereof; (v) any
involuntary lien of any kind or character is imposed on any Collateral; or (vi)
the occurrence of any deterioration or impairment of the Collateral or any part
thereof which causes the Collateral in the good faith judgment of CSFB Capital
to become unsatisfactory as to character or value.
(H) DEATH OR INCOMPETENCY. Counterparty ("Principal") (i)
dies; (ii) is declared incompetent by a court of competent jurisdiction due to a
physical, mental or emotional condition resulting from injury, sickness, disease
or other cause; (iii) becomes unable to act in a prudent, timely, and effective
manner as a consequence of any accident, physical or mental condition (whether
organic or psychological) or other similar cause for an indefinite period of
time (notwithstanding the appointment of a guardian, conservator or other legal
representative for Principal), in the opinion of two or more examining
physicians appointed by the Calculation Agent (Principal hereby (a) submits to
any such examinations reasonably requested by the Calculation Agent for this
purpose, and (b) waives, to the fullest extent permitted by applicable law
and/or standards of professional conduct, the benefits and privileges of
physician-patient confidentiality in this connection); or Principal is sued for
divorce if the applicable jurisdiction is a community property state.
(I) ADDITIONAL TERMINATION EVENT. If any "Additional
Termination Event" is specified in the Confirmation as applying, the occurrence
of such event (and, in such event, the Affected Party or Affected Parties shall
be as specified for such Additional Termination Event in such Confirmation).
5. TERMINATION OF TRANSACTION
(A) NOTICE. If a Termination Event occurs with respect to a
party (the "Affected Party"), such party will, promptly upon becoming aware of
it, notify the other party specifying the nature of that Termination Event and
will also give such other information about that Termination Event as the other
party may reasonably require.
(B) TWO AFFECTED PARTIES. If a Tax Event occurs and there are
two Affected Parties, each party will use all reasonable efforts to reach
agreement within 30 days after notice thereof is given on action to avoid that
Termination Event.
(C) RIGHT TO TERMINATE. If a transfer under Section 4(F)
hereof or an agreement under Section 5(B) hereof, as the case may be, has not
been effected within the time therein specified or any other Termination Event
occurs, CSFB Capital or any Affected Party in the case of a Tax Event, or the
party which is not the Affected Party in the case of any other Termination Event
if there is only one Affected Party may, by not more than 20 days' notice to the
other party, designate a day not earlier than the day such notice is effective
as an early termination date (the "Early Termination Date") for all
Transactions; provided, however, the designation of an Early Termination Date
shall not be conditional upon the receipt of such notification.
(D) EFFECT OF DESIGNATION. Upon the occurrence or effective
designation of an Early Termination Date, the amount, if any, payable in respect
of an Early Termination Date shall be determined pursuant to Section 5(F)
hereof. On or as soon as reasonably practicable following the occurrence of an
Early Termination Date, the Calculation Agent will make the calculations, if
any, contemplated by Section 5(F) hereof and will provide to the parties hereto
a statement (1) showing, in reasonable detail, such calculations and specifying
any amount payable under Section 5(F) hereof and (2) giving details of the
relevant account to which any amount payable to it is to be paid.
(E) PAYMENT DATE. An amount calculated as being due in respect
of an Early Termination Date under Section 5(F) hereof will be payable on the
day (the "Payment Date") that is two Business Days after the day on which notice
of the amount payable is given. Such amount will be paid together with (to the
extent permitted under applicable law) interest thereon (before as well as after
judgment), from (and including) the relevant Early Termination Date to (but
excluding) the date such amount is payable at the Default Rate (without proof or
evidence of any actual cost and as certified by such party) if it were to fund
or of funding such amounts and thereafter to (but excluding) the date such
amount is actually paid. Such interest will be calculated on the basis of daily
compounding and the actual number of days elapsed.
(F) PAYMENTS ON EARLY TERMINATION. Promptly after the
occurrence of an Early Termination Date, the Calculation Agent will determine,
in good faith and, if applicable, in accordance with Section 6 hereof ("Payments
upon Merger Events"), the payments due on such date. The Calculation Agent will,
subject to the preceding sentence, determine the net losses and costs (or gain)
in connection with this Agreement and all Transactions, including any loss of
bargain, cost of funding or, without duplication, loss or cost incurred as a
result of the termination, liquidation, obtaining or reestablishment of any
hedge or related trading position (or any gain resulting from any of them); such
amounts include losses and costs (or gains) in respect of any payment or
delivery required to have been made on or before the relevant Early Termination
Date and not made, except so as to avoid duplication. In accordance therewith,
the Calculation Agent shall determine what amount, if any, is payable and by
whom on the early Payment Date.
6. PAYMENT UPON MERGER EVENTS.
(A) If, in respect of a Transaction, "Cancellation and
Payment" applies in relation to a Merger Event or Merger Event is specified as
an Additional Termination Event, then the Calculation Agent will determine, in
accordance with clause (B) below, the value to each party of the Transaction,
based on the option value of each of the Transaction's components, and the net
amount to be paid, if any, by one party (the "Payer") to the other party (the
"Payee"). The Payer will pay to the Payee an amount determined as provided in
clause (B) below, such payment to be made not later than three Business Days
following the determination by the Calculation Agent of such amount.
