sc13dza

4 World Financial Center, North Tower FL 5

New York, NY 10080

Attention:

Swap Group

Telephone No.: 212 449-6577

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JOiSiJUjnJ1xI8xt8O+p7RDqNbZ0MrRuw+gxsHt9XYXTtubkY4yjdDakEOMlY0uE DnxzbbUZHyOBfR6JcO5t2Q== 0000950133-03-003525.txt : 20031023 0000950133-03-003525.hdr.sgml : 20031023 20031023145652 ACCESSION NUMBER: 0000950133-03-003525 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 20031023 GROUP MEMBERS: ANGELA NORMAN BROWN GROUP MEMBERS: HARRY D. MURPHY GROUP MEMBERS: JOYCE MURPHY MINCHEW GROUP MEMBERS: MARC D. MURPHY GROUP MEMBERS: STRATTON K. MURPHY GROUP MEMBERS: WENDELL H.MURPHY, JR. GROUP MEMBERS: WENDELL MURPHY CRUMPLER SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: SMITHFIELD FOODS INC CENTRAL INDEX KEY: 0000091388 STANDARD INDUSTRIAL CLASSIFICATION: MEAT PACKING PLANTS [2011] IRS NUMBER: 520845861 STATE OF INCORPORATION: VA FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-07808 FILM NUMBER: 03953930 BUSINESS ADDRESS: STREET 1: 200 COMMERCE STREET STREET 2: EXECUTIVE OFFICE BUILDING CITY: SMITHFIELD STATE: VA ZIP: 23430 BUSINESS PHONE: 7573653000 MAIL ADDRESS: STREET 1: 200 COMMERCE STREET STREET 2: EXECUTIVE OFFICE BUILDING CITY: SMITHFIELD STATE: VA ZIP: 23430 FORMER COMPANY: FORMER CONFORMED NAME: LIBERTY EQUITIES CORP DATE OF NAME CHANGE: 19710221 FORMER COMPANY: FORMER CONFORMED NAME: LIBERTY REAL ESTATE TRUST DATE OF NAME CHANGE: 19661113 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MURPHY WENDELL H CENTRAL INDEX KEY: 0000904450 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: P.O. BOX 1087 CITY: ROSE HILL STATE: NC ZIP: 28458 BUSINESS PHONE: 910 289 6439 MAIL ADDRESS: STREET 1: PO BOX 1087 CITY: ROSE HILL STATE: NC ZIP: 28458 SC 13D/A 1 w90450sc13dza.htm SCHEDULE 13D AMENDMENT NO.2 sc13dza

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934
(Amendment No. 2)*

Smithfield Foods, Inc.

(Name of Issuer)

Common Stock, $.50 par value

(Title of Class of Securities)

832248 95 9

(CUSIP Number)

Mark Roberts
P.O. Box 1076
Rose Hill, NC 28458

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

June 19, 2003

(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(b)(3) or (4), check the following box. [ ]

* 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.

SCHEDULE 13D


CUSIP No. 832248 95 9		Page 2 of 19 Pages



1	NAME OF REPORTING PERSON

	Wendell H. Murphy

2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*	(a) (b)	[ ] [x]


3	SEC USE ONLY


4	SOURCE OF FUNDS*
	OO


5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)		[ ]


6	CITIZENSHIP OR PLACE OF ORGANIZATION
	United States of America

	7	SOLE VOTING POWER
		5,186,606
NUMBER OF
SHARES
BENEFICIALLY	8	SHARED VOTING POWER
OWNED BY		73
EACH
REPORTING
PERSON	9	SOLE DISPOSITIVE POWER
WITH		4,768,690


	10	SHARED DISPOSITIVE POWER
		73

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	5,186,679


12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*	[ ]


13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	4.7%


14	TYPE OF REPORTING PERSON*
	IN

*SEE INSTRUCTIONS BEFORE FILLING OUT!

SCHEDULE 13D


CUSIP No. 832248 95 9		Page 3 of 19 Pages



1	NAME OF REPORTING PERSON

	Harry D. Murphy

2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*	(a) (b)	[ ] [x]


3	SEC USE ONLY


4	SOURCE OF FUNDS*
	OO


5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)		[ ]


6	CITIZENSHIP OR PLACE OF ORGANIZATION
	United States of America

	7	SOLE VOTING POWER
		2,925,034
NUMBER OF
SHARES
BENEFICIALLY	8	SHARED VOTING POWER
OWNED BY		17
EACH
REPORTING
PERSON	9	SOLE DISPOSITIVE POWER
WITH		2,565,501


	10	SHARED DISPOSITIVE POWER
		17

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	2,925,051


12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*	[ ]


13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	2.7%


14	TYPE OF REPORTING PERSON*
	IN

*SEE INSTRUCTIONS BEFORE FILLING OUT!

SCHEDULE 13D


CUSIP No. 832248 95 9		Page 4 of 19 Pages



1	NAME OF REPORTING PERSON

	Joyce Murphy Minchew

2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*	(a) (b)	[ ] [x]


3	SEC USE ONLY


4	SOURCE OF FUNDS*
	OO


5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)		[ ]


6	CITIZENSHIP OR PLACE OF ORGANIZATION
	United States of America

	7	SOLE VOTING POWER
		1,782,603
NUMBER OF
SHARES
BENEFICIALLY	8	SHARED VOTING POWER
OWNED BY		26
EACH
REPORTING
PERSON	9	SOLE DISPOSITIVE POWER
WITH		1,638,243


	10	SHARED DISPOSITIVE POWER
		26

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	1,782,629


12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*	[ ]


13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	1.6%


14	TYPE OF REPORTING PERSON*
	IN

*SEE INSTRUCTIONS BEFORE FILLING OUT!

SCHEDULE 13D


CUSIP No. 832248 95 9		Page 5 of 19 Pages



1	NAME OF REPORTING PERSON

	Wendell H. Murphy, Jr.

2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*	(a) (b)	[ ] [x]


3	SEC USE ONLY


4	SOURCE OF FUNDS*
	OO


5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)		[ ]


6	CITIZENSHIP OR PLACE OF ORGANIZATION
	United States of America

	7	SOLE VOTING POWER
		3,396,069
NUMBER OF
SHARES
BENEFICIALLY	8	SHARED VOTING POWER
OWNED BY		51
EACH
REPORTING
PERSON	9	SOLE DISPOSITIVE POWER
WITH		3,122,533


	10	SHARED DISPOSITIVE POWER
		51

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	3,396,120


12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*	[ ]


13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	3.1%


14	TYPE OF REPORTING PERSON*
	IN

*SEE INSTRUCTIONS BEFORE FILLING OUT!

SCHEDULE 13D


CUSIP No. 832248 95 9		Page 6 of 19 Pages



1	NAME OF REPORTING PERSON

	Wendell Murphy Crumpler

2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*	(a) (b)	[ ] [x]


3	SEC USE ONLY


4	SOURCE OF FUNDS*
	OO


5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)		[ ]


6	CITIZENSHIP OR PLACE OF ORGANIZATION
	United States of America

	7	SOLE VOTING POWER
		999,004
NUMBER OF
SHARES
BENEFICIALLY	8	SHARED VOTING POWER
OWNED BY		15
EACH
REPORTING
PERSON	9	SOLE DISPOSITIVE POWER
WITH		918,185


	10	SHARED DISPOSITIVE POWER
		15

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	999,019


12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*	[ ]


13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	0.9%


14	TYPE OF REPORTING PERSON*
	IN

*SEE INSTRUCTIONS BEFORE FILLING OUT!

SCHEDULE 13D


CUSIP No. 832248 95 9		Page 7 of 19 Pages



1	NAME OF REPORTING PERSON

	Stratton K. Murphy

2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*	(a) (b)	[ ] [x]


3	SEC USE ONLY


4	SOURCE OF FUNDS*
	OO


5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)		[ ]


6	CITIZENSHIP OR PLACE OF ORGANIZATION
	United States of America

	7	SOLE VOTING POWER
		1,168,265
NUMBER OF
SHARES
BENEFICIALLY	8	SHARED VOTING POWER
OWNED BY		9
EACH
REPORTING
PERSON	9	SOLE DISPOSITIVE POWER
WITH		985,794


	10	SHARED DISPOSITIVE POWER
		9

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	1,168,274


12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*	[ ]


13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	1.1%


14	TYPE OF REPORTING PERSON*
	IN

*SEE INSTRUCTIONS BEFORE FILLING OUT!

SCHEDULE 13D


CUSIP No. 832248 95 9		Page 8 of 19 Pages



1	NAME OF REPORTING PERSON

	Marc D. Murphy

2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*	(a) (b)	[ ] [x]


3	SEC USE ONLY


4	SOURCE OF FUNDS*
	OO


5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)		[ ]


6	CITIZENSHIP OR PLACE OF ORGANIZATION
	United States of America

	7	SOLE VOTING POWER
		1,168,265
NUMBER OF
SHARES
BENEFICIALLY	8	SHARED VOTING POWER
OWNED BY		9
EACH
REPORTING
PERSON	9	SOLE DISPOSITIVE POWER
WITH		985,794


	10	SHARED DISPOSITIVE POWER
		9

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	1,168,274


12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*	[ ]


13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	1.1%


14	TYPE OF REPORTING PERSON*
	IN

*SEE INSTRUCTIONS BEFORE FILLING OUT!

SCHEDULE 13D


CUSIP No. 832248 95 9		Page 9 of 19 Pages



1	NAME OF REPORTING PERSON

	Angela Norman Brown

2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*	(a) (b)	[ ] [x]


3	SEC USE ONLY


4	SOURCE OF FUNDS*
	OO


5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)		[ ]


6	CITIZENSHIP OR PLACE OF ORGANIZATION
	United States of America

	7	SOLE VOTING POWER
		548,291
NUMBER OF
SHARES
BENEFICIALLY	8	SHARED VOTING POWER
OWNED BY		8
EACH
REPORTING
PERSON	9	SOLE DISPOSITIVE POWER
WITH		503,873


	10	SHARED DISPOSITIVE POWER
		8

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	548,299


12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*	[ ]


13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	0.5%


14	TYPE OF REPORTING PERSON*
	IN

*SEE INSTRUCTIONS BEFORE FILLING OUT!


CUSIP No. 832248 95 9		Page 10 of 19 Pages

Item 1 Security and Issuer

This Amendment No. 2 to Schedule 13D relating to the common stock (the “Smithfield Common Stock”) of Smithfield Foods, Inc., a Virginia corporation (“Smithfield”), is being filed on behalf of Wendell H. Murphy, Harry D. Murphy, Joyce Murphy Norman, Wendell H. Murphy, Jr., Wendy Murphy Crumpler, Stratton K. Murphy, Marc D. Murphy, and Angela Norman Brown (each, a “Reporting Person” and, collectively, the “Reporting Persons”), to amend the Schedule 13D which was originally filed with the with the Securities and Exchange Commission (the “Commission”) on August 31, 2001 (the “Schedule 13D”), as amended by Amendment No. 1 to the Schedule 13D filed with the Commission on November 7, 2001. Unless otherwise indicated, all capitalized terms used but not defined herein shall have the meanings set forth in the Schedule 13D.

Item 3 Source and Amount of Funds or Other Consideration

Item 3 is hereby amended by adding the following information:

On July 22, 2003, Smithfield increased the estimate of Additional Acquisition Shares to 575,972 from 446,872. This increase in the estimate resulted in the following increases, for no consideration, of shares of Smithfield Common Stock deemed beneficially owned by the Reporting Persons:


Reporting Person	Number of Additional Shares Acquired

Wendell H. Murphy		46,839
Harry D. Murphy		8,538
Joyce Murphy Minchew		17,106
Wendell H. Murphy, Jr.		32,640
Wendy Murphy Crumpler		9,806
Stratton K. Murphy		4,476
Marc D. Murphy		4,476
Angela Norman Brown		5,219
Total		129,100

The Reporting Persons expect to receive a portion of the 575,972 Additional Acquisition Shares within the next 60 days, but as of the date of this filing, do not know the exact amount to be distributed or the exact date when such distribution will occur.

Item 5 Interest in Securities of the Issuer

Item 5 is hereby amended by adding the following information:

Limited Liability Company Transfers:

In December 2002, each of Wendell H. Murphy, Wendell H. Murphy, Jr., Wendy Murphy Crumpler, Joyce Murphy Minchew and Angela Norman Brown transferred the shares of Smithfield Common Stock indicated below to limited liability companies directly or indirectly wholly-owned by such Reporting Persons for the consideration described below.

• Wendell H. Murphy transferred the number of shares of Smithfield Common Stock indicated below to the following Delaware limited liability companies on the dates


CUSIP No. 832248 95 9		Page 11 of 19 Pages

indicated in exchange for all of the limited liability company interests of WHM-Sr. Legacy, LLC.


Date	Entity	Shares

12/19/02	WHM-Sr. Legacy, LLC		549,707
12/13/02	WHM Jr. Legacy, LLC		1,500,000
12/13/02	WMC Legacy, LLC		1,500,000

WHM Jr. Legacy, LLC and WMC Legacy, LLC are wholly-owned by WHM-Sr. Legacy, LLC.

• Wendell H. Murphy, Jr. transferred 1,921,052 shares of Smithfield Common Stock on December 18, 2002 to DM Legacy, LLC, a Delaware limited liability company, in exchange for all of the limited liability company interests of DM Legacy, LLC (which included both Class A and Class B limited liability company interests).

• Wendy Murphy Crumpler transferred 564,267 shares of Smithfield Common Stock on December 16, 2002 to Register Legacy, LLC, a Delaware limited liability company, in exchange for all of the limited liability company interests of Register Legacy, LLC (which included both Class A and Class B limited liability company interests).

• Joyce Murphy Minchew transferred 1,209,476 shares of Smithfield Common Stock on December 16, 2002 to JM Legacy, LLC, a Delaware limited liability company, in exchange for all of the limited liability company interests of JM Legacy, LLC (which included both Class A and Class B limited liability company interests).

• Angela Norman Brown transferred 310,123 shares of Smithfield Common Stock on December 16, 2002 to AB Legacy, LLC, a Delaware limited liability company, in exchange for all of the limited liability company interests of AB Legacy, LLC (which included both Class A and Class B limited liability company interests).

On July 21, 2003, each of Wendell H. Murphy, Wendell H. Murphy, Jr., Wendy Murphy Crumpler, Joyce Murphy Minchew and Angela Norman Brown transferred all of the Class B limited liability company interests they held in the above limited liability companies to various family trusts in exchange for promissory notes of the trusts. Under each of the limited liability company agreements, the Class B interests receive 99% of the economic interest of the assets held in the respective limited liability companies. As a result, each of these Reporting Persons transferred 99% of the economic interest in the shares of Smithfield Common Stock held by each limited liability company to these family trusts. The Reporting Persons retained the Class A limited liability company interests, which give the Reporting Persons voting and dispositive power over the shares of Smithfield Common Stock held by the limited liability companies. The family trusts to which the Class B interests were transferred have the right to receive the dividends from, and the proceeds of the sale of the shares of Smithfield Common Stock held by the limited liability companies to the extent those dividends and proceeds represent 99% of the economic interest of the assets held in the respective limited liability companies. Because the Reporting Persons retain the voting and dispositive power over the shares of Smithfield Common Stock held by the limited liability companies as a result of their continued ownership of the Class A interests, the Reporting Persons retain beneficial ownership of these shares of Smithfield Common Stock.

CUSIP No. 832248 95 9 Page 12 of 19 Pages

Prepaid Variable Forward Contracts:

On the dates set forth in the table below, the “Forward Contract Dates,” each of the Reporting Persons entered into a prepaid variable forward contract (“Forward Contract”) with an unaffiliated third party buyer pursuant to a Master Agreement (the “Master Agreement”), dated on the respective dates set forth in the table below, “the Master Contract Dates.” Pursuant to the Master Agreement, each Reporting Person received cash on the Forward Contract Date in exchange for the obligation to deliver a number of shares of Smithfield Common Stock on a date in the future, the “Delivery Date,” (or on an earlier date if the Master Agreement is terminated early) pursuant to the following formula. Each Reporting Person also pledged the number of shares of Smithfield Common Stock indicated in the table below under the column “Shares Subject to Forward Contact” (as to each Reporting Person, the “Number of Forward Contract Shares”) on the Forward Contract Date to secure his or her obligations under the Master Agreement.

(i) if the price of Smithfield Common Stock on the respective Delivery Date ^1/ (the “Settlement Value”) is less than or equal to the floor price (the “Floor Price”), the Reporting Person must deliver the Number of Forward Contract Shares;

(ii) if the Settlement Value is less than or equal to the threshold price (the “Threshold Price”), but greater than the Floor Price, then the Reporting Person must deliver a number of shares equal to the Number of Forward Contract Shares times the Floor Price divided by the Settlement Value;

(iii) if the Settlement Value is greater than the Threshold Price, then the Reporting Person must deliver a number of shares equal to the Number of Forward Contract Shares times the sum of the Floor Price and the amount by which the Settlement Value exceeds the Threshold Price divided by the Settlement Value.

For the Forward Contracts dated June 19, 2003 and July 15, 2003, the number of shares to be delivered on the Delivery Date is calculated with the above formula on each of the 10 business days prior to and including the Delivery Date. Following are the prices for each Forward Contract as they relate to the above formula:


Forward Contract Date	Floor Price		Threshold Price

03/14/2003	$	14.07	$	22.87
06/19/2003	$	23.3713	$	30.3827
07/15/2003	$	23.0112	$	29.9146

Alternatively, each Reporting Person has the option to settle the Master Agreement for cash, in which case the cash settlement amount payable would be equal to the result obtained by multiplying the number of shares to be delivered on the Delivery Date by the Settlement Value. Unless there is a default under the Master Agreement, each Reporting Person retains all voting rights with respect to the shares of Smithfield Common Stock pledged by such Reporting Person until such shares are delivered in settlement of the Master Agreement. The unaffiliated third party buyer is entitled to any dividends received by the

1/ For the Forward Contracts dated March 14, 2003, this price is the closing price on the Delivery Date. For the Forward Contracts dated June 19, 2003 and July 15, 2003, this price is the volume weighted average price per share as displayed on Bloomberg on each of the 10 business days prior to and including the Delivery Date.

CUSIP No. 832248 95 9 Page 13 of 19 Pages

Reporting Persons on the Number of Forward Contract Shares. The Forward Contracts are subject to early termination upon the occurrence of certain events.

In addition to the Number of Forward Contract Shares subject to the Forward Contract the following table also sets forth the amount of the cash payment received by each Reporting Person pursuant to the respective Master Agreement.

Forward

Master

Shares Subject

Contract

Agreement

Delivery

to Forward

Cash

Reporting Person

Date

Contract

Received

Harry D. Murphy

03/14/2003

02/27/2003

03/14/2006

359,533

4,624,199

Stratton K. Murphy

03/14/2003

02/27/2003

03/14/2006

182,471

2,346,884

Marc D. Murphy

03/14/2003

02/27/2003

03/14/2006

182,471

2,346,884

Wendell H. Murphy

06/19/2003

06/16/2003

06/19/2006

174,762

3,537,104

Wendell H. Murphy, Jr.

06/19/2003

06/16/2003

06/19/2006

113,436

2,295,893

Wendy Murphy Crumpler

06/19/2003

06/16/2003

06/19/2006

33,516

678,349

Joyce Murphy Minchew

06/19/2003

06/16/2003

06/19/2006

59,866

1,211,661

Angela Norman Brown

06/19/2003

06/16/2003

06/19/2006

18,420

372,813

Wendell H. Murphy

07/15/2003

06/19/2003

07/15/2008

243,154

4,783,952

Wendell H. Murphy, Jr.

07/15/2003

06/19/2003

07/15/2008

160,100

3,149,900

Wendy Murphy Crumpler

07/15/2003

06/19/2003

07/15/2008

47,303

930,666

Joyce Murphy Minchew

07/15/2003

06/19/2003

07/15/2008

84,494

1,662,384

Angela Norman Brown

07/15/2003

06/19/2003

07/15/2008

25,998

511,500

Total

1,685,524

28,452,189

As noted above, although the Reporting Persons have entered into the Forward Contracts and have pledged the shares of the Smithfield Common Stock listed above under the column “Shares Subject to Forward Contracts,” the Reporting Persons have retained all voting rights with respect to these shares and accordingly continue to be deemed the beneficial owners of such shares. As a result of the pledge of the shares, however, the Reporting Persons do not have dispositive power with respect to the pledged shares.

CUSIP No. 832248 95 9 Page 14 of 19 Pages

Open Market Sales:

Between May 28, 2003 and June 9, 2003, the following Reporting Persons sold shares of Smithfield Common Stock in transactions on the New York Stock Exchange (the “Open Market Sales”).

The Open Market Sales of Wendell H. Murphy are as follows:


Date of sale		Number of shares sold		Price per share		Gross Proceeds

05/28/2003			37,533	$	20.75	$	778,810
05/29/2003			11,356	$	20.7549	$	235,693
05/30/2003			44,764	$	20.9628	$	938,379
06/02/2003			3,597	$	21.016	$	75,595
06/05/2003			19,701	$	22.3228	$	439,781
06/06/2003			86,021	$	22.4325	$	1,929,666
06/09/2003			23,945	$	22.2766	$	533,413
	Total		226,917		—	$	4,931,337

The Open Market Sales of Wendell H. Murphy, Jr. are as follows:


Date of sale		Number of shares sold		Price per share		Gross Proceeds

05/28/2003			24,303	$	20.75	$	504,287
05/29/2003			5,008	$	20.7549	$	103,941
05/30/2003			31,243	$	20.9628	$	654,941
06/02/2003			2,569	$	21.016	$	53,990
06/05/2003			12,036	$	22.3228	$	268,677
06/06/2003			55,683	$	22.4325	$	1,249,109
06/09/2003			16,446	$	22.2766	$	366,361
	Total		147,288		—	$	3,201,306

The Open Market Sales of Wendy Murphy Crumpler are as follows:


Date of sale		Number of shares sold		Price per share		Gross Proceeds

05/28/2003			7,180	$	20.75	$	148,985
05/29/2003			1,480	$	20.7549	$	30,717
05/30/2003			9,231	$	20.9628	$	193,508
06/02/2003			760	$	21.016	$	15,972
06/05/2003			3,556	$	22.3228	$	79,380
06/06/2003			16,452	$	22.4325	$	369,059
06/09/2003			4,859	$	22.2766	$	108,242
	Total		43,518		—	$	945,863

The Open Market Sales of Joyce Murphy Minchew are as follows:

Date of sale Number of shares sold Price per share Gross Proceeds

05/28/2003
12,826 $ 20.75 $ 266,140

05/29/2003
2,643 $ 20.7549 $ 54,855

05/30/2003
16,489 $ 20.9628 $ 345,656

06/02/2003
1,356 $ 21.016 $ 28,498

CUSIP No. 832248 95 9 Page 15 of 19 Pages

06/05/2003		6,352	$	22.3228	$	141,794
06/06/2003		29,387	$	22.4325	$	659,224
06/09/2003		8,679	$	22.2766	$	193,339
	Total	77,732		—	$	1,689,506

The Open Market Sales of Angela Norman Brown are as follows:


Date of sale		Number of shares sold		Price per share		Gross Proceeds

05/28/2003			3,946	$	20.75	$	81,880
05/29/2003			813	$	20.7549	$	16,874
05/30/2003			5,073	$	20.9628	$	106,344
06/02/2003			418	$	21.016	$	8,785
06/05/2003			1,954	$	22.3228	$	43,619
06/06/2003			9,042	$	22.4325	$	202,835
06/09/2003			2,671	$	22.2766	$	59,501
	Total		23,917		—	$	519,838

Current Beneficial Ownership of the Reporting Persons:

As of the date of this Amendment, the Reporting Persons beneficially own an aggregate of 17,174,345 shares of Smithfield Common Stock (such number includes 208 shares of Smithfield Common Stock owned directly by MurFam and 575,972 Additional Acquisition Shares). The shares beneficially owned by the Reporting Persons represent approximately 15.7% (assuming the receipt by the Reporting Persons of the Escrowed Acquisition Shares and the Additional Acquisition Shares referred to in the Schedule 13D) of the 109,730,431 shares of Smithfield Common Stock outstanding on September 5, 2003, as set forth in the Form 10-Q of Smithfield filed on September 10, 2003. The number of shares of Smithfield Common Stock beneficially owned by each Reporting Person is as follows:


	Total Number of		Percentage of			Additional
	Shares Beneficially		Outstanding Common			Acquisition
Reporting Person	Owned		Stock			Shares^2/

Wendell H. Murphy		5,186,679		4.7	%		208,968
Harry D. Murphy		2,925,051		2.7	%		38,092
Joyce Murphy Minchew		1,782,629		1.6	%		76,318
Wendell H. Murphy, Jr.		3,396,120		3.1	%		145,621
Wendy Murphy Crumpler		999,019		0.9	%		43,748
Stratton K. Murphy		1,168,274		1.1	%		19,970
Marc D. Murphy		1,168,274		1.1	%		19,970
Angela Norman Brown		548,299		0.5	%		23,285
Total		17,174,345		15.70	%		575,972

Each Reporting Person has sole voting and dispositive power over those shares of Smithfield Common Stock individually beneficially owned by such Reporting Person and not pledged pursuant to the

2/ The Additional Acquisition Shares are included in the Total Number of Shares Beneficially Owned column.

CUSIP No. 832248 95 9 Page 16 of 19 Pages

Forward Contracts; each Reporting Person has shared voting and dispositive power over those shares of Smithfield Common Stock beneficially owned by such Reporting Person by virtue of such Reporting Person’s ownership interest in MurFam; and each Reporting Person has sole voting power (but no dispositive power) over those shares of Smithfield Common Stock beneficially owned by such Reporting Person pledged pursuant to the Forward Contracts, as follows:


	Sole Voting and		Shared Voting and
Reporting Person	Dispositive Power		Dispositive Power		Sole Voting Power

Wendell H. Murphy		4,768,690		73		417,916
Wendell H. Murphy, Jr.		3,122,533		51		273,536
Wendy Murphy Crumpler		918,185		15		80,819
Joyce Murphy Minchew		1,638,243		26		144,360
Angela Norman Brown		503,873		8		44,418
Harry D. Murphy		2,565,501		17		359,533
Stratton K. Murphy		985,794		9		182,471
Marc D. Murphy		985,794		9		182,471
Total		15,488,613		208		1,685,524

Item 6 Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer

Item 6 is hereby amended by adding the following information:

Each of the Reporting Persons entered into the Forward Contracts described in Item 5 above pursuant to which they pledged the Number of Forward Contract Shares indicated above.

Item 7 Material to be Filed as Exhibits


Exhibit 1		Trade Confirmations dated March 14, 2003 from Merrill Lynch, Pierce, Fenner & Smith Incorporated to each of Marc D. Murphy, Stratton K. Murphy and Harry D. Murphy.

Exhibit 2		Form of ISDA Master Agreement dated February 27, 2003 between Merrill Lynch, Pierce, Fenner & Smith Incorporated and each of Marc D. Murphy, Stratton K. Murphy and Harry D. Murphy.

Exhibit 3		Variable Prepaid Forward Confirmation dated June 19, 2003 from Credit Suisse First Boston Capital LLC to each of Wendell H. Murphy, Wendell H. Murphy, Jr., Wendy Murphy Crumpler, Joyce Murphy Minchew and Angela Norman Brown.

Exhibit 4		Variable Prepaid Forward Confirmation dated July 15, 2003 from Credit Suisse First Boston Capital LLC to each of Wendell H. Murphy, Wendell H. Murphy, Jr., Wendy Murphy Crumpler, Joyce Murphy Minchew and Angela Norman Brown.

Exhibit 5		Form of Variable Prepaid Forward Agreement dated June 16, 2003 and June 19, 2003 between Credit Suisse First Boston Capital LLC and each of Wendell H. Murphy, Wendell H. Murphy, Jr., Wendy Murphy Crumpler, Joyce Murphy Minchew and Angela Norman Brown.

CUSIP No. 832248 95 9 Page 17 of 19 Pages

Signature

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Amendment No. 2 to Schedule 13D is true, complete and correct.

Date: October 23, 2003

Wendell H. Murphy

/s/ Mark Roberts
Mark Roberts
Attorney-in-Fact

Harry D. Murphy

/s/ Mark Roberts
Mark Roberts
Attorney-in-Fact

Joyce Murphy Minchew

/s/ Mark Roberts
Mark Roberts
Attorney-in-Fact

Wendell H. Murphy, Jr.

