-----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, AOcqX/FcVq53CxqAmkGoIE9mmuh9o/bwGU1tRuLy1e4JsFi3RfMAP667GqYy0iaU JWu/RFxPqoYHeeufSx/bNA== 0000950131-99-001635.txt : 19990323 0000950131-99-001635.hdr.sgml : 19990323 ACCESSION NUMBER: 0000950131-99-001635 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990322 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MOTOROLA INC CENTRAL INDEX KEY: 0000068505 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 361115800 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 001-07221 FILM NUMBER: 99570068 BUSINESS ADDRESS: STREET 1: 1303 E ALGONQUIN RD CITY: SCHAUMBURG STATE: IL ZIP: 60196 BUSINESS PHONE: 8475765000 FORMER COMPANY: FORMER CONFORMED NAME: MOTOROLA DELAWARE INC DATE OF NAME CHANGE: 19760414 10-K 1 FORM 10-K ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________ FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [ ] FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to ________________ COMMISSION FILE NUMBER 1-7221 MOTOROLA, INC. (Exact name of registrant as specified in its charter) DELAWARE 36-1115800 (State of Incorporation) (I.R.S. Employer Identification No.) 1303 EAST ALGONQUIN ROAD, SCHAUMBURG, ILLINOIS 60196 (Address of principal executive offices) (847) 576-5000 (Registrant's telephone number ) SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NAME OF EACH EXCHANGE ON TITLE OF EACH CLASS WHICH REGISTERED ------------------- ------------------------ Common Stock, $3 Par Value per Share New York Stock Exchange Chicago Stock Exchange Rights to Purchase Junior Participating New York Stock Exchange Preferred Stock, Series B Chicago Stock Exchange Liquid Yield Option Notes due 2009 New York Stock Exchange Liquid Yield Option Notes due 2013 New York Stock Exchange 6.68% Trust Originated Preferred Securities New York Stock Exchange (issued by Motorola Capital Trust I and guaranteed by Motorola, Inc.) SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ___ - Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [_] The aggregate market value of voting and non-voting common equity held by non-affiliates of the registrant as of January 31, 1999 was approximately $42.3 billion (based on closing sale price of $72.38 per share as reported for the New York Stock Exchange-Composite Transactions). The number of shares of the registrant's Common Stock, $3 par value per share, outstanding as of January 31, 1999 was 601,948,574. DOCUMENTS INCORPORATED BY REFERENCE
Document LOCATION IN FORM 10-K -------- --------------------- Portions of Registrant's Proxy Statement for 1998 Annual Meeting of Stockholders Including Parts I, II, III and IV Management's Discussion and Analysis and Consolidated Financial Statements
=============================================================================== TABLE OF CONTENTS Page ---- PART I.......................................................................................... 1 Item 1. Business............................................................................... 1 General....................................................................................... 1 Business Segments............................................................................. 1 Cellular Products.......................................................................... 1 Land Mobile Products....................................................................... 2 Messaging, Information and Media Products.................................................. 4 Semiconductor Products..................................................................... 5 Other Products............................................................................. 6 Integrated Electronic Systems Sector..................................................... 6 Space and Systems Technology Group....................................................... 7 Creation of the Communications Enterprise.................................................. 9 Financial Information About Segments.......................................................... 9 Customers..................................................................................... 9 Backlog....................................................................................... 9 Research and Development...................................................................... 9 Patents and Trademarks........................................................................ 10 Environmental Quality......................................................................... 10 Miscellaneous................................................................................. 10 Business Risk Factors......................................................................... 10 Financial Information About Foreign and Domestic Operations and Export Sales.................. 13 Item 2. Properties............................................................................. 13 Item 3. Legal Proceedings...................................................................... 13 Item 4. Submission of Matters to a Vote of Security Holders.................................... 15 Executive Officers of the Registrant............................................................ 15 PART II......................................................................................... 16 Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.................. 16 Sales of Unregistered Securities.............................................................. 16 Market Information for Securities............................................................. 17 Item 6. Selected Financial Data................................................................ 17 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.. 17 Item 8. Financial Statements and Supplementary Data............................................ 17 Item 9. Changes in and Disagreements With accountants on Accounting and Financial Disclosure... 17 PART III........................................................................................ 17 Item 10. Directors and Executive Officers of the Registrant.................................... 17 Item 11. Executive Compensation................................................................ 17 Item 12. Security Ownership of Certain Beneficial Owners and Management........................ 18 Item 13. Certain Relationships and Related Transactions........................................ 18 PART IV......................................................................................... 18 Item 14. Exhibits, financial Statement Schedules and Reports on Form 8-K....................... 18 14(a)(1) Financial Statements................................................................ 18 14(a)(2) Financial Statement Schedule and Auditors' Report................................... 18 14(a)(3) Exhibits............................................................................ 18
PART I Throughout this 10-K report we "incorporate by reference" certain information in parts of other documents filed with the Securities and Exchange Commission (the "SEC"). The SEC allows us to disclose important information by referring to it in that manner. Please refer to such information. "Motorola" (which may be referred to as "we", "us" or "our") means Motorola, Inc. or Motorola, Inc. and its subsidiaries, as the context requires. "Motorola" is a registered trademark of Motorola, Inc. ITEM 1: BUSINESS General Motorola is a global leader in providing integrated communications solutions and embedded electronic solutions. These include: . Software-enhanced wireless telephone, two-way radio, messaging and satellite communications products and systems, as well as networking and Internet-access products, for consumers, network operators, and commercial, government and industrial customers. . Embedded semiconductor solutions for customers in the consumer, networking and computing, transportation, and wireless communications markets. . Embedded electronic systems for automotive, communications, imaging, manufacturing systems, computer and consumer markets. Motorola is a corporation organized under the laws of the State of Delaware as the successor to an Illinois corporation organized in 1928. Motorola's