(B) The amount to be paid by the Payer to the Payee under
clause (A) above will be the amount agreed promptly by the parties after the
Merger Date, failing which it will be determined by the Calculation Agent and
based on quotations sought by it from four leading market dealers. Each
quotation will represent the quoting dealer's expert opinion as to the fair
value to Payee of the Transaction, based on the option value of each of the
Transaction's components, such that the terms of the Transaction would preserve
for Payee the economic equivalent of any payment or delivery (assuming
satisfaction of each applicable condition precedent) by the parties in respect
of the relevant Transaction that would have been required after that date but
for the occurrence of the Merger Event. Each quotation will be calculated on the
basis of the following information provided by the Calculation Agent (and such
other factors as the quoting dealer deems appropriate):
(i) a volatility equal to the average of the Option
Period Volatility of the relevant shares of Class A Common Stock for
each Exchange Business Day during the historical period between the
Trade Date and the Announcement Date;
(ii) dividends based on, and payable on the same
dates as, amounts determined by the Calculation Agent to have been paid
in respect of gross ordinary cash dividends on the relevant shares of
Class A Common Stock in the calendar year ending on the Announcement
Date; and
(iii) a value ascribed to the relevant shares of
Class A Common Stock equal to the consideration, if any, paid in
respect of such shares of Class A Common Stock to holders of such
shares of Class A Common Stock at the time of the Merger Event.
If more than three quotations are provided, the amount will be the arithmetic
mean of the quotations, without regard to the quotations having the highest and
the lowest values. If exactly three quotations are provided, the amount will be
the quotation remaining after disregarding the highest and the lowest
quotations. For this purpose, if more than one quotation has the same highest or
lowest value, then one of such quotations will be disregarded. If two quotations
are provided, the amount will be the arithmetic mean of the quotations. If one
quotation is provided, the amount will equal the quotation. If no quotation is
provided, the amount will be determined by the Calculation Agent in its sole
discretion.
7. EXPENSES
If a Termination Event other than a Tax Event occurs with
respect to a party, that party will, on demand, indemnify and hold harmless the
other party for and against all reasonable out-of-pocket expenses, including
legal fees and stamp and similar taxes, incurred by such other party by reason
of the enforcement and protection of its rights under this Agreement or by
reason of the early termination of any Transaction, including, but not limited
to, costs of collection.
8. SET-OFF.
Any amount (the "Early Termination Amount") payable to one
party (the "Payee") by the other party (the "Payer") under Section 5 hereof,
will, at the option of the party ("X") other than the Affected Party (and
without prior notice to the Affected Party), be reduced by its set-off against
any amount(s) (the "Other Agreement Amount") payable (whether at such time or in
the future or upon the occurrence of a contingency) by the Payee to the Payer or
instrument(s) or undertaking(s) issued or executed by one party to, or in favor
of, the other party (and
the Other Agreement Amount will be discharged promptly and in all respects to
the extent it is so set off). X will give notice to the other party of any
set-off effected pursuant to this Section 8.
If an obligation is unascertained, X may in good faith
estimate that obligation and set off in respect of the estimate, subject to the
relevant party accounting to the other when the obligation is ascertained.
9. TAXES.
All payments under Transactions will be made without any
deduction or withholding for or on account of any tax unless such deduction or
withholding is required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, then in effect. If a party is so
required to deduct or withhold, then that party ("X") will:
(i) promptly notify the other party ("Y") of such
requirement;
(ii) pay to the relevant authorities the full amount required
to be deducted or withheld (including the full amount required
to be deducted or withheld from any additional amount paid by
X to Y under clause (iv) below) promptly upon the earlier of
determining that such deduction or withholding is required or
receiving notice that such amount has been assessed against Y;
(iii) promptly forward to Y an official receipt (or a
certified copy), or other documentation reasonably acceptable
to Y, evidencing such payment to such authorities; and
(iv) if such Tax is an Indemnifiable Tax, pay to Y, in
addition to the payment to which Y is otherwise entitled under
the Transactions, such additional amount as is necessary to
ensure that the net amount actually received by Y (free and
clear of Indemnifiable Taxes, whether assessed against X or Y)
will equal the full amount Y would have received had no such
deduction or withholding been required. However, X will not be
required to pay any additional amount to Y to the extent that
it would not be required to be paid but for the failure by Y
to deliver promptly, upon reasonable demand by X, any form or
document that may be required or reasonably requested in
writing in order to allow X to make a payment under the
Transactions without any deduction or withholding for or on
account of any tax or with such deduction or withholding at a
reduced rate, with any such form or document to be accurate
and completed in a manner reasonably satisfactory to such
other party and to be executed and to be delivered with any
reasonably required certification.
If (1) X is required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, to
make any deduction or withholding in respect of which X would
not be required to pay an additional amount to Y under clause
(iv) above; (2) X does not so deduct or withhold; and (3) a
liability resulting from such tax is assessed directly against
X, then, except to the extent Y has satisfied or then
satisfies the liability resulting from such tax, Y will
promptly pay to X the amount of such liability (including any
related liability for interest, but including any related
liability for penalties only if Y has failed to provide any
form or document as described in clause (iv) above).
10. SECURITY AGREEMENT.
(A) COLLATERAL.