/s/ Mark Roberts
Mark Roberts
Attorney-in-Fact

Wendy Murphy Crumpler

/s/ Mark Roberts
Mark Roberts
Attorney-in-Fact

Stratton K. Murphy

/s/ Mark Roberts
Mark Roberts
Attorney-in-Fact

CUSIP No. 832248 95 9 Page 18 of 19 Pages

Marc D. Murphy

/s/ Mark Roberts
Mark Roberts
Attorney-in-Fact

Angela Norman Brown

/s/ Mark Roberts
Mark Roberts
Attorney-in-Fact

CUSIP No. 832248 95 9 Page 19 of 19 Pages

EXHIBIT INDEX

Exhibit		Description


1		Confirmations dated March 14, 2003 from Merrill Lynch, Pierce, Fenner & Smith Incorporated to each of Marc D. Murphy, Stratton K. Murphy and Harry D. Murphy.

2		Form of ISDA Master Agreement dated February 27, 2003 between Merrill Lynch, Pierce, Fenner & Smith Incorporated and each of Marc D. Murphy, Stratton K. Murphy and Harry D. Murphy.

3		Variable Prepaid Forward Confirmation dated June 19, 2003 from Credit Suisse First Boston Capital LLC to each of Wendell H. Murphy, Wendell H. Murphy, Jr., Wendy Murphy Crumpler, Joyce Murphy Minchew and Angela Norman Brown.

4		Variable Prepaid Forward Confirmation dated July 15, 2003 from Credit Suisse First Boston Capital LLC to each of Wendell H. Murphy, Wendell H. Murphy, Jr., Wendy Murphy Crumpler, Joyce Murphy Minchew and Angela Norman Brown.

5		Form of Variable Prepaid Forward Agreement dated June 16, 2003 and June 19, 2003 between Credit Suisse First Boston Capital LLC and each of Wendell H. Murphy, Wendell H. Murphy, Jr., Wendy Murphy Crumpler, Joyce Murphy Minchew and Angela Norman Brown.

6		Joint Filing Agreement dated October 23, 2003 among Wendell H. Murphy, Harry D. Murphy, Joyce Murphy Minchew, Wendell H. Murphy, Jr., Wendy Murphy Crumpler, Stratton K. Murphy, Marc D. Murphy, and Angela Norman Brown.

EX-1 3 w90450exv1.htm EXHIBIT 1 exv1


		Merrill Lynch, Pierce, Fenner & Smith Incorporated
Confirmation of OTC Transaction		4 World Financial Center, 5^th Floor
		New York, NY 10080

Dated: March 14, 2003		ML Ref: 038744


To:		MARC DANIEL MURPHY (“Counterparty” and “MURPHY_MARC”)
		P.O. BOX 970
		ROSE HILL, NC 28458-0970

CC:		ROGER HUNT
		E-mail: RHUNT@PCLIENT.ML.COM

From:		Merrill Lynch, Pierce, Fenner & Smith Incorporated (“ML” and “MLPFS”)
		Tel: (212) 449-8675
		Fax: (646) 805-2780

Dear Sir / Madam:

The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and conditions of the above referenced transaction entered into between Counterparty and MLPFS, on the Trade Date specified below (the “Transaction”). This Confirmation constitutes a “Confirmation” as referred to in the Master Agreement specified below.

The definitions and provisions contained in the 2000 ISDA Definitions (the “Swap Definitions”) and the 1996 ISDA Equity Derivatives Definitions (the “Equity Definitions” and together with the Swap Definitions, the “Definitions”) in each case as published by the International Swaps and Derivatives Association, Inc., are incorporated into this Confirmation. In the event of any inconsistency between the Swap Definitions and the Equity Definitions, the Equity Definitions will govern and in the event of any inconsistency between the Definitions and this Confirmation, this Confirmation will govern.

This Confirmation supplements, forms part of, and is subject to, the Master Agreement (including the Schedule thereto and the Credit Support Annex incorporated therein), dated as of February 27, 2003, as amended and supplemented from time to time (the “Agreement”), between you and us. All provisions contained in the Agreement govern this Confirmation except as expressly modified below.

The terms of the particular Transaction to which this Confirmation relates are as follows:

General Terms:


Trade Date:		March 14, 2003

Effective Date:		March 19, 2003

Termination Date:		March 14, 2006 (or if not a Business Day, the next succeeding Business Day).

Seller:		Counterparty

Buyer:		MLPFS

Shares:		The common stock of SMITHFIELD FOODS INC
		(Security Symbol: SFD).


Number of Shares:	182,471

Multiplier:	One (1).

Floor Price:	USD 14.074

Cap Price:	USD 22.87

Final Price:	The closing price for the Shares at the Valuation Time on the Valuation Date.

Settlement Date:	Three Business Days after the Valuation Date.

Initial Payment Amount:	MLPFS shall pay to Counterparty on the Initial Payment Date USD 2,346,883.96

Initial Payment Date:	March 19, 2003

Dividend Payment Amount:	Counterparty shall pay to MLPFS on the Dividend Payment Date (as defined herein) an amount equal to the product of (i) 100% of the cash amount of the dividends per share on the date that such dividends would have been received by MLPFS (the “Dividend Payment Date”) from the Issuer of the Shares if MLPFS had been the corporate shareholder of record of the Shares during the term of this Transaction and (ii) the Number of Shares, provided that, if an ex-dividend date occurs with respect to the Shares on or before the Settlement Date and no corresponding payments have been received by shareholders of record of the Shares on or before such date, then the dividends to which such ex-dividend date relates shall be deemed to be dividends for purposes hereof.

Settlement Currency:	USD

Exchange:	New York Stock Exchange

Related Exchange:	Any exchange(s) on which options contracts related to the Shares are principally traded.

Business Days:	New York

Valuation:

Valuation Time:	At the close of trading on the Exchange.

Valuation Date:	The Termination Date

Settlement Terms:	Settlement of this Transaction shall be either Cash Settlement or Physical Settlement as determined by Counterparty in writing to ML no less than ten (10) Business Days prior to the Termination Date. In the event ML is not notified, the settlement method for this Transaction shall be Physical Settlement.

Cash Settlement Terms:

Cash Settlement:	If Cash Settlement applies, then on the Cash Settlement Payment Date, Counterparty will pay to MLPFS the Cash Settlement Amount.

Cash Settlement Amount:	An amount determined by the Calculation Agent on the Valuation Date based on the following formula:

	a)	if the Final Price is less than the Floor Price, an amount equal to:


		Number of Shares x Final Price;

	b)	if the Final Price is less than or equal to the Cap Price but greater than or equal to the Floor Price, an amount equal to:

		Floor Price x Number of Shares;

	c)	if the Final Price is greater than the Cap Price, an amount equal to:

		[Floor Price + (Final Price - Cap Price)] x Number of Shares

Cash Settlement
Payment Date:	Three (3) Currency Business Days after the Valuation Date.

Physical Settlement Terms:

Physical Settlement:	If Physical Settlement applies, on the Settlement Date, Counterparty will deliver to MLPFS the Shares (the “Deliverable Shares”) in an amount equal to the Number of Shares to be Delivered.

Number of Shares to be Delivered:	Shares in an amount determined by the Calculation Agent on the Valuation Date based on the following formula:

	a)	if the Final Price is less than the Floor Price, Shares in an amount equal to:

		Number of Shares;

	b)	if the Final Price is less than or equal to the Cap Price but greater than or equal to the Floor Price, Shares in an amount equal to:

		Floor Price x Number of Shares;

		Final Price

	c)	if the Final Price is greater than the Cap Price, Shares in an amount equal to:

		Floor Price + (Final Price – Cap Price) x Number of Shares

		Final Price

Settlement Date:	Three (3) Exchange Business Days after the Valuation Date.

Conditions to Physical Settlement:

	Notwithstanding anything contained herein to the contrary, unless one of the following conditions are met, Cash Settlement shall apply to this Transaction:

	(1)	Counterparty is not an affiliate (an “Affiliate”) (as defined in Rule 144 (“Rule 144”) of the Securities Act of 1933, as amended (the “Securities Act”)) of the Issuer of the Shares on the Settlement Date or at anytime during the three month period prior to the Settlement Date, and the Deliverable Shares were either: (x) Shares acquired by the Counterparty pursuant to a registration statement filed under the Securities Act or (y) acquired from the Company, or from an Affiliate of the Company, if such Shares would be restricted securities as defined in Rule 144, in a transaction exempt from registration under the Securities Act and at least two years has elapsed (with such two year period being measured in accordance with Rule


			144) since the date Counterparty last acquired (in a transaction in which the full consideration was paid) the Deliverable Shares from the Company or from an Affiliate of the Company, or

		(2)	Counterparty is an Affiliate and has complied with all the procedures under that certain SEC No Action Letter at 1999 WL 1244018 necessary to enable the Shares delivered by Counterparty to be treated as securities that are neither restricted nor control securities in transactions for the account of MLPFS.

Physical Settlement Fee:		Counterparty will pay to ML a physical settlement fee on the Settlement Date, such fee shall equal any fees, commissions and markdown that ML would realize if Counterparty were selling the Shares for cash to or through ML, as determined by ML.

Failure to Deliver:		Applicable

Clearance System(s):		The principal domestic clearance system customarily settling trades on a delivery versus payment basis on the Shares.

Adjustments:

Method of Adjustment:		In the event of the occurrence of a 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 Shares and, if so, will (i) make the corresponding adjustment(s), if any, to the Number of Shares, the Floor Price and the Cap Price and, in any case, any other variable relevant to the settlement or payment terms of this 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).

Extraordinary Events:

	Consequences of Merger Event:

	(a) Share-for-Share:	Cancellation and Payment; provided however, if the New Shares are publicly traded on a nationally recognized exchange or on Nasdaq, Alternative Obligation shall apply.

	(b) Share-for-Other:	Cancellation and Payment.

	(c) Share-for-Combined:	Cancellation and Payment; provided however, if any portion of the consideration for the relevant shares consists of equity securities that are publicly traded on a nationally recognized exchange or on Nasdaq (the “Publicly Traded Securities Consideration”), Alternative Obligation shall apply only to that portion of the Transaction corresponding to the Publicly Traded Securities Consideration.

		Notwithstanding anything to the contrary in the Equity Definitions, the amount payable under this Transaction upon the occurrence of an Extraordinary Event shall be calculated by the Calculation Agent in good faith in accordance with Section 9.7 of the Equity Definitions using, among other things, the factors identified in subparagraphs (i), (ii) and (iii) therein, but without the requirement of soliciting dealer quotations therefor.

	Nationalization or Insolvency:	Negotiated Closeout


Calculation Agent:		MLPFS

Non-Reliance:		Each party represents to the other party that it is acting for its own account, and has made its own independent decisions to enter into this Transaction and as to whether this Transaction is appropriate or proper for it based on its own judgment and upon advice from such advisors as it has deemed necessary. It is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into this Transaction, it being understood that information and explanations related to the terms and conditions of this Transaction shall not be considered investment advice or a recommendation to enter into this Transaction. 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 this Transaction.

Governing law:		The laws of the State of New York (without reference to choice of law doctrine)

Collateral:

	Independent Amount:	Independent Amount with respect to Counterparty and this Transaction means a number of Shares equal to the Number of Shares (the “Pledged Shares”).

	Eligible Collateral:	The Pledged Shares will constitute Eligible Collateral with respect to this Transaction with a Valuation Percentage of 100%.

	Exposure:	This Transaction will be disregarded for purposes of determining the Secured Party’s Exposure under the CSA.

Representations of Counterparty:		Counterparty (a) has such knowledge and experience in financial and business affairs as to be capable of evaluating the merits and risks of entering into the Transaction; (b) qualifies as an “accredited investor” under Regulation D of the Securities Act of 1933, as amended (the “Securities Act”); (c) has consulted with its own legal, financial, accounting and tax advisors in connection with the Transaction; (d) is entering into the Transaction for a bona fide business purpose to hedge an existing position; (e) acknowledges that in return for downside protection against a decline in the market price of the Shares below the Floor Price, Counterparty is foregoing the upside value of an increase in the market price of the Shares above the Cap Price; and (f) in exchange for prepayment of the purchase price under the Transaction, Counterparty agrees to sell (and physically deliver) the Shares to MLPFS on the Settlement Date (unless Counterparty elects Cash Settlement in the manner specified herein). Counterparty has no knowledge of any non-public material information regarding the Issuer of the Shares. Counterparty has furnished MLPFS with copies of all material agreements or contracts to which it is a party, by which it is bound, or by which the Pledged Shares are bound, that relate to the Pledged Shares.

Acknowledgements:		(1) The parties acknowledge and agree that there are no other representations, agreements or other undertakings of the parties in relation to this Transaction, except as set forth in this Confirmation or in the Agreement.

		(2) The parties hereto intend for:


		(i) This Transaction to be a “securities contract” as defined in Section 741(7) of the Bankruptcy Code, qualifying for the protection under Section 555 of the Bankruptcy Code.

		(ii) A party’s right to liquidate this Transaction and to exercise any other remedies upon the occurrence of any Event of Default under the Agreement with respect to the other party to constitute a “contractual right” as defined in the Bankruptcy Code.

		(iii) Any cash, securities or other property provided as performance assurance, credit, support or collateral with respect to this Transaction to constitute “margin payments” as defined in the Bankruptcy Code.

		(iv) All payments for, under or in connection with this Transaction, all payments for the Shares and the transfer of such Shares to constitute “settlement payments” as defined in the Bankruptcy Code.

		(v) “Bankruptcy Code” means Title 11 of the United States Code.

Interpretation:		For purposes of the Equity Definitions, this Transaction will be deemed to be a Physically settled Share Option Transaction if Physical Settlement applies and a Cash-settled Share Option Transaction if Cash Settlement applies, in either case with an Exercise Date equal to the Valuation Date.

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 by facsimile transmission to the Attention of: Brian Carroll (Telecopier No. 646-805-2780).

Very truly yours,

Merrill Lynch, Pierce, Fenner & Smith Incorporated


By:		/s/ VIVIAN JACKSON

Vivian Jackson
Title: Authorized Signatory

Confirmed as of the date first above written:

MARC DANIEL MURPHY


By:		/s/ MARC DANIEL MURPHY

Name:
Title:


		Merrill Lynch, Pierce, Fenner & Smith Incorporated
Confirmation of OTC Transaction		4 World Financial Center, 5^th Floor
		New York, NY 10080

Dated: March 14, 2003		ML Ref: 038772


To:		STRATTON KING MURPHY (“Counterparty” and “MURPHY_STRATTON”)
		P.O. BOX 970
		ROSE HILL, NC 28458-0970

CC:		ROGER HUNT
		E-mail: RHUNT@PCLIENT.ML.COM

From:		Merrill Lynch, Pierce, Fenner & Smith Incorporated (“ML” and “MLPFS”)
		Tel: (212) 449-8675
		Fax: (646) 805-2780

Dear Sir / Madam:

The terms of the particular Transaction to which this Confirmation relates are as follows:

General Terms:


Trade Date:		March 14, 2003

Effective Date:		March 19, 2003

Termination Date:		March 14, 2006 (or if not a Business Day, the next succeeding Business Day).

Seller:		Counterparty

Buyer:		MLPFS

Shares:		The common stock of SMITHFIELD FOODS INC (Security Symbol: SFD).


Number of Shares:		182,471


Multiplier:		One (1).

Floor Price:		USD 14.074

Cap Price:		USD 22.87

Final Price:		The closing price for the Shares at the Valuation Time on the Valuation Date.

Settlement Date:		Three Business Days after the Valuation Date.

Initial Payment Amount:		MLPFS shall pay to Counterparty on the Initial Payment Date USD 2,346,883.56

Initial Payment Date:		March 19, 2003

Dividend Payment Amount:		Counterparty shall pay to MLPFS on the Dividend Payment Date (as defined herein) an amount equal to the product of (i) 100% of the cash amount of the dividends per share on the date that such dividends would have been received by MLPFS (the “Dividend Payment Date”) from the Issuer of the Shares if MLPFS had been the corporate shareholder of record of the Shares during the term of this Transaction and (ii) the Number of Shares, provided that, if an ex-dividend date occurs with respect to the Shares on or before the Settlement Date and no corresponding payments have been received by shareholders of record of the Shares on or before such date, then the dividends to which such ex-dividend date relates shall be deemed to be dividends for purposes hereof.

Settlement Currency:		USD

Exchange:		New York Stock Exchange

Related Exchange:		Any exchange(s) on which options contracts related to the Shares are principally traded.

Business Days:		New York

Valuation:

Valuation Time:		At the close of trading on the Exchange.

Valuation Date:		The Termination Date

Settlement Terms:		Settlement of this Transaction shall be either Cash Settlement or Physical Settlement as determined by Counterparty in writing to ML no less than ten (10) Business Days prior to the Termination Date. In the event ML is not notified, the settlement method for this Transaction shall be Physical Settlement.

Cash Settlement Terms:

Cash Settlement:		If Cash Settlement applies, then on the Cash Settlement Payment Date, Counterparty will pay to MLPFS the Cash Settlement Amount.

Cash Settlement Amount:		An amount determined by the Calculation Agent on the Valuation Date based on the following formula:

		a) if the Final Price is less than the Floor Price, an amount equal to:


		Number of Shares x Final Price;

	b)	if the Final Price is less than or equal to the Cap Price but greater than or equal to the Floor Price, an amount equal to:

		Floor Price x Number of Shares;

	c)	if the Final Price is greater than the Cap Price, an amount equal to:

		[Floor Price + (Final Price - Cap Price)] x Number of Shares

Cash Settlement
Payment Date:	Three (3) Currency Business Days after the Valuation Date.

Physical Settlement Terms:

Physical Settlement:	If Physical Settlement applies, on the Settlement Date, Counterparty will deliver to MLPFS the Shares (the “Deliverable Shares”) in an amount equal to the Number of Shares to be Delivered.

Number of Shares to be Delivered:	Shares in an amount determined by the Calculation Agent on the Valuation Date based on the following formula:

	a)	if the Final Price is less than the Floor Price, Shares in an amount equal to:

		Number of Shares;

	b)	if the Final Price is less than or equal to the Cap Price but greater than or equal to the Floor Price, Shares in an amount equal to:

		Floor Price x Number of Shares; Final Price

	c)	if the Final Price is greater than the Cap Price, Shares in an amount equal to:

		Floor Price + (Final Price – Cap Price) x Number of Shares

		Final Price

Settlement Date:	Three (3) Exchange Business Days after the Valuation Date.

Conditions to Physical Settlement:
	Notwithstanding anything contained herein to the contrary, unless one of the following conditions are met, Cash Settlement shall apply to this Transaction:

	(1)	Counterparty is not an affiliate (an “Affiliate”) (as defined in Rule 144 (“Rule 144”) of the Securities Act of 1933, as amended (the “Securities Act”)) of the Issuer of the Shares on the Settlement Date or at anytime during the three month period prior to the Settlement Date, and the Deliverable Shares were either: (x) Shares acquired by the Counterparty pursuant to a registration statement filed under the Securities Act or (y) acquired from the Company, or from an Affiliate of the Company, if such Shares would be restricted securities as defined in Rule 144, in a transaction exempt from registration under the Securities Act and at least two years has elapsed (with such two year period being measured in accordance with Rule


			144) since the date Counterparty last acquired (in a transaction in which the full consideration was paid) the Deliverable Shares from the Company or from an Affiliate of the Company, or

		(2)	Counterparty is an Affiliate and has complied with all the procedures under that certain SEC No Action Letter at 1999 WL 1244018 necessary to enable the Shares delivered by Counterparty to be treated as securities that are neither restricted nor control securities in transactions for the account of MLPFS.

Physical Settlement Fee:		Counterparty will pay to ML a physical settlement fee on the Settlement Date, such fee shall equal any fees, commissions and markdown that ML would realize if Counterparty were selling the Shares for cash to or through ML, as determined by ML.

Failure to Deliver:		Applicable

Clearance System(s):		The principal domestic clearance system customarily settling trades on a delivery versus payment basis on the Shares.

Adjustments:

Method of Adjustment:		In the event of the occurrence of a 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 Shares and, if so, will (i) make the corresponding adjustment(s), if any, to the Number of Shares, the Floor Price and the Cap Price and, in any case, any other variable relevant to the settlement or payment terms of this 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).

Extraordinary Events:

	Consequences of Merger Event:

	(a) Share-for-Share:	Cancellation and Payment; provided however, if the New Shares are publicly traded on a nationally recognized exchange or on Nasdaq, Alternative Obligation shall apply.

	(b) Share-for-Other:	Cancellation and Payment.

	(c) Share-for-Combined:	Cancellation and Payment; provided however, if any portion of the consideration for the relevant shares consists of equity securities that are publicly traded on a nationally recognized exchange or on Nasdaq (the “Publicly Traded Securities Consideration”), Alternative Obligation shall apply only to that portion of the Transaction corresponding to the Publicly Traded Securities Consideration.

		Notwithstanding anything to the contrary in the Equity Definitions, the amount payable under this Transaction upon the occurrence of an Extraordinary Event shall be calculated by the Calculation Agent in good faith in accordance with Section 9.7 of the Equity Definitions using, among other things, the factors identified in subparagraphs (i), (ii) and (iii) therein, but without the requirement of soliciting dealer quotations therefor.

	Nationalization or Insolvency:	Negotiated Close-out


Calculation Agent:		MLPFS

Non-Reliance:		Each party represents to the other party that it is acting for its own account, and has made its own independent decisions to enter into this Transaction and as to whether this Transaction is appropriate or proper for it based on its own judgment and upon advice from such advisors as it has deemed necessary. It is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into this Transaction, it being understood that information and explanations related to the terms and conditions of this Transaction shall not be considered investment advice or a recommendation to enter into this Transaction. 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 this Transaction.

Governing law:		The laws of the State of New York (without reference to choice of law doctrine)

Collateral:

	Independent Amount:	Independent Amount with respect to Counterparty and this Transaction means a number of Shares equal to the Number of Shares (the “Pledged Shares”).

	Eligible Collateral:	The Pledged Shares will constitute Eligible Collateral with respect to this Transaction with a Valuation Percentage of 100%.

	Exposure:	This Transaction will be disregarded for purposes of determining the Secured Party’s Exposure under the CSA.

Representations of Counterparty:		Counterparty (a) has such knowledge and experience in financial and business affairs as to be capable of evaluating the merits and risks of entering into the Transaction; (b) qualifies as an “accredited investor” under Regulation D of the Securities Act of 1933, as amended (the “Securities Act”); (c) has consulted with its own legal, financial, accounting and tax advisors in connection with the Transaction; (d) is entering into the Transaction for a bona fide business purpose to hedge an existing position; (e) acknowledges that in return for downside protection against a decline in the market price of the Shares below the Floor Price, Counterparty is foregoing the upside value of an increase in the market price of the Shares above the Cap Price; and (f) in exchange for prepayment of the purchase price under the Transaction, Counterparty agrees to sell (and physically deliver) the Shares to MLPFS on the Settlement Date (unless Counterparty elects Cash Settlement in the manner specified herein).

		Counterparty has no knowledge of any non-public material information regarding the Issuer of the Shares.

		Counterparty has furnished MLPFS with copies of all material agreements or contracts to which it is a party, by which it is bound, or by which the Pledged Shares are bound, that relate to the Pledged Shares.

Acknowledgements:		(1) The parties acknowledge and agree that there are no other representations, agreements or other undertakings of the parties in relation to this Transaction, except as set forth in this Confirmation or in the Agreement.

		(2) The parties hereto intend for:


		(i) This Transaction to be a “securities contract” as defined in Section 741(7) of the Bankruptcy Code, qualifying for the protection under Section 555 of the Bankruptcy Code.

		(ii) A party’s right to liquidate this Transaction and to exercise any other remedies upon the occurrence of any Event of Default under the Agreement with respect to the other party to constitute a “contractual right” as defined in the Bankruptcy Code.

		(iii) Any cash, securities or other property provided as performance assurance, credit, support or collateral with respect to this Transaction to constitute “margin payments” as defined in the Bankruptcy Code.

		(iv) All payments for, under or in connection with this Transaction, all payments for the Shares and the transfer of such Shares to constitute “settlement payments” as defined in the Bankruptcy Code.

		(v) “Bankruptcy Code” means Title 11 of the United States Code.

Interpretation:		For purposes of the Equity Definitions, this Transaction will be deemed to be a Physically settled Share Option Transaction if Physical Settlement applies and a Cash-settled Share Option Transaction if Cash Settlement applies, in either case with an Exercise Date equal to the Valuation Date.

Very truly yours,

Merrill Lynch, Pierce, Fenner & Smith Incorporated


By:		/s/ VIVIAN JACKSON

Vivian Jackson
Title: Authorized Signatory

Confirmed as of the date first above written:

STRATTON KING MURPHY


By:		/s/ STRATTON KING MURPHY
Name:
Title:


		Merrill Lynch, Pierce, Fenner & Smith Incorporated
Confirmation of OTC Transaction		4 World Financial Center, 5^th Floor
		New York, NY 10080


Dated: March 14, 2003		ML Ref: 038773

To:		HARRY D MURPHY (“Counterparty” and “MURPHY_HARRY”)
		P.O. BOX 970
		ROSE HILL, NC 28458-0970

CC:		ROGER HUNT
		E-mail: RHUNT@PCLIENT.ML.COM

From:		Merrill Lynch, Pierce, Fenner & Smith Incorporated (“ML” and “MLPFS”)
		Tel: (212) 449-8675
		Fax: (646) 805-2780

Dear Sir / Madam:

The terms of the particular Transaction to which this Confirmation relates are as follows:


General Terms:

Trade Date:		March 14, 2003

Effective Date:		March 19, 2003

Termination Date:		March 14, 2006 (or if not a Business Day, the next succeeding Business Day).

Seller:		Counterparty

Buyer:		MLPFS

Shares:		The common stock of SMITHFIELD FOODS INC
		(Security Symbol: SFD).


Number of Shares:		359,533

Multiplier:		One (1).

Floor Price:		USD 14.074

Cap Price:		USD 22.87

Final Price:		The closing price for the Shares at the Valuation Time on the Valuation Date.

Settlement Date:		Three Business Days after the Valuation Date.

Initial Payment Amount:		MLPFS shall pay to Counterparty on the Initial Payment Date USD 4,624,199.09

Initial Payment Date:		March 19, 2003

Dividend Payment Amount:		Counterparty shall pay to MLPFS on the Dividend Payment Date (as defined herein) an amount equal to the product of (i) 100% of the cash amount of the dividends per share on the date that such dividends would have been received by MLPFS (the “Dividend Payment Date”) from the Issuer of the Shares if MLPFS had been the corporate shareholder of record of the Shares during the term of this Transaction and (ii) the Number of Shares, provided that, if an ex-dividend date occurs with respect to the Shares on or before the Settlement Date and no corresponding payments have been received by shareholders of record of the Shares on or before such date, then the dividends to which such ex-dividend date relates shall be deemed to be dividends for purposes hereof.

Settlement Currency:		USD

Exchange:		New York Stock Exchange

Related Exchange:		Any exchange(s) on which options contracts related to the Shares are principally traded.

Business Days:		New York

Valuation:

Valuation Time:		At the close of trading on the Exchange.

Valuation Date:		The Termination Date

Settlement Terms:		Settlement of this Transaction shall be either Cash Settlement or Physical Settlement as determined by Counterparty in writing to ML no less than ten (10) Business Days prior to the Termination Date. In the event ML is not notified, the settlement method for this Transaction shall be Physical Settlement.

Cash Settlement Terms:

Cash Settlement:		If Cash Settlement applies, then on the Cash Settlement Payment Date, Counterparty will pay to MLPFS the Cash Settlement Amount.

Cash Settlement Amount:		An amount determined by the Calculation Agent on the Valuation Date based on the following formula:

		a) if the Final Price is less than the Floor Price, an amount equal to:


		Number of Shares x Final Price;

	b)	if the Final Price is less than or equal to the Cap Price but greater than or equal to the Floor Price, an amount equal to:

		Floor Price x Number of Shares;

	c)	if the Final Price is greater than the Cap Price, an amount equal to:

		[Floor Price + (Final Price - Cap Price)] x Number of Shares

Cash Settlement Payment Date:	Three (3) Currency Business Days after the Valuation Date.

Physical Settlement Terms:

Physical Settlement:	If Physical Settlement applies, on the Settlement Date, Counterparty will deliver to MLPFS the Shares (the “Deliverable Shares”) in an amount equal to the Number of Shares to be Delivered.

Number of Shares to be Delivered:	Shares in an amount determined by the Calculation Agent on the Valuation Date based on the following formula:

	a)	if the Final Price is less than the Floor Price, Shares in an amount equal to:

		Number of Shares;

	b)	if the Final Price is less than or equal to the Cap Price but greater than or equal to the Floor Price, Shares in an amount equal to:

		Floor Price x Number of Shares;
		Final Price

	c)	if the Final Price is greater than the Cap Price, Shares in an amount equal to:

		Floor Price + (Final Price – Cap Price) x Number of Shares
		Final Price

Settlement Date:	Three (3) Exchange Business Days after the Valuation Date.