principal executive offices are located at 1303 East Algonquin Road, Schaumburg, Illinois 60196 (telephone number: 847-576-5000). Business Segments CELLULAR PRODUCTS The Cellular Subscriber Sector ("CSS") primarily designs, manufactures, sells and services subscriber radio-telephone equipment for cellular, personal and satellite communications networks. In addition, CSS resells cellular line service in the United States and France. CSS's products include cellular and satellite telephones and related accessories. Products are marketed worldwide through carriers, distributors, dealers, retailers, and, in certain markets, through a direct sales force or licensees. The Cellular Infrastructure Group ("CIG") primarily designs, manufactures, sells, installs, and services wireless infrastructure equipment. CIG's products include electronic exchanges (i.e., telephone switches), base site controllers and radio base stations for Code Division Multiple Access (CDMA), Personal Communication Systems (PCS), Personal Digital Cellular (PDC), Global System for Mobile Communications (GSM), wireless local loop and analog technologies. Products are marketed worldwide through a direct sales force or licensees. The Network Management Group holds and manages investments in wireless operating systems in a number of international jurisdictions and in gateway companies for the Iridium(R) satellite communications network. Radio frequencies are required to provide cellular services. The allocation of frequencies is regulated in the United States and other countries throughout the world and limited spectrum space is allocated to wireless services. The growth of the wireless and personal communications industry may be affected if adequate frequencies are not allocated or, alternatively, if new technologies are not developed to better utilize the frequencies currently allocated for such use. Such occurrences might have an effect on the segment's results. There are a few customers that, collectively, the loss of, or a significant reduction in purchases by, could have a material adverse effect on the segment's results. CSS carries reasonable product inventories in distribution centers to meet customer delivery requirements. As a general rule, CSS does not permit customers to return merchandise and does not grant extended payment terms, although exceptions may be made if necessary to meet unique market conditions. 1 For CIG, payment terms are particular to individual contracts, some of which provide for the holdback of certain residual payments to Motorola until system acceptance by the customer. In certain circumstances, CIG permits customer returns in accordance with specific contract terms. Increasingly, as a result of the financial demands of major network deployments, network operators are requiring suppliers, like CIG, to provide or arrange for long-term financing in connection with equipment purchases. Financing may cover all or a portion of the purchase price, as well as working capital, and can be sizeable. CIG may also assist customers in obtaining financing from banks or other sources. CIG expects that the need to provide this financing or arrange financing for its customers will continue, and could increase. The wireless telephone market has experienced an ongoing technology shift from analog products, where CSS has a higher relative market share, to digital products, where CSS has a lower relative market share. As a result, during 1998 CSS experienced under-utilization of certain of its analog telephone production facilities. CSS addressed these capacity issues by converting a significant portion of its analog facilities to provide for the production of its expanding portfolio of digital telephones. This conversion of manufacturing capacity from analog to digital is expected to be completed during 1999. The segment experiences intense competition in worldwide markets from numerous competitors ranging in size from some of the world's largest companies to small, specialized firms. In particular, the segment has experienced significant competition in the market for digital products. Competitive factors in the market for the segment's products include: technology offered; price; product and system performance, features, quality, delivery, availability and warranty; the quality and availability of service; company image; relationship with key customers and time-to-market. As described above, an additional factor for CIG is the availability of vendor financing, as customers continue to look to equipment vendors as an additional source of financing. The segment's backlog amounted to $2.23 billion at December 31, 1998 and $2.19 billion at December 31, 1997. For 1998 versus 1997, backlog was up significantly for CSS and down for CIG. The 1998 order backlog is believed to be generally firm and 100% of that amount is expected to be shipped in 1999. The forward- looking estimates of the firmness of such orders is subject to future events which may cause the percentage of the 1998 backlog actually shipped to change. Materials used in the segment's operations are generally second-sourced to ensure a continuity of supply. Occasional shortages in purchased components do occur. Energy necessary for the segment's manufacturing facilities consists of electricity, natural gas and gasoline, all of which are currently in generally adequate supply. The segment's facilities are highly automated and, therefore, require a reliable source of electrical power. Labor is generally available in reasonable proximity to the segment's manufacturing facilities. Difficulties in obtaining any of the aforementioned items could affect the segment's results. Patent protection is extremely important to the segment's operations. The segment has an extensive portfolio of patents relating to its products, systems, technologies and manufacturing processes. Motorola is also licensed to use certain patents owned by others. The protection of these licenses is also important to the segment's operations. Reference is made to the material under the heading "General" for information relating to patents and trademarks, research and development activities and the seasonality and volatility of business with respect to this segment. CSS's headquarters are located in Libertyville, Illinois. CSS operates manufacturing facilities in Libertyville and Harvard, Illinois; Easter Inch, Scotland; Flensburg, Germany; Tianjin, China; Singapore; and Jaguariuna, Brazil and has a manufacturing licensee in China. CIG's headquarters are located in Arlington Heights, Illinois. CIG operates manufacturing facilities in Arlington Heights and McHenry, Illinois; Fort Worth, Texas; Jaguariuna, Brazil; Hangzhou, China; and Groundwell, England and has a manufacturing licensee in China. LAND MOBILE PRODUCTS The Land Mobile Products Sector ("LMPS") primarily designs, manufactures, sells, installs and services analog and digital two-way radio voice and data products and systems for many different commercial, governmental and industrial customers worldwide. LMPS products provide voice and data communications between vehicles, persons and base stations. Also, LMPS provides network services for two-way radio subscribers in international markets through joint ventures. 