(i) On or prior to the Trade Date, Counterparty will
deliver and transfer or procure the delivery and transfer of a number of Shares
specified in the relevant Confirmation, either in Clearing Organization form or
in certificated form together with all instruments of transfer duly executed in
blank (the "Pledged Securities") to Credit Suisse First Boston LLC or another
custodian specified by CSFB Capital (the "Securities Intermediary"), to be held
in an account (the "Pledged Account") in the name of CSFB Capital subject to the
ownership interest of Counterparty pursuant to this Section 10. Counterparty
hereby transfers and delivers to
CSFB Capital, as security, all its right, title and interest in and to any
Transaction it may enter into with CSFB Capital pursuant to this Agreement (the
"Contract Rights"). Counterparty hereby grants CSFB Capital, as collateral for
the obligations of Counterparty in respect of the Transactions pursuant to this
Agreement (collectively, the "Secured Obligations"), a first priority perfected
security interest in the Pledged Securities, all distributions, dividends and
right and warrant issuances in respect thereof, the Contract Rights and all
proceeds of the foregoing (collectively, the "Collateral"). With respect to
Collateral held in accounts in a Clearing Organization, Counterparty shall
furnish to CSFB Capital a list of such Collateral by title (or series) and, if
relevant, quantity, unpaid principal amount and maturity date.
(ii) Counterparty undertakes that, for so long as the
Collateral consists, in whole or in part, of Class B Common Stock, that it shall
not, at any time, cause any or all of the shares of Class B Common Stock that is
registered in the name of Counterparty or Counterparty's nominee to be
transferred of record into the name of the CSFB Capital or its nominee;
provided, however, that, upon the occurrence of an Enforcement Event or at the
direction of the Counterparty, CSFB Capital may cause any or all of the
Collateral that is registered in the name of Counterparty or Counterparty's
nominee to be transferred of record into the name of CSFB Capital or its
nominee.
(iii) "Total Return Option" is not applicable.
(B) ENFORCEMENT EVENTS. Upon the occurrence of any
Termination Event under this Agreement or in connection with any current or
future Transactions contemplated herein (an "Enforcement Event"), (x) CSFB
Capital shall have all the rights of a secured creditor under the Uniform
Commercial Code in effect in the State of New York with respect to the
Collateral and (y) CSFB Capital shall have all the remedies specified in Section
11 hereof.
(C) ENTITLEMENT ORDERS. For purposes of perfecting the
security interest of CSFB Capital in the Pledged Securities and the Pledged
Account, Counterparty hereby authorizes the Securities Intermediary and CSFB
Capital to enter into an agreement with the Securities Intermediary pursuant to
which the Securities Intermediary will comply with "entitlement orders" (e.g.,
orders directing the transfer or redemption of the Pledged Securities or other
property credited to the Pledged Account) issued by CSFB Capital without further
consent of Counterparty.
(D) ADDITIONAL COLLATERAL. If, while this Agreement and the
relevant Confirmation are in effect, Counterparty shall become entitled to
receive or shall receive (i) any principal payment in respect of the Pledged
Securities or (ii) any debenture, other debt instrument, stock certificate,
option, right, other security or other property including cash, as an addition
to, in substitution of, or in exchange for any of the Pledged Securities,
whether or not in connection with any reclassification, recapitalization,
increase or reduction of capital, reorganization, merger, consolidation,
liquidation or dissolution of the issuer of the Pledged Securities, then
Counterparty agrees to accept the same as CSFB Capital's agent and to hold the
same in trust on behalf of CSFB Capital and to deliver the same forthwith to
CSFB Capital in the exact form received and in compliance with the terms of this
Section 10, as additional Collateral for the Secured Obligations.
(E) FURTHER ASSURANCES. Counterparty undertakes that, for so
long as the Secured Obligations remain outstanding, Counterparty shall promptly
execute all documents and do all acts and things which are required for enabling
or assisting CSFB Capital to perfect or improve title to and security over the
Collateral or otherwise to enforce any of the rights of CSFB Capital under or in
connection with this Section 10.
(F) VOTING. Counterparty shall be entitled to exercise any and
all voting and other consensual rights pertaining to the Collateral or any part
thereof for any purpose not inconsistent with the terms of the Transaction
Documents or any Transaction thereunder, provided, however, that Counterparty
shall not exercise or refrain from exercising such right if, in the judgment of
CSFB Capital, such action would have a material adverse effect on the value of
the Collateral; and provided further, that Counterparty shall give CSFB Capital
at least five Business Days' prior written notice of the manner in which
Counterparty intends to exercise, or the reasons for refraining from exercising,
any such right.
(G) RETURN OF COLLATERAL. Unless an Enforcement Event has
occurred, at such times as Counterparty has performed fully Counterparty's
obligations under all Transactions or such obligations are otherwise
extinguished, CSFB Capital shall at the request of Counterparty return the
Collateral to Counterparty and upon such return CSFB Capital's security interest
shall be released without further action by either party.
(H) OBLIGATIONS UNDER TRANSACTIONS. Notwithstanding the pledge
referred to above, Counterparty remains fully liable to CSFB Capital for all its
obligations under the Transaction Documents and any Transaction thereunder.