Conditions to Physical
Settlement:	Notwithstanding anything contained herein to the contrary, unless one of the following conditions are met, Cash Settlement shall apply to this Transaction:

	(1)	Counterparty is not an affiliate (an “Affiliate”) (as defined in Rule 144 (“Rule 144”) of the Securities Act of 1933, as amended (the “Securities Act”)) of the Issuer of the Shares on the Settlement Date or at anytime during the three month period prior to the Settlement Date, and the Deliverable Shares were either: (x) Shares acquired by the Counterparty pursuant to a registration statement filed under the Securities Act or (y) acquired from the Company, or from an Affiliate of the Company, if such Shares would be restricted securities as defined in Rule 144, in a transaction exempt from registration under the Securities Act and at least two years has elapsed (with such two


				year period being measured in accordance with Rule 144) since the date Counterparty last acquired (in a transaction in which the full consideration was paid) the Deliverable Shares from the Company or from an Affiliate of the Company, or

		(2)		Counterparty is an Affiliate and has complied with all the procedures under that certain SEC No Action Letter at 1999 WL 1244018 necessary to enable the Shares delivered by Counterparty to be treated as securities that are neither restricted nor control securities in transactions for the account of MLPFS.


Physical Settlement Fee:		Counterparty will pay to ML a physical settlement fee on the Settlement Date, such fee shall equal any fees, commissions and markdown that ML would realize if Counterparty were selling the Shares for cash to or through ML, as determined by ML.

Failure to Deliver:		Applicable

Clearance System(s):		The principal domestic clearance system customarily settling trades on a delivery versus payment basis on the Shares.

Adjustments:

Method of Adjustment:		In the event of the occurrence of a 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 Shares and, if so, will (i) make the corresponding adjustment(s), if any, to the Number of Shares, the Floor Price and the Cap Price and, in any case, any other variable relevant to the settlement or payment terms of this 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).

Extraordinary Events:

Consequences of Merger Event:

(a) Share-for-Share:		Cancellation and Payment; provided however, if the New Shares are publicly traded on a nationally recognized exchange or on Nasdaq, Alternative Obligation shall apply.

(b) Share-for-Other:		Cancellation and Payment.

(c) Share-for-Combined:		Cancellation and Payment; provided however, if any portion of the consideration for the relevant shares consists of equity securities that are publicly traded on a nationally recognized exchange or on Nasdaq (the “Publicly Traded Securities Consideration”), Alternative Obligation shall apply only to that portion of the Transaction corresponding to the Publicly Traded Securities Consideration.

		Notwithstanding anything to the contrary in the Equity Definitions, the amount payable under this Transaction upon the occurrence of an Extraordinary Event shall be calculated by the Calculation Agent in good faith in accordance with Section 9.7 of the Equity Definitions using, among other things, the factors identified in subparagraphs (i), (ii) and (iii) therein, but without the requirement of soliciting dealer quotations therefor.

Nationalization or


Insolvency:		Negotiated Closeout

Calculation Agent:		MLPFS

Non-Reliance:		Each party represents to the other party that it is acting for its own account, and has made its own independent decisions to enter into this Transaction and as to whether this Transaction is appropriate or proper for it based on its own judgment and upon advice from such advisors as it has deemed necessary. It is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into this Transaction, it being understood that information and explanations related to the terms and conditions of this Transaction shall not be considered investment advice or a recommendation to enter into this Transaction. 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 this Transaction.

Governing law:		The laws of the State of New York (without reference to choice of law doctrine)

Collateral:
Independent Amount:		Independent Amount with respect to Counterparty and this Transaction means a number of Shares equal to the Number of Shares (the “Pledged Shares”).

Eligible Collateral:		The Pledged Shares will constitute Eligible Collateral with respect to this Transaction with a Valuation Percentage of 100%.

Exposure:		This Transaction will be disregarded for purposes of determining the Secured Party’s Exposure under the CSA.

Representations of Counterparty:		Counterparty (a) has such knowledge and experience in financial and business affairs as to be capable of evaluating the merits and risks of entering into the Transaction; (b) qualifies as an “accredited investor” under Regulation D of the Securities Act of 1933, as amended (the “Securities Act”); (c) has consulted with its own legal, financial, accounting and tax advisors in connection with the Transaction; (d) is entering into the Transaction for a bona fide business purpose to hedge an existing position; (e) acknowledges that in return for downside protection against a decline in the market price of the Shares below the Floor Price, Counterparty is foregoing the upside value of an increase in the market price of the Shares above the Cap Price; and (f) in exchange for prepayment of the purchase price under the Transaction, Counterparty agrees to sell (and physically deliver) the Shares to MLPFS on the Settlement Date (unless Counterparty elects Cash Settlement in the manner specified herein).

		Counterparty has no knowledge of any non-public material information regarding the Issuer of the Shares.

		Counterparty has furnished MLPFS with copies of all material agreements or contracts to which it is a party, by which it is bound, or by which the Pledged Shares are bound, that relate to the Pledged Shares.

Acknowledgements:		(1) The parties acknowledge and agree that there are no other representations, agreements or other undertakings of the parties in relation to this Transaction, except as set forth in this Confirmation or in the Agreement.

		(2) The parties hereto intend for:


		(i) This Transaction to be a “securities contract” as defined in Section 741(7) of the Bankruptcy Code, qualifying for the protection under Section 555 of the Bankruptcy Code.
		(ii) A party’s right to liquidate this Transaction and to exercise any other remedies upon the occurrence of any Event of Default under the Agreement with respect to the other party to constitute a “contractual right” as defined in the Bankruptcy Code.
		(iii) Any cash, securities or other property provided as performance assurance, credit, support or collateral with respect to this Transaction to constitute “margin payments” as defined in the Bankruptcy Code.
		(iv) All payments for, under or in connection with this Transaction, all payments for the Shares and the transfer of such Shares to constitute “settlement payments” as defined in the Bankruptcy Code.
		(v) “Bankruptcy Code” means Title 11 of the United States Code.

Interpretation:		For purposes of the Equity Definitions, this Transaction will be deemed to be a Physically settled Share Option Transaction if Physical Settlement applies and a Cash-settled Share Option Transaction if Cash Settlement applies, in either case with an Exercise Date equal to the Valuation Date.

Very truly yours,

Merrill Lynch, Pierce, Fenner & Smith Incorporated

By: /s/ VIVIAN JACKSON

Vivian Jackson

Title: Authorized Signatory

Confirmed as of the date first above written:

HARRY D MURPHY

By: /s/ HARRY D. MURPHY

Name:
Title:

6 EX-2 4 w90450exv2.htm EXHIBIT 2 exv2

(Multicurrency—Cross Border)

(ISDA LOGO)

International Swaps and Derivatives Association, Inc.

MASTER AGREEMENT
dated as of _____________________

MERRILL LYNCH PIERCE, FENNER & SMITH INCORPORATED and (the “Counterparty”) have entered and/or anticipate entering into one or more transactions (each a “Transaction”) that are or will be governed by this Master Agreement, which includes the schedule (the “Schedule”), and the documents and other confirming evidence (each a “Confirmation”) exchanged between the parties confirming those Transactions.

Accordingly, the parties agree as follows:—

1. Interpretation

(a) Definitions. The terms defined in Section 14 and in the Schedule will have the meanings therein specified for the purpose of this Master Agreement.

(b) Inconsistency. In the event of any inconsistency between the provisions of the Schedule and the other provisions of this Master Agreement, the Schedule will prevail. In the event of any inconsistency between the provisions of any Confirmation and this Master Agreement (including the Schedule), such Confirmation will prevail for the purpose of the relevant Transaction.

(c) Single Agreement. All Transactions are entered into in reliance on the fact that this Master Agreement and all Confirmations form a single agreement between the parties (collectively referred to as this “Agreement”), and the parties would not otherwise enter into any Transactions.

2. Obligations

(a) General Conditions.

(i) Each party will make each payment or delivery specified in each Confirmation to be made by it, subject to the other provisions of this Agreement.

(ii) Payments under this Agreement will be made on the due date for value on that date in the place of the account specified in the relevant Confirmation or otherwise pursuant to this Agreement, in freely transferable funds and in the manner customary for payments in the required currency. Where settlement is by delivery (that is, other than by payment), such delivery will be made for receipt on the due date in the manner customary for the relevant obligation unless otherwise specified in the relevant Confirmation or elsewhere in this Agreement.

(iii) Each obligation of each party under Section 2(a)(i) is subject to (1) the condition precedent that no Event of Default or Potential Event of Default with respect to the other party has occurred and is continuing, (2) the condition precedent that no Early Termination Date in respect of the relevant Transaction has occurred or been effectively designated and (3) each other applicable condition precedent specified in this Agreement.

(b) Change of Account. Either party may change its account for receiving a payment or delivery by giving notice to the other party at least five Local Business Days prior to the scheduled date for the payment or delivery to which such change applies unless such other party gives timely notice of a reasonable objection to such change.

(i) in the same currency; and

(ii) in respect of the same Transaction,

by each party to the other, then, on such date, each party’s obligation to make payment of any such amount will be automatically satisfied and discharged and, if the aggregate amount that would otherwise have been payable by one party exceeds the aggregate amount that would otherwise have been payable by the other party, replaced by an obligation upon the party by whom the larger aggregate amount would have been payable to pay to the other party the excess of the larger aggregate amount over the smaller aggregate amount.

The parties may elect in respect of two or more Transactions that a net amount will be determined in respect of all amounts payable on the same date in the same currency in respect of such Transactions, regardless of whether such amounts are payable in respect of the same Transaction. The election may be made in the Schedule or a Confirmation by specifying that subparagraph (ii) above will not apply to the Transactions identified as being subject to the election, together with the starting date (in which case subparagraph (ii) above will not, or will cease to, apply to such Transactions from such date). This election may be made separately for different groups of Transactions and will apply separately to each pairing of Offices through which the parties make and receive payments or deliveries.

(d) Deduction or Withholding for Tax.

(i) Gross-Up. All payments under this Agreement 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:—

(1) promptly notify the other party (“Y”) of such requirement;

(2) 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 this Section 2(d)) promptly upon the earlier of determining that such deduction or withholding is required or receiving notice that such amount has been assessed against Y;

(3) 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

(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to the payment to which Y is otherwise entitled under this Agreement, 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:—

(A) the failure by Y to comply with or perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d); or

(B) the failure of a representation made by Y pursuant to Section 3(f) to be accurate and true unless such failure would not have occurred but for (I) any action taken by a taxing authority, or brought in a court of competent jurisdiction, on or after the date on which a Transaction is entered into (regardless of whether such action is taken or brought with respect to a party to this Agreement) or (II) a Change in Tax Law.

(ii) Liability. 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 Section 2(d)(i)(4);

(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 comply with or perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).

(e) Default Interest; Other Amounts. Prior to the occurrence or effective designation of an Early Termination Date in respect of the relevant Transaction, a party that defaults in the performance of any payment obligation will, to the extent permitted by law and subject to Section 6(c), be required to pay interest (before as well as after judgment) on the overdue amount to the other party on demand in the same currency as such overdue amount, for the period from (and including) the original due date for payment to (but excluding) the date of actual payment, at the Default Rate. Such interest will be calculated on the basis of daily compounding and the actual number of days elapsed. If, prior to the occurrence or effective designation of an Early Termination Date in respect of the relevant Transaction, a party defaults in the performance of any obligation required to be settled by delivery, it will compensate the other party on demand if and to the extent provided for in the relevant Confirmation or elsewhere in this Agreement.

3. Representations

Each party represents to the other party (which representations will be deemed to be repeated by each party on each date on which a Transaction is entered into and, in the case of the representations in Section 3(f), at all times until the termination of this Agreement) that:—

(a) Basic Representations.

(i) Status. It is duly organized and validly existing under the laws of the jurisdiction of its organization or incorporation and, if relevant under such laws, in good standing;

(ii) Powers. It has the power to execute this Agreement and any other documentation relating to this Agreement to which it is a party, to deliver this Agreement and any other documentation relating to this Agreement that it is required by this Agreement to deliver and to perform its obligations under this Agreement and any obligations it has under any Credit Support Document to which it is a party and has taken all necessary action to authorize such execution, delivery and performance;

(iii) No Violation or Conflict. Such execution, delivery and performance do not violate or conflict with any law applicable to it, any provision of its constitutional 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 with respect to this Agreement or any Credit Support Document to which it is a party have been obtained and are in full force and effect and all conditions of any such consents have been complied with; and

(v) Obligations Binding. Its obligations under this Agreement and any Credit Support Document to which it is a party 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)).

(b) Absence of Certain Events. No Event of Default or Potential Event of Default or, to its knowledge, Termination Event with respect to it has occurred and is continuing and no such event or circumstance would occur as a result of its entering into or performing its obligations under this Agreement or any Credit Support Document to which it is a party.

(c) Absence of Litigation. There is not pending or, to its knowledge, threatened against it or any of its Affiliates any action, suit or proceeding at law or in equity or before any court, tribunal, governmental body, agency or official or any arbitrator that is likely to affect the legality, validity or enforceability against it of this Agreement or any Credit Support Document to which it is a party or its ability to perform its obligations under this Agreement or such Credit Support Document.

(d) Accuracy of Specified Information. All applicable information that is furnished in writing by or on behalf of it to the other party and is identified for the purpose of this Section 3(d) in the Schedule is, as of the date of the information, true, accurate and complete in every material respect.

(e) Payer Tax Representation. Each representation specified in the Schedule as being made by it for the purpose of this Section 3(e) is accurate and true.

(f) Payee Tax Representations. Each representation specified in the Schedule as being made by it for the purpose of this Section 3(f) is accurate and true.

4. Agreements

Each party agrees with the other that, so long as either party has or may have any obligation under this Agreement or under any Credit Support Document to which it is a party:—

(a) Furnish Specified Information. It will deliver to the other party or, in certain cases under subparagraph (iii) below, to such government or taxing authority as the other party reasonably directs:—

(i) any forms, documents or certificates relating to taxation specified in the Schedule or any Confirmation;

(ii) any other documents specified in the Schedule or any Confirmation; and

(iii) upon reasonable demand by such other party, any form or document that may be required or reasonably requested in writing in order to allow such other party or its Credit Support Provider to make a payment under this Agreement or any applicable Credit Support Document 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 the party in receipt of such demand), 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,

in each case by the date specified in the Schedule or such Confirmation or, if none is specified. as soon as reasonably practicable.

(b) Maintain Authorizations. It will use all reasonable efforts to maintain in full force and effect all consents of any governmental or other authority that are required to be obtained by it with respect to this Agreement or any Credit Support Document to which it is a party and will use all reasonable efforts to obtain any that may become necessary in the future.

(c) Comply with Laws. It will comply in all material respects with all applicable laws and orders to which it may be subject if failure so to comply would materially impair its ability to perform its obligations under this Agreement or any Credit Support Document to which it is a party.

(d) Tax Agreement. It will give notice of any failure of a representation made by it under Section 3(f) to be accurate and true promptly upon learning of such failure.

(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax levied or imposed upon it or in respect of its execution or performance of this Agreement by a jurisdiction in which it is incorporated, organized, managed and controlled, or considered to have its seat, or in which a branch or office through which it is acting for the purpose of this Agreement is located (“Stamp Tax Jurisdiction”) and will indemnify the other party against any Stamp Tax levied or imposed upon the other party or in respect of the other party’s execution or performance of this Agreement by any such Stamp Tax Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the other party.

5. Events of Default and Termination Events

(a) Events of Default. The occurrence at any time with respect to a party or, if applicable, any Credit Support Provider of such party or any Specified Entity of such party of any of the following events constitutes an event of default (an “Event of Default”) with respect to such party:—

(i) Failure to Pay or Deliver. Failure by the party to make, when due, any payment under this Agreement or delivery under Section 2(a)(i) or 2(e) required to be made by it if such failure is not remedied on or before the third Local Business Day after notice of such failure is given to the party;

(ii) Breach of Agreement. Failure by the party to comply with or perform any agreement or obligation (other than an obligation to make any payment under this Agreement or delivery under Section 2(a)(i) or 2(e) or to give notice of a Termination Event or any agreement or obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party in accordance with this Agreement if such failure is not remedied on or before the thirtieth day after notice of such failure is given to the party;

(iii) Credit Support Default.

(1) Failure by the party or any Credit Support Provider of such party to comply with or perform any agreement or obligation to be complied with or performed by it in accordance with any Credit Support Document if such failure is continuing after any applicable grace period has elapsed;

(2) the expiration or termination of such Credit Support Document or the failing or ceasing of such Credit Support Document to be in full force and effect for the purpose of this Agreement (in either case other than in accordance with its terms) prior to the satisfaction of all obligations of such party under each Transaction to which such Credit Support Document relates without the written consent of the other party; or

(3) the party or such Credit Support Provider disaffirms, disclaims, repudiates or rejects, in whole or in part, or challenges the validity of, such Credit Support Document;

(iv) Misrepresentation. A representation (other than a representation under Section 3(e) or (f)) made or repeated or deemed to have been made or repeated by the party or any Credit Support Provider of such party in this Agreement or any Credit Support Document proves to have been incorrect or misleading in any material respect when made or repeated or deemed to have been made or repeated;

(v) Default under Specified Transaction. The party, any Credit Support Provider of such party or any applicable Specified Entity of such party (1) 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 an early termination of, that Specified Transaction, (2) 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 such default continues for at least three Local Business Days if there is no applicable notice requirement or grace period) or (3) 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);

(vi) Cross Default. If “Cross Default” is specified in the Schedule as applying to the party, the occurrence or existence of (1) a default, event of default or other similar condition or event (however described) in respect of such party, any Credit Support Provider of such party or any applicable Specified Entity of such party under one or more agreements or instruments relating to Specified Indebtedness of any of them (individually or collectively) in an aggregate amount of not less than the applicable Threshold Amount (as specified in the Schedule) which has resulted in such Specified Indebtedness becoming, or becoming capable at such time of being declared, due and payable under such agreements or instruments, before it would otherwise have been due and payable or (2) a default by such party, such Credit Support Provider or such Specified Entity (individually or collectively) in making one or more payments on the due date thereof in an aggregate amount of not less than the applicable Threshold Amount under such agreements or instruments (after giving effect to any applicable notice requirement or grace period);

(vii) Bankruptcy. The party, any Credit Support Provider of such party or any applicable Specified Entity of such party:—

(1) is dissolved (other than pursuant to a consolidation, amalgamation or merger); (2) 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; (3) makes a general assignment, arrangement or composition with or for the benefit of its creditors; (4) 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 the institution or presentation thereof; (5) has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); (6) 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; (7) 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; (8) 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 (1) to (7) (inclusive); or (9) takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts; or

(viii) Merger Without Assumption. The party or any Credit Support Provider of such party consolidates or amalgamates with, or merges with or into, or transfers all or substantially all its assets to, another entity and, at the time of such consolidation, amalgamation, merger or transfer:—

(1) the resulting, surviving or transferee entity fails to assume all the obligations of such party or such Credit Support Provider under this Agreement or any Credit Support Document to which it or its predecessor was a party by operation of law or pursuant to an agreement reasonably satisfactory to the other party to this Agreement; or

(2) the benefits of any Credit Support Document fail to extend (without the consent of the other party) to the performance by such resulting, surviving or transferee entity of its obligations under this Agreement.

(b) Termination Events. The occurrence at any time with respect to a party or, if applicable, any Credit Support Provider of such party or any Specified Entity of such party of any event specified below constitutes an Illegality if the event is specified in (i) below, a Tax Event if the event is specified in (ii) below or a Tax Event Upon Merger if the event is specified in (iii) below, and, if specified to be applicable, a Credit Event Upon Merger if the event is specified pursuant to (iv) below or an Additional Termination Event if the event is specified pursuant to (v) below:—

(i) Illegality. Due to the adoption of, or any change in, any applicable law after the date on which a Transaction is entered into, or due to the promulgation of, or any change in, the interpretation by any court, tribunal or regulatory authority with competent jurisdiction of any applicable law after such date, it becomes unlawful (other than as a result of a breach by the party of Section 4(b)) for such party (which will be the Affected Party):—

(1) to perform any absolute or contingent obligation to make a payment or delivery or to receive a payment or delivery in respect of such Transaction or to comply with any other material provision of this Agreement relating to such Transaction; or

(2) to perform, or for any Credit Support Provider of such party to perform, any contingent or other obligation which the party (or such Credit Support Provider) has under any Credit Support Document relating to such Transaction;

(ii) 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 on which a Transaction is entered into (regardless of whether such action is taken or brought with respect to a party to this Agreement) or (y) a Change in Tax Law, the party (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 2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) 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 interest under Section 2(e), 6(d)(ii) or 6(e)) and no additional amount is required to be paid in respect of such Tax under Section 2(d)(i)(4) (other than by reason of Section 2(d)(i)(4)(A) or (B));

(iii) Tax Event Upon Merger. The party (the “Burdened Party”) on the next succeeding Scheduled Payment Date will either (1) be required to pay an additional amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a payment from which an amount has been deducted or withheld for or on account of any Indemnifiable Tax in respect of which the other party is not required to pay an additional amount (other than by reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a party consolidating or amalgamating with, or merging with or into, or transferring all or substantially all its assets to, another entity (which will be the Affected Party) where such action does not constitute an event described in Section 5(a)(viii);

(iv) Credit Event Upon Merger. If “Credit Event Upon Merger” is specified in the Schedule as applying to the party, such party (“X”), any Credit Support Provider of X or any applicable Specified Entity of X consolidates or amalgamates with, or merges with or into, or transfers all or substantially all its assets to, another entity and such action does not constitute an event described in Section 5(a)(viii) but the creditworthiness of the resulting, surviving or transferee entity is materially weaker than that of X, such Credit Support Provider or such Specified Entity, as the case may be, immediately prior to such action (and, in such event, X or its successor or transferee, as appropriate, will be the Affected Party); or

(v) Additional Termination Event. If any “Additional Termination Event” is specified in the Schedule or any 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 the Schedule or such Confirmation).

(c) Event of Default and Illegality. If an event or circumstance which would otherwise constitute or give rise to an Event of Default also constitutes an Illegality, it will be treated as an Illegality and will not constitute an Event of Default.

6. Early Termination

(a) Right to Terminate Following Event of Default. If at any time an Event of Default with respect to a party (the “Defaulting Party”) has occurred and is then continuing, the other party (the “Non-defaulting Party”) may, by not more than 20 days notice to the Defaulting Party specifying the relevant Event of Default, designate a day not earlier than the day such notice is effective as an Early Termination Date in respect of all outstanding Transactions. If, however, “Automatic Early Termination” is specified in the Schedule as applying to a party, then an Early Termination Date in respect of all outstanding Transactions will occur immediately upon the occurrence with respect to such party of an Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the extent analogous thereto, (8), and as of the time immediately preceding the institution of the relevant proceeding or the presentation of the relevant petition upon the occurrence with respect to such party of an Event of Default specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).

(b) Right to Terminate Following Termination Event.

(i) Notice. If a Termination Event occurs, an Affected Party will, promptly upon becoming aware of it, notify the other party, specifying the nature of that Termination Event and each Affected Transaction and will also give such other information about that Termination Event as the other party may reasonably require.

(ii) Transfer to Avoid Termination Event. If either an Illegality under Section 5(b)(i)(1) or a Tax Event occurs and there is only one Affected Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the Affected Party, the Affected Party will, as a condition to its right to designate an Early Termination Date under Section 6(b)(iv), 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 under Section 6(b)(i) all its rights and obligations under this Agreement in respect of the Affected Transactions to another of its Offices or Affiliates so that such Termination 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 under Section 6(b)(i).

Any such transfer by a party under this Section 6(b)(ii) 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.

(iii) Two Affected Parties. If an Illegality under Section 5(b)(i)(1) or 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 under Section 6(b)(i) on action to avoid that Termination Event.

(iv) Right to Terminate. If:—

(1) a transfer under Section 6(b)(ii) or an agreement under Section 6(b)(iii), as the case may be, has not been effected with respect to all Affected Transactions within 30 days after an Affected Party gives notice under Section 6(b)(i); or

(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon Merger or an Additional Termination Event occurs, or a Tax Event Upon Merger occurs and the Burdened Party is not the Affected Party,

either party in the case of an Illegality, the Burdened Party in the case of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event or an Additional Termination Event if there is more than one Affected Party, or the party which is not the Affected Party in the case of a Credit Event Upon Merger or an Additional Termination Event if there is only one Affected Party may, by not more than 20 days notice to the other party and provided that the relevant Termination Event is then continuing, designate a day not earlier than the day such notice is effective as an Early Termination Date in respect of all Affected Transactions.

(i) If notice designating an Early Termination Date is given under Section 6(a) or (b), the Early Termination Date will occur on the date so designated, whether or not the relevant Event of Default or Termination Event is then continuing.

(ii) Upon the occurrence or effective designation of an Early Termination Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in respect of the Terminated Transactions will be required to be made, but without prejudice to the other provisions of this Agreement. The amount, if any, payable in respect of an Early Termination Date shall be determined pursuant to Section 6(e).

(d) Calculations.

(i) Statement. On or as soon as reasonably practicable following the occurrence of an Early Termination Date, each party will make the calculations on its part, if any, contemplated by Section 6(e) and will provide to the other party a statement (1) showing, in reasonable detail, such calculations (including all relevant quotations and specifying any amount payable under Section 6(e)) and (2) giving details of the relevant account to which any amount payable to it is to be paid. In the absence of written confirmation from the source of a quotation obtained in determining a Market Quotation, the records of the party obtaining such quotation will be conclusive evidence of the existence and accuracy of such quotation.

(ii) Payment Date. An amount calculated as being due in respect of any Early Termination Date under Section 6(e) will be payable on the day that notice of the amount payable is effective (in the case of an Early Termination Date which is designated or occurs as a result of an Event of Default) and on the day which is two Local Business Days after the day on which notice of the amount payable is effective (in the case of an Early Termination Date which is designated as a result of a Termination Event). Such amount will be paid together with (to the extent permitted under applicable law) interest thereon (before as well as after judgment) in the Termination Currency, from (and including) the relevant Early Termination Date to (but excluding) the date such amount is paid, at the Applicable Rate. Such interest will be calculated on the basis of daily compounding and the actual number of days elapsed.

(e) Payments on Early Termination. If an Early Termination Date occurs, the following provisions shall apply based on the parties’ election in the Schedule of a payment measure, either “Market Quotation” or “Loss,” and a payment method, either the “First Method” or the “Second Method.” If the parties fail to designate a payment measure or payment method in the Schedule, it will be deemed that “Market Quotation” or the “Second Method,” as the case may be, shall apply. The amount, if any, payable in respect of an Early Termination Date and determined pursuant to this Section will be subject to any Set-off.

(i) Events of Default. If the Early Termination Date results from an Event of Default:—

(1) First Method and Market Quotation. If the First Method and Market Quotation apply, the Defaulting Party will pay to the Non-defaulting Party the excess, if a positive number, of (A) the sum of the Settlement Amount (determined by the Non-defaulting Party) in respect of the Terminated Transactions and the Termination Currency Equivalent of the Unpaid Amounts owing to the Non-defaulting Party over (B) the Termination Currency Equivalent of the Unpaid Amounts owing to the Defaulting Party.

(2) First Method and Loss. If the First Method and Loss apply, the Defaulting Party will pay to the Non-defaulting Party, if a positive number, the Non-defaulting Party’s Loss in respect of this Agreement.

(3) Second Method and Market Quotation. If the Second Method and Market Quotation apply, an amount will be payable equal to (A) the sum of the Settlement Amount (determined by the Non-defaulting Party) in respect of the Terminated Transactions and the Termination Currency Equivalent of the Unpaid Amounts owing to the Non-defaulting Party less (B) the Termination Currency Equivalent of the Unpaid Amounts owing to the Defaulting Party. If that amount is a positive number, the Defaulting Party will pay it to the Non-defaulting Party; if it is a negative number, the Non-defaulting Party will pay the absolute value of that amount to the Defaulting Party.

(4) Second Method and Loss. If the Second Method and Loss apply, an amount will be payable equal to the Non-defaulting Party’s Loss in respect of this Agreement. If that amount is a positive number, the Defaulting Party will pay it to the Non-defaulting Party; if it is a negative number, the Non-defaulting Party will pay the absolute value of that amount to the Defaulting Party.

(ii) Termination Events. If the Early Termination Date results from a Termination Event:—

(1) One Affected Party. If there is one Affected Party, the amount payable will be determined in accordance with Section 6(e)(i)(3), if Market Quotation applies, or Section 6(e)(i)(4), if Loss applies, except that, in either case, references to the Defaulting Party and to the Non-defaulting Party will be deemed to be references to the Affected Party and the party which is not the Affected Party, respectively, and, if Loss applies and fewer than all the Transactions are being terminated, Loss shall be calculated in respect of all Terminated Transactions.