2 The principal customers for two-way radio products and systems include public safety agencies, such as police, fire, highway maintenance departments and forestry services; petroleum companies; gas, electric and water utilities; telephone companies; diverse industrial companies; mining companies; transportation companies such as railroads, airlines, taxicab operations and trucking firms; institutions, such as schools and hospitals; and companies in the construction, vending machine and service businesses. These products are also sold and leased to various federal agencies for many uses. In addition, there is a growing consumer two-way radio market using the products for personal and family communication needs. LMPS also manufactures and sells signaling and control systems and communication control centers used in two-way radio operations. Additionally, LMPS unveiled its M-Smart(TM) family of platforms for smart card products, which allow organizations to quickly deploy and build value-added applications, including cards, card operating systems, readers and application development workbenches. Sales of iDEN(R) equipment to Nextel Communications, Inc., an entity in which Motorola holds a minority ownership position, represent a material part of the business of LMPS. The impact of losing this customer could have a material adverse effect on the performance of the segment. In addition, there are a few customers that, collectively, the loss of, or a significant reduction in purchases by, could have a material adverse effect on LMPS's results. Users of two-way radios are regulated by a variety of governmental and other regulatory agencies throughout the world. In the United States, users of two-way radios are licensed by the Federal Communication Commission ("FCC") which has broad authority to make rules and regulations and prescribe restrictions and conditions to carry out the provisions of the Communications Act of 1934. The FCC's authority includes, among other things, the power to classify radio stations, prescribe the nature of the service to be rendered by each class of station, assign frequencies to the various classes of stations and regulate the kinds of equipment which may be used. Regulatory agencies in other countries have similar types of authority. Consequently, the business and results of this segment could be affected by the rules and regulations adopted by the FCC or regulatory agencies in other countries from time to time. Motorola has developed products using trunking and data communications technologies to enhance spectral efficiencies. The growth and results of the two-way radio communications industry may be affected, however, by the regulations of the FCC or other regulatory agencies relating to the allocation of frequencies for land mobile communications users, especially in urban areas where such frequencies are heavily used. The products manufactured and marketed by LMPS are sold directly through its own distribution force, or through independent authorized distributors and dealers, commercial mobile radio service operators, retailers and independent commission sales representatives. The direct distribution force also provides system engineering and installation and other technical services to meet the customer's particular needs. The customer may choose to install and maintain the equipment with its own employees, or may obtain installation, service and parts from a network of Motorola authorized service stations (most of whom are also authorized dealers) or from other non-Motorola service stations. Subscriber units are sold directly and through indirect distribution channels. Leasing and conditional sale arrangements are also made available to customers. The majority of the leases and conditional sale contracts entered into by LMPS are sold to several unaffiliated finance companies or banks on terms, which, in most instances, provide recourse to Motorola with certain limitations. In addition, a significant number of leases and conditional sale contracts are sold to a Motorola finance subsidiary. In certain circumstances, LMPS permits customers to return products in accordance with industry practices. LMPS's business includes providing custom products based on assembling basic units into a large variety of models or combinations. This requires the stocking of inventories and large varieties of piece parts and replacement parts, as well as a variety of basic level assemblies in order to meet short delivery requirements. This segment's backlog amounted to $1.49 billion at December 31, 1998 and $1.37 billion at December 31, 1997. The 1998 backlog amount is believed to be generally firm, and approximately 81% of that amount is expected to be shipped during 1999. This forward-looking estimate of the firmness of such orders is subject to future events, which may cause the percentage of the 1998 backlog actually shipped to change. This segment experiences widespread, intense competition from numerous competitors ranging from some of the world's largest, diversified companies to foreign state-owned telecommunications companies to many small, specialized firms. In addition, LMPS faces competition from numerous companies whose principal manufacturing operations are located outside the United States, which may serve to reduce their manufacturing costs and enhance 3 their brand recognition in their locale. Competitive factors for LMPS include: price; technology offered; product performance, quality, delivery and availability; and the quality and availability of service and systems engineering, with no one factor being dominant. An additional factor is the availability of vendor financing, as infrastructure customers continue to look to equipment vendors as an additional source of financing. Availability of the materials and components required by LMPS is relatively dependable and certain, but normal fluctuations in market demand and supply could cause temporary, selective shortages and affect results. Direct sourcing of materials and components from foreign suppliers is becoming more extensive. LMPS operates certain offshore subassembly plants, the loss of one or more of which could constrain its production capabilities and affect results. Natural gas, electricity and, to a lesser extent, oil are the primary sources of energy. Current supplies of these forms of energy are generally considered to be adequate for this segment's U.S. and foreign operations. However, difficulties in obtaining any of the aforementioned items could affect the segment's results. Patent protection is very important to the segment's business. Reference is made to the material under the heading "General" for information relating to patents and trademarks, research and development activities and volatility with respect to this segment. This segment's headquarters are located in Schaumburg, Illinois, with major manufacturing facilities in Schaumburg, Illinois; Plantation, Florida; Mount Pleasant, Iowa; Swords, Ireland; Arad, Israel; Penang, Malaysia; Berlin, Germany; and Tianjin, China. MESSAGING, INFORMATION AND MEDIA PRODUCTS Motorola's Messaging, Information and Media Sector ("MIMS") primarily designs, manufactures, sells, installs and services paging subscriber, paging infrastructure and related products, such as paging software and accessories. MIMS also provides network services for paging and wireless data and gateway communication subscribers through wholly-owned and operated businesses as well as domestic and international joint ventures. It manufactures and sells modems, analog and digital transmission devices and other data communication devices, as well as wireline networking products like routers for carrying converged voice and data traffic. In addition, MIMS manufactures equipment that enables voice and high-speed data communications over cable networks and offers handwriting and speech recognition software for various applications. MIMS sells equipment and systems to consumers and business, institutional and governmental organizations. A majority of MIMS manufacturing, distribution and sales occurs outside of the United States. Radio frequencies are required to provide paging and wireless data information services. The allocation of frequencies is regulated in the United States and other countries throughout the world, and limited spectrum space is allocated to wireless services. The growth of the paging and wireless data information industry and this segment's results could be affected if adequate frequencies are not allocated for its use, or alternatively, if new technology is not developed to increase capacity on presently allocated frequencies. MIMS products are sold worldwide through both domestic and international sales organizations, which sell through direct and indirect channels such as distributors, retailers and value-added resellers. Consistent with general practices in the industry, under certain limited circumstances, MIMS allows customer returns. Payment terms are set based upon industry and regional practices for each product channel and extended payment terms are granted in some cases. MIMS carries reasonable product inventories to meet customer delivery requirements. There are a few customers