(I) NO REHYPOTHECATION. CSFB Capital may not sell, lend,
pledge, rehypothecate, assign, invest, use, commingle or otherwise dispose of,
or otherwise use in its business (collectively, "REHYPOTHECATE"), any
Collateral.
(J) UCC. This Agreement constitutes a security agreement under
Articles 8 and 9 of the UCC (a "Security Agreement").
(K) SUBSTITUTE COLLATERAL. On five (5) Business Days' written
notice, Counterparty shall have the right to substitute (i) shares of Class A
Common Stock or Class B Common Stock or (ii) short-term, direct obligations of
the U.S. government ("U.S. Obligations"), for the Pledged Securities. Such
shares of Class A Common Stock or Class B Common Stock or U.S. Obligations shall
constitute Collateral hereunder. In the event that the Counterparty elects to
substitute Collateral, CSFB Capital, in its sole discretion, shall determine the
value of such substitute Collateral, the procedures and dates for determining
the sufficiency of such Collateral and the amounts of any additional Collateral
that CSFB Capital may from time to time require (including, without limitation,
the extent to which the value of such Collateral will be required to exceed the
amount of the Secured Obligations). If CSFB Capital shall request that
Counterparty pledge additional Collateral, and such additional Collateral is not
pledged and delivered by the close of business on the next Business Day, then,
CSFB Capital shall commence its rights as if an Enforcement Event had occurred,
including, but not limited to, the sale of Collateral.
11. REMEDIES UPON SECURITY AGREEMENT DEFAULT.
Upon the occurrence and during the continuance of any default
under the Security Agreement, including without limitation a Termination Event
under Section 4(G) in respect of the Security Agreement or the Collateral:
(A) CSFB Capital may forthwith transfer and register in its or
its nominee's name the whole or any part of the Collateral not theretofore so
transferred or registered, (i) exercise all voting rights with respect thereto,
(ii) demand, sue for, collect, receive and give acquittance for any and all cash
dividends or other distributions or monies due or to become due upon or by
virtue thereof, (iii) sell the Collateral in one or more sales applying the
proceeds therefrom to the payment of the Secured Obligations in accordance with
Section 11(G) hereof and (iv) otherwise to act with respect to the Collateral or
the proceeds thereof as though CSFB Capital were the outright owner thereof.
CSFB Capital shall have no duty to exercise any of the aforesaid rights,
privileges and options and shall not be responsible for any failure to do so or
delay in so doing.
(B) Counterparty acknowledges and agrees that the Pledged
Securities are of a type customarily sold on a recognized market and, therefore,
that CSFB Capital is not required to send any notice of its intention to sell or
otherwise dispose of the Pledged Securities hereunder. Counterparty further
agrees that ten days' notice from CSFB Capital of its intention to sell or
otherwise dispose of other Collateral shall be commercially reasonable. Any sale
shall be made at a public or private sale, either for cash or upon credit or for
future delivery at such price as CSFB Capital may deem fair, and to the extent
permitted by applicable law, CSFB Capital may be the purchaser of the whole or
any part of such Collateral so sold and hold the same thereafter in its own
right free from any claim of Counterparty or any right or equity of redemption,
which right or equity is hereby waived and released. Each sale shall be made to
the highest bidder, but CSFB Capital reserves the right to reject any and all
bids at such sale which, in its sole discretion, it shall deem inadequate.
(C) At the original time or times appointed for the sale of
the whole or any part of the Collateral, CSFB Capital may, on one or more
occasions, postpone any of said sales by public announcement at the
time of sale. In the event of any such postponement, CSFB Capital shall give
Counterparty notice of such postponement.
(D) Counterparty acknowledges that any sale under the
circumstances described in this Section 11 shall be deemed to have been held in
a manner which is commercially reasonable. In the event of any sale under the
circumstances described in this Section 11, CSFB Capital shall incur no
responsibility or liability for selling the whole or any part of the Collateral
at a price which CSFB Capital may deem reasonable under the circumstances,
notwithstanding the possibility that a substantially higher price might be
realized if the sales were deferred for any reason.
(E) Counterparty agrees that it will not at any time plead,
claim or take the benefit of any appraisal, stay or similar law now or hereafter
in force, or otherwise interfere with any right, power and remedy of CSFB
Capital provided for in the Security Agreement or now or hereafter existing at
law or in equity or by statute or otherwise, or the exercise or beginning of the
exercise by CSFB Capital of any one or more such rights, powers or remedies.
(F) In the case of the Pledged Securities, Counterparty shall
irrevocably instruct, and hereby irrevocably instructs, CSFB Capital to transfer
such Collateral to CSFB Corp, and shall irrevocably instruct, and hereby
irrevocably instructs, CSFB Corp to liquidate the Collateral for the account of
Counterparty and to pay to CSFB Capital the proceeds of such liquidation to be
applied in the manner set forth in Section 11(G) below.
(G) After the occurrence of a default under the Security
Agreement, CSFB Capital may apply the net proceeds of any Collateral as follows:
(i) first, to pay all costs and expenses, (including
attorneys' fees and expenses), incurred by or on behalf of
CSFB Capital in or incidental to the care or safekeeping of
the Collateral or enforcement of its rights with respect to
the Collateral or in any way relating to the rights of CSFB
Capital under this Security Agreement;
(ii) second, to pay interest in respect of any of the Secured
Obligations;
(iii) third, to pay the Secured Obligations; and
(iv) fourth, only after the amounts required for (i), (ii) and
(iii) of this Section 11(G) shall have been fully paid and
after the payment by CSFB Capital of all other amounts
required by any provision of law, to pay the surplus, if any,
to Counterparty.