(2) Two Affected Parties. If there are two Affected Parties:—

(A) if Market Quotation applies, each party will determine a Settlement Amount in respect of the Terminated Transactions, and an amount will be payable equal to (I) the sum of (a) one-half of the difference between the Settlement Amount of the party with the higher Settlement Amount (“X”) and the Settlement Amount of the party with the lower Settlement Amount (“Y”) and (b) the Termination Currency Equivalent of the Unpaid Amounts owing to X less (II) the Termination Currency Equivalent of the Unpaid Amounts owing to Y; and

(B) if Loss applies, each party will determine its Loss in respect of this Agreement (or, if fewer than all the Transactions are being terminated, in respect of all Terminated Transactions) and an amount will be payable equal to one-half of the difference between the Loss of the party with the higher Loss (“X”) and the Loss of the party with the lower Loss (“Y”).

If the amount payable is a positive number, Y will pay it to X; if it is a negative number, X will pay the absolute value of that amount to Y.

(iii) Adjustment for Bankruptcy. In circumstances where an Early Termination Date occurs because “Automatic Early Termination” applies in respect of a party, the amount determined under this Section 6(e) will be subject to such adjustments as are appropriate and permitted by law to reflect any payments or deliveries made by one party to the other under this Agreement (and retained by such other party) during the period from the relevant Early Termination Date to the date for payment determined under Section 6(d)(ii).

(iv) Pre-Estimate. The parties agree that if Market Quotation applies an amount recoverable under this Section 6(e) is a reasonable pre-estimate of loss and not a penalty. Such amount is payable for the loss of bargain and the loss of protection against future risks and except as otherwise provided in this Agreement neither party will be entitled to recover any additional damages as a consequence of such losses.

7. Transfer

Subject to Section 6(b)(ii), neither this Agreement nor any interest or obligation in or under this Agreement may be transferred (whether by way of security or otherwise) by either party without the prior written consent of the other party, except that:—

(a) a party may make such a transfer of this Agreement pursuant to a consolidation or amalgamation with, or merger with or into, or transfer of all or substantially all its assets to, another entity (but without prejudice to any other right or remedy under this Agreement); and

(b) a party may make such a transfer of all or any part of its interest in any amount payable to it from a Defaulting Party under Section 6(e).

Any purported transfer that is not in compliance with this Section will be void.

8. Contractual Currency

(a) Payment in the Contractual Currency. Each payment under this Agreement will be made in the relevant currency specified in this Agreement for that payment (the “Contractual Currency”). To the extent permitted by applicable law, any obligation to make payments under this Agreement in the Contractual Currency will not be discharged or satisfied by any tender in any currency other than the Contractual Currency, except to the extent such tender results in the actual receipt by the party to which payment is owed, acting in a reasonable manner and in good faith in converting the currency so tendered into the Contractual Currency, of the full amount in the Contractual Currency of all amounts payable in respect of this Agreement. If for any reason the amount in the Contractual Currency so received falls short of the amount in the Contractual Currency payable in respect of this Agreement, the party required to make the payment will, to the extent permitted by applicable law, immediately pay such additional amount in the Contractual Currency as may be necessary to compensate for the shortfall. If for any reason the amount in the Contractual Currency so received exceeds the amount in the Contractual Currency payable in respect of this Agreement, the party receiving the payment will refund promptly the amount of such excess.

(b) Judgments. To the extent permitted by applicable law, if any judgment or order expressed in a currency other than the Contractual Currency is rendered (i) for the payment of any amount owing in respect of this Agreement, (ii) for the payment of any amount relating to any early termination in respect of this Agreement or (iii) in respect of a judgment or order of another court for the payment of any amount described in (i) or (ii) above, the party seeking recovery, after recovery in full of the aggregate amount to which such party is entitled pursuant to the judgment or order, will be entitled to receive immediately from the other party the amount of any shortfall of the Contractual Currency received by such party as a consequence of sums paid in such other currency and will refund promptly to the other party any excess of the Contractual Currency received by such party as a consequence of sums paid in such other currency if such shortfall or such excess arises or results from any variation between the rate of exchange at which the Contractual Currency is converted into the currency of the judgment or order for the purposes of such judgment or order and the rate of exchange at which such party is able, acting in a reasonable manner and in good faith in converting the currency received into the Contractual Currency, to purchase the Contractual Currency with the amount of the currency of the judgment or order actually received by such party. The term “rate of exchange” includes, without limitation, any premiums and costs of exchange payable in connection with the purchase of or conversion into the Contractual Currency.

(c) Separate Indemnities. To the extent permitted by applicable law, these indemnities constitute separate and independent obligations from the other obligations in this Agreement, will be enforceable as separate and independent causes of action, will apply notwithstanding any indulgence granted by the party to which any payment is owed and will not be affected by judgment being obtained or claim or proof being made for any other sums payable in respect of this Agreement.

(d) Evidence of Loss. For the purpose of this Section 8, it will be sufficient for a party to demonstrate that it would have suffered a loss had an actual exchange or purchase been made.

9. Miscellaneous

(a) Entire Agreement. This Agreement constitutes the entire agreement and understanding of the parties with respect to its subject matter and supersedes all oral communication and prior writings with respect thereto.

(b) Amendments. No amendment, modification or waiver in respect of this Agreement will be effective unless in writing (including a writing evidenced by a facsimile transmission) and executed by each of the parties or confirmed by an exchange of telexes or electronic messages on an electronic messaging system.

(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and 6(c)(ii), the obligations of the parties under this Agreement will survive the termination of any Transaction.

(d) Remedies Cumulative. Except as provided in this Agreement, the rights, powers, remedies and privileges provided in this Agreement are cumulative and not exclusive of any rights, powers, remedies and privileges provided by law.

(e) Counterparts and Confirmations.

(i) This Agreement (and each amendment, modification and waiver in respect of it) may be executed and delivered in counterparts (including by facsimile transmission), each of which will be deemed an original.

(ii) The parties intend that they are legally bound by the terms of each Transaction from the moment they agree to those terms (whether orally or otherwise). A Confirmation shall be entered into as soon as practicable and may be executed and delivered in counterparts (including by facsimile transmission) or be created by an exchange of telexes or by an exchange of electronic messages on an electronic messaging system, which in each case will be sufficient for all purposes to evidence a binding supplement to this Agreement. The parties will specify therein or through another effective means that any such counterpart, telex or electronic message constitutes a Confirmation.

(f) No Waiver of Rights. A failure or delay in exercising any right, power or privilege in respect of this Agreement will not be presumed to operate as a waiver, and a single or partial exercise of any right, power or privilege will not be presumed to preclude any subsequent or further exercise, of that right, power or privilege or the exercise of any other right, power or privilege.

(g) Headings. The headings used in this Agreement are for convenience of reference only and are not to affect the construction of or to be taken into consideration in interpreting this Agreement.

10. Offices; Multibranch Parties

(a) If Section 10(a) is specified in the Schedule as applying, each party that enters into a Transaction through an Office other than its head or home office represents to the other party that, notwithstanding the place of booking office or jurisdiction of incorporation or organization of such party, the obligations of such party are the same as if it had entered into the Transaction through its head or home office. This representation will be deemed to be repeated by such party on each date on which a Transaction is entered into.

(b) Neither party may change the Office through which it makes and receives payments or deliveries for the purpose of a Transaction without the prior written consent of the other party.

(c) If a party is specified as a Multibranch Party in the Schedule, such Multibranch Party may make and receive payments or deliveries under any Transaction through any Office listed in the Schedule, and the Office through which it makes and receives payments or deliveries with respect to a Transaction will be specified in the relevant Confirmation.

11. Expenses

A Defaulting 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 Tax, incurred by such other party by reason of the enforcement and protection of its rights under this Agreement or any Credit Support Document to which the Defaulting Party is a party or by reason of the early termination of any Transaction, including, but not limited to, costs of collection.

12. Notices

(a) Effectiveness. Any notice or other communication in respect of this Agreement may be given in any manner set forth below (except that a notice or other communication under Section 5 or 6 may not be given by facsimile transmission or electronic messaging system) to the address or number or in accordance with the electronic messaging system details provided (see the Schedule) 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 telex, on the date the recipient’s answerback is received;

(iii) if sent by facsimile transmission, on the date that transmission is received by a responsible employee of the recipient in legible form (it being agreed that the burden of proving receipt will be on the sender and will not be met by a transmission report generated by the sender’s facsimile machine);

(iv) 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; or

(v) if sent by electronic messaging system, on the date that electronic message is received, unless the date of that delivery (or attempted delivery) or that receipt, as applicable, is not a Local Business Day or that communication is delivered (or attempted) or received, as applicable, after the close of business on a Local Business Day, in which case that communication shall be deemed given and effective on the first following day that is a Local Business Day.

(b) Change of Addresses. Either party may by notice to the other change the address, telex or facsimile number or electronic messaging system details at which notices or other communications are to be given to it.

13. Governing Law and Jurisdiction

(a) Governing Law. This Agreement will be governed by and construed in accordance with the law specified in the Schedule.

(b) Jurisdiction. With respect to any suit, action or proceedings relating to this Agreement (“Proceedings”), each party irrevocably:—

(i) submits to the jurisdiction of the English courts, if this Agreement is expressed to be governed by English law, or to the non-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, if this Agreement is expressed to be governed by the laws of the State of New York; and

(ii) 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.

Nothing in this Agreement precludes either party from bringing Proceedings in any other jurisdiction (outside, if this Agreement is expressed to be governed by English law, the Contracting States, as defined in Section 1(3) of the Civil Jurisdiction and Judgments Act 1982 or any modification, extension or re-enactment thereof for the time being in force) nor will the bringing of Proceedings in any one or more jurisdictions preclude the bringing of Proceedings in any other jurisdiction.

(c) Service of Process. Each party irrevocably appoints the Process Agent (if any) specified opposite its name in the Schedule to receive, for it and on its behalf, service of process in any Proceedings. If for any reason any party’s Process Agent is unable to act as such, such party will promptly notify the other party and within 30 days appoint a substitute process agent acceptable to the other party. The parties irrevocably consent to service of process given in the manner provided for notices in Section 12. Nothing in this Agreement will affect the right of either party to serve process in any other manner permitted by law.

(d) Waiver of Immunities. Each party irrevocably waives, to the fullest extent permitted by applicable law, with respect to itself and its revenues and assets (irrespective of their use or intended use), all immunity on the grounds of sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any court, (iii) relief by way of injunction, order for specific performance or for recovery of property, (iv) attachment of its assets (whether before or after judgment) and (v) execution or enforcement of any judgment to which it or its revenues or assets might otherwise be entitled in any Proceedings in the courts of any jurisdiction and irrevocably agrees, to the extent permitted by applicable law, that it will not claim any such immunity in any Proceedings.

14. Definitions

As used in this Agreement:—

“Additional Termination Event” has the meaning specified in Section 5(b).

“Affected Party” has the meaning specified in Section 5(b).

“Affected Transactions” means (a) with respect to any Termination Event consisting of an Illegality, Tax Event or Tax Event Upon Merger, all Transactions affected by the occurrence of such Termination Event and (b) with respect to any other Termination Event, all Transactions.

“Affiliate” means, subject to the Schedule, 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.

“Applicable Rate” means:—

(a) in respect of obligations payable or deliverable (or which would have been but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;

(b) in respect of an obligation to pay an amount under Section 6(e) of either party from and after the date (determined in accordance with Section 6(d)(ii)) on which that amount is payable, the Default Rate;

(c) is respect of all other obligations payable or deliverable (or which would have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default Rate; and

(d) in all other cases, the Termination Rate.

“Burdened Party” has the meaning specified in Section 5(b).

“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 law) that occurs on or after the date on which the relevant Transaction is entered into.

“consent” includes a consent, approval, action, authorization, exemption, notice, filing, registration or exchange control consent.

“Credit Event Upon Merger” has the meaning specified in Section 5(b).

“Credit Support Document” means any agreement or instrument that is specified as such in this Agreement.

“Credit Support Provider” has the meaning specified in the Schedule.

“Default Rate” means a rate per annum equal to the cost (without proof or evidence of any actual cost) to the relevant payee (as certified by it) if it were to fund or of funding the relevant amount plus 1% per annum.

“Defaulting Party” has the meaning specified in Section 6(a).

“Early Termination Date” means the date determined in accordance with Section 6(a) or 6(b)(iv).

“Event of Default” has the meaning specified in Section 5(a) and, if applicable, in the Schedule.

“Illegality” has the meaning specified in Section 5(b).

“Indemnifiable Tax” means any Tax other than a Tax that would not be imposed in respect of a payment under this Agreement 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 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, this Agreement or a Credit Support Document).

“law” includes any treaty, law, rule or regulation (as modified, in the case of tax matters, by the practice of any relevant governmental revenue authority) and “lawful” and “unlawful” will be construed accordingly.

“Local Business Day” means, subject to the Schedule, a day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) (a) in relation to any obligation under Section 2(a)(i), in the place(s) specified in the relevant Confirmation or, if not so specified, as otherwise agreed by the parties in writing or determined pursuant to provisions contained, or incorporated by reference, in this Agreement, (b) in relation to any other payment, in the place where the relevant account is located and, if different, in the principal financial centre, if any, of the currency of such payment, (c) in relation to any notice or other communication, including notice contemplated under Section 5(a)(i), in the city specified in the address for notice provided by the recipient and, in the case of a notice contemplated by Section 2(b), in the place where the relevant new account is to be located and (d) in relation to Section 5(a)(v)(2), in the relevant locations for performance with respect to such Specified Transaction.

“Loss” means, with respect to this Agreement or one or more Terminated Transactions, as the case may be, and a party, the Termination Currency Equivalent of an amount that party reasonably determines in good faith to be its total losses and costs (or gain, in which case expressed as a negative number) in connection with this Agreement or that Terminated Transaction or group of Terminated Transactions, as the case may be, including any loss of bargain, cost of funding or, at the election of such party but without duplication, loss or cost incurred as a result of its terminating, liquidating, obtaining or reestablishing any hedge or related trading position (or any gain resulting from any of them). Loss includes losses and costs (or gains) in respect of any payment or delivery required to have been made (assuming satisfaction of each applicable condition precedent) on or before the relevant Early Termination Date and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3) or 6(e)(ii)(2)(A) applies. Loss does not include a party’s legal fees and out-of-pocket expenses referred to under Section 11. A party will determine its Loss as of the relevant Early Termination Date or, if that is not reasonably practicable, as of the earliest date thereafter as is reasonably practicable. A party may (but need not) determine its Loss by reference to quotations of relevant rates or prices from one or more leading dealers in the relevant markets.

“Market Quotation” means, with respect to one or more Terminated Transactions and a party making the determination, an amount determined on the basis of quotations from Reference Market-makers. Each quotation will be for an amount, if any, that would be paid to such party (expressed as a negative number) or by such party (expressed as a positive number) in consideration of an agreement between such party (taking into account any existing Credit Support Document with respect to the obligations of such party) and the quoting Reference Market-maker to enter into a transaction (the “Replacement Transaction”) that would have the effect of preserving for such party the economic equivalent of any payment or delivery (whether the underlying obligation was absolute or contingent and assuming the satisfaction of each applicable condition precedent) by the parties under Section 2(a)(i) in respect of such Terminated Transaction or group of Terminated Transactions that would, but for the occurrence of the relevant Early Termination Date, have been required after that date. For this purpose, Unpaid Amounts in respect of the Terminated Transaction or group of Terminated Transactions are to be excluded but, without limitation, any payment or delivery that would, but for the relevant Early Termination Date, have been required (assuming satisfaction of each applicable condition precedent) after that Early Termination Date is to be included. The Replacement Transaction would be subject to such documentation as such party and the Reference Market-maker may, in good faith, agree. The party making the determination (or its agent) will request each Reference Market-maker to provide its quotation to the extent reasonably practicable as of the same day and time (without regard to different time zones) on or as soon as reasonably practicable after the relevant Early Termination Date. The day and time as of which those quotations are to be obtained will be selected in good faith by the party obliged to make a determination under Section 6(e), and, if each party is so obliged, after consultation with the other. If more than three quotations are provided, the Market Quotation will be the arithmetic mean of the quotations, without regard to the quotations having the highest and lowest values. If exactly three such quotations are provided, the Market Quotation will be the quotation remaining after disregarding the highest and lowest quotations. For this purpose, if more than one quotation has the same highest value or lowest value, then one of such quotations shall be disregarded. If fewer than three quotations are provided, it will be deemed that the Market Quotation in respect of such Terminated Transaction or group of Terminated Transactions cannot be determined.

“Non-default Rate” means a rate per annum equal to the cost (without proof or evidence of any actual cost) to the Non-defaulting Party (as certified by it) if it were to fund the relevant amount.

“Non-defaulting Party” has the meaning specified in Section 6(a).

“Office” means a branch or office of a party, which may be such party’s head or home office.

“Potential Event of Default” means any event which, with the giving of notice or the lapse of time or both, would constitute an Event of Default.

“Reference Market-makers” means four leading dealers in the relevant market selected by the party determining a Market Quotation in good faith (a) from among dealers of the highest credit standing which satisfy all the criteria that such party applies generally at the time in deciding whether to offer or to make an extension of credit and (b) to the extent practicable, from among such dealers having an office in the same city.

“Relevant Jurisdiction” means, with respect to a party, the jurisdictions (a) in which the party is incorporated organized, managed and controlled or considered to have its seat, (b) where an Office through which the party is acting for purposes of this Agreement is located, (c) in which the party executes this Agreement and (d) in relation to any payment, from or through which such payment is made.

“Scheduled Payment Date” means a date on which a payment or delivery is to be made under Section 2(a)(i) with respect to a Transaction.

“Set-off” means set-off, offset, combination of accounts, right of retention or withholding or similar right or requirement to which the payer of an amount under Section 6 is entitled or subject (whether arising under this Agreement, another contract, applicable law or otherwise) that is exercised by, or imposed on, such payer.

“Settlement Amount” means, with respect to a party and any Early Termination Date, the sum of:—

(a) the Termination Currency Equivalent of the Market Quotations (whether positive or negative) for each Terminated Transaction or group of Terminated Transactions for which a Market Quotation is determined; and

(b) such party’s Loss (whether positive or negative and without reference to any Unpaid Amounts) for each Terminated Transaction or group of Terminated Transactions for which a Market Quotation cannot be determined or would not (in the reasonable belief of the party making the determination) produce a commercially reasonable result.

“Specified Entity” has the meaning specified in the Schedule.

“Specified Indebtedness” means, subject to the Schedule, any obligation (whether present or future, contingent or otherwise, as principal or surety or otherwise) in respect of borrowed money.

“Specified Transaction” means, subject to the Schedule, (a) any transaction (including an agreement with respect thereto) now existing or hereafter entered into between one party to this Agreement (or any Credit Support Provider of such party or any applicable Specified Entity of such party) and the other party to this Agreement (or any Credit Support Provider of such other party or any applicable Specified Entity of such other party) 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 similar transaction (including any option with respect to any of these transactions), (b) any combination of these transactions and (c) any other transaction identified as a Specified Transaction in this Agreement or the relevant confirmation.

“Stamp Tax” means any stamp, registration, documentation or similar tax.

“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 5(b).

“Tax Event Upon Merger” has the meaning specified in Section 5(b).

“Terminated Transactions” means with respect to any Early Termination Date (a) if resulting from a Termination Event, all Affected Transactions and (b) if resulting from an Event of Default, all Transactions (in either case) in effect immediately before the effectiveness of the notice designating that Early Termination Date (or, if “Automatic Early Termination” applies, immediately before that Early Termination Date).

“Termination Currency” has the meaning specified in the Schedule.

“Termination Currency Equivalent” means, in respect of any amount denominated in the Termination Currency, such Termination Currency amount and, in respect of any amount denominated in a currency other than the Termination Currency (the “Other Currency”), the amount in the Termination Currency determined by the party making the relevant determination as being required to purchase such amount of such Other Currency as at the relevant Early Termination Date, or, if the relevant Market Quotation or Loss (as the case may be), is determined as of a later date, that later date, with the Termination Currency at the rate equal to the spot exchange rate of the foreign exchange agent (selected as provided below) for the purchase of such Other Currency with the Termination Currency at or about 11:00 a.m. (in the city in which such foreign exchange agent is located) on such date as would be customary for the determination of such a rate for the purchase of such Other Currency for value on the relevant Early Termination Date or that later date. The foreign exchange agent will, if only one party is obliged to make a determination under Section 6(e), be selected in good faith by that party and otherwise will be agreed by the parties.

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“Termination Event” means an Illegality, a Tax Event or a Tax Event Upon Merger or, if specified to be applicable, a Credit Event Upon Merger or an Additional Termination Event.

“Termination Rate” means a rate per annum equal to the arithmetic mean of the cost (without proof or evidence of any actual cost) to each party (as certified by such party) if it were to fund or of funding such amounts .

“Unpaid Amounts” owing to any party means, with respect to an Early Termination Date, the aggregate of (a) in respect of all Terminated Transactions, the amounts that became payable (or that would have become payable but for Section 2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early Termination Date and which remain unpaid as at such Early Termination Date and (b) in respect of each Terminated Transaction, for each obligation under Section 2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be settled by delivery to such party on or prior to such Early Termination Date and which has not been so settled as at such Early Termination Date, an amount equal to the fair market value of that which was (or would have been) required to be delivered as of the originally scheduled date for delivery, in each case together with (to the extent permitted under applicable law) interest, in the currency of such amounts, from (and including) the date such amounts or obligations were or would have been required to have been paid or performed to (but excluding) such Early Termination Date, at the Applicable Rate. Such amounts of interest will be calculated on the basis of daily compounding and the actual number of days elapsed. The fair market value of any obligation referred to in clause (b) above shall be reasonably determined by the party obliged to make the determination under Section 6(e) or, if each party is so obliged, it shall be the average of the Termination Currency Equivalents of the fair market values reasonably determined by both parties.

IN WITNESS WHEREOF the parties have executed this document on the respective dates specified below with effect from the date specified on the first page of this document.


		MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

		By:

				Name:
				Title:
				Date:



		By:

				Name:
				Title:
				Date:

SCHEDULE
to the
ISDA Master Agreement
dated as of
__________
between
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
(“Party A”)
and

__________________________________________

(“Party B”)
Part 1.
Termination Provisions

In this Agreement:

(a) The “Cross Default” provisions of Section 5(a)(vi) will apply to Party A and to Party B.

“Threshold Amount” means, for Party A, U.S. $100,000,000, and for Party B, U.S. $500,000.

(b) “Termination Currency” means United States Dollars.

Part 2.
Documents to be delivered are:


Party Required
to deliver	Form/Document/	Date by which to be	Covered by Section
Document	Certificate	Delivered	3(d) Representation

Party B	Certificate or other documents evidencing the authority of the party entering into this Agreement and any	Upon the execution of this Agreement.	Yes.
	Confirmation.

Party B	Letter of Representations in substantially the form of	Upon execution of this Agreement.	Yes.
	Exhibit A.

Part 3.
Miscellaneous

(a) Addresses for Notices: For the purpose of Section 12(a) of this Agreement:

Address for notices or communications to Party A:

Address for notices of communications to Party B: Unless provided below, as specified in the applicable

(b)

Process Agent. For the purpose of Section 13(c):

Party A appoints as its Process Agent: Not Applicable.

Party B appoints as its Process Agent: Not Applicable, unless specified.

(d) Credit Support Document. Details of any Credit Support Document:

Party A: Not Applicable

Party B: 1) The Cash Management Account Agreement (“CMA”) between Party A and Party B; and 2) the Credit Support Annex (“CSA”) which supplements, forms part of and is subject to this Agreement, annexed hereto as Exhibit B. In the event of any inconsistency between the CSA and the CMA, the CSA shall govern.

(e) Governing Law and Jurisdiction. This Agreement will be governed by and construed in accordance with the laws of the State of New York without reference to choice of law doctrine.

(f) Arbitration. Each party agrees that all controversies which may arise under this Agreement, including but not limited to those involving any Transaction or the construction, performance, or breach of this Agreement shall be determined by arbitration. Any arbitration under this Agreement shall be conducted only before The New York Stock Exchange, Inc. (“NYSE”), The American Stock Exchange, Inc. (“ASE”), or an Arbitration Facility provided by any other exchange (“Other Exchanges”), or The National Association of Securities Dealers, Inc. (“NASD”), and in accordance with its arbitration rules then in force. Party B may elect in the first instance whether arbitration shall be conducted before the NYSE, the ASE, Other Exchanges, or the NASD, but if Party B fails to make such election, by registered letter or telegram addressed to Party A before the expiration of five days after receipt of a written request from Party A to make such election, then Party A may make such election. Judgment upon the award of the arbitration may be entered in any court, state or federal, having jurisdiction. Party A and Party B understand and agree that: (A) arbitration is final and binding on the parties; (B) each party is waiving its right to seek remedies in court, including the right to Jury Trial; (C) pre-arbitration discovery is generally more limited than and different from court proceedings; (D) the arbitrator’s award is not required to include factual findings or legal reasoning and any Party’s right to appeal or to seek modification of rulings by the arbitrators is strictly limited; and (E) the panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry.

(g) Payments on Early Termination. For purposes of Section 6(e) of the Agreement, Market Quotation and the Second Method shall apply.

Part 4.
Other Provisions

(1) Transfer. Notwithstanding the provisions of Section 7, Party A may assign its rights and delegate its obligations under any Transaction, in whole or in part, to any affiliate (an “Assignee”) of ML & Co., effective (the “Effective Date”) upon delivery to Party B of both (a) an executed acceptance and assumption by the Assignee (an “Assumption”) of the transferred obligations of Party A under the Transaction(s) (the “Transferred Obligations”); and (b) an executed guarantee (the “Guarantee”) of ML & Co., of the Transferred Obligations. On the Effective Date, (a) Party A shall be released from all obligations and liabilities arising under the Transferred Obligations; and (b) the Transferred Obligations shall cease to be Transaction(s) under this Agreement and shall be deemed to be Transaction(s) under the Master Agreement between Assignee and Party B, provided that, if at such time Assignee and Party B have not entered into a Master Agreement, Assignee and Party B shall be deemed to have entered into an ISDA form of Master Agreement (Multicurrency-Cross Border) without any Schedule attached thereto.

(2) Acknowledgment. Party B acknowledges that Party A has a first priority lien, charge and security interest on all securities and property covered by the CMA which secures, among other things, Party B’s obligations arising under, in connection with or pursuant to this Agreement or any Transaction contemplated hereunder.

(3) Applicability of Certain Provisions. If Party B is a natural person, those provisions relating solely to non natural persons shall not apply to Party B.

(4) References. Whenever the Agreement refers to a party as “it” or “its”, such reference shall be interpreted to also include Party B.

EXHIBIT B

Credit Support Annex

(ISDA LOGO)

International Swap Dealers Association, Inc.

CREDIT SUPPORT ANNEX

to the Schedule to the

ISDA MASTER AGREEMENT

dated as of _______________

between


MERRILL LYNCH, PIERCE,	and
FENNER & SMITH INCORPORATED
(“Party A”)		(“Party B”)

This Annex supplements, forms part of, and is subject to, the above-referenced Agreement, is part of its Schedule and is a Credit Support Document under this Agreement with respect to Party B.

Accordingly, the parties agree as follows:

Paragraph 1. Interpretation

(a) Definitions and Inconsistency. Capitalized terms not otherwise defined herein or elsewhere in this Agreement have the meanings specified pursuant to Paragraph 12, and all references in this Annex to Paragraphs are to Paragraphs of this Annex. In the event of any inconsistency between this Annex and the other provisions of this Schedule, this Annex will prevail, and in the event of any inconsistency between Paragraph 13 and the other provisions of this Annex, Paragraph 13 will prevail.

(b) Secured Party and Pledgor. All references in this Annex to the “Secured Party” will be to either party when acting in that capacity and all corresponding references to the Pledgor will be to the other party when acting in that capacity; provided, however, that if Other Posted Support is held by a party to this Annex, all references herein to that party as the Secured Party with respect to that Other Posted Support will be to that party as the beneficiary thereof and will not subject that support or that party as the beneficiary thereof to provisions of law generally relating to security interests and secured parties.

Paragraph 2. Security Interest

Each party, as the Pledgor, hereby pledges to the other party, as the Secured Party, as security for its Obligations and grants to the Secured Party a first priority continuing security interest in, lien on and right of Set-off against all Posted Collateral Transferred to or received by the Secured Party hereunder. Upon the Transfer by the Secured Party to the Pledgor or Posted Collateral, the security interest and lien granted hereunder on that Posted Collateral will be released immediately and, to the extent possible, without any further action by either party.