that, collectively, the loss of, or a significant reduction in purchases by, could have a material adverse effect on the segment's results. This segment experiences widespread, intense competition from numerous competitors ranging from some of the world's largest, diversified companies to foreign state-owned telecommunications companies to many small, specialized firms. The principal manufacturing operations of many competitors are located outside of the United States, which may serve to reduce their manufacturing costs and enhance their brand recognition in their locale. The paging business is experiencing increasing competition from low cost and prepaid digital wireless telephone services around the world, as customers continue to look more favorably at wireless phones as options for messaging needs. Competitive factors for MIMS include: price; technology offered; product performance, features, quality, availability and warranty; the quality and availability of service; time-to-market; and company image. An additional factor for 4 the infrastructure business is the availability of vendor financing, as customers continue to look to equipment vendors as an additional source of financing. The segment's backlog amounted to $410 million at December 31, 1998 and $428 million at December 31, 1997. The 1998 backlog is believed to be generally firm, and approximately 100% of that amount is expected to be shipped during 1999. This forward-looking estimate of the firmness of such orders is subject to future events, which may cause the percentage of the 1998 backlog actually shipped to change. Materials and components required by this segment are relatively dependable and certain, but normal fluctuations in market demand and supply could cause temporary, selective shortages. Occasionally, shortages or extended delivery periods have occurred in various component parts, the effects of which have generally been industry-wide and short in duration. Natural gas, electricity and oil are the primary sources of energy necessary for the segment's operations. These types of energy are currently readily available, but difficulties in obtaining any of the aforementioned items could affect the segment's results. Patent protection is very important to the segment's business. Reference is made to the material under the heading "General" for information relating to patents and trademarks, research and development activities and seasonality of business with respect to this segment. This segment's headquarters are located in Schaumburg, Illinois, with manufacturing facilities in; Boynton Beach, Florida; Mansfield, Massachusetts; Ft. Worth, Texas; Tianjin, China; Bangalore, India; Dublin, Ireland; Chihuahua, Mexico; and Singapore; additionally, software development and administration offices are located in Palo Alto, California; Alpharetta, Georgia; Arlington Heights, Illinois; Bothell, Washington; Mississuaga, Canada and Richmond, Canada. SEMICONDUCTOR PRODUCTS Semiconductors control and amplify electrical signals and are used in a broad range of electronic products, including consumer electronic products, computers, communications equipment, solid-state ignition systems and other automotive electronic products, major home appliances, industrial controls, robotics, aircraft, space vehicles, calculators and automatic controls. The Semiconductor Products Sector ("SPS") produces embedded processors. SPS designs, produces and sells integrated semiconductor solutions for customers serving the networking and computing, transportation and wireless communication markets and for consumer applications in imaging and entertainment. SPS also provides high-volume, standard discrete, analog and digital semiconductors used in virtually every type of electronic equipment. SPS sells its products worldwide to original equipment manufacturers ("OEMs") and a network of industrial distributors through its own sales force, agents and distributors. Products manufactured by SPS are also supplied to other operating units of Motorola. Other businesses of Motorola collectively constitute the segment's largest customer and the volume of purchases by these businesses has affected, and could continue to affect, SPS's results. Customers are allowed to return merchandise for the longer of (i) the product warranty period of the distributor or (ii) three years. The segment and its results are affected by the cyclical nature of the semiconductor industry. Available capacity, cyclical customer demands, new product introductions and aggressive pricing has and could continue to impact its business and results. In 1998, the segment experienced under-utilization of certain of its production facilities due to reduced market demand. The segment's capacity for certain other products is being increased to meet current market demand. In addition, the segment supplements its internal manufacturing capacity with joint venture manufacturing facilities and purchases of products from outside vendors. SPS has announced a goal to increase the use of foundry manufacturing for older and specialized technologies. The semiconductor industry is subject to rapid changes in technology, and requires a high level of capital spending and an extensive research, development and design program to maintain state-of-the-art technology. Accordingly, SPS maintains an extensive research and development program in advanced semiconductor technology and a significant portion of Motorola's capital expenditures have historically been, and are expected to continue to be, for semiconductor facilities. 5 The segment's backlog amounted to $1.66 billion at December 31, 1998 and $1.77 billion at December 31, 1997. Orders may be and are placed by customers for delivery up to 12 months in the future but for purposes of calculating backlog only the next 13 weeks requirements are reported. In the semiconductor industry, backlog quantities and shipment schedules under outstanding purchase orders are frequently revised to reflect changes in customer needs. Binding agreements calling for the sale of specific quantities at specific prices are, typically, contractually subject to price or quantity revisions and are, as a matter of industry practice, rarely formally enforced. Therefore, the segment believes that most of its order backlog is cancelable. For these reasons, the amount of backlog as of any particular date may not be an accurate indicator of future results. SPS experiences intense competition from numerous competitors ranging from large companies offering a full range of products to small companies specializing in certain segments of the market. The competitive environment also is changing as a result of increased alliances between competitors. The segment competes in many semiconductor markets, including the telecommunications, personal computer/work station, industrial, transportation, consumer, computer, and distributor markets. Important factors in competition are: price; technology offered; product features, quality, availability and warranty; the quality and availability of service; time-to-market; and company image. The ability to develop new products to meet customer requirements and to meet customer delivery schedules also are competitive factors. The segment is not currently experiencing any shortages in obtaining raw materials. A significant portion of certain materials and parts used by SPS is supplied from a single country. With respect to these and other materials, the segment is constantly evaluating additional sources of supply to minimize the risk of obtaining materials from only a few sources. Electricity, oil and natural gas are used extensively in the segment's operations. All of these energy sources are available in adequate quantities for current needs. Electricity and oil are the primary energy sources for the segment's foreign operations, and presently, there are no shortages of these sources although the reliability of electrical power has been a problem from time to time at certain facilities outside of the U.S. Difficulties in obtaining any of the aforementioned items could affect SPS's results. Patent protection is very important to SPS's operations. In addition, Motorola is licensed to use certain patents owned