(H) Counterparty shall be liable for the deficiency if the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay all amounts to which CSFB Capital is entitled and the fees of any attorneys
employed by CSFB Capital to realize upon such Collateral and collect such
deficiency.
12. NOTICES.
Any notice or other communication in respect of this Agreement
or any Transaction hereunder may be given in any manner set forth below to the
address or number provided in Section 1 hereof and will be deemed effective as
indicated: (i) if in writing and delivered in person or by courier, on the date
it is delivered; (ii) if sent by facsimile transmission, on the Business Day
that receipt of the transmission is confirmed by telephone; or (iii) if sent by
certified or registered mail (airmail, if overseas) or the equivalent (return
receipt requested), on the date that mail is delivered or its delivery is
attempted. Any notice, demand or other communication to be provided by CSFB
Capital pursuant to this Agreement (including, without limitation, any notice,
demand or communication pursuant to Section 5 hereof) shall be sent to the
address or facsimile number provided in Section 1 hereof notwithstanding the
death of Counterparty, the adjudication of Counterparty as incompetent or the
appointment of a guardian with respect to the affairs of Counterparty. Any
failure by Counterparty or guardian, conservator, executor, administrator or
other similarly appointed person to receive any such notice, demand or
communication shall in no way abrogate, invalidate or otherwise affect the
validity or enforceability of the notice, demand or
communication or the matters set forth therein, including, without limitation,
the designation of a Termination Event, Early Termination Date or any other such
matter. Either party may by notice to the other change the address or facsimile
number at which notices or other communications are to be given to it.
13. FURNISHING OF SPECIFIED INFORMATION.
(A) TAX INFORMATION. Each party ("X") agrees to deliver to the
other party ("Y"), or to such government or taxing authority as Y reasonably
directs, the following documents as indicated below:
Any form or document that may be required or reasonably
requested in writing in order to allow Y to make a payment under this Agreement
or any Transaction hereunder without any deduction or withholding for or on
account of any Tax or with such deduction or withholding at a reduced rate (so
long as the completion, execution or submission of such form or document would
not materially prejudice the legal or commercial position of X in receipt of
such demand), with any such form or document to be accurate and completed in a
manner reasonably satisfactory to Y and to be executed and to be delivered with
any reasonably required certification promptly following any such request.
(B) OTHER SPECIFIED INFORMATION. Counterparty agrees to
deliver to CSFB Capital, or to such government or taxing authority as CSFB
Capital reasonably directs, the following documents as indicated below:
(i) To the extent not publicly available, complete copies of
all filings (if any) made by Counterparty with the Securities and Exchange
Commission (including, without limitation, Schedules 13D and 13G and Forms 3, 4
and 5) with respect to any shares of Class A Common Stock or Class B Common
Stock, as applicable, upon execution of this Agreement and promptly thereafter
following the filing of any such Schedules or Forms;
(ii) A certified copy of any certificate of dissolution or
termination issued with respect to Counterparty; and
(iii) Such other documents as CSFB Capital may reasonably
request from time to time promptly following any such request.
14. MISCELLANEOUS.
(A) FRACTIONAL SHARES. In the event shares of Class A Common
Stock or Class B Common Stock are delivered with respect to any Transaction, a
cash payment shall be made in lieu of the delivery of fractional shares of Class
A Common Stock or Class B Common Stock, such amount being determined by the
Calculation Agent as the product of such fractional number of shares of Class A
Common Stock or Class B Common Stock and the Final Price determined in the
manner specified in the Confirmation.
(B) EXERCISE OF RIGHTS. It is understood and agreed that no
failure or delay by a party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any right, power or privilege hereunder.
(C) SEVERABILITY. In the event that any clause or paragraph
hereof is deemed unlawful or unenforceable, such clause or paragraph shall be
stricken from this Agreement, and the remainder shall remain in full force and
effect.
(D) CONSENT TO RECORDING. Counterparty (i) consents to the
recording of the telephone conversations of trading and marketing personnel or
any other representatives of the parties in connection with this Agreement or
any potential transaction between the parties and (ii) agrees to obtain any
necessary consent of, and give notice of such recording to, such
representatives.
(E) ASSIGNMENT. Neither party may transfer or assign its
rights and obligations under this Transaction except with the prior written
consent of the other party and any purported transfer or assignment shall be
void and of no effect; provided, however, that (i) CSFB Capital shall have the
right to assign and transfer (by way of security or otherwise) any interest or
obligation in any Transaction or Transaction Document to any of its affiliates
and (ii) CSFB Capital may, upon reasonable notice to Counterparty, effect a
novation of this Transaction and thereby transfer all of its rights, interests
and obligations hereunder to any person or entity having a rating, as assigned
by any "nationally recognized statistical rating organization" (as used in Rule
15c3-1(c)(2)(vi)(F) under the Securities Exchange Act), equal to or higher than
the lowest rating then in effect with respect to the long-term unsecured,
unsubordinated debt securities of Credit Suisse First Boston; provided that any
such assignment and/or novation effected pursuant to (i) or (ii) above will not
cause Counterparty to experience a material adverse tax consequence. CSFB
Capital and Counterparty agree to enter into any assignment and/or novation
documentation necessary to effect any permitted assignment and/or novation
hereunder.