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Paragraph 3. Credit Support Obligations

(a) Delivery Amount. Subject to Paragraphs 4 and 5, upon demand made by the Secured Party on or promptly following a Valuation Date, if the Delivery Amount for that Valuation Date equals or exceeds the Pledgor’s Minimum Transfer Amount, then the Pledgor will Transfer to the Secured Party Eligible Credit Support having a Value as of the date of Transfer at least equal to the applicable Delivery Amount (rounded pursuant to Paragraph 13). Unless otherwise specified in Paragraph 13, the “Delivery Amount” applicable to the Pledgor for any Valuation Date will equal the amount by which:

(i) the Credit Support Amount

exceeds

(ii) the Value as of that Valuation Date of all Posted Credit Support held by the Secured Party.

(b) Return Amount. Subject to Paragraphs 4 and 5, upon a demand made by the Pledgor on or promptly following a Valuation Date, if the Return Amount for that Valuation Date equals or exceeds Secured Party’s Minimum Transfer Amount, then the Secured Party will Transfer to the Pledgor Posted Credit Support specified by the Pledgor in that demand having a Value as of the date of Transfer as close as practicable to the applicable Return Amount (rounded pursuant to Paragraph 13). Unless otherwise specified in Paragraph 13, the “Return Amount” applicable to the Secured Party for any Valuation Date will equal the amount by which:

(i) the Value as of that Valuation Date of all Posted Credit Support held by the Secured Party

exceeds

(ii) the Credit Support Amount.

“Credit Support Amount” means, unless otherwise specified in Paragraph 13, for any Valuation Date (i) the Secured Party’s Exposure for that Valuation Date plus (ii) the aggregate of all Independent Amounts applicable to the Pledgor, if any, minus (iii) all Independent Amounts applicable to the Secured Party, if any, minus (iv) the Pledgor’s Threshold; provided, however, that the Credit Support Amount will be deemed to be zero whenever the calculation of Credit Support Amount yields a number less than zero.

Paragraph 4. Conditions Precedent, Transfer Timing, Calculations and Substitutions

(a) Conditions Precedent. Each Transfer obligation of the Pledgor under Paragraphs 3 and 5 and of the Secured Party under Paragraphs 3, 4(d)(ii), 5 and 6(d) is subject to the conditions precedent that:

(i) no Event of Default, Potential Event of Default or Specified Condition has occurred and is continuing with respect to the other party; and

(ii) no Early Termination Date for which any unsatisfied payment obligations exist has occurred or been designated as the result of an Event of Default or Specified Condition with respect to the other party.

(b) Transfer Timing. Subject to Paragraphs 4(a) and 5 and unless otherwise specified, if a demand for the Transfer of Eligible Credit Support or Posted Credit Support is made by the Notification Time, then the relevant Transfer will be made not later than the close of business on the next Local Business Day; if a demand is made after the Notification Time, then the relevant Transfer will be made not later than the close of business on the second Local Business Day thereafter.

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(c) Calculations. All calculations of Value and Exposure for purposes of Paragraphs 3 and 6(d) will be made by the Valuation Agent as of the Valuation Time. The Valuation Agent will notify each party (or the other party, if the Valuation Agent is a party) of its calculations not later than the Notification Time on the Local Business Day following the applicable Valuation Date (or in the case of Paragraph 6(d), following the date of calculation.

(d) Substitutions.

(i) Unless otherwise specified in Paragraph 13, upon notice to the Second Party specifying the items of Posted Credit Support to be exchanged, the Pledgor may, on any Local Business Day, Transfer to the Secured Party substitute Eligible Credit Support (the “Substitute Credit Support”); and

(ii) subject to Paragraph 4(a), the Secured Party will Transfer to the Pledgor the items of Posted Credit Support specified by the Pledgor in its notice not later than the Local Business Day following the date on which the Secured Party receives the Substitute Credit Support, unless otherwise specified in Paragraph 13 (the “Substitution Date”); provided that the Secured Party will only be obligated to Transfer Posted Credit Support with a Value as of the date of Transfer of that Posted Credit Support equal to the Value as of that date of the Substitute Credit Support.

Paragraph 5. Dispute Resolution

If a party (a “Disputing Party”) disputes (I) the Valuation Agent’s calculation of a Delivery Amount or a Return Amount or (II) the Value of any Transfer of Eligible Credit Support or Posted Credit Support, then (1) the Disputing Party will notify the other party and the Valuation Agent (if the Valuation Agent is not the other party) not later than the close of business on the Local Business Day following (X) the date that the demand is made under Paragraph 3 in case of (I) above or (Y) the date that the demand is made under Paragraph 3 in the case of (I) above or (Y) the date of Transfer in the case of (II) above, (2) subject to Paragraph 4(a), the appropriate party will Transfer the undisputed amount to the other party not later than the close of business on the Local Business Day following (X) the date that the demand is made under Paragraph 3 in the case of (I) above or (Y) the date of Transfer in the case of (II) above, (3) the parties will consult with each other in an attempt to resolve the dispute and (4) if they fail to resolve the dispute by the Resolution Time, then:

(i) In the case of a dispute involving a Delivery Amount or Return Amount, unless otherwise specified in Paragraph 13, the Valuation Agent will recalculate the Exposure and the Value as of the Recalculation Date by:

(A) utilizing any calculations of Exposure for the Transactions (or Swap Transactions) that the parties have agreed are not in dispute;

(B) calculating the Exposure for the Transactions (or Swap Transactions) in dispute by seeking four actual quotations at mid-market from Reference Market-makers for purposes of calculating Market Quotation, and taking the arithmetic average of those obtained; provided that if four quotations are not available for a particular Transaction (or Swap Transaction), then fewer than four quotations may be used for that Transaction (or Swap Transaction); and if no quotations are available for a particular Transaction (or Swap Transaction), then the Valuation Agent’s original calculations will be used for that Transaction (or Swap Transaction);

(C) utilizing the procedures specified in Paragraph 13 for calculating the Value, if disputed, of Posted Credit Support.

(ii) In the case of a dispute involving the Value of any Transfer of Eligible Credit Support or Posted Credit Support the Valuation Agent will recalculate the Value as of the date of Transfer pursuant to Paragraph 13.

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Following a recalculation pursuant to this Paragraph, the Valuation Agent will notify each party (or the other party, if the Valuation Agent is a party) not later than the Notification Time on the Local Business Day following the Resolution Time. The appropriate party will, upon demand following that notice by the Valuation Agent or a resolution pursuant to (3) above and subject to Paragraphs 4(a) and 4(b), make the appropriate Transfer.

Paragraph 6. Holding and Using Posted Collateral

(a) Care of Posted Collateral. Without limiting the Secured Party’s rights under Paragraph 6(c), the Secured Party will exercise reasonable care to assure the safe custody of all Posted Collateral to the extent required by applicable law, and in any event the Secured Party will be deemed to have exercised reasonable care if it exercises at least the same degree of care as it would exercise with respect to its own property. Except as specified in the preceding sentence, the Secured Party will have no duty with respect to Posted Collateral, including, without limitation, any duty to collect any Distributions, or enforce or preserve any rights pertaining thereto.

(b) Eligibility to Hold Posted Collateral; Custodians.

(i) General. Subject to the satisfaction of any conditions specified in Paragraph 13 for holding Posted Collateral, the Secured Party will be entitled to hold Posted Collateral or to appoint an agent (a “Custodian”) to hold Posted Collateral for the Secured Party. Upon notice by the Secured Party to the Pledgor of the appointment of a Custodian, the Pledgor’s obligations to make any Transfer will be discharged by making the Transfer to that Custodian. The holding of Posted Collateral by a Custodian will be deemed to be the holding of that Posted Collateral by the Secured Party for which the Custodian is acting.

(ii) Failure to Satisfy Conditions. If the Secured Party or its Custodian fails to satisfy conditions for holding Posted Collateral, then upon a demand made by the Pledgor, the Secured Party will, not later than five Local Business Days after the demand, Transfer or cause its Custodian to Transfer all Posted Collateral held by it to a Custodian that satisfies those conditions or to the Secured Party if it satisfies those conditions.

(iii) Liability. The Secured Party will be liable for the acts or omissions of its Custodian to the same extent that the Secured Party would be liable hereunder for its own acts or omissions.

(c) Use of Posted Collateral. Unless otherwise specified in Paragraph 13 and without limiting the rights and obligations of the parties under Paragraphs 3, 4(d)(ii), 5, 6(d) and 8, if the Secured Party is not a Defaulting Party or an Affected Party with respect to a Specified Condition and no Early Termination Date has occurred or been designated as the result of an Event of Default or Specified Condition with respect to the Secured Party, then the Secured Party will, notwithstanding Section 9-207 of the New York Uniform Commercial Code, have the right to:

(i) sell, pledge, rehypothecate, assign, invest, use, commingle or otherwise dispose of, or otherwise use in its business any Posted Collateral it holds, free from any claim or right of any nature whatsoever of the Pledgor, including any equity or right of redemption by the Pledgor; and

(ii) register any Posted Collateral in the name of the Secured Party, its Custodian or a nominee for either.

For purposes of the obligation to Transfer Eligible Credit Support or Posted Credit Support pursuant to Paragraphs 3 and 5 and any rights or remedies authorized under this Agreement, the Secured Party will be deemed to continue to hold all Posted Collateral and to receive Distributions made thereon, regardless of whether the Secured Party has exercised any rights with respect to any Posted Collateral pursuant to (i) or (ii) above.

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(d) Distributions and Interest Amount.

(i) Distributions. Subject to Paragraph 4(a), if the Secured Party receives or is deemed to receive Distributions on a Local Business Day, it will Transfer to the Pledgor not later than the following Business Day any Distributions it receives or is deemed to receive to the extent that a Delivery Amount would not be created or increased by that Transfer, as calculated by the Valuation Agent (and the date of calculation will be deemed to be a Valuation Date for this purpose).

(ii) Interest Amount. Unless otherwise specified in Paragraph 13 and subject to Paragraph 4(a), in lieu of any interest, dividends or other amounts paid or deemed to have been paid with respect to Posted Collateral in the form of Cash (all of which may be retained by the Secured Party), the Secured Party will Transfer to the Pledgor at the times specified in Paragraph 13 the Interest Amount to the extent that a Delivery Amount would not be created or increased by that Transfer, as calculated by the Valuation Agent (and the date of calculation will be deemed to be a Valuation Date for this purpose). The Interest Amount or portion thereof not Transferred pursuant to this Paragraph will constitute Posted Collateral in the form of Cash and will be subject to the security interest granted under Paragraph 2.

Paragraph 7. Events of Default

For purposes of Section 5(a)(iii)(1) of this Agreement, an Event of Default will exist with respect to a party if:

(i) that party fails (or fails to cause its Custodian) to make, when due, any Transfer of Eligible Collateral, Posted Collateral or the Interest Amount, as applicable, required to be made by it and that failure continues for two Local Business Days after notice of that failure is given to that party;

(ii) that party fails to comply with any restriction or prohibition specified in this Annex with respect to any of the rights specified in Paragraph 6(c) and that failure continues for five Local Business Days after notice of that failure is given to that party; or

(iii) that party fails to comply with or perform any agreement or obligation other than those specified in Paragraphs 7(i) and 7(ii) and that failure continues for 30 days after notice of that failure is given to that party.

Paragraph 8. Certain Rights and Remedies

(a) Secured Party’s Rights and Remedies. If at any time (1) an Event of Default or Specified Condition with respect to the Pledgor has occurred and is continuing or (2) an Early Termination Date has occurred or been designated as the result of an Event of Default or Specified Condition with respect to the Pledgor, then, unless the Pledgor has paid in full all of its Obligations that are then due, the Secured Party may exercise one or more of the following rights and remedies:

(i) all rights and remedies available to a secured party under applicable law with respect to Posted Collateral held by the Secured Party;

(ii) any other rights and remedies available to the Secured Party under the terms of Other Posted Support, if any;

(iii) the right to Set-off any amounts payable by the Pledgor with respect to any Obligations against any Posted Collateral or the Cash equivalent of any Posted Collateral held by the Secured Party (or any obligation of the Secured Party to Transfer that Posted Collateral); and

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(iv) the right to liquidate any Posted Collateral held by the Secured Party through one or more public or private sales or other dispositions with such notice, if any, as may be required under applicable law, free from any claim or right of any nature whatsoever of the Pledgor, including any equity or right of redemption by the Pledgor (with the Secured Party having the right to purchase any or all of the Posted Collateral to be sold) and to apply the proceeds (or the Cash equivalent thereof) from the liquidation of the Posted Collateral to any amounts payable by the Pledgor with respect to any Obligations in that order as the Secured Party may elect.

Each party acknowledges and agrees that Posted Collateral in the form of securities may decline speedily in value and is of a type customarily sold on a recognized market, and, accordingly, the Pledgor is not entitled to prior notice of any sale of that Posted Collateral by the Secured Party, except any notice that is required under applicable law and cannot be waived.

(b) Pledgor’s Rights and Remedies. If at any time an Early Termination Date has occurred or been designated as the result of an Event of Default or Specified Condition with respect to the Secured Party, then (except in the case of an Early Termination Date relating to less than all Transactions (or Swap Transactions) where the Secured Party has paid in full all of its obligations that are then due under Section 6(e) of this Agreement):

(i) the Pledgor may exercise all rights and remedies available to a Pledgor under applicable law with respect to Posted Collateral held by the Secured Party;

(ii) the Pledgor may exercise any other rights and remedies available to the Pledgor under the terms of Other Posted Support, if any;

(iii) the Secured Party will be obligated immediately to Transfer all Posted Collateral and the Interest Amount to the Pledgor; and

(iv) to the extent that Posted Collateral or the Interest Amount is not so Transferred pursuant to (iii) above, the Pledgor may:

(A) Set-off any amounts payable by the Pledgor with respect to any Obligations against any Posted Collateral or the Cash equivalent of any Posted Collateral held by the Secured Party (or any obligation of the Secured Party to Transfer that Posted Collateral); and

(B) to the extent that the Pledgor does not Set-off under (iv)(A) above, withhold payment of any remaining amounts payable by the Pledgor with respect to any Obligations, up to the Value of any remaining Posted Collateral held by the Secured Party, until that Posted Collateral is Transferred to the Pledgor.

(c) Deficiencies and Excess Proceeds. The Secured Party will Transfer to the Pledgor any proceeds and Posted Credit Support remaining after liquidation, Set-off and/or application under Paragraphs 8(a) and 8(b) after satisfaction in full of all amounts payable by the Pledgor with respect to any Obligations; the Pledgor in all events will remain liable for any amounts remaining unpaid after any liquidation, Set-off and/or application under Paragraphs 8(a) and 8(b).

(d) Final Returns. When no amounts are or thereafter may become payable by the Pledgor with respect to any Obligations (except for any potential liability under Section 2(d) of this Agreement), the Secured Party will Transfer to the Pledgor all Posted Credit Support and the Interest Amount, if any.

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Paragraph 9. Representations

Each party represents to the other party (which representation will be deemed to be repeated as of each date on which it, as the Pledgor, Transfers Eligible Collateral) that:

(i) it has the power to grant a security interest in and lien on any Eligible Collateral it Transfers as the Pledgor and has taken all necessary actions to authorize the granting of that security interest and lien;

(ii) it is the sole owner of or otherwise has the right to Transfer all Eligible Collateral it Transfers to the Secured Party hereunder, free and clear of any security interest, lien, encumbrance or other restrictions other than the security interest and lien granted under Paragraph 2;

(iii) upon the Transfer of any Eligible Collateral to the Secured Party under the terms of this Annex, the Secured Party will have a valid and perfected first priority security interest therein (assuming that any central clearing corporation or any third-party financial intermediary or other entity not within the control of the Pledgor involved in the Transfer of that Eligible Collateral gives the notices and takes the action required of it under applicable law for perfection of that interest); and

(iv) the performance by it of its obligations under this Annex will not result in the creation of any security interest, lien or other encumbrance on any Posted Collateral other than the security interest and lien granted under Paragraph 2.

Paragraph 10. Expenses

(a) General. Except as otherwise provided in Paragraphs 10(b) and 10(c), each party will pay its own costs and expenses in connection with performing its obligations under this Annex and neither party will be liable for any costs and expenses incurred by the other party in connection herewith.

(b) Posted Credit Support. The Pledgor will promptly pay when due all taxes, assessments or charges of any nature that are imposed with respect to Posted Credit support held by the Secured Party upon becoming aware of the same, regardless of whether any portion of that Posted Credit Support is subsequently disposed of under Paragraph 6(c), except for those taxes, assessments and charges that result from the exercise of the Secured Party’s rights under Paragraph 6(c).

(c) Liquidation/Application of Posted Credit Support. All reasonable costs and expenses incurred by or on behalf of the Secured Party or the Pledgor in connection with the liquidation and/or application of any Posted Credit Support under Paragraph 8 will be payable, on demand and pursuant to the Expenses Section of this Agreement, by the Defaulting Party or, if there is no Defaulting Party, equally by the parties.

Paragraph 11. Miscellaneous

(a) Default Interest. A Secured Party that fails to make, when due, any Transfer of Posted Collateral or the Interest Amount will be obliged to pay the Pledgor (to the extent permitted under applicable law) an amount equal to interest at the Default Rate multiplied by the Value of the items of property that were required to be Transferred, from (and including) the date that the Posted Collateral or Interest Amount was required to be Transferred to (but excluding) the date of Transfer of that Posted Collateral or Interest Amount. This interest will be calculated on the basis of daily compounding and the actual number of days elapsed.

(b) Further Assurances. Promptly following a demand made by a party, the other party will execute, deliver, file and record any financing statement, specific assignment or other document and take any other action that may be necessary or desirable and reasonably requested by that party to create, preserve, perfect or validate any security interest or lien granted under Paragraph 2, to enable that party to exercise or enforce its rights under this Annex with

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respect to Posted Credit Support or an Interest Amount or to effect or document a release of a security interest on Posted Collateral or an Interest Amount.

(c) Further Protection. The Pledgor will promptly give notice to the Secured Party of, and defend against, any suit, action, proceeding or lien that involves Posted Credit Support Transferred by the Pledgor or that could adversely affect the security interest and lien granted by it under Paragraph 2, unless that suit, action, proceeding or lien results from the exercise of the Secured Party’s rights under Paragraph 6(c).

(d) Good Faith and Commercially Reasonable Manner. Performance of all obligations under this Annex, including, but not limited to, all calculations, valuations and determinations made by either party, will be made in good faith and in a commercially reasonable manner.

(e) Demands and Notices. All demands and notices given by a party under this Annex will be made as specified in the Notices Section of this Agreement, except as otherwise provided in Paragraph 13.

(f) Specifications of Certain Matters. Anything referred to in this Annex as being specified in Paragraph 13 also may be specified in one or more Confirmations or other documents and this Annex will be construed accordingly.

Paragraph 12. Definitions

As used in this Annex:—

“Cash” means the lawful currency of the United States of America.

“Credit Support Amount” has the meaning specified in Paragraph 3.

“Custodian” has the meaning specified in Paragraphs 6(b)(i) and 13.

“Delivery Amount” has the meaning specified in Paragraph 3(a).

“Disputing Party” has the meaning specified in Paragraph 5.

“Distributions” means, with respect to Posted Collateral other than Cash, all principal, interest and other payments and distributions of cash or other property with respect thereto, regardless of whether the Secured Party has disposed of that Posted Collateral under Paragraph 6(c). Distributions will not include any item of property acquired by the Secured Party upon any disposition or liquidation of Posted Collateral or, with respect to any Posted Collateral in the form of Cash, any distributions on that collateral, unless otherwise specified herein.

“Eligible Collateral” means, with respect to a party, the items, if any, specified as such for that party in Paragraph 13.

“Eligible Credit Support” means Eligible Collateral and Other Eligible Support.

“Exposure” means for any Valuation Date or other date for which Exposure is calculated and subject to Paragraph 5 in the case of a dispute, the amount, if any, that would be payable to a party that is the Secured Party by the other party (expressed as a positive number) or by a party that is the Secured Party to the other party (expressed as a negative number) pursuant to Section 6(e)(ii)(2)(A) of this Agreement as if all Transactions (or Swap Transactions) were being terminated as of the relevant Valuation Time; provided that Market Quotation will be determined by the Valuation Agent using its estimates at mid-market of the amounts that would be paid for Replacement Transactions (as that term is defined in the definition of “Market Quotation”).

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“Independent Amount” means, with respect to party, the amount specified as such for that party in Paragraph 13; if no amount is specified, zero.

“Interest Amount” means, with respect to an Interest Period, the aggregate sum of the amounts of interest calculated for each day in that Interest Period on the principal amount of Posted Collateral in the form of Cash held by the Secured Party on that day, determined by the Secured Party for each such day as follows:

(x) the amount of Cash on that day; multiplied by

(y) the Interest Rate in effect for that day; divided by

(z) 360.

“Interest Period” means the period from (and including) the last Local Business Day on which an Interest Amount was Transferred (or, if no Interest Amount has yet been Transferred, the Local Business Day on which Posted Collateral in the form of Cash was Transferred to or received by the Secured Party) to (but excluding) the Local Business Day on which the current Interest Amount is to be Transferred.

“Interest Rate” means the rate specified in Paragraph 13.

“Local Business Day,” unless otherwise specified in Paragraph 13, has the meaning specified in the Definitions Section of this Agreement, except that references to a payment in clause (b) thereof will be deemed to include a Transfer under this Annex.

“Minimum Transfer Amount” means, with respect to a party, the amount specified as such for that party in Paragraph 13; if no amount is specified, zero.

“Notification Time” has the meaning specified in Paragraph 13.

“Obligations” means, with respect to a party, all present and future obligations of that party under this Agreement and any additional obligations specified for that party in Paragraph 13.

“Other Eligible Support” means, with respect to a party, the items, if any, specified as such for that party in Paragraph 13.

“Other Posted Support” means all Other Eligible Support Transferred to the Secured Party that remains in effect for the benefit of that Secured Party.

“Pledgor” means either party, when that party (i) receives a demand for or is required to Transfer Eligible Credit Support under Paragraph 3(a) or (ii) has Transferred Eligible Credit Support under Paragraph 3(a).

“Posted Collateral” means all Eligible Collateral, other property, Distributions, and all proceeds thereof that have been Transferred to or received by the Secured Party under this Annex and not Transferred to the Pledgor pursuant to Paragraph 3(b), 4(d)(ii) or 6(d)(i) or released by the Secured Party under Paragraph 8. Any Interest Amount or portion thereof not Transferred pursuant to Paragraph 6(d)(ii) will constitute Posted Collateral in the form of Cash.

“Posted Credit Support” means Posted Collateral and Other Posted Support.

“Recalculation Date” means the Valuation Date that gives rise to the dispute under Paragraph 5; provided, however, that if a subsequent Valuation Date occurs under Paragraph 3 prior to the resolution of the dispute, then the “Recalculation Date” means the most recent Valuation Date under Paragraph 3.

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“Resolution Time” has the meaning specified in Paragraph 13.

“Return Amount” has the meaning specified in Paragraph 3(b).

“Secured Party” means either party, when that party (i) makes a demand for or is entitled to receive Eligible Credit Support under Paragraph 3(a) or (ii) holds or is deemed to hold Posted Credit Support.

“Specified Condition” means, with respect to a party, any event specified as such for that party in Paragraph 13.

“Substitute Credit Support” has the meaning specified in Paragraph 4(d)(i).

“Substitution Date” has the meaning specified in Paragraph 4(d)(ii).

“Threshold” means, with respect to a party, the amount specified as such for that party in Paragraph 13; if no amount is specified, zero.

“Transfer” means, with respect to any Eligible Credit Support, Posted Credit Support or Interest Amount, and in accordance with the instructions of the Secured Party, Pledgor or Custodian, as applicable:

(i) in the case of Cash, payment or delivery by wire transfer into one or more bank accounts specified by the recipient;

(ii) in the case of certificated securities that cannot be paid or delivered by book-entry, payment or delivery in appropriate physical form to the recipient or its account accompanied by any duly executed instruments of transfer, assignments in blank, transfer tax stamps and any other documents necessary to constitute a legally valid transfer to the recipient;

(iii) in the case of securities that can be paid or delivered in book-entry, the giving of written instruments to the relevant depository institution or other entity specified by the recipient, together with a written copy thereof to the recipient, sufficient if complied with to result in a legally effective transfer of the relevant interest to the recipient; and

(iv) in the case of Other Eligible Support or Other Posted Support, as specified in Paragraph 13.

“Valuation Agent” has the meaning specified in Paragraph 13.

“Valuation Date” means each date specified in or otherwise determined pursuant to Paragraph 13.

“Valuation Percentage” means, for any item of Eligible Collateral, the percentage specified in Paragraph 13.

“Valuation Time” has the meaning specified in Paragraph 13.

“Value” means for any Valuation Date or other date for which Value is calculated, and subject to Paragraph 5 in the case of a dispute, with respect to:

(i) Eligible Collateral or Posted Collateral that is:

(A) Cash, the amount thereof; and

(B) a security, the bid price obtained by the Valuation Agent multiplied by the applicable Valuation Percentage, if any;

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(ii) Posted Collateral that consists of items that are not specified as Eligible Collateral, zero; and

(iii) Other Eligible Support and Other Posted Support, as specified in Paragraph 13.

Paragraph 13. Elections and Variables

(a) Security Interest for “Obligations”. The term “Obligations” as used in this Annex includes the following additional obligations: None.

(b) Credit Support Obligations.

(i) Delivery Amount, Return Amount and Credit Support Amount.

(A) “Delivery Amount” has the meaning specified in Paragraph 3(a).

(B) “Return Amount” has the meaning specified in Paragraph 3(b).

(C) “Credit Support Amount” has the meaning specified in Paragraph 3(b).

(ii) Eligible Collateral. The following items will qualify as “Eligible Collateral”:


		Valuation
		Percentage
(A)	Cash currency denominated in U.S. Dollars;		100%

(B)	negotiable debt obligations issued by the U.S. Treasury Department having a remaining maturity at issuance of not more than one year;		98%

(C)	negotiable debt obligations issued by the U.S. Treasury Department having a remaining maturity at issuance of more than one year but not more than ten years;		98%

(D)	negotiable debt obligations issued by the U.S. Treasury Department having a remaining maturity at issuance of more than ten years;		95%

(E)	Any other collateral acceptable to Secured Party in its sole discretion.		As determined by the Secured Party.

(iii) Other Eligible Support. There shall be no “Other Eligible Support” for either Party A or Party B.

(iv) Thresholds.

(A) “Independent Amount” for Party B means, with respect to each Transaction, any amount specified as such in a Confirmation governing such Transaction.

(B) “Threshold” for the Pledgor means zero.

(C) “Minimum Transfer Amount” means, with respect to a party, $100,000; provided, that if an Event of Default has occurred and is continuing with respect to Party B, the Minimum Transfer Amount with respect to Party B shall be zero.

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(D) “Rounding”. The Delivery Amount and the Return Amount will be rounded up and down respectively to the nearest integral multiple of $10,000.

(i) “Valuation Agent” means the Secured Party.

(ii) “Valuation Date” means (a) the Trade Date of each Transaction, if either party has an Independent Amount greater than zero for that Transaction, and (b) each other Local Business Day designated as a Valuation Date by notice given by one party to the other no later than the Notification Time on the Local Business Day before the Valuation Date so designated.

(iii) “Valuation Time” means the close of business in the city of the Valuation Agent on the Local Business Day preceding the Valuation Date or date of calculation, as applicable; provided that the calculations of Value and Exposure will be made as of approximately the same time on the same date.

(iv) “Notification Time” means by 10:00 a.m., New York time, on a Local Business Day.

(d) Conditions Precedent and Secured Party’s Rights and Remedies. Each of the following Termination Events will be a “Specified Condition” for the Pledgor: None.

(e) Substitution.

(i) “Substitution Date” has the meaning specified in Paragraph 4(d)(ii).

(ii) “Consent.” The Pledgor must obtain the Secured Party’s consent for any substitution pursuant to Paragraph 4(d).

(f) Dispute Resolution.

          (i) “Resolution Time” means 1:00 p.m., New York Time, on the fifth Local Business Day following the date on which notice is given that gives rise to a dispute under Paragraph 5.

          (ii) “Value.” For the purpose of Paragraph 5(i)(C) and 5(ii), the Value of Eligible Collateral other then Cash will be calculated as follows:

          the sum of (i) (x) the arithmetic mean of the closing bid prices quoted on the relevant date of three nationally recognized principal market makers (which may include an affiliate of Party A) for such security chosen by the Valuation Agent multiplied by the applicable Valuation Percentage or (y) if no quotations are available from such principal market makers on the relevant date, the arithmetic mean of the closing bid prices on the next preceding date multiplied by the applicable Valuation Percentage plus (ii) the accrued interest, if any, on such security (except to the extent Transferred to a party pursuant to any applicable provision of this Agreement or included in the applicable price referred to in (i) of this clause) as of such date.