by others. The protection of these licenses is also important to SPS's operations. Reference is made to the material under the heading "General" for information relating to patents and trademarks, research and development activities and seasonality of business with respect to this industry segment. The Semiconductor Products segment's headquarters are in Austin, Texas. Its major facilities are located in Austin, Texas; Chandler, Mesa, Phoenix and Tempe, Arizona; Tianjin, China; Toulouse, France; Munich, Germany; Kwai Chung and Tai Po, Hong Kong; Aizu, Sendai and Tokyo, Japan; Paju, South Korea; Geneva, Switzerland; Tel Aviv, Israel; Kuala Lumpur and Seremban, Malaysia; Guadalajara, Mexico; Carmona, the Philippines; Singapore; Chung-Li, Taiwan; and East Kilbride and South Queensferry, Scotland. In February 1999, SPS announced its intention to sell its Chung-Li, Taiwan and Paju, South Korea facilities, each of which provide manufacturing and assembly and test capabilities for SPS. The sale of these facilities is expected to close by the end of 1999, although there can be no assurance that the pending transactions will be completed. In addition, during 1998 SPS began converting a significant portion of its major manufacturing facilities located at 52nd Street in Phoenix, Arizona from manufacturing to non-manufacturing utilization. This conversion is expected to be completed in 1999. SPS is consolidating its production network into fewer integrated "anchor" sites for economics of scale and improved efficiency OTHER PRODUCTS Integrated Electronic Systems Sector The Integrated Electronic Systems Sector ("IESS") (formerly the Automotive, Component, Computer and Energy Sector) designs, manufactures and sells automotive and industrial electronics products, energy storage products and systems, electronic fluorescent ballasts and multi-function embedded board and computer system products. The Sector serves a wide range of markets, including automotive, lighting, telecommunications, manufacturing systems and imaging. In 1998, the Telematics Communications Group ("TCG") was formed to focus corporate- wide efforts on the growing worldwide opportunity in the emerging automotive communications industry. In addition, IESS oversees the research and development efforts of the Flat Panel Display Division, which is developing the next generation of flat panel displays. 6 The Automotive and Industrial Electronics Group ("AIEG") sells electronic components, modules and systems to original equipment manufacturers ("OEMs"), including foreign and domestic automobile manufacturers, heavy vehicle manufacturers, farm equipment manufacturers and industrial customers. The Motorola Computer Group ("MCG"), which became part of IESS in early 1998, sells its products to OEMs and industrial distributors worldwide, some of whom produce computer products that compete with MCG. The Energy Systems Group ("ESG") sells primarily to the wireless communications industry and has also been expanding into the portable computer market. A significant portion of ESG's sales are to other industry segments within Motorola, primarily the cellular telephone and paging business. A significant part of the Sector's business is dependent upon the business of these other Motorola industry segments, collectively, and two other external customers. The loss of any of these three customers could have a material adverse effect on the business of IESS. Demand for the products of AIEG and TCG is linked to automobile sales in the United States and other countries. Demand for MCG's products is linked to manufacturing systems, imaging, and telecommunications in the United States and other countries. The Sector experiences competition from numerous global competitors, including automobile manufacturer's internal control suppliers. Competitive factors in the sale of IESS's products include price; product quality, performance and delivery; supply integrity; quality reputation; responsiveness; and design and manufacturing technology. An additional factor for MCG's products is the availability of software. In certain circumstances, IESS permits customers to return products in accordance with industry practices. The Sector's backlog amounted to $315 million at December 31, 1998 and $309 million at December 31, 1997. The 1998 backlog for the Sector is believed to be generally firm, and approximately 100% of that amount is expected to be shipped during 1999. This forward-looking estimate of the firmness of such orders is subject to future events that may cause the percentage of the 1998 backlog actually shipped to change. All materials used by IESS in its operations have good availability at this time. The Sector uses electricity and gas in its operations, which are currently adequate in supply. However, difficulties in obtaining any of the aforementioned items could affect IESS's results. Patent protection is important to the Sector's business and, in particular, is very important to the business of the Flat Panel Display Division. Reference is made to the material under the heading "General" for information relating to patents and trademarks and research and development activities with respect to this Sector. The Sector's headquarters are located in Northbrook, Illinois. It also has manufacturing operations located in Scottsdale and Tempe, Arizona; Atlanta, Georgia; Harvard, Lake Zurich and Schaumburg, Illinois; Elma, New York; Carlisle, Pennsylvania; Seguin, Texas; Tianjin, China; San Jose, Costa Rica; Stotfold, England; Angers, France; Dublin, Ireland; and Penang, Malaysia. The business has announced plans to close its component manufacturing facilities in San Jose, Costa Rica and Carlisle, Pennsylvania during 1999. SPACE AND SYSTEMS TECHNOLOGY GROUP The Space and Systems Technology Group ("SSTG") is engaged in the design, production and integration of advanced electronic communication systems and products for a variety of international and domestic commercial and government users. The emphasis of SSTG is to be a premier systems developer and integrator. SSTG provides electronic and communications equipment products that have various applications based upon customer requirements of SSTG's business segments, including government and satellite communications. The satellite communications business, Satellite Communications Group ("SCG"), markets, designs, builds, and operates and maintains space-based telecommunications systems. On November 1, 1998, SCG successfully completed the terms of the Space System Contract with Iridium Operating LLC, an entity in whose parent company Motorola holds a minority ownership interest (together with such parent company, referred to collectively as "Iridium"), to build and deploy the Iridium(R) satellite communications network. On that same date, SCG began fulfilling the terms of the five-year Operations and Maintenance Contract to operate and continue to manufacture and deploy satellites for the maintenance of the Iridium system. The Iridium system is designed to provide global digital service to handheld telephones and related equipment. Iridium is the first low-earth orbit, worldwide satellite-based communications network in existence for general public use. A few similar systems are planned by competitors. Currently, the primary competing systems are expected to be the proposed Globalstar(TM) communications system and the proposed ICO(R) communications system. 