(F) GOVERNING LAW. THIS AGREEMENT AND EACH CONFIRMATION WILL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK (WITHOUT REFERENCE TO CHOICE OF LAW DOCTRINE).
(G) SUBMISSION TO JURISDICTION. With respect to any suit,
action or proceedings relating to this Agreement or any Transaction hereunder
("Proceedings"), each party irrevocably submits to the exclusive jurisdiction of
the courts of the State of New York and the United States District Court located
in the Borough of Manhattan in New York City; and waives any objection which it
may have at any time to the laying of venue of any Proceedings brought in any
such court, waives any claim that such Proceedings have been brought in an
inconvenient forum and further waives the right to object, with respect to such
Proceedings, that such court does not have any jurisdiction over such party.
(H) WAIVER OF JURY TRIAL. EACH PARTY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY SUIT, ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY
TRANSACTION OR ANY TRANSACTION DOCUMENT. EACH PARTY (I) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING
WAIVER IN THE EVENT OF ANY SUCH SUIT, ACTION OR PROCEEDING AND (II) ACKNOWLEDGES
THAT IT AND THE OTHER PARTY HAVE ENTERED INTO THE CONFIRMATION AND THE SECURITY
AGREEMENT, AS APPLICABLE, IN RELIANCE ON, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SUBSECTION.
15. DEFINITIONS.
The terms defined in this Section 15 and in the Confirmation
will have the meanings specified herein and therein for the purpose of this
Agreement and the related Transaction. As used in this Agreement, the following
terms shall have the meanings specified below:
"Additional Termination Event" has the meaning specified in
Section 4(I) hereof.
"Affected Party" has the meaning specified in Section 5(A)
hereof.
"Affiliate" means, in relation to any person, any entity
controlled, directly or indirectly, by the person, any entity that controls,
directly or indirectly, the person, or any entity directly or indirectly under
common control with the person. For this purpose, "control" of any entity or
person means ownership of a majority of the voting power of the entity or
person.
"Announcement Date" means, in respect of a Merger Event, the
date of the first public announcement of a firm intention, in the case of a
Merger Event, to merge or to make an offer (whether or not amended or on the
terms originally announced) that leads to the Merger Event, as determined by the
Calculation Agent.
"Base Number of Shares" means the number of Shares specified
as such in the relevant Confirmation.
"Business Day" means any day other than a Saturday or a Sunday
or a day on which banks are required or authorized to close in New York or
London.
"Calculation Agent Adjustment" has the meaning specified in
Section 3(B) hereof.
"Change in Tax Law" means the enactment, promulgation,
execution or ratification of, or any change in or amendment to, any law (or in
the application or official interpretation of any laws) that occurs on or after
the date of this Agreement.
"Clearing Organization" means (i) The Depository Trust Company
in New York, New York, (ii) the Euroclear System, operated by Morgan Guaranty
Trust Company, New York, Brussels branch, (iii) CEDEL S.A., Luxembourg or (iv)
such other clearing organization or book-entry system in which Collateral may be
held.
"Collateral" has the meaning specified in Section 10(A)
hereof.
"Combined Consideration" means New Shares in combination with
Other Consideration.
"Contract Rights" has the meaning specified in Section 10(A)
hereof.
"CSFB LLC" means Credit Suisse First Boston LLC.
"Early Termination Date" has the meaning specified in Section
5(C) hereof.
"Eligible Collateral" means, in respect of any Transaction,
shares of Class A Common Stock or Class B Common Stock as defined for the
purposes of that Transaction; provided that Counterparty has good and marketable
title thereto, free of all Liens (other than the security interests in the
Collateral created hereby) and Transfer Restrictions (other than the Existing
Transfer Restrictions, if any) and that CSFB Capital has a valid, first priority
perfected security interest therein, a first lien thereon and Control (as such
term is defined in the UCC) with respect thereto.
"Enforcement Event" has the meaning specified in Section 10(B)
hereof.
"Exchange" means the principal market on which shares of Class
A Common Stock are traded, as specified in the relevant Confirmation.
"Exchange Business Day" means any day that is (or, but for the
occurrence of a Market Disruption Event, would have been) a trading day on the
relevant Exchange other than a day on which trading on such Exchange is
scheduled to close prior to its regular weekday closing time.
"Ex-Dividend Date" means, in respect of any cash dividend in
respect of any shares of Class A Common Stock or Class B Common Stock, the first
Exchange Business Day on which those shares of Class A Common Stock or Class B
Common Stock trade "ex-div" on the relevant Exchange in respect of such
dividend.
"Existing Transfer Restrictions" means, with respect to any
securities, Transfer Restrictions existing at the date on which such securities
are pledged by Pledgor to Secured Party by virtue of the fact that Pledgor is an
"affiliate", within the meaning of Rule 144, of the Issuer, by virtue of the
fact that such securities are "restricted securities", within the meaning of
Rule 144, by virtue of Rule 145, or otherwise.