          (iii) “Alternative.” Not Applicable.

(g) Holding and Using Posted Collateral.

          (i) “Eligibility to Hold Posted Collateral; Custodians.” Secured Party and its Custodian will be entitled to hold Posted Collateral pursuant to Paragraph 6(b), provided that the following conditions are satisfied:

          (1) The Secured Party: The Secured Party is not a Defaulting Party; and

          (2) The Custodian: The Custodian is either: (a) an affiliate of the Secured Party or (b) a bank or trust company having total assets of at least US $10,000,000,000.

          (ii) “Use of Posted Collateral” The provisions of Paragraph 6(c) will apply.

(h) Distributions and Interest Amount.

(i) “Interest Rate.” The Interest Rate will be the rate per annum equal to the overnight Federal Funds Rate for each day cash is held by the Secured Party as reported in Federal Reserve Publication H.15-519.

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(ii) “Transfer of Interest Amount.” The Transfer of the Interest Amount will be made on the last Local Business Day of each calendar month and on any Local Business Day that Posted Collateral in the form of Cash is Transferred to the Pledgor pursuant to Paragraph 3(b).

(iii) “Alternative to Interest Amount.” Not Applicable.

(i) Additional Representations. Not Applicable.

(j) “Other Eligible Support and Other Posted Support.”

(i) “Value” with respect to Other Eligible Support and Other Posted Support means: Not Applicable.

(ii) “Transfer” with respect to Other Eligible Support and Other Posted Support means: Not Applicable.

(k) Demands and Notices. All demands, specifications and notices made by a party to this Annex will be made pursuant to the Notices Section of this Agreement.

(l) Addresses for Transfers. Not Applicable.

(m) Agreement as to Single Secured Party and Pledgor. Party A and Party B agree that, notwithstanding anything to the contrary in the recital to this Annex, Paragraph 1(b) or Paragraph 2 or the definitions in Paragraph 12, (a) the term “Secured Party” as used in this Annex means only Party A, (b) the term “Pledgor” as used in this Annex means only Party B, (c) only Party B makes the pledge and grant in Paragraph 2, the acknowledgment in the final sentence of Paragraph 8(a) and the representations in Paragraph 9 and (d) only Party B will be required to make Transfers of Eligible Credit Support hereunder. Party A and Party B further agree that, notwithstanding anything to the contrary in Paragraph 7, this Annex will constitute a Credit Support Document only with respect to Party B, and the Events of Default in Paragraph 7 will apply only to Party B.

B-13 EX-3 5 w90450exv3.htm EXHIBIT 3 exv3

Credit Suisse First Boston Capital LLC
Credit Suisse First Boston LLC
11 Madison Avenue
New York, NY 10010

VARIABLE PREPAID FORWARD CONFIRMATION

Date: June 19, 2003

To: Wendell H. Murphy, Sr.

From: Credit Suisse First Boston Capital LLC

Re: Variable Prepaid Forward

Transaction ID: SFD#01A

External ID: 7004080

Dear: Mr. Murphy, Sr.

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 June 19, 2003, 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.


General Terms:

	Trade Date:	June 19, 2003

	Scheduled Valuation Date:	June 19, 2006 (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:	Smithfield Foods, Inc.

	Shares (Ticker):	Shares of common stock of the Issuer (SFD)

	Exchange:	New York Stock Exchange

	Base Number of Shares:	Initially 174,762 Shares, subject to Calculation Agent Adjustment.

	Floor:	Initially 100% of Initial Price = $23.3713, subject to Calculation Agent Adjustment.

	Cap:	Initially 130% of Initial Price = $30.3827, subject to Calculation Agent Adjustment.

	Participation above Cap:	0%

	Initial Price:	$23.3713

	Prepaid Percentage:	86.6%

	Purchase Price:	$3,537,103.50 (Initial Price x Base Number of Shares x Prepaid Percentage).

	Payment Date:	Three (3) Business Days after the later of the day on which Transaction Documents executed by Counterparty are received by CSFB Capital and the day on which CSFB Capital receives from Counterparty a number of Shares as Collateral equal to the number of Shares specified in the Pledge of Collateral provision below.


Valuation:

	Averaging Date Final Price:	The Volume Weighted Average Price per Share, 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 Date, or if such Volume Weighted Average Price is not available, the market value of one (1) Share on 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 precluded from purchasing or selling Shares 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.

				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. CSFB Capital need not communicate to the Counterparty the reason for CSFB Capital’s exercise of its rights pursuant to this provision.


Settlement Terms:

Physical Settlement:

	Averaging Date Deliverable Number of Shares:	In respect of each Averaging Date, a number of Shares equal to the lesser of A or B, where:

		“A” is the result of the Base Number of Shares divided by the number of Averaging Dates; and

		“B” is the product of C multiplied by D, where:

		“C” is the result of the Base Number of Shares divided by the number of Averaging Dates, and

		“D” is the result of (x) divided by (y), where:

		"(x)” is the sum, determined as of the Valuation Date, of

		(i) the Floor (expressed as an amount) and

		(ii) the product of (a) one (1) minus the Participation Above Cap and (b) any amount by which the corresponding Averaging Date Final Price exceeds the Cap (expressed as an amount); and

		“(y)” is the corresponding Averaging Date Final Price.

	Total Deliverable Number of Shares:	The sum of the Averaging Date Deliverable Number of Shares for all of the Averaging Dates.

	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, 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 Participant:		Counterparty will have the right to cash settle the Transaction; on the third Business Day following each Averaging Date (each a “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 each Cash Settlement Payment Date, an amount in U.S. dollars, determined as of the relevant Averaging Date, equal to the product of (i) the applicable Averaging Date Deliverable Number of Shares multiplied by (ii) each corresponding Averaging Date Final Price.

	Net Stock Settlement Requirements:	If Counterparty elects Net Stock Settlement, Counterparty covenants, represents and warrants that (i) it will deliver to CSFB Capital only Shares that are eligible for immediate resale by Counterparty under Rule 144 or Rule 145 and (ii) it (and each person whose sales of Shares would be aggregated with Counterparty’s sales under Rule 144(e)(3)) will not sell any Shares during the three-month period ending on the third Exchange Business Day following the Scheduled Valuation Date.
Adjustments:

	Total Return Option:	Inapplicable

	Fixed Dividend Level:	USD 0.00 (zero) per Share

	Method of Adjustment:	Calculation Agent Adjustment.


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 Shares consisting of cash in U.S. dollars per Share or the value of any non-cash assets, 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 record 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 pursuant to this Dividend Pass-Through provision for a period ending on the Scheduled Valuation Date unless a record date occurred during such period for an Actual Dividend.]¹


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.

	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 the Issuer of the same class as the Shares is significantly impaired; Counterparty will be the Affected Party.

Collateral:

	Pledge of Collateral:		On the Trade Date, Counterparty will pledge a quantity of Shares equal to the Base Number of Shares on the Trade Date 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 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 on Transfer:	Counterparty represents and warrants to CSFB Capital that (i) Counterparty’s “holding period” for the Shares pledged hereunder, determined in accordance with Rule 144, commenced on January 28, 2000, and the Issuer is in compliance with Rule 144(c)(l) and (ii) other than the restrictions under Rule 144, such Shares are free of any contractual or legal restrictions on transfer.

	Manner of Hedging:	CSFB Capital represents that it will execute any initial hedging in Shares 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 pursuant to Rule 144 and (y) will cause each person whose sales of Shares would be aggregated with Counterparty’s sales under Rule 144(e)(3) not to sell any Shares, 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.

		(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:	Bank Name: Chase, NY, NY

		ABA Routing #: 021 000 021

		Name on Account: Pershing LLC

		Account #:

		For further credit to: Wendell H. Murphy, Sr. to Sub Account #:

	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 #:

	Deliveries to CSFB Capital:	Credit Suisse First Boston LLC DTC: 355 Ref a/c:

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.

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/ LINDA STEINMULLER

				Name:
				Title:

		CREDIT SUISSE FIRST BOSTON LLC,
		solely in its capacity as Agent

		By:		/s/ DEBRA TAGELDEIN

				Name: DEBRA TAGELDEIN
				Title: Assistant Vice President

COUNTERPARTY- WENDELL H. MURPHY, SR.

/s/ WENDELL H. MURPHY SR.

Name: Wendell H. Murphy, Sr.

Credit Suisse First Boston Capital LLC
Credit Suisse First Boston LLC
11 Madison Avenue
New York, NY 10010

VARIABLE PREPAID FORWARD CONFIRMATION


Date:		June 19, 2003

To:		Wendell H. Murphy, Jr.

From:		Credit Suisse First Boston Capital LLC

Re:		Variable Prepaid Forward


Transaction ID:		SFD#02A

External ID:		7004080

Dear: Mr. Murphy, Jr.

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.


General Terms:

	Trade Date:	June 19, 2003

	Scheduled Valuation Date:	June 19, 2006 (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:	Smithfield Foods, Inc.

	Shares (Ticker):	Shares of common stock of the Issuer (SFD)

	Exchange:	New York Stock Exchange

	Base Number of Shares:	Initially 113,436 Shares, subject to Calculation Agent Adjustment.

	Floor:	Initially 100% of Initial Price = $23.3713, subject to Calculation Agent Adjustment.

	Cap:	Initially 130% of Initial Price = $30.3827, subject to Calculation Agent Adjustment.

	Participation above Cap:	0%

	Initial Price:	$23.3713

	Prepaid Percentage:	86.6%

	Purchase Price:	$2,295,893.12 (Initial Price x Base Number of Shares x Prepaid Percentage).

	Payment Date:	Three (3) Business Days after the later of the day on which Transaction Documents executed by Counterparty are received by CSFB Capital and the day on which CSFB Capital receives from Counterparty a number of Shares as Collateral equal to the number of Shares specified in the Pledge of Collateral provision below.


Valuation:

	Averaging Date Final Price:	The Volume Weighted Average Price per Share, 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 Date, or if such Volume Weighted Average Price is not available, the market value of one (1) Share on 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 precluded from purchasing or selling Shares 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. 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. CSFB Capital need not communicate to the Counterparty the reason for CSFB Capital’s exercise of its rights pursuant to this provision.

Settlement Terms:

Physical Settlement:

	Averaging Date Deliverable Number of Shares:	In respect of each Averaging Date, a number of Shares equal to the lesser of A or B, where:

		“A” is the result of the Base Number of Shares divided by the number of Averaging Dates; and

		“B” is the product of C multiplied by D, where:

		“C” is the result of the Base Number of Shares divided by the number of Averaging Dates, and

		“D” is the result of (x) divided by (y), where:

		“(x)” is the sum, determined as of the Valuation Date, of

		(i) the Floor (expressed as an amount) and

		(ii) the product of (a) one (1) minus the Participation Above Cap and (b) any amount by which the corresponding Averaging Date Final Price exceeds the Cap (expressed as an amount); and

		“(y)” is the corresponding Averaging Date Final Price.

	Total Deliverable Number of Shares:	The sum of the Averaging Date Deliverable Number of Shares for all of the Averaging Dates.

	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, 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 Participant:		Counterparty will have the right to cash settle the Transaction; on the third Business Day following each Averaging Date (each a “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 each Cash Settlement Payment Date, an amount in U.S. dollars, determined as of the relevant Averaging Date, equal to the product of (i) the applicable Averaging Date Deliverable Number of Shares multiplied by (ii) each corresponding Averaging Date Final Price.

	Net Stock Settlement Requirements:	If Counterparty elects Net Stock Settlement, Counterparty covenants, represents and warrants that (i) it will deliver to CSFB Capital only Shares that are eligible for immediate resale by Counterparty under Rule 144 or Rule 145 and (ii) it (and each person whose sales of Shares would be aggregated with Counterparty’s sales under Rule 144(e)(3)) will not sell any Shares during the three-month period ending on the third Exchange Business Day following the Scheduled Valuation Date.

Adjustments:

	Total Return Option:	Inapplicable

	Fixed Dividend Level:	USD 0.00 (zero) per Share

	Method of Adjustment:	Calculation Agent Adjustment.


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 Shares consisting of cash in U.S. dollars per Share or the value of any non-cash assets, 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 record 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 pursuant to this Dividend Pass-Through provision for a period ending on the Scheduled Valuation Date unless a record date occurred during such period for an Actual Dividend.]¹


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.

	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 the Issuer of the same class as the Shares is significantly impaired; Counterparty will be the Affected Party.

Collateral:

	Pledge of Collateral:	On the Trade Date, Counterparty will pledge a quantity of Shares equal to the Base Number of Shares on the Trade Date 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 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 on Transfer:	Counterparty represents and warrants to CSFB Capital that (i) Counterparty’s “holding period” for the Shares pledged hereunder, determined in accordance with Rule 144, commenced on January 28, 2000, and the Issuer is in compliance with Rule 144(c)(l) and (ii) other than the restrictions under Rule 144, such Shares are free of any contractual or legal restrictions on transfer.

		Manner of Hedging:	CSFB Capital represents that it will execute any initial hedging in Shares 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 pursuant to Rule 144 and (y) will cause each person whose sales of Shares would be aggregated with Counterparty’s sales under Rule 144(e)(3) not to sell any Shares, 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.

		(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:	Bank Name: Chase, NY, NY ABA Routing #: 021 000 021 Name on Account: Pershing LLC Account #: For further credit to: Wendell H. Murphy, Jr. to Sub Account #:

	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 #:

	Deliveries to CSFB Capital:	Credit Suisse First Boston LLC DTC: 355 Ref a/c:

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.

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/ LINDA STEINMULLER

				Name: LINDA STEINMULLER
				Title: VICE PRESIDENT

		CREDIT SUISSE FIRST BOSTON LLC, solely in its capacity as Agent

		By:		/s/ DEBRA TAGELDEIN

				Name: DEBRA TAGELDEIN
				Title: Assistant Vice President


COUNTERPARTY- WENDELL H. MURPHY, JR.

/s/ WENDELL H. MURPHY, JR.
Name: Wendell H. Murphy, Jr.

Credit Suisse First Boston Capital LLC
Credit Suisse First Boston LLC
11 Madison Avenue
New York, NY 10010

VARIABLE PREPAID FORWARD CONFIRMATION

Date: June 19, 2003

To: Joyce M. Minchew

From: Credit Suisse First Boston Capital LLC

Re: Variable Prepaid Forward

Transaction ID: SFD#03A

External ID: 7004079

Dear: Ms. Minchew

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.

General Terms:


		Trade Date:		June 19, 2003

		Scheduled Valuation Date:		June 19, 2006 (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:		Smithfield Foods, Inc.

		Shares (Ticker):		Shares of common stock of the Issuer (SFD)

		Exchange:		New York Stock Exchange

		Base Number of Shares:		Initially 59,866 Shares, subject to Calculation Agent Adjustment.

		Floor:		Initially 100% of Initial Price = $23.3713, subject to Calculation Agent Adjustment.

		Cap:		Initially 130% of Initial Price = $30.3287, subject to Calculation Agent Adjustment.

		Participation above Cap:		0%

		Initial Price:		$23.3713

		Prepaid Percentage:		86.6%

		Purchase Price:		$1,211,660.65 (Initial Price x Base Number of Shares x Prepaid Percentage).

		Payment Date:		Three (3) Business Days after the later of the day on which Transaction Documents executed by Counterparty are received by CSFB Capital and the day on which CSFB Capital receives from Counterparty a number of Shares as Collateral equal to the number of Shares specified in the Pledge of Collateral provision below.

Valuation:


		Averaging Date Final Price:		The Volume Weighted Average Price per Share, 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 Date, or if such Volume Weighted Average Price is not available, the market value of one (1) Share on 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 precluded from purchasing or selling Shares 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.

				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. CSFB Capital need not communicate to the Counterparty the reason for CSFB Capital’s exercise of its rights pursuant to this provision.

Settlement Terms:

Physical Settlement:


		Averaging Date Deliverable Number of Shares:		In respect of each Averaging Date, a number of Shares equal to the lesser of A or B, where:

				“A” is the result of the Base Number of Shares divided by the number of Averaging Dates; and

				“B” is the product of C multiplied by D, where:

				“C” is the result of the Base Number of Shares divided by the number of Averaging Dates, and

				“D” is the result of (x) divided by (y), where:

				“(x)” is the sum, determined as of the Valuation Date, of

				(i) the Floor (expressed as an amount) and

				(ii) the product of (a) one (1) minus the Participation Above Cap and (b) any amount by which the corresponding Averaging Date Final Price exceeds the Cap (expressed as an amount): and

				“(y)” is the corresponding Averaging Date Final Price.

		Total Deliverable Number of Shares:		The sum of the Averaging Date Deliverable Number of Shares for all of the Averaging Dates.

		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, 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 Participant:		Counterparty will have the right to cash settle the Transaction; on the third Business Day following each Averaging Date (each a “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 each Cash Settlement Payment Date, an amount in U.S. dollars, determined as of the relevant Averaging Date, equal to the product of (i) the applicable Averaging Date Deliverable Number of Shares multiplied by (ii) each corresponding Averaging Date Final Price.

Net Stock Settlement Requirements:		If Counterparty elects Net Stock Settlement, Counterparty covenants, represents and warrants that (i) it will deliver to CSFB Capital only Shares that are eligible for immediate resale by Counterparty under Rule 144 or Rule 145 and (ii) it (and each person whose sales of Shares would be aggregated with Counterparty’s sales under Rule 144(e)(3)) will not sell any Shares during the three-month period ending on the third Exchange Business Day following the Scheduled Valuation Date.

Adjustments:


		Total Return Option:		Inapplicable

		Fixed Dividend Level:		USD 0.00 (zero) per Share

		Method of Adjustment:		Calculation Agent Adjustment.


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 Shares consisting of cash in U.S. dollars per Share or the value of any non-cash assets, 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 record 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 pursuant to this Dividend Pass-Through provision for a period ending on the Scheduled Valuation Date unless a record date occurred during such period for an Actual Dividend.]¹

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.

		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 the Issuer of the same class as the Shares is significantly impaired; Counterparty will be the Affected Party.

Collateral:


		Pledge of Collateral:		On the Trade Date, Counterparty will pledge a quantity of Shares equal to the Base Number of Shares on the Trade Date 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 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 on Transfer:		Counterparty represents and warrants to CSFB Capital that (i) Counterparty’s “holding period” for the Shares pledged hereunder, determined in accordance with Rule 144, commenced on January 28, 2000, and the Issuer is in compliance with Rule 144(c)(l) and (ii) other than the restrictions under Rule 144, such Shares are free of any contractual or legal restrictions on transfer.

		Manner of Hedging:		CSFB Capital represents that it will execute any initial hedging in Shares 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 pursuant to Rule 144 and (y) will cause each person whose sales of Shares would be aggregated with Counterparty’s sales under Rule 144(e)(3) not to sell any Shares, 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.

				(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:		Bank Name: Chase, NY, NY

				ABA Routing #: 021 000 021

				Name on Account: Pershing LLC

				Account #:

				For further credit to: Joyce M. Minchew to Sub Account #:

		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 #:

		Deliveries to CSFB Capital:		Credit Suisse First Boston LLC DTC: 355 Ref a/c:

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.

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/ LINDA STEINMULLER

				Name: LINDA STEINMULLER
				Title: VICE PRESIDENT

		CREDIT SUISSE FIRST BOSTON LLC, solely in its capacity as Agent

		By:		/s/ DEBRA TAGELDEIN

				Name: DEBRA TAGELDEIN
				Title: Assistant Vice President

COUNTERPARTY- JOYCE M. MINCHEW

/s/ JOYCE M. MINCHEW

Name: Joyce M. Minchew

Credit Suisse First Boston Capital LLC
Credit Suisse First Boston LLC
11 Madison Avenue
New York, NY 10010

VARIABLE PREPAID FORWARD CONFIRMATION

Date: June 19, 2003

To: Wendy M. Cumpler

From: Credit Suisse First Boston Capital LLC

Re: Variable Prepaid Forward

Transaction ID: SFD#07A

External ID: 7004077

Dear: Ms. Cumpler

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.

General Terms:


Trade Date:		June 19, 2003

Scheduled Valuation Date:		June 19, 2006 (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:		Smithfield Foods, Inc.

Shares (Ticker):		Shares of common stock of the Issuer (SFD)

Exchange:		New York Stock Exchange

Base Number of Shares:		Initially 33,516 Shares, subject to Calculation Agent Adjustment.

Floor:		Initially 100% of Initial Price = $23.3713, subject to Calculation Agent Adjustment.

Cap:		Initially 130% of Initial Price = $30.3827, subject to Calculation Agent Adjustment.

Participation above Cap:		0%

Initial Price:		$23.3713

Prepaid Percentage:		86.6%

Purchase Price:		$678,348.62 (Initial Price x Base Number of Shares x Prepaid Percentage).

Payment Date:		Three (3) Business Days after the later of the day on which Transaction Documents executed by Counterparty are received by CSFB Capital and the day on which CSFB Capital receives from Counterparty a number of Shares as Collateral equal to the number of Shares specified in the Pledge of Collateral provision below.

Valuation:


Averaging Date Final Price:		The Volume Weighted Average Price per Share, 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 Date, or if such Volume Weighted Average Price is not available, the market value of one (1) Share on 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 precluded from purchasing or selling Shares 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.

		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. CSFB Capital need not communicate to the Counterparty the reason for CSFB Capital’s exercise of its rights pursuant to this provision.

Settlement Terms:

Physical Settlement:


Averaging Date Deliverable Number of Shares:		In respect of each Averaging Date, a number of Shares equal to the lesser of A or B, where:

		“A” is the result of the Base Number of Shares divided by the number of Averaging Dates; and

		“B” is the product of C multiplied by D, where:

		“C” is the result of the Base Number of Shares divided by the number of Averaging Dates, and

		“D” is the result of (x) divided by (y), where:

		“(x)” is the sum, determined as of the Valuation Date, of

		(i) the Floor (expressed as an amount) and

		(ii) the product of (a) one (1) minus the Participation Above Cap and (b) any amount by which the corresponding Averaging Date Final Price exceeds the Cap (expressed as an amount): and

		“(y)” is the corresponding Averaging Date Final Price.

Total Deliverable Number of Shares:		The sum of the Averaging Date Deliverable Number of Shares for all of the Averaging Dates.

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, 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 Participant:		Counterparty will have the right to cash settle the Transaction; on the third Business Day following each Averaging Date (each a “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 each Cash Settlement Payment Date, an amount in U.S. dollars, determined as of the relevant Averaging Date, equal to the product of (i) the applicable Averaging Date Deliverable Number of Shares multiplied by (ii) each corresponding Averaging Date Final Price.

	Net Stock Settlement Requirements:	If Counterparty elects Net Stock Settlement, Counterparty covenants, represents and warrants that (i) it will deliver to CSFB Capital only Shares that are eligible for immediate resale by Counterparty under Rule 144 or Rule 145 and (ii) it (and each person whose sales of Shares would be aggregated with Counterparty’s sales under Rule 144(e)(3)) will not sell any Shares during the three-month period ending on the third Exchange Business Day following the Scheduled Valuation Date.

Adjustments:


	Total Return Option:	Inapplicable

	Fixed Dividend Level:	USD 0.00 (zero) per Share

	Method of Adjustment:	Calculation Agent Adjustment.


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 Shares consisting of cash in U.S. dollars per Share or the value of any non-cash assets, 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 record 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 pursuant to this Dividend Pass-Through provision for a period ending on the Scheduled Valuation Date unless a record date occurred during such period for an Actual Dividend.]¹

_________________

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.

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 the Issuer of the same class as the Shares is significantly impaired; Counterparty will be the Affected Party.

Collateral:


Pledge of Collateral:		On the Trade Date, Counterparty will pledge a quantity of Shares equal to the Base Number of Shares on the Trade Date 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 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 on Transfer:		Counterparty represents and warrants to CSFB Capital that (i) Counterparty’s “holding period” for the Shares pledged hereunder, determined in accordance with Rule 144, commenced on January 28, 2000, and the Issuer is in compliance with Rule 144(c)(l) and (ii) other than the restrictions under Rule 144, such Shares are free of any contractual or legal restrictions on transfer.

Manner of Hedging:		CSFB Capital represents that it will execute any initial hedging in Shares 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 pursuant to Rule 144 and (y) will cause each person whose sales of Shares would be aggregated with Counterparty’s sales under Rule 144(e)(3) not to sell any Shares, 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.

		(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:		Bank Name: Chase, NY, NY

		ABA Routing #: 021 000 021

		Name on Account: Pershing LLC

		Account #:

		For further credit to: Wendy M. Cumpler to Sub Account #:

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 #:

Deliveries to CSFB Capital:		Credit Suisse First Boston LLC DTC: 355 Ref a/c:

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

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/ LINDA STEINMULLER Name: LINDA STEINMULLER
				Title: VICE PRESIDENT


		CREDIT SUISSE FIRST BOSTON LLC, solely in its capacity as Agent

		By:		/s/ DEBRA TAGELDEIN Name: DEBRA TAGELDEIN
				Title: Assistant Vice President

COUNTERPARTY- WENDY M. CUMPLER

/s/ WENDY M. CUMPLER

Name: Wendy M. Cumpler

Credit Suisse First Boston Capital LLC
Credit Suisse First Boston LLC
11 Madison Avenue
New York, NY 10010

VARIABLE PREPAID FORWARD CONFIRMATION

Date: June 19, 2003

To: Angela N. Brown

From: Credit Suisse First Boston Capital LLC

Re: Variable Prepaid Forward

Transaction ID: SFD#08A

External ID: 7004078

Dear: Ms. Brown

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 June 19, 2003, 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.

General Terms:


Trade Date:		June 19, 2003

Scheduled Valuation Date:		June 19, 2006 (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:		Smithfield Foods, Inc.

Shares (Ticker):		Shares of common stock of the Issuer (SFD)

Exchange:		New York Stock Exchange

Base Number of Shares:		Initially 18,420 Shares, subject to Calculation Agent Adjustment.

Floor:		Initially 100% of Initial Price = $23.3713, subject to Calculation Agent Adjustment.

Cap:		Initially 130% of Initial Price = $30.3827, subject to Calculation Agent Adjustment.

Participation above Cap:		0%

Initial Price:		$23.3713

Prepaid Percentage:		86.6%

Purchase Price:		$372,812.43, (Initial Price x Base Number of Shares x Prepaid Percentage).

Payment Date:		Three (3) Business Days after the later of the day on which Transaction Documents executed by Counterparty are received by CSFB Capital and the day on which CSFB Capital receives from Counterparty a number of Shares as Collateral equal to the number of Shares specified in the Pledge of Collateral provision below.

Valuation:


Averaging Date Final Price:		The Volume Weighted Average Price per Share, 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 Date, or if such Volume Weighted Average Price is not available, the market value of one (1) Share on 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 precluded from purchasing or selling Shares 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.

		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. CSFB Capital need not communicate to the Counterparty the reason for CSFB Capital’s exercise of its rights pursuant to this provision.

Settlement Terms:

Physical Settlement:


Averaging Date Deliverable Number of Shares:		In respect of each Averaging Date, a number of Shares equal to the lesser of A or B, where:

		“A” is the result of the Base Number of Shares divided by the number of Averaging Dates; and

		“B” is the product of C multiplied by D, where:

		“C” is the result of the Base Number of Shares divided by the number of Averaging Dates, and

		“D” is the result of (x) divided by (y), where:

		“(x)” is the sum, determined as of the Valuation Date, of

		(i) the Floor (expressed as an amount) and

		(ii) the product of (a) one (1) minus the Participation Above Cap and (b) any amount by which the corresponding Averaging Date Final Price exceeds the Cap (expressed as an amount);and

		“(y)” is the corresponding Averaging Date Final Price.

Total Deliverable Number of Shares:		The sum of the Averaging Date Deliverable Number of Shares for all of the Averaging Dates.

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, 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 Participant:		Counterparty will have the right to cash settle the Transaction; on the third Business Day following each Averaging Date (each a “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 each Cash Settlement Payment Date, an amount in U.S. dollars, determined as of the relevant Averaging Date, equal to the product of (i) the applicable Averaging Date Deliverable Number of Shares multiplied by (ii) each corresponding Averaging Date Final Price.

Net Stock Settlement Requirements:		If Counterparty elects Net Stock Settlement, Counterparty covenants, represents and warrants that (i) it will deliver to CSFB Capital only Shares that are eligible for immediate resale by Counterparty under Rule 144 or Rule 145 and (ii) it (and each person whose sales of Shares would be aggregated with Counterparty’s sales under Rule 144(e)(3)) will not sell any Shares during the three-month period ending on the third Exchange Business Day following the Scheduled Valuation Date.