7 Competition for these systems is generally on the basis of first-to-market, available geographical coverage, price and quality and reliability of service. The contracts Motorola has executed with Iridium for the construction, deployment, operation and maintenance of the global communications system provide for payments to Motorola over a ten-year period, which began in 1993. Motorola has in turn entered into significant subcontracts for portions of the system, for which it will remain contractually and financially obligated even if Iridium is unable to satisfy the terms of the contracts with Motorola. During the last five years, these Iridium contracts have become a significant portion of SSTG's business and revenue from the satellite-based business is expected to remain a major contributor to SSTG's sales for the next several years. For a more detailed discussion of Motorola's relationship with Iridium, see Note 8, "Commitments and Contingencies," of the Notes to Consolidated Financial Statements in the appendix to Motorola's Proxy Statement for the 1999 annual meeting of stockholders SCG has been designated by Teledesic LLC, an entity in which Motorola has a minority ownership interest, as the prime contractor for the Teledesic(R) system. The Teledesic system is conceived as a global, broadband "Internet-in- the-Sky" satellite communications system. The network is planned to provide high speed data connections to businesses, institutions and individuals worldwide. The system would be composed of a constellation of low-Earth-orbit satellites, designed to provide affordable, worldwide, "fiber-like" access to telecommunications services, including broadband Internet access, video conferencing, high quality voice and other digital data needs, to fixed locations. SSTG's government business operations primarily perform research, development and production work under contracts with governmental agencies, but also conduct independent research and development programs. They produce diversified military electronic equipment, including military communications equipment, data links, display systems, missile guidance equipment, electronic ordnance devices and drone electronic systems. The government business operations have been predominantly dependent on the U.S. Government as the main customer, acting as either a prime contractor or a subcontractor to other prime contractors. The total loss of this business could have a material adverse effect on SSTG. Contracts are secured from U.S. Government agencies and their suppliers by negotiation and competitive bids. The government acquisition environment is highly regulated and is increasingly more competitive. Competition has increased substantially in all aspects of the government business due to a reduction and slowdown in acquisition resulting from a lower defense budget. Competitors include large and small technically competent firms. Some competitors from whom the government business operations procured subcontract work in the past are becoming more vertically integrated and are performing the work previously subcontracted. The government business operations expect to remain competitive based on price, technology offered, quality of product performance and warranty. Additionally, the business is beginning to leverage growth by applying its core technologies to commercial opportunities. Total sales for SSTG include sales made to a number of governments and corporations. Products of SSTG are marketed by a few distributors, by independent representatives and by SSTG's own sales force. SSTG customer returns, when allowed, provide for only repair or replacement of products under warranty. The U.S. Government requests warranty coverage for essential performance requirements along with design and manufacturing requirements on those systems used to carry out combat and support missions. SSTG does not carry significant amounts of inventory to meet delivery requirements of customers because it has not experienced serious source supply issues. SSTG's backlog amounted to $1.05 billion at December 31, 1998 and $1.48 billion at December 31, 1997. The 1998 backlog is believed to be generally firm and 91% of that amount is expected to be shipped during 1999. All contracts with the U.S. Government are subject to cancellation at the convenience of the Government, and the contracts with Iridium may be terminated by Iridium pursuant to the terms set forth in the contracts. The forward-looking estimate of the firmness of the 1998 backlog as discussed above is subject to future events, which may cause the percentage of the 1998 backlog actually shipped to change. Materials used by SSTG in its operations are generally available. Natural gas and electricity are the principle types of energy used, and availability of both to SSTG is currently adequate. Difficulties in obtaining any of the aforementioned items could affect SSTG's results. 8 Patents continue to become more important to SSTG as competition increases in a declining U.S. Government market and as SSTG expands commercial opportunities. Reference is made to the material under the heading "General" for information related to patents and trademarks and research and development activities with respect to SSTG. The Group has its headquarters in Scottsdale, Arizona, with manufacturing facilities in Scottsdale and Chandler, Arizona and an administrative office in Tempe, Arizona. CREATION OF THE COMMUNICATIONS ENTERPRISE In July 1998, Motorola began realigning its communications-related businesses into one organization called the Motorola Communications Enterprise. The new structure is intended to enable integrated solutions and improved responsiveness to the needs of distinct customer segments. Business segments in the Motorola Communications Enterprise include cellular, space, land mobile, and messaging, information and media, which together accounted for about three-fourths of Motorola's $29.4 billion in sales in 1998. For this year-end reporting, Motorola continues to use the previous segments because management continued to make operating decisions and assess performance based on these segments. For a description of Motorola's 1999 segment realignment, see the information included under the "1999 Segment Realignment" section of "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in the appendix to Motorola's Proxy Statement for the 1999 annual meeting of stockholders. Financial Information About Segments. The response to this section of Item 1 incorporates by reference Note 9, "Information by Segment and Geographic Region," of the Notes to Consolidated Financial Statements contained in the appendix to Motorola's Proxy Statement for the 1999 annual meeting of stockholders. Customers. Motorola is not dependent for a material part of its overall business upon a single or a very few customers. Approximately 2.5% of Motorola's total sales and revenues in 1998 were received from various branches and agencies, including the armed services, of the U.S. Government. All contracts with the U.S. Government are subject to cancellation at the convenience of the Government. Government contractors, including Motorola, are routinely subjected to numerous audits and investigations, which may be either civil or criminal in nature. The consequences of these audits and investigations may include administrative action to suspend business dealings with the contractor and to exclude it from receiving new business. In addition, Motorola, like other contractors, is internally reviewing aspects of its government contracting operations, and, where appropriate, taking corrective actions and making voluntary disclosures to the Government. These audits and investigations could adversely affect Motorola and its results. Backlog. Motorola's aggregate backlog position, including the backlog position of subsidiaries through which some of its business units operate, as of the end of the last two fiscal years, was approximately as follows: December 31, 1998.............................. $7.16 billion December 31, 1997.............................. $7.55 billion Except as previously discussed in this Item 1(c), the orders supporting the 1998 backlog amounts shown in the foregoing table are believed to be generally firm, and approximately 95% of orders on hand at December 31, 1998 are expected to be shipped during 1999. However, this is a forward-looking estimate of the amount expected to be shipped, and future events may cause the percentage actually shipped to change. Motorola uses the percentage-of-completion method to recognize revenues and costs associated with most long-term contracts. For contracts involving certain technologies, revenues and profits, or parts thereof, are deferred until technological feasibility is established and customer acceptance is obtained. For other product sales, revenue is recognized at the time of shipment, and reserves are established for price protection and cooperative marketing programs with distributors. Research and Development. Motorola's business segments participate