"Extraordinary Dividend" a 10% or more increase from the last
dividend paid on the shares.
"Indemnifiable Tax" means any withholding tax other than a tax
that would not be imposed in respect of a payment under a Transaction but for a
present or former connection between the jurisdiction of the
government or taxation authority imposing such tax and the recipient of such
payment or a person related to such recipient (including, without limitation, a
connection arising from such recipient or related person being or having been a
citizen or resident of such jurisdiction, or being or having been organized,
present or engaged in a trade or business in such jurisdiction or having had a
permanent establishment or fixed place of business in such jurisdiction, but
excluding a connection arising solely from such recipient or related person
having executed, delivered, performed its obligations or received a payment
under, or enforced the relevant Transaction).
"Initial Price" means the amount specified as such in the
relevant Confirmation.
"Insider" means (i) a person who is an officer, director of
the Issuer or a beneficial owner of more than 10% of any class of equity
securities of the Issuer required to file reports pursuant to Section 16(a) of
the Securities Exchange Act (ii) a person who is an affiliate of the Issuer
within the meaning of Rule 144 and (iii) a person who is a beneficial owner of
more than 5% of any class of equity securities of the Issuer required to file
reports pursuant to Section 13 of the Securities Exchange Act.
"Issuer" means the issuer identified as such in the relevant
Confirmation.
"Lien" means any lien, mortgage, security interest, pledge,
charge or encumbrance of any kind.
"Loss of Economic Stock-Borrow" means CSFB Capital is unable
to obtain the shares of Class A Common Stock or Class B Common Stock, either
directly or through any of its affiliates, through the securities lending market
at a competitive level and on a basis consistent with the economic assumptions
of CSFB Capital as of the Trade Date.
"Market Disruption Event" means the occurrence or existence on
any Exchange Business Day during the one-half hour period that ends at the
relevant Valuation Time of the suspension of or limitation imposed on trading
(i) in the relevant shares of Class A Common Stock or Class B Common Stock on
the Exchange or any successor exchange or (ii) in options or futures contracts
relating to the relevant shares of Class A Common Stock or Class B Common Stock
on the relevant options or futures exchanges, if in either case the Calculation
Agent determines such suspension or limitation is material to a valuation of
shares of Class A Common Stock or Class B Common Stock.
"Merger Date" means, in respect of a Merger Event, the date
upon which all holders of the relevant shares of Class A Common Stock or Class B
Common Stock (other than, in the case of a takeover offer, shares of Class A
Common Stock or Class B Common Stock owned or controlled by the offeror) have
agreed or have irrevocably become obliged to transfer their shares of Class A
Common Stock or Class B Common Stock.
"Merger Event" means, in respect of any relevant shares of
Class A Common Stock or Class B Common Stock, any (i) reclassification or change
of shares of Class A Common Stock or Class B Common Stock that results in a
transfer of or an irrevocable commitment to transfer all of such shares of Class
A Common Stock or Class B Common Stock outstanding, (ii) consolidation,
amalgamation or merger of the Issuer with or into another entity or (iii) other
takeover offer for such shares of Class A Common Stock or Class B Common Stock
that results in a transfer of or an irrevocable commitment to transfer all such
shares of Class A Common Stock or Class B Common Stock (other than such shares
of Class A Common Stock or Class B Common Stock owned or controlled by the
offeror), in each case if the Merger Date is on or before the final Valuation
Date.
"New Shares" means shares, whether of the offeror or a third
party offered as consideration to existing holders of shares of Class A Common
Stock or Class B Common Stock as consideration for entering into a Merger Event.
"Non-Stock Consideration" means cash or property other than
common stock.
"Option Period Volatility" means, in respect of any Exchange
Business Day, the volatility (calculated by referring to the closing price of
the relevant shares of Class A Common Stock on the Exchange) for a period equal
to the number of days between the Announcement Date and the Scheduled Valuation
Date.
"Payment Date" has the meaning specified in Section 5(E)
hereof.
"Payments upon Merger Events" has the meaning specified in
section 5(F) hereof.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
"Pledged Account" has the meaning specified in Section 10(A)
hereof.
"Pledged Securities" has the meaning specified in Section
10(A) hereof.
"Pledgor" has the meaning specified in Section 10(I).
"Potential Adjustment Event" means any of the following:
(i) a subdivision, consolidation or reclassification
of relevant shares of Class A Common Stock or Class B Common Stock
(unless a Merger Event), or, a free distribution or dividend of any
such shares of Class A Common Stock or Class B Common Stock to existing
holders by way of bonus, capitalization or similar issue;
(ii) a distribution or dividend to existing holders
of the relevant shares of Class A Common Stock or Class B Common Stock
of (A) such shares of Class A Common Stock or Class B Common Stock, or
(B) other share capital or securities granting the right to payment of
dividends and/or the proceeds of liquidation of the Issuer equally or
proportionately with such payments to holders of such shares of Class A
Common Stock or Class B Common Stock, or (C) any other type of
securities, rights or warrants or other assets, in any case for payment
(cash or other) at less than the prevailing market price as determined
by the Calculation Agent;
(iii) an extraordinary dividend;
(iv) a call by the Issuer in respect of relevant
shares of Class A Common Stock or Class B Common Stock that are not
fully paid;
(v) a repurchase by the Issuer of relevant shares of
Class A Common Stock or Class B Common Stock whether out of profits or
capital and whether the consideration for such repurchase is cash,
securities or otherwise; or
(vi) any other similar event that may have (A) a
diluting or concentrative effect on the theoretical value of the
relevant shares of Class A Common Stock or Class B Common Stock or (B)
a material effect on the Option Period Volatility.