Adjustments:


Total Return Option:		Inapplicable

Fixed Dividend Level:		USD 0.00 (zero) per Share

Method of Adjustment:		Calculation Agent Adjustment.


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 Shares consisting of cash in U.S. dollars per Share or the value of any non-cash assets, 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 record 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 pursuant to this Dividend Pass-Through provision for a period ending on the Scheduled Valuation Date unless a record date occurred during such period for an Actual Dividend.]¹

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.

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 the Issuer of the same class as the Shares is significantly impaired; Counterparty will be the Affected Party.

Collateral:


Pledge of Collateral:		On the Trade Date, Counterparty will pledge a quantity of Shares equal to the Base Number of Shares on the Trade Date 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 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 on Transfer:		Counterparty represents and warrants to CSFB Capital that (i) Counterparty’s “holding period” for the Shares pledged hereunder, determined in accordance with Rule 144, commenced on January 28, 2000, and the Issuer is in compliance with Rule 144(c)(1) and (ii) other than the restrictions under Rule 144, such Shares are free of any contractual or legal restrictions on transfer.

Manner of Hedging:		CSFB Capital represents that it will execute any initial hedging in Shares 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 pursuant to Rule 144 and (y) will cause each person whose sales of Shares would be aggregated with Counterparty’s sales under Rule 144(e)(3) not to sell any Shares, 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.

		(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:		Bank Name: Chase, NY, NY

		ABA Routing #: 021 000 021

		Name on Account: Pershing LLC

		Account #:

		For further credit to: Angela N. Brown to Sub Account #:

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 #:

Deliveries to CSFB Capital:		Credit Suisse First Boston LLC DTC: 355 Ref a/c:

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.

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/ LINDA STEINMULLER
	Name:	LINDA STEINMULLER
	Title:	VICE PRESIDENT

CREDIT SUISSE FIRST BOSTON LLC, solely in its capacity as Agent

By:	/s/ DEBRA TAGELDEIN
	Name:	DEBRA TAGELDEIN
	Title:	Assistant Vice President

COUNTERPARTY- ANGELA N. BROWN

/s/ ANGELA N. BROWN

Name: Angela N. Brown

10 EX-4 6 w90450exv4.htm EXHIBIT 4 exv4

Credit Suisse First Boston Capital LLC
Credit Suisse First Boston LLC
11 Madison Avenue
New York, NY 10010

VARIABLE PREPAID FORWARD CONFIRMATION

Date: July 15, 2003

To: Wendell H. Murphy, Sr.

From: Credit Suisse First Boston Capital LLC

Re: Variable Prepaid Forward

Transaction ID: SFD#01B

External ID: 7004232

Dear: Mr. Murphy, Sr.

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 June 19, 2003, 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.

General Terms:


		Trade Date:		July 15, 2003

		Scheduled Valuation Date:		July 15, 2008 (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:		Smithfield Foods, Inc.

		Shares (Ticker):		Shares of common stock of the Issuer (SFD)

		Exchange:		New York Stock Exchange

		Base Number of Shares:		Initially 243,154 Shares, subject to Calculation Agent Adjustment.

		Floor:		Initially 100.0% of Initial Price = $23.0112, subject to Calculation Agent Adjustment.

		Cap:		Initially 130.0% of Initial Price = $29.9146, subject to Calculation Agent Adjustment.

		Participation above Cap:		0%

		Initial Price:		$23.0112

		Prepaid Percentage:		85.5%

		Purchase Price:		$4,783,951.85 (Initial Price x Base Number of Shares x Prepaid Percentage).

		Payment Date:		Three (3) Business Days after the later of the day on which Transaction Documents executed by Counterparty are received by CSFB Capital and the day on which CSFB Capital receives from Counterparty a number of Shares as Collateral equal to the number of Shares specified in the Pledge of Collateral provision below.

Valuation:


		Averaging Date Final Price:		The Volume Weighted Average Price per Share, 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 Date, or if such Volume Weighted Average Price is not available, the market value of one (1) Share on 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 precluded from purchasing or selling Shares 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.

				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. CSFB Capital need not communicate to the Counterparty the reason for CSFB Capital’s exercise of its rights pursuant to this provision.

Settlement Terms:

Physical Settlement:


Averaging Date Deliverable Number of Shares:		In respect of each Averaging Date, a number of Shares equal to the lesser of A or B, where:

		“A” is the result of the Base Number of Shares divided by the number of Averaging Dates; and

		“B” is the product of C multiplied by D, where:

		“C” is the result of the Base Number of Shares divided by the number of Averaging Dates, and

		“D” is the result of (x) divided by (y), where:

		“(x)” is the sum, determined as of the Valuation Date, of

		(i) the Floor (expressed as an amount) and

		(ii) the product of (a) one (1) minus the Participation Above Cap and (b) any amount by which the corresponding Averaging Date Final Price exceeds the Cap (expressed as an amount):and

		“(y)” is the corresponding Averaging Date Final Price.

Total Deliverable Number of Shares:		The sum of the Averaging Date Deliverable Number of Shares for all of the Averaging Dates.

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, 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 Participant:		Counterparty will have the right to cash settle the Transaction; on the third Business Day following each Averaging Date (each a “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 (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 each Cash Settlement Payment Date, an amount in U.S. dollars, determined as of the relevant Averaging Date, equal to the product of (i) the applicable Averaging Date Deliverable Number of Shares multiplied by (ii) each corresponding Averaging Date Final Price.

	Net Stock Settlement Requirements:	If Counterparty elects Net Stock Settlement, Counterparty covenants, represents and warrants that (i) it will deliver to CSFB Capital only Shares that are eligible for immediate resale by Counterparty under Rule 144 or Rule 145 and (ii) it (and each person whose sales of Shares would be aggregated with Counterparty’s sales under Rule 144(e)(3)) will not sell any Shares during the three-month period ending on the third Exchange Business Day following the Scheduled Valuation Date.

Adjustments:

	Total Return Option:	Inapplicable

	Fixed Dividend Level:	USD 0.00 (zero) per Share

	Method of Adjustment:	Calculation Agent Adjustment.


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 Shares consisting of cash in U.S. dollars per Share or the value of any non-cash assets, 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 record 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 pursuant to this Dividend Pass-Through provision for a period ending on the Scheduled Valuation Date unless a record date occurred during such period for an Actual Dividend.

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.

		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 the Issuer of the same class as the Shares is significantly impaired; Counterparty will be the Affected Party.

Collateral:


		Pledge of Collateral:		On the Trade Date, Counterparty will pledge a quantity of Shares equal to the Base Number of Shares on the Trade Date 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 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 on Transfer:		Counterparty represents and warrants to CSFB Capital that (i) Counterparty’s “holding period” for the Shares pledged hereunder, determined in accordance with Rule 144, commenced on January 28, 2000, and the Issuer is in compliance with Rule 144(c)(l) and (ii) other than the restrictions under Rule 144, such Shares are free of any contractual or legal restrictions on transfer.

		Manner of Hedging:		CSFB Capital represents that it will execute any initial hedging in Shares 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 pursuant to Rule 144 and (y) will cause each person whose sales of Shares would be aggregated with Counterparty’s sales under Rule 144(e)(3) not to sell any Shares, 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.

		(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:		Bank Name: Chase, NY, NY

				ABA Routing #: 021 000 021

				Name on Account: Pershing LLC

				Account #:

				For further credit to: Wendell H. Murphy, Sr. to Sub Account #:

		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 #:

		Deliveries to CSFB Capital:		Credit Suisse First Boston LLC
				DTC: 355
				Ref a/c:

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.

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/ DEBRA TAGELDEIN

				Name: DEBRA TAGELDEIN
				Title: Assistant Vice President

COUNTERPARTY-WENDELL H. MURPHY, SR.

/s/ WENDELL H. MURPHY, SR.

Name: Wendell H. Murphy, Sr.

Credit Suisse First Boston Capital LLC
Credit Suisse First Boston LLC
11 Madison Avenue
New York, NY 10010

VARIABLE PREPAID FORWARD CONFIRMATION

Date: July 15, 2003

To: Wendell H. Murphy, Jr.

From: Credit Suisse First Boston Capital LLC

Re: Variable Prepaid Forward

Transaction ID: SFD#02B

External ID: 7004233

Dear: Mr. Murphy, Jr.

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.

General Terms:


		Trade Date:		July 15, 2003

		Scheduled Valuation Date:		July 15, 2008 (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:		Smithfield Foods, Inc.

		Shares (Ticker):		Shares of common stock of the Issuer (SFD)

		Exchange:		New York Stock Exchange

		Base Number of Shares:		Initially 160,100 Shares, subject to Calculation Agent Adjustment.

		Floor:		Initially 100.0% of Initial Price = $23.0112, subject to Calculation Agent Adjustment.

		Cap:		Initially 130.0% of Initial Price = $29.9146, subject to Calculation Agent Adjustment.

		Participation above Cap:		0%

		Initial Price:		$23.0112

		Prepaid Percentage:		85.5%

		Purchase Price:		$3,149,899.62 (Initial Price x Base Number of Shares x Prepaid Percentage).

		Payment Date:		Three (3) Business Days after the later of the day on which Transaction Documents executed by Counterparty are received by CSFB Capital and the day on which CSFB Capital receives from Counterparty a number of Shares as Collateral equal to the number of Shares specified in the Pledge of Collateral provision below.

Valuation:


		Averaging Date Final Price:		The Volume Weighted Average Price per Share, 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 Date, or if such Volume Weighted Average Price is not available, the market value of one (1) Share on 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 precluded from purchasing or selling Shares 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.

				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. CSFB Capital need not communicate to the Counterparty the reason for CSFB Capital’s exercise of its rights pursuant to this provision.

Settlement Terms:

Physical Settlement:


		Averaging Date Deliverable Number of Shares:		In respect of each Averaging Date, a number of Shares equal to the lesser of A or B, where:

				“A” is the result of the Base Number of Shares divided by the number of Averaging Dates; and

				“B” is the product of C multiplied by D, where:

				“C” is the result of the Base Number of Shares divided by the number of Averaging Dates, and

				“D” is the result of (x) divided by (y), where:

				“(x)” is the sum, determined as of the Valuation Date, of

				(i) the Floor (expressed as an amount) and

				(ii) the product of (a) one (1) minus the Participation Above Cap and (b) any amount by which the corresponding Averaging Date Final Price exceeds the Cap (expressed as an amount): and

				“(y)” is the corresponding Averaging Date Final Price.

		Total Deliverable Number of Shares:		The sum of the Averaging Date Deliverable Number of Shares for all of the Averaging Dates.

		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, 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 Participant:		Counterparty will have the right to cash settle the Transaction; on the third Business Day following each Averaging Date (each a “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 (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 each Cash Settlement Payment Date, an amount in U.S. dollars, determined as of the relevant Averaging Date, equal to the product of (i) the applicable Averaging Date Deliverable Number of Shares multiplied by (ii) each corresponding Averaging Date Final Price.

		Net Stock Settlement Requirements:		If Counterparty elects Net Stock Settlement, Counterparty covenants, represents and warrants that (i) it will deliver to CSFB Capital only Shares that are eligible for immediate resale by Counterparty under Rule 144 or Rule 145 and (ii) it (and each person whose sales of Shares would be aggregated with Counterparty’s sales under Rule 144(e)(3)) will not sell any Shares during the three-month period ending on the third Exchange Business Day following the Scheduled Valuation Date.

Adjustments:


		Total Return Option:		Inapplicable

		Fixed Dividend Level:		USD 0.00 (zero) per Share

		Method of Adjustment:		Calculation Agent Adjustment.


		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 Shares consisting of cash in U.S. dollars per Share or the value of any non-cash assets, 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 record 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 pursuant to this Dividend Pass-Through provision for a period ending on the Scheduled Valuation Date unless a record date occurred during such period for an Actual Dividend.

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.

		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 the Issuer of the same class as the Shares is significantly impaired; Counterparty will be the Affected Party.

Collateral:


		Pledge of Collateral:		On the Trade Date, Counterparty will pledge a quantity of Shares equal to the Base Number of Shares on the Trade Date 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 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 on Transfer:		Counterparty represents and warrants to CSFB Capital that (i) Counterparty’s “holding period” for the Shares pledged hereunder, determined in accordance with Rule 144, commenced on January 28, 2000, and the Issuer is in compliance with Rule 144(c)(l) and (ii) other than the restrictions under Rule 144, such Shares are free of any contractual or legal restrictions on transfer.

		Manner of Hedging:		CSFB Capital represents that it will execute any initial hedging in Shares 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 pursuant to Rule 144 and (y) will cause each person whose sales of Shares would be aggregated with Counterparty’s sales under Rule 144(e)(3) not to sell any Shares, 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.

		(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:		Bank Name: Chase, NY, NY

				ABA Routing #: 021 000 021

				Name on Account: Pershing LLC

				Account #:

				For further credit to: Wendell H. Murphy, Jr. to Sub Account #:


		Account #:

Deliveries to CSFB Capital:		Credit Suisse First Boston LLC DTC: 355 Ref a/c:

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.

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/ DEBRA TAGELDEIN

				Name: DEBRA TAGELDEIN
				Title: Assistant Vice President

COUNTERPARTY-WENDELL H. MURPHY, JR.

/s/ WENDELL H. MURPHY, JR.

Name: Wendell H. Murphy, Jr.

Credit Suisse First Boston Capital LLC
Credit Suisse First Boston LLC
11 Madison Avenue
New York, NY 10010

VARIABLE PREPAID FORWARD CONFIRMATION

Date: July 15, 2003

To: Joyce M. Minchew

From: Credit Suisse First Boston Capital LLC

Re: Variable Prepaid Forward

Transaction ID: SFD#03B

External ID: 7004231

Dear: Ms. Minchew

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.

General Terms:


Trade Date:		July 15, 2003

Scheduled Valuation Date:		July 15, 2008 (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:		Smithfield Foods, Inc.

Shares (Ticker):		Shares of common stock of the Issuer (SFD)

Exchange:		New York Stock Exchange

Base Number of Shares:		Initially 84,494 Shares, subject to Calculation Agent Adjustment.

Floor:		Initially 100.0% of Initial Price = $23.0112, subject to Calculation Agent Adjustment.

Cap:		Initially 130.0% of Initial Price = $29.9146, subject to Calculation Agent Adjustment.

Participation above Cap:		0%

Initial Price:		$23.0112

Prepaid Percentage:		85.5%

Purchase Price:		$1,662,383.62 (Initial Price x Base Number of Shares x Prepaid Percentage).

Payment Date:		Three (3) Business Days after the later of the day on which Transaction Documents executed by Counterparty are received by CSFB Capital and the day on which CSFB Capital receives from Counterparty a number of Shares as Collateral equal to the number of Shares specified in the Pledge of Collateral provision below.

Valuation:


Averaging Date Final Price:		The Volume Weighted Average Price per Share, 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 Date, or if such Volume Weighted Average Price is not available, the market value of one (1) Share on 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 precluded from purchasing or selling Shares 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.

		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. CSFB Capital need not communicate to the Counterparty the reason for CSFB Capital’s exercise of its rights pursuant to this provision.

Settlement Terms:

Physical Settlement:


Averaging Date Deliverable Number of Shares:		In respect of each Averaging Date, a number of Shares equal to the lesser of A or B, where:

		“A” is the result of the Base Number of Shares divided by the number of Averaging Dates; and

		“B” is the product of C multiplied by D, where:

		“C” is the result of the Base Number of Shares divided by the number of Averaging Dates, and

		“D” is the result of (x) divided by (y), where:

		“(x)” is the sum, determined as of the Valuation Date, of

		(i) the Floor (expressed as an amount) and

		(ii) the product of (a) one (1) minus the Participation Above Cap and (b) any amount by which the corresponding Averaging Date Final Price exceeds the Cap (expressed as an amount) ; and

		“(y)” is the corresponding Averaging Date Final Price.

Total Deliverable Number of Shares:		The sum of the Averaging Date Deliverable Number of Shares for all of the Averaging Dates.

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, 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 Participant:		Counterparty will have the right to cash settle the Transaction; on the third Business Day following each Averaging Date (each a “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 (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 each Cash Settlement Payment Date, an amount in U.S. dollars, determined as of the relevant Averaging Date, equal to the product of (i) the applicable Averaging Date Deliverable Number of Shares multiplied by (ii) each corresponding Averaging Date Final Price.

Net Stock Settlement Requirements:		If Counterparty elects Net Stock Settlement, Counterparty covenants, represents and warrants that (i) it will deliver to CSFB Capital only Shares that are eligible for immediate resale by Counterparty under Rule 144 or Rule 145 and (ii) it (and each person whose sales of Shares would be aggregated with Counterparty’s sales under Rule 144(e)(3)) will not sell any Shares during the three-month period ending on the third Exchange Business Day following the Scheduled Valuation Date.

Adjustments:


Total Return Option:		Inapplicable

Fixed Dividend Level:		USD 0.00 (zero) per Share

Method of Adjustment:		Calculation Agent Adjustment.


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 Shares consisting of cash in U.S. dollars per Share or the value of any non-cash assets, 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 record 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 pursuant to this Dividend Pass-Through provision for a period ending on the Scheduled Valuation Date unless a record date occurred during such period for an Actual Dividend.

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.

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 the Issuer of the same class as the Shares is significantly impaired; Counterparty will be the Affected Party.

Collateral:


Pledge of Collateral:		On the Trade Date, Counterparty will pledge a quantity of Shares equal to the Base Number of Shares on the Trade Date 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 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 on Transfer:		Counterparty represents and warrants to CSFB Capital that (i) Counterparty’s “holding period” for the Shares pledged hereunder, determined in accordance with Rule 144, commenced on January 28, 2000, and the Issuer is in compliance with Rule 144(c)(1) and (ii) other than the restrictions under Rule 144, such Shares are free of any contractual or legal restrictions on transfer.

Manner of Hedging:		CSFB Capital represents that it will execute any initial hedging in Shares 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 pursuant to Rule 144 and (y) will cause each person whose sales of Shares would be aggregated with Counterparty’s sales under Rule 144(e)(3) not to sell any Shares, 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.

		(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:		Bank Name: Chase, NY, NY

		ABA Routing #: 021 000 021

		Name on Account: Pershing LLC

		Account#:

		For further credit to: Joyce M. Minchew to Sub Account #:


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 #:

Deliveries to CSFB Capital:		Credit Suisse First Boston LLC DTC: 355 Ref a/c:

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.

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/ DEBRA TAGELDEIN

				Name: DEBRA TAGELDElN
				Title: Assistant Vice President

COUNTERPARTY- JOYCE M. MINCHEW

/s/ JOYCE M. MINCHEW

Name: Joyce M. Minchew

Credit Suisse First Boston Capital LLC
Credit Suisse First Boston LLC
11 Madison Avenue
New York, NY 10010

VARIABLE PREPAID FORWARD CONFIRMATION

Date: July 15, 2003

To: Wendy M.Cumpler

From: Credit Suisse First Boston Capital LLC

Re: Variable Prepaid Forward

Transaction ID: SFD#07B

External ID: 7004229

Dear: Ms. Cumpler

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.

General Terms:


		Trade Date:		July 15, 2003

		Scheduled Valuation Date:		July 15, 2008 (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:		Smithfield Foods, Inc.

		Shares (Ticker):		Shares of common stock of the Issuer (SFD)

		Exchange:		New York Stock Exchange

		Base Number of Shares:		Initially 47,303 Shares, subject to Calculation Agent Adjustment.

		Floor:		Initially 100.0% of Initial Price = $23.0112, subject to Calculation Agent Adjustment.

		Cap:		Initially 130.0% of Initial Price = $29.9146, subject to Calculation Agent Adjustment.

		Participation above Cap:		0%

		Initial Price:		$23.0112

		Prepaid Percentage:		85.5%

		Purchase Price:		$930,666.47 (Initial Price x Base Number of Shares x Prepaid Percentage).

		Payment Date:		Three (3) Business Days after the later of the day on which Transaction Documents executed by Counterparty are received by CSFB Capital and the day on which CSFB Capital receives from Counterparty a number of Shares as Collateral equal to the number of Shares specified in the Pledge of Collateral provision below.

Valuation:


		Averaging Date Final Price:		The Volume Weighted Average Price per Share, 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 Date, or if such Volume Weighted Average Price is not available, the market value of one (1) Share on 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 precluded from purchasing or selling Shares 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.

				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. CSFB Capital need not communicate to the Counterparty the reason for CSFB Capital’s exercise of its rights pursuant to this provision.

Settlement Terms:

Physical Settlement:


		Averaging Date Deliverable Number of Shares:		In respect of each Averaging Date, a number of Shares equal to the lesser of A or B, where:

				“A” is the result of the Base Number of Shares divided by the number of Averaging Dates; and

				“B” is the product of C multiplied by D, where:

				“C” is the result of the Base Number of Shares divided by the number of Averaging Dates, and

				“D” is the result of (x) divided by (y), where:

				“(x)” is the sum, determined as of the Valuation Date, of

				(i) the Floor (expressed as an amount) and

				(ii) the product of (a) one (1) minus the Participation Above Cap and (b) any amount by which the corresponding Averaging Date Final Price exceeds the Cap (expressed as an amount); and

				“(y)” is the corresponding Averaging Date Final Price.

		Total Deliverable Number of Shares:		The sum of the Averaging Date Deliverable Number of Shares for all of the Averaging Dates.

		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, 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 Participant:		Counterparty will have the right to cash settle the Transaction; on the third Business Day following each Averaging Date (each a “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 (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 each Cash Settlement Payment Date, an amount in U.S. dollars, determined as of the relevant Averaging Date, equal to the product of (i) the applicable Averaging Date Deliverable Number of Shares multiplied by (ii) each corresponding Averaging Date Final Price.

	Net Stock Settlement Requirements:	If Counterparty elects Net Stock Settlement, Counterparty covenants, represents and warrants that (i) it will deliver to CSFB Capital only Shares that are eligible for immediate resale by Counterparty under Rule 144 or Rule 145 and (ii) it (and each person whose sales of Shares would be aggregated with Counterparty’s sales under Rule 144(e)(3)) will not sell any Shares during the three-month period ending on the third Exchange Business Day following the Scheduled Valuation Date.

Adjustments:


		Total Return Option:		Inapplicable

		Fixed Dividend Level:		USD 0.00 (zero) per Share

		Method of Adjustment:		Calculation Agent Adjustment.


		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 Shares consisting of cash in U.S. dollars per Share or the value of any non-cash assets, 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 record 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 pursuant to this Dividend Pass-Through provision for a period ending on the Scheduled Valuation Date unless a record date occurred during such period for an Actual Dividend.

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.

		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 the Issuer of the same class as the Shares is significantly unpaired; Counterparty will be the Affected Party.

Collateral:


		Pledge of Collateral:		On the Trade Date, Counterparty will pledge a quantity of Shares equal to the Base Number of Shares on the Trade Date 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 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 on Transfer:		Counterparty represents and warrants to CSFB Capital that (i) Counterparty’s “holding period” for the Shares pledged hereunder, determined in accordance with Rule 144, commenced on January 28, 2000, and the Issuer is in compliance with Rule 144(c)(1) and (ii) other than the restrictions under Rule 144, such Shares are free of any contractual or legal restrictions on transfer.

		Manner of Hedging:		CSFB Capital represents that it will execute any initial hedging in Shares 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 pursuant to Rule 144 and (y) will cause each person whose sales of Shares would be aggregated with Counterparty’s sales under Rule 144(e)(3) not to sell any Shares, 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.

		(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:		Bank Name: Chase, NY, NY

				ABA Routing #: 021 000 021

				Name on Account: Pershing LLC

				Account #:

				For further credit to: Wendy M. Cumpler to Sub Account #:


		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 #:

		Deliveries to CSFB Capital:		Credit Suisse First Boston LLC
				DTC: 355
				Ref a/c:

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.

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/ DEBRA TAGELDEIN

				Name: DEBRA TAGELDEIN
				Title: Assistant Vice President


COUNTERPARTY- WENDY M. CUMPLER

/s/ WENDY M CUMPLER

Name: Wendy M. Cumpler

Credit Suisse First Boston Capital LLC
Credit Suisse First Boston LLC
11 Madison Avenue
New York, NY 10010

VARIABLE PREPAID FORWARD CONFIRMATION


Date: July 15, 2003

To: Angela N. Brown

From: Credit Suisse First Boston Capital LLC

Re: Variable Prepaid Forward


Transaction ID: SFD#08B

External ID: 7004230


Dear:		Ms. Brown

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.


General Terms:

	Trade Date:	July 15, 2003

	Scheduled Valuation Date:	July 15, 2008 (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:	Smithfield Foods, Inc.

	Shares (Ticker):	Shares of common stock of the Issuer (SFD)

	Exchange:	New York Stock Exchange

	Base Number of Shares:	Initially 25,998 Shares, subject to Calculation Agent Adjustment.

	Floor:	Initially 100.0% of Initial Price = $23.0112, subject to Calculation Agent Adjustment.

	Cap:	Initially 130.0% of Initial Price = $29.9146, subject to Calculation Agent Adjustment.

	Participation above Cap:	0%

	Initial Price:	$23.0112

	Prepaid Percentage:	85.5%

	Purchase Price:	$511,499.63, (Initial Price x Base Number of Shares x Prepaid Percentage).

	Payment Date:	Three (3) Business Days after the later of the day on which Transaction Documents executed by Counterparty are received by CSFB Capital and the day on which CSFB Capital receives from Counterparty a number of Shares as Collateral equal to the number of Shares specified in the Pledge of Collateral provision below.


Valuation:

	Averaging Date Final Price:	The Volume Weighted Average Price per Share, 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 Date, or if such Volume Weighted Average Price is not available, the market value of one (1) Share on 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 precluded from purchasing or selling Shares 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.

		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. CSFB Capital need not communicate to the Counterparty the reason for CSFB Capital’s exercise of its rights pursuant to this provision.

Settlement Terms:

Physical Settlement:

	Averaging Date Deliverable Number of Shares:	In respect of each Averaging Date, a number of Shares equal to the lesser of A or B, where:

		“A” is the result of the Base Number of Shares divided by the number of Averaging Dates; and

		“B” is the product of C multiplied by D, where:

		“C” is the result of the Base Number of Shares divided by the number of Averaging Dates, and

		“D” is the result of (x) divided by (y), where:

		“(x)” is the sum, determined as of the Valuation Date, of

		(i) the Floor (expressed as an amount) and

		(ii) the product of (a) one (1) minus the Participation Above Cap and (b) any amount by which the corresponding Averaging Date Final Price exceeds the Cap (expressed as an amount): and

		“(y)” is the corresponding Averaging Date Final Price.

	Total Deliverable Number of Shares:	The sum of the Averaging Date Deliverable Number of Shares for all of the Averaging Dates.

	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, 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 Participant:		Counterparty will have the right to cash settle the Transaction; on the third Business Day following each Averaging Date (each a “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 (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 each Cash Settlement Payment Date, an amount in U.S. dollars, determined as of the relevant Averaging Date, equal to the product of (i) the applicable Averaging Date Deliverable Number of Shares multiplied by (ii) each corresponding Averaging Date Final Price.

	Net Stock Settlement Requirements:	If Counterparty elects Net Stock Settlement, Counterparty covenants, represents and warrants that (i) it will deliver to CSFB Capital only Shares that are eligible for immediate resale by Counterparty under Rule 144 or Rule 145 and (ii) it (and each person whose sales of Shares would be aggregated with Counterparty’s sales under Rule 144(e)(3)) will not sell any Shares during the three-month period ending on the third Exchange Business Day following the Scheduled Valuation Date.

Adjustments:

	Total Return Option:	Inapplicable

	Fixed Dividend Level:	USD 0.00 (zero) per Share

	Method of Adjustment:	Calculation Agent Adjustment.


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 Shares consisting of cash in U.S. dollars per Share or the value of any non-cash assets, 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 record 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 pursuant to this Dividend Pass-Through provision for a period ending on the Scheduled Valuation Date unless a record date occurred during such period for an Actual Dividend.


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.

	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 the Issuer of the same class as the Shares is significantly impaired; Counterparty will be the Affected Party.

Collateral:

	Pledge of Collateral:		On the Trade Date, Counterparty will pledge a quantity of Shares equal to the Base Number of Shares on the Trade Date 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 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 on Transfer:	Counterparty represents and warrants to CSFB Capital that (i) Counterparty’s “holding period” for the Shares pledged hereunder, determined in accordance with Rule 144, commenced on January 28, 2000, and the Issuer is in compliance with Rule 144(c)(l) and (ii) other than the restrictions under Rule 144, such Shares are free of any contractual or legal restrictions on transfer.