in very competitive industries with constant changes in technology. Throughout its history, Motorola has relied, and continues to rely, primarily on its research and development programs for the development of new products and its production engineering capabilities for the improvement of existing products. Technical data and product application ideas are exchanged among Motorola's business segments on a regular basis. Management believes, looking forward, that Motorola's 9 commitment to research and development programs, both to improve existing products and services and to develop new products and services, together with its utilization of state-of-the-art technology, should allow each of its segments to remain competitive. Research and development expenditures relating to new product development or product improvement, other than customer-sponsored contracts, were approximately $2.89 billion in 1998, $2.75 billion in 1997 and $2.39 billion in 1996. In addition, research funded under customer-sponsored contracts amounted to approximately $433 million in 1998, $616 million in 1997 and $758 million in 1996. Approximately 18,300 professional employees were engaged in such research activities (including customer-sponsored contracts) during 1998. Patents and Trademarks. As of December 31, 1998, Motorola owned approximately 10,307 utility and design patents in the United States and 10,882 patents in foreign countries. These foreign patents are mostly counterparts of Motorola's U.S. patents, but an increasing number result from research conducted outside the United States and are originally filed in the country of origin. During 1998, Motorola was granted 1,596 U.S. utility and design patents. Many of the patents owned by Motorola are used in its operations or licensed for use by others, and Motorola is licensed to use certain patents owned by others. In some instances, certain of the patents licensed by Motorola to others have generated significant amounts of revenue to Motorola. Motorola has obtained registration of the "MOTOROLA" and "M Symbol Logo" trademarks throughout the world for many products and services. Worldwide recognition of these marks has resulted in their categorization as "famous" marks. These marks are considered to be valuable corporate assets. Certain other trademarks and service marks of Motorola are registered in relevant markets. Awareness of brand value and resulting brand development during 1998 resulted in the introduction of two major new brands that span multiple product categories: DIGITAL DNA and MOTOROLA WINGS. Worldwide registration of these new brands is underway. Environmental Quality. Motorola operations are from time to time the subjects of investigations, conferences, discussions and negotiations with various federal, state and local environmental agencies with respect to the discharge or cleanup of hazardous waste and compliance by those operations with environmental laws and regulations. The balance of the response to this section of Item 1 incorporates by reference the information contained under the caption "Environmental and Legal" in Note 8, "Commitments and Contingencies," of the Notes to Consolidated Financial Statements contained in the appendix to Motorola's Proxy Statement for the 1999 annual meeting of stockholders. Miscellaneous. At December 31, 1998, there were approximately 133,000 employees of Motorola and its subsidiaries. The business of Motorola and its industry segments has certain seasonal characteristics: the Semiconductor Products segment has tended to have stronger, seasonally-adjusted sales in the first half of the year; and sales of products, such as cellular telephones and pagers, in consumer markets tend to increase in the fourth quarter. An increase or decrease in large system orders in CIG, LMPS or SSTG could cause volatility in orders, revenues and profits recognized in any particular period. Business Risk Factors. Except for historical matters, the matters discussed in this Form 10-K are forward-looking statements that involve risks and uncertainties. Forward-looking statements include, but are not limited to, statements under the following headings; (i) "Cellular Products," about the allocation and regulation of frequencies, expected shipments during 1999, the impact from the loss of key customers, the need to provide or arrange for financing in connection with equipment sales, the completion of the conversion of manufacturing capacity from digital to analog, and the availability of supplies; (ii) "Land Mobile Products," about the impact from the loss of key customers, the allocation and regulation of frequencies, expected shipments during 1999, and the availability of supplies; (iii) "Messaging, Information and Media Products," about the allocation of frequencies or development of new technologies, expected shipments during 1999, the impact from the loss of key customers, and the availability of supplies; (iv) "Semiconductor Products," about the impact from the loss of key customers, the impact of available capacity, cyclical customer demands, new product introductions and aggressive pricing, expected shipments during 1999, capital expenditures, backlog, the availability of supplies and the completion of pending transactions, and the conversion of existing manufacturing facilities; (v) "Integrated Electronic Systems Sector," about the impact from the loss of key customers, expected shipments during 1999, the availability of supplies, the completion of plans to close and exit existing facilities; (vi) "Space and Systems Technology Group," about the impact from the loss of key customers, competitiveness, the impact from various actions by Iridium, expected shipments during 1999, and the 10 availability of supplies; (vii) "General," about expected shipments during 1999, seasonality of business, large system orders and competitiveness through research and development and utilization of technology; (viii) "Item 2: Properties," about the completion of facilities currently being constructed and plans to sell or shut down currently operating facilities; and (ix) "Item 3: Legal Proceedings," about the ultimate disposition of pending legal matters. Motorola wishes to caution readers that in addition to the important factors described elsewhere in this Form 10-K, the following important factors, among others, sometimes have affected, and in the future could affect, Motorola's actual results and could cause Motorola's actual consolidated results during 1999, and beyond, to differ materially from those expressed in any forward- looking statements made by, or on behalf of, Motorola: Changes in Laws Affecting Frequency . The effects of, and changes in, laws and regulations and other activities of governments, agencies and similar organizations, including, but not limited to, those affecting frequency, use and availability of spectrum authorizations and licensing. Risks From Large Systems Contracts . Risks related to the loss of material customers of one or more of Motorola's businesses, including the unexpected loss of sales and market perception, particularly because of the continuing trend towards increasingly large system contracts for CIG, LMPS and SSTG infrastructure equipment and the resulting reliance on large customers. Demand for Customer Financing . Increasing demand for customer financing of equipment sales, particularly infrastructure equipment sold by CIG, LMPS, SSTG and the paging infrastructure business, and the ability of these businesses to provide financing on competitive terms with other companies. Transition From Analog to Digital . The ability of Motorola's cellular businesses to continue their transition to digital technologies and successfully compete in those businesses and retain or gain market share. Motorola faces intense competition in these markets from established companies and new entrants. Product life cycles can be short and new products are expensive to both develop and bring to market. Year 2000 Issues . Motorola's ability to manufacture and deliver products and the level of purchases made by customers may be affected by an unanticipated adverse impact from Year 2000 issues, particularly the failure of products and services from major suppliers to function properly in the Year 2000. Euro Conversion . Risks related to the introduction of the euro currency in Europe, including the ability of Motorola to successfully compete in Europe. Development of New Products . The risks related to Motorola's significant investment in developing and introducing new products such as digital cellular telephones, two-way and voice paging, CDMA for cellular and PCS systems and third-generation wireless, wireless local loop products, flat panel display products, products for transmission of telephony and high-speed data over hybrid fiber coaxial cable systems, integrated digital radios, and semiconductor products. These risks include: difficulties and delays in the development, production, testing and marketing of products; customer acceptance of products, particularly as Motorola's focus on the consumer market increases; the significant amount of resources Motorola must devote to the development of new technology; and the ability of Motorola to differentiate its products and compete with other companies in the same market. 