"Purchase Price" means the purchase price for the Shares, as
specified in the relevant Confirmation.
"Rehypothecate" has the meaning specified in Section 10(I).
"Rule 144" means Rule 144 promulgated under the Securities
Act.
"Rule 145" means Rule 145 promulgated under the Securities
Act.
"Scheduled Valuation Date" means the date specified as such in
the relevant Confirmation.
"Secured Obligations" has the meaning specified in Section
10(A) hereof.
"Secured Party" has the meaning specified in Section 10(I).
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Securities Intermediary" has the meaning specified in Section
10(A) hereof.
"Security Agreement Default" has the meaning specified in
section 4(G) hereof.
"Share-for-Combined" means, in respect of a Merger Event, that
the consideration for the relevant shares of Class A Common Stock or Class B
Common Stock consists of Combined Consideration.
"Share-for-Other" means, in respect of a Merger Event, that
the consideration for the shares of Class A Common Stock or Class B Common Stock
consists solely of Other Consideration.
"Share-for-Share" means, in respect of a Merger Event, that
the consideration for the shares of Class A Common Stock or Class B Common Stock
consists of (or, at the option of the holder of such shares of Class A Common
Stock or Class B Common Stock, may consist) solely of New Shares.
"Shares" means the equity securities identified as such in the
relevant Confirmation.
"Specified Transaction" means (1) any transaction (including
an agreement with respect thereto) now existing or hereafter entered into
between the Counterparty or any Affiliate of the Counterparty and CSFB Capital
or any Affiliate of CSFB Capital which is a rate swap transaction, basis swap,
forward rate transaction, commodity swap, commodity option, equity or equity
index swap, equity or equity index option, bond option, interest rate option,
foreign exchange transaction, cap transaction, floor transaction, collar
transaction, currency swap transaction, cross-currency rate swap transaction,
currency option or any other such transaction (including any option with respect
to any of these transactions), (2) any combination of these transactions, and
(3) any other agreement, deed or instrument entered into between the parties.
"Tax" means any present or future tax, levy, impost, duty,
charge, assessment or fee of any nature (including interest, penalties and
additions thereto) that is imposed by any government or other taxing authority
in respect of any payment under this Agreement other than a stamp, registration,
documentation or similar tax.
"Tax Event" has the meaning specified in Section 4(F) hereof.
"Trading Day" means an Exchange Business Day on which no
Market Disruption Event occurs.
"Transaction Document" means (1) this Agreement; (2) each
Confirmation; and (3) any related agreement thereunder.
"Transfer Restrictions" means, with respect to any Share, any
condition to or restriction on the ability of the owner thereof to sell, assign
or otherwise transfer such Share or of any document related thereto whether set
forth on the certificate of such Share itself or in any document related
thereto, including, without limitation, (i) any requirement that any sale,
assignment or other transfer of such Share be consented to or approved by any
Person, including, without limitation, the Issuer or any other obligor thereon,
(ii) any limitations on the type or status, financial or otherwise, of any
purchaser, pledgee, assignee or transferee of such Share, (iii) any requirement
of the delivery of any certificate, consent, agreement, opinion of counsel,
notice or any other document of any Person to the Issuer of, any other obligor
on or any registrar or transfer agent for, such Share, prior to the sale,
pledge, assignment or other transfer of such Share and (iv) any registration or
qualification requirement or prospectus delivery requirement for such item of
collateral pursuant to any federal, state or foreign securities law (including,
without limitation, any such requirement arising as a result of Rule 144 or Rule
145; provided that the required delivery of any assignment, instruction or
entitlement order from the seller, pledgor, assignor or transferor of such
Share, together with any evidence of the corporate or other authority of such
Person, shall not constitute a "Transfer Restriction".
"UCC" means the Uniform Commercial Code as in effect in the
State of New York.
"Valuation Date" means the date specified as such in the
relevant Confirmation.
Please confirm that the foregoing correctly sets forth the
terms of our agreement by executing and returning the copy of this Agreement
enclosed for that purpose.
Yours faithfully,
CREDIT SUISSE FIRST BOSTON CAPITAL LLC
By: /s/ Samantha Waddell
---------------------------------
Name: Samantha Waddell
Title: Vice President Operations
Accepted and confirmed as of the date first written above by:
MORTIMER B. FULLER, III
/s/ Mortimer B. Fuller, III
----------------------------
By your signature above, you hereby acknowledge the Collateral transfers by
Counterparty as contemplated in this Agreement and agree that your legal and/or
beneficial rights, if any, in any such Collateral shall be subordinate to the
rights of CSFB Capital in such Collateral as a secured party as provided in this
Agreement and as provided by applicable law. In accordance with the terms of
this Agreement, CSFB Capital shall be entitled to apply the Collateral (and any
proceeds thereof) to satisfy Counterparty's obligations to CSFB Capital under
this Agreement prior to any claim or right which you may have in the Collateral.