	Manner of Hedging:	CSFB Capital represents that it will execute any initial hedging in Shares 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 pursuant to Rule 144 and (y) will cause each person whose sales of Shares would be aggregated with Counterparty’s sales under Rule 144(e)(3) not to sell any Shares, 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.

		(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:	Bank Name: Chase, NY, NY
		ABA Routing #: 021 000 021
		Name on Account: Pershing LLC
		Account #:
		For further credit to: Angela N. Brown to Sub Account #:


	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 #:

	Deliveries to CSFB Capital:	Credit Suisse First Boston LLC DTC: 355 Ref a/c:

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.

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/ DEBRA TAGELDEIN

		Name:	DEBRA TAGELDEIN
		Title:	Assistant Vice President

COUNTERPARTY- ANGELA N. BROWN

/s/ ANGELA N. BROWN

Name: Angela N. Brown

10 EX-5 7 w90450exv5.htm EXHIBIT 5 exv5

Credit Suisse First Boston Capital LLC
Credit Suisse First Boston LLC
11 Madison Avenue
New York, NY 10010

VARIABLE PREPAID FORWARD AGREEMENT

Date:	________________

To:	________________

From:	Credit Suisse First Boston Capital LLC

Re:	Variable Prepaid Forward Transactions

Transaction ID: SFD#01

Dear:

________________

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.

TABLE OF CONTENTS


1. Notice Information			3
2. Representations and Warranties			3
3. Adjustment Events			5
4. Termination Events			6
5. Termination of Transaction			8
6. Payment upon Merger Events			8
7. Expenses			9
8. Set-Off			9
9. Taxes			9
10. Security Agreement			10
11. Remedies upon Security Agreement Default			13
12. Notices			14
13. Furnishing of Specified Information			14
14. Miscellaneous			15
15. Definitions			16

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

With a copy to:		Credit Suisse First Boston LLC 11 Madison Avenue, 3^rd 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.: Allen Silberstein / Debra Tageldein Tel: (212) 325 8681 / (212) 325 8655 Fax.: (212) 538 8898

Counterparty:		Wendell H. Murphy, Sr. 4134 Hwy 117 S Rose Hill, North Carolina, 28458

		Tel: 910-289-2111 Fax: 910-284-6434

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. § 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, 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 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;

(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.

(viii) Organization; Capacity and Authority. Counterparty represents and warrants that it has been duly organized and is validly existing and in good standing under the laws of the jurisdiction of its organization, has all necessary power and authority to perform its obligations under each Transaction Document to which it is a party and to own or hold its properties and to conduct the business in which it is engaged and is duly qualified to do business in each jurisdiction in which the conduct of its business requires such qualification.

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 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 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 one Business Day 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 for each Exchange Business Day during the two-year historical period ending on the Announcement Date of the Merger Event;

(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 in the calendar year ending on the Announcement Date; and

(iii) a value ascribed to the relevant Shares equal to the consideration, if any, paid in respect of such Shares to holders of such Shares 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 “Paver”) 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) If “Total Return Option” is specified as applicable in the relevant Confirmation, (x) the Counterparty instructs the Securities Intermediary to purchase additional Shares with any cash dividends upon receipt thereof at their current market price thereof; The Securities Intermediary may charge its normal commissions therefor and (y) the Counterparty shall cause each definitive certificate evidencing the Shares to be re-registered in the name of “Credit Suisse First Boston LLC (or such other custodian), as secured party” and shall cause all cash dividends paid on the Shares to be paid directly to Credit Suisse First Boston LLC (or such other custodian).

(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) Rehypothecation. Without limiting the rights and obligations of the parties under this Security Agreement provision, upon the consent of Counterparty in its capacity as pledgor (“Pledgor”) (which consent need not be in writing), on any day from, and including, the date which is thirty (30) calendar days

following the Trade Date of the Transaction to which the relevant Collateral relates CSFB Capital, in its capacity as secured party (“Secured Party”), may sell, lend, pledge, rehypothecate, assign, invest, use, commingle or otherwise dispose of, or otherwise use in its business (collectively, “Rehypothecate”), any Collateral, free from any claim or right of any nature whatsoever of Pledgor, including any equity or right of redemption by pledgor and, if a Borrow Fee is specified in the relevant Confirmation, CSFB Capital shall pay to Counterparty, on the first Business Day following the first date on which CSFB Capital Rehypothecates any Collateral in respect of the Transaction to which such Confirmation relates but not in respect of any subsequent Rehypothecation of Collateral in respect of that Transaction, an amount in U.S. Dollars equal to the Borrow Fee (as such term is defined in the relevant Confirmation); provided that Secured Party will replace any Rehypothecated Collateral (with the same Collateral or identical substitute Collateral) (A) upon five (5) Business Days’ notice from Pledgor or (B) if not already replaced, on the applicable Share Delivery Date or any relevant Early Termination Date, as the case might be; provided further that in the case of any Early Termination Date arising pursuant to a Merger Event in which the consideration received by holder of Shares does not consist solely of Non-Stock Consideration, Secured Party will be obligated to replace only Non-Stock Consideration in an amount and of the type that a holder of a number of Shares equal to the number of Shares Rehypothecated by Secured Party immediately prior to such Merger Event would have been entitled to receive in such Merger Event. If at any time at which any Shares constituting Collateral have been Rehypothecated pursuant to this Rehypothecation Section there shall occur an event of a type that would, had Secured Party borrowed such Shares from Pledgor on terms customary for loans of equity securities (as determined by the Calculation Agent), require either (i) an adjustment to the number of Shares or a change in the type of securities or other property that Secured Party would be required to deliver to Pledgor to repay such stock loan or (ii) a payment or delivery by Secured Party to Pledgor in respect of dividends paid or distributions made on such Shares, then, in the case of clause (i), such adjustment or change shall be applied to the number of Shares that Secured Party is required to replace upon notice from Pledgor in accordance with the first proviso to the immediately preceding sentence and, in the case of clause (ii), Secured Party shall make such payment or delivery to Pledgor, whereupon the amount so paid or the assets so delivered shall become Collateral hereunder. All determinations related to the immediately preceding sentence shall be made by the Calculation Agent. Notwithstanding the foregoing, if, in respect of any Transaction, a number of Shares equal to the Base Number of Shares is unavailable for Rehypothecation by Secured Party at any time ((1) as a result of pledgor’s withholding pledgor’s consent to Rehypothecation of such Collateral, (2) as a result of pledgor’s causing Secured Party to replace such Collateral pursuant to the first proviso to the first sentence in this Rehypothecation Section, (3) as a result of any Transfer Restrictions (including the Existing Transfer Restrictions, if any) or (4) otherwise) (a “Rehypothecation Unavailability”), the Calculation Agent shall adjust one or more of the Floor, Cap and any other variable relevant to the exercise, settlement or payment terms hereof or of the Transaction, as appropriate to make Secured Party whole for any costs relating to the borrowing of Shares in connection with hedging Secured Party’s exposure to the Transaction (whether such borrowing is effected by Secured Party or by a counterparty to a transaction entered into by Secured Party to hedge Secured Party’s exposure to the Transaction), as determined by the Calculation Agent. For purposes of determining the occurrence of a Security Agreement Default, the Rehypothecation of any Collateral pledged hereunder shall not affect the status of such Collateral as Collateral or Eligible Collateral hereunder.

(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 short-term, direct obligations of the U.S. government (“U.S. Obligations”), for the Pledged Securities. Such 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 Counterparty pledge additional Collateral, and such failure shall not be cured 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 LLC, and shall irrevocably instruct, and hereby irrevocably instructs, CSFB LLC 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) 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 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 are delivered with respect to any Transaction, a cash payment shall be made in lieu of the delivery of fractional Shares , such amount being determined by the Calculation Agent as the product of such fractional number of Shares 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 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 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, the first Exchange Business Day on which those Shares 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, 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 on the Exchange or any successor exchange or (ii) in options of futures contracts relating to the relevant Shares 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.

“Merger Date” means, in respect of a Merger Event, the date upon which all holders of the relevant Shares (other than, in the case of a takeover offer, Shares owned or controlled by the offeror) have agreed or have irrevocably become obliged to transfer their Shares.

“Merger Event” means, in respect of any relevant Shares, any (i) rectification or change of Shares that results in a transfer of or an irrevocable commitment to transfer all of such Shares outstanding, (ii) consolidation, amalgamation or merger of the Issuer with or into another entity or (iii) other takeover offer for such Shares that results in a transfer of or an irrevocable commitment to transfer all such Shares (other than such Shares 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 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 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 (unless a Merger Event), or, a free distribution or dividend of any such Shares to existing holders by way of bonus, capitalization or similar issue;

(ii) a distribution or dividend to existing holders of the relevant Shares of (A) such Shares, 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, 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 that are not fully paid;

(v) a repurchase by the Issuer of relevant Shares 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 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.

“Rehypothecation Unavailability” has the meaning specified in Section 10(I).

“Rehypothecate” has the meaning specified in Section 10(I) and “Rehypothecated” and “Rehypothecation” shall be interpreted accordingly.

“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 consists of Combined Consideration.

“Share-for-Other” means, in respect of a Merger Event, that the consideration for the Shares consists solely of Other Consideration.

“Share-for-Share” means, in respect of a Merger Event, that the consideration for the Shares consists of (or, at the option of the holder of such Shares, 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 mat 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/ LINDA STEINMULLER

				Name: LINDA STEINMULLER Title: VICE PRESIDENT

Accepted and confirmed as of the date first written above by:

COUNTERPARTY-___________________


By:

Name:________________

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.

21 EX-6 8 w90450exv6.htm EXHIBIT 6 exv6

JOINT FILING AGREEMENT

The undersigned hereby agree as follows:

(i) Each of them agrees that the Amendment No. 2 to Schedule 13D to which this Agreement is attached as an exhibit is filed on behalf of each of them.

(ii) Each of them is responsible for the timely filing of such Amendment No. 2 to Schedule 13D and any further amendments thereto, and for the completeness and accuracy of the information concerning such person contained therein; but none of them is responsible for the completeness or accuracy of the information concerning the other persons making the filing, unless such person knows or has reason to believe that such information is inaccurate.


Dated: October 23, 2003		Wendell H. Murphy

		/s/ Mark Roberts Mark Roberts Attorney-in-Fact

		Harry D. Murphy

		/s/ Mark Roberts Mark Roberts Attorney-in-Fact

		Joyce Murphy Minchew

		/s/ Mark Roberts Mark Roberts Attorney-in-Fact

		Wendell H. Murphy, Jr.

		/s/ Mark Roberts Mark Roberts Attorney-in-Fact

		Wendy Murphy Crumpler

		/s/ Mark Roberts Mark Roberts Attorney-in-Fact

		Stratton K. Murphy

		/s/ Mark Roberts Mark Roberts Attorney-in-Fact



		Marc D. Murphy

		/s/ Mark Roberts Mark Roberts Attorney-in-Fact

		Angela Norman Brown

		/s/ Mark Roberts Mark Roberts Attorney-in-Fact

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			WHM Jr. Legacy, LLC and WMC Legacy, LLC are wholly-owned by WHM-Sr. Legacy, LLC.

	•		Wendell H. Murphy, Jr. transferred 1,921,052 shares of Smithfield Common Stock on December 18, 2002 to DM Legacy, LLC, a Delaware limited liability company, in exchange for all of the limited liability company interests of DM Legacy, LLC (which included both Class A and Class B limited liability company interests).

	•		Wendy Murphy Crumpler transferred 564,267 shares of Smithfield Common Stock on December 16, 2002 to Register Legacy, LLC, a Delaware limited liability company, in exchange for all of the limited liability company interests of Register Legacy, LLC (which included both Class A and Class B limited liability company interests).

	•		Joyce Murphy Minchew transferred 1,209,476 shares of Smithfield Common Stock on December 16, 2002 to JM Legacy, LLC, a Delaware limited liability company, in exchange for all of the limited liability company interests of JM Legacy, LLC (which included both Class A and Class B limited liability company interests).

	•		Angela Norman Brown transferred 310,123 shares of Smithfield Common Stock on December 16, 2002 to AB Legacy, LLC, a Delaware limited liability company, in exchange for all of the limited liability company interests of AB Legacy, LLC (which included both Class A and Class B limited liability company interests).

		(i) Each party will make each payment or delivery specified in each Confirmation to be made by it, subject to the other provisions of this Agreement.

		(ii) Payments under this Agreement will be made on the due date for value on that date in the place of the account specified in the relevant Confirmation or otherwise pursuant to this Agreement, in freely transferable funds and in the manner customary for payments in the required currency. Where settlement is by delivery (that is, other than by payment), such delivery will be made for receipt on the due date in the manner customary for the relevant obligation unless otherwise specified in the relevant Confirmation or elsewhere in this Agreement.

		(iii) Each obligation of each party under Section 2(a)(i) is subject to (1) the condition precedent that no Event of Default or Potential Event of Default with respect to the other party has occurred and is continuing, (2) the condition precedent that no Early Termination Date in respect of the relevant Transaction has occurred or been effectively designated and (3) each other applicable condition precedent specified in this Agreement.

		(i) in the same currency; and

		(ii) in respect of the same Transaction,

			(1) promptly notify the other party (“Y”) of such requirement;

			(2) 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 this Section 2(d)) promptly upon the earlier of determining that such deduction or withholding is required or receiving notice that such amount has been assessed against Y;

			(3) 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

			(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to the payment to which Y is otherwise entitled under this Agreement, 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:—

			(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 Section 2(d)(i)(4);

			(2) X does not so deduct or withhold; and

			(3) a liability resulting from such Tax is assessed directly against X,

		(i) *Status.* It is duly organized and validly existing under the laws of the jurisdiction of its organization or incorporation and, if relevant under such laws, in good standing;

		(ii) *Powers.* It has the power to execute this Agreement and any other documentation relating to this Agreement to which it is a party, to deliver this Agreement and any other documentation relating to this Agreement that it is required by this Agreement to deliver and to perform its obligations under this Agreement and any obligations it has under any Credit Support Document to which it is a party and has taken all necessary action to authorize such execution, delivery and performance;

		(iii) *No Violation or Conflict.* Such execution, delivery and performance do not violate or conflict with any law applicable to it, any provision of its constitutional 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 with respect to this Agreement or any Credit Support Document to which it is a party have been obtained and are in full force and effect and all conditions of any such consents have been complied with; and

		(v) *Obligations Binding.* Its obligations under this Agreement and any Credit Support Document to which it is a party 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)).

		(i) any forms, documents or certificates relating to taxation specified in the Schedule or any Confirmation;

		(ii) any other documents specified in the Schedule or any Confirmation; and

		(iii) upon reasonable demand by such other party, any form or document that may be required or reasonably requested in writing in order to allow such other party or its Credit Support Provider to make a payment under this Agreement or any applicable Credit Support Document 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 the party in receipt of such demand), 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,

		(i) *Failure to Pay or Deliver.* Failure by the party to make, when due, any payment under this Agreement or delivery under Section 2(a)(i) or 2(e) required to be made by it if such failure is not remedied on or before the third Local Business Day after notice of such failure is given to the party;

		(ii) *Breach of Agreement.* Failure by the party to comply with or perform any agreement or obligation (other than an obligation to make any payment under this Agreement or delivery under Section 2(a)(i) or 2(e) or to give notice of a Termination Event or any agreement or obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party in accordance with this Agreement if such failure is not remedied on or before the thirtieth day after notice of such failure is given to the party;

		(iii) *Credit Support Default.*

			(1) Failure by the party or any Credit Support Provider of such party to comply with or perform any agreement or obligation to be complied with or performed by it in accordance with any Credit Support Document if such failure is continuing after any applicable grace period has elapsed;

			(2) the expiration or termination of such Credit Support Document or the failing or ceasing of such Credit Support Document to be in full force and effect for the purpose of this Agreement (in either case other than in accordance with its terms) prior to the satisfaction of all obligations of such party under each Transaction to which such Credit Support Document relates without the written consent of the other party; or

			(3) the party or such Credit Support Provider disaffirms, disclaims, repudiates or rejects, in whole or in part, or challenges the validity of, such Credit Support Document;

		(iv) *Misrepresentation.* A representation (other than a representation under Section 3(e) or (f)) made or repeated or deemed to have been made or repeated by the party or any Credit Support Provider of such party in this Agreement or any Credit Support Document proves to have been incorrect or misleading in any material respect when made or repeated or deemed to have been made or repeated;

		(v) *Default under Specified Transaction.* The party, any Credit Support Provider of such party or any applicable Specified Entity of such party (1) 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 an early termination of, that Specified Transaction, (2) 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 such default continues for at least three Local Business Days if there is no applicable notice requirement or grace period) or (3) 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);

		(vi) *Cross Default.* If “Cross Default” is specified in the Schedule as applying to the party, the occurrence or existence of (1) a default, event of default or other similar condition or event (however described) in respect of such party, any Credit Support Provider of such party or any applicable Specified Entity of such party under one or more agreements or instruments relating to Specified Indebtedness of any of them (individually or collectively) in an aggregate amount of not less than the applicable Threshold Amount (as specified in the Schedule) which has resulted in such Specified Indebtedness becoming, or becoming capable at such time of being declared, due and payable under such agreements or instruments, before it would otherwise have been due and payable or (2) a default by such party, such Credit Support Provider or such Specified Entity (individually or collectively) in making one or more payments on the due date thereof in an aggregate amount of not less than the applicable Threshold Amount under such agreements or instruments (after giving effect to any applicable notice requirement or grace period);

		(vii) *Bankruptcy.* The party, any Credit Support Provider of such party or any applicable Specified Entity of such party:—

			(1) the resulting, surviving or transferee entity fails to assume all the obligations of such party or such Credit Support Provider under this Agreement or any Credit Support Document to which it or its predecessor was a party by operation of law or pursuant to an agreement reasonably satisfactory to the other party to this Agreement; or

			(2) the benefits of any Credit Support Document fail to extend (without the consent of the other party) to the performance by such resulting, surviving or transferee entity of its obligations under this Agreement.

			(1) to perform any absolute or contingent obligation to make a payment or delivery or to receive a payment or delivery in respect of such Transaction or to comply with any other material provision of this Agreement relating to such Transaction; or

			(2) to perform, or for any Credit Support Provider of such party to perform, any contingent or other obligation which the party (or such Credit Support Provider) has under any Credit Support Document relating to such Transaction;

		(ii) *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 on which a Transaction is entered into (regardless of whether such action is taken or brought with respect to a party to this Agreement) or (y) a Change in Tax Law, the party (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 2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) 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 interest under Section 2(e), 6(d)(ii) or 6(e)) and no additional amount is required to be paid in respect of such Tax under Section 2(d)(i)(4) (other than by reason of Section 2(d)(i)(4)(A) or (B));

		(iii) *Tax Event Upon Merger.* The party (the “Burdened Party”) on the next succeeding Scheduled Payment Date will either (1) be required to pay an additional amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a payment from which an amount has been deducted or withheld for or on account of any Indemnifiable Tax in respect of which the other party is not required to pay an additional amount (other than by reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a party consolidating or amalgamating with, or merging with or into, or transferring all or substantially all its assets to, another entity (which will be the Affected Party) where such action does not constitute an event described in Section 5(a)(viii);

		(iv) *Credit Event Upon Merger.* If “Credit Event Upon Merger” is specified in the Schedule as applying to the party, such party (“X”), any Credit Support Provider of X or any applicable Specified Entity of X consolidates or amalgamates with, or merges with or into, or transfers all or substantially all its assets to, another entity and such action does not constitute an event described in Section 5(a)(viii) but the creditworthiness of the resulting, surviving or transferee entity is materially weaker than that of X, such Credit Support Provider or such Specified Entity, as the case may be, immediately prior to such action (and, in such event, X or its successor or transferee, as appropriate, will be the Affected Party); or

		(i) *Notice.* If a Termination Event occurs, an Affected Party will, promptly upon becoming aware of it, notify the other party, specifying the nature of that Termination Event and each Affected Transaction and will also give such other information about that Termination Event as the other party may reasonably require.

		(ii) *Transfer to Avoid Termination Event.* If either an Illegality under Section 5(b)(i)(1) or a Tax Event occurs and there is only one Affected Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the Affected Party, the Affected Party will, as a condition to its right to designate an Early Termination Date under Section 6(b)(iv), 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 under Section 6(b)(i) all its rights and obligations under this Agreement in respect of the Affected Transactions to another of its Offices or Affiliates so that such Termination 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 under Section 6(b)(i). Any such transfer by a party under this Section 6(b)(ii) 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.

		(iii) *Two Affected Parties.* If an Illegality under Section 5(b)(i)(1) or 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 under Section 6(b)(i) on action to avoid that Termination Event.

		(iv) *Right to Terminate.* If:—

			(1) a transfer under Section 6(b)(ii) or an agreement under Section 6(b)(iii), as the case may be, has not been effected with respect to all Affected Transactions within 30 days after an Affected Party gives notice under Section 6(b)(i); or

			(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon Merger or an Additional Termination Event occurs, or a Tax Event Upon Merger occurs and the Burdened Party is not the Affected Party,

		(i) If notice designating an Early Termination Date is given under Section 6(a) or (b), the Early Termination Date will occur on the date so designated, whether or not the relevant Event of Default or Termination Event is then continuing.

		(ii) Upon the occurrence or effective designation of an Early Termination Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in respect of the Terminated Transactions will be required to be made, but without prejudice to the other provisions of this Agreement. The amount, if any, payable in respect of an Early Termination Date shall be determined pursuant to Section 6(e).

		(i) *Statement.* On or as soon as reasonably practicable following the occurrence of an Early Termination Date, each party will make the calculations on its part, if any, contemplated by Section 6(e) and will provide to the other party a statement (1) showing, in reasonable detail, such calculations (including all relevant quotations and specifying any amount payable under Section 6(e)) and (2) giving details of the relevant account to which any amount payable to it is to be paid. In the absence of written confirmation from the source of a quotation obtained in determining a Market Quotation, the records of the party obtaining such quotation will be conclusive evidence of the existence and accuracy of such quotation.

		(ii) *Payment Date.* An amount calculated as being due in respect of any Early Termination Date under Section 6(e) will be payable on the day that notice of the amount payable is effective (in the case of an Early Termination Date which is designated or occurs as a result of an Event of Default) and on the day which is two Local Business Days after the day on which notice of the amount payable is effective (in the case of an Early Termination Date which is designated as a result of a Termination Event). Such amount will be paid together with (to the extent permitted under applicable law) interest thereon (before as well as after judgment) in the Termination Currency, from (and including) the relevant Early Termination Date to (but excluding) the date such amount is paid, at the Applicable Rate. Such interest will be calculated on the basis of daily compounding and the actual number of days elapsed.

			(2) First Method and Loss. If the First Method and Loss apply, the Defaulting Party will pay to the Non-defaulting Party, if a positive number, the Non-defaulting Party’s Loss in respect of this Agreement.

			(3) Second Method and Market Quotation. If the Second Method and Market Quotation apply, an amount will be payable equal to (A) the sum of the Settlement Amount (determined by the Non-defaulting Party) in respect of the Terminated Transactions and the Termination Currency Equivalent of the Unpaid Amounts owing to the Non-defaulting Party less (B) the Termination Currency Equivalent of the Unpaid Amounts owing to the Defaulting Party. If that amount is a positive number, the Defaulting Party will pay it to the Non-defaulting Party; if it is a negative number, the Non-defaulting Party will pay the absolute value of that amount to the Defaulting Party.

			(4) Second Method and Loss. If the Second Method and Loss apply, an amount will be payable equal to the Non-defaulting Party’s Loss in respect of this Agreement. If that amount is a positive number, the Defaulting Party will pay it to the Non-defaulting Party; if it is a negative number, the Non-defaulting Party will pay the absolute value of that amount to the Defaulting Party.

			(1) One Affected Party. If there is one Affected Party, the amount payable will be determined in accordance with Section 6(e)(i)(3), if Market Quotation applies, or Section 6(e)(i)(4), if Loss applies, except that, in either case, references to the Defaulting Party and to the Non-defaulting Party will be deemed to be references to the Affected Party and the party which is not the Affected Party, respectively, and, if Loss applies and fewer than all the Transactions are being terminated, Loss shall be calculated in respect of all Terminated Transactions.

			(2) Two Affected Parties. If there are two Affected Parties:—

		(iii) *Adjustment for Bankruptcy.* In circumstances where an Early Termination Date occurs because “Automatic Early Termination” applies in respect of a party, the amount determined under this Section 6(e) will be subject to such adjustments as are appropriate and permitted by law to reflect any payments or deliveries made by one party to the other under this Agreement (and retained by such other party) during the period from the relevant Early Termination Date to the date for payment determined under Section 6(d)(ii).

		(iv) *Pre-Estimate.* The parties agree that if Market Quotation applies an amount recoverable under this Section 6(e) is a reasonable pre-estimate of loss and not a penalty. Such amount is payable for the loss of bargain and the loss of protection against future risks and except as otherwise provided in this Agreement neither party will be entitled to recover any additional damages as a consequence of such losses.

		(i) This Agreement (and each amendment, modification and waiver in respect of it) may be executed and delivered in counterparts (including by facsimile transmission), each of which will be deemed an original.

		(ii) The parties intend that they are legally bound by the terms of each Transaction from the moment they agree to those terms (whether orally or otherwise). A Confirmation shall be entered into as soon as practicable and may be executed and delivered in counterparts (including by facsimile transmission) or be created by an exchange of telexes or by an exchange of electronic messages on an electronic messaging system, which in each case will be sufficient for all purposes to evidence a binding supplement to this Agreement. The parties will specify therein or through another effective means that any such counterpart, telex or electronic message constitutes a Confirmation.

		(i) if in writing and delivered in person or by courier, on the date it is delivered;

		(ii) if sent by telex, on the date the recipient’s answerback is received;

		(iii) if sent by facsimile transmission, on the date that transmission is received by a responsible employee of the recipient in legible form (it being agreed that the burden of proving receipt will be on the sender and will not be met by a transmission report generated by the sender’s facsimile machine);

		(iv) 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; or (v) if sent by electronic messaging system, on the date that electronic message is received, unless the date of that delivery (or attempted delivery) or that receipt, as applicable, is not a Local Business Day or that communication is delivered (or attempted) or received, as applicable, after the close of business on a Local Business Day, in which case that communication shall be deemed given and effective on the first following day that is a Local Business Day.

		(i) submits to the jurisdiction of the English courts, if this Agreement is expressed to be governed by English law, or to the non-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, if this Agreement is expressed to be governed by the laws of the State of New York; and

		(ii) 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.

(a)		The “Cross Default” provisions of Section 5(a)(vi) will apply to Party A and to Party B.
		“Threshold Amount” means, for Party A, U.S. $100,000,000, and for Party B, U.S. $500,000.

(b)		“Termination Currency” means United States Dollars.

		(i) the Credit Support Amount

		exceeds

		(ii) the Value as of that Valuation Date of all Posted Credit Support held by the Secured Party.

		(i) the Value as of that Valuation Date of all Posted Credit Support held by the Secured Party

		exceeds

		(ii) the Credit Support Amount.

		(i) no Event of Default, Potential Event of Default or Specified Condition has occurred and is continuing with respect to the other party; and

		(ii) no Early Termination Date for which any unsatisfied payment obligations exist has occurred or been designated as the result of an Event of Default or Specified Condition with respect to the other party.

		(i) Unless otherwise specified in Paragraph 13, upon notice to the Second Party specifying the items of Posted Credit Support to be exchanged, the Pledgor may, on any Local Business Day, Transfer to the Secured Party substitute Eligible Credit Support (the “Substitute Credit Support”); and

		(ii) subject to Paragraph 4(a), the Secured Party will Transfer to the Pledgor the items of Posted Credit Support specified by the Pledgor in its notice not later than the Local Business Day following the date on which the Secured Party receives the Substitute Credit Support, unless otherwise specified in Paragraph 13 (the “Substitution Date”); provided that the Secured Party will only be obligated to Transfer Posted Credit Support with a Value as of the date of Transfer of that Posted Credit Support equal to the Value as of that date of the Substitute Credit Support.

			(A) utilizing any calculations of Exposure for the Transactions (or Swap Transactions) that the parties have agreed are not in dispute;

			(B) calculating the Exposure for the Transactions (or Swap Transactions) in dispute by seeking four actual quotations at mid-market from Reference Market-makers for purposes of calculating Market Quotation, and taking the arithmetic average of those obtained; provided that if four quotations are not available for a particular Transaction (or Swap Transaction), then fewer than four quotations may be used for that Transaction (or Swap Transaction); and if no quotations are available for a particular Transaction (or Swap Transaction), then the Valuation Agent’s original calculations will be used for that Transaction (or Swap Transaction);

			(C) utilizing the procedures specified in Paragraph 13 for calculating the Value, if disputed, of Posted Credit Support.