11 Demand for Wireless Communications Equipment . The need for continued significant demand for wireless communications equipment, including equipment of the type Motorola manufactures or is developing. Ability to Compete in Semiconductor Market . The ability of Motorola's semiconductor business to compete in the highly competitive semiconductor market. Factors that could adversely affect Motorola's ability to compete are production inefficiencies and higher costs related to underutilized facilities, including both wholly-owned and joint venture facilities; shortage of manufacturing capacity for some products; competitive factors, such as rival chip architectures, mix of products, acceptance of new products and price pressures; risk of inventory obsolescence due to shifts in market demand; the continued growth of embedded technologies and systems and Motorola's ability to compete in that market; and the effect of orders from Motorola's equipment businesses . Increased Use of Foundry Manufacturing Capacity . The ability of Motorola's semiconductor business to increase its utilization of foundry manufacturing capacity and the impact of such efforts on capital expenditures, production costs and the ability to satisfy delivery requirements. Exit, Conversion, Sale or Closure of Existing Facilities . Unexpected delays in the conversion of certain semiconductor manufacturing facilities from manufacturing to non-manufacturing utilization and the impact of such conversion on operating results, production costs and the ability to satisfy delivery requirements. . Unexpected changes in circumstances that delay or frustrate Motorola's plans to sell or close certain operating facilities and the impact of such sales or closures on operating results, production costs and the ability to satisfy delivery requirements. Risks Related to the Iridium(R) System . Factors relating to the success of the Iridium project and its impact on Motorola, including: the ability of Iridium LLC and its gateway operators to market the Iridium service, to timely receive and, as appropriate, operate and sell telecommunications equipment, including phones and pagers made by Motorola, and to otherwise timely finance and operate a successful telecommunications business and generate income; the ability of Iridium LLC to meet its financing needs during at least the next few years to continue to make contractual payments to Motorola and to make debt payments and otherwise operate; the risks associated with the large Iridium system operations and maintenance contract with Motorola and the financial risk to Motorola under that contract, including the difficulty in projecting costs associated with that contract and Motorola's obligations to subcontractors related to that contract; the market acceptance (both on its own and when compared to possible competitors) of what is expected to be the first worldwide global satellite-based communication service and of the related equipment; and the significant technological and other risks associated with the development and commercial operation of the project, including any software and support systems-related risks. Outcome of Litigation . The outcome of pending and future litigation and the protection and validity of patents and other intellectual property rights. Patent and other intellectual property rights of Motorola are important competitive tools and many generate income under license agreements. There can be assurances that these rights will not be challenged, invalidated or circumvented in one or more countries. Additional Risk Factors Included In Proxy Statement Certain portions of Motorola's Proxy Statement for the 1999 annual meeting of stockholders with Management's Discussion and Analysis and Consolidated Financial Statements are incorporated by reference into this Form 10-K. There are additional important factors included therein, including those on pages F-15 through F-18 of the appendix to Motorola's Proxy Statement for the 1999 annual meeting of stockholders, that sometimes have affected, and in the future could affect, Motorola's actual results and could cause Motorola's actual consolidated 12 results during 1999, and beyond, to differ materially from those expressed in any forward-looking statements made by, or on behalf of, Motorola. Financial Information About Foreign and Domestic Operations and Export Sales. Domestic export sales to third parties were $3.06 billion in 1998, $3.98 billion in 1997 and $3.74 billion in 1996. Domestic export sales to affiliates were $4.96 billion in 1998, $6.86 billion in 1997 and $6.31 billion in 1996. The remainder of the response to this section of Item 1 incorporates by reference Note 8, "Commitments and Contingencies," of the Notes to Consolidated Financial Statements and the "1998 Compared to 1997" and "1997 Compared to 1996" sections of "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in the appendix to Motorola's Proxy Statement for the 1999 annual meeting of stockholders. (R) Reg. U.S. Patent & Trademark Office. Iridium(R) is a registered trademark and service mark of Iridium LLC. Globalstar(TM) is a trademark of Globalstar Limited Partnership. ICO(R) is a registered trademark and service mark of I-CO Global Communications (Holdings) Limited. Teledesic(R) is a registered service mark of Teledesic LLC. ITEM 2: PROPERTIES Motorola's principal executive offices are located at 1303 East Algonquin Road, Schaumburg, Illinois 60196. Its other major facilities in the United States are located in Arlington Heights, Harvard, Lake Zurich, Libertyville, Northbrook and Schaumburg, Illinois; Elma, New York; Phoenix, Chandler, Scottsdale, Mesa and Tempe, Arizona; Boynton Beach and Plantation, Florida; Lawrenceville, Georgia; Austin, Ft. Worth and Seguin, Texas; Mount Pleasant, Iowa; Mansfield, Massachusetts; and San Jose, California. Motorola also operates manufacturing facilities or sales offices in 42 other countries. (See Item 1 for information regarding the location of the principal manufacturing facilities for each industry segment.) Motorola owns 130 facilities (manufacturing, sales, service and office), 75 of which are located in North America and 55 of which are located in other countries. Motorola leases 594 such facilities, 303 of which are located in North America and 291 of which are located in other countries. Motorola generally considers the productive capacity of the plants operated by each of its industry segments adequate and suitable for the requirements of each business group. New semiconductor product manufacturing facilities are under construction in Xi-Qing, China and an expansion of the semiconductor product manufacturing facility in Chandler, Arizona is currently underway. A new manufacturing facility that is expected to be shared by a number of Motorola business units within the Communications Enterprise is being constructed in Jaguariuna, Brazil. This new facility is expected to be fully operational in early 1999. As part of Motorola's overall strategy to reduce operating costs and improve the financial performance of the corporation, a number of non-profitable businesses and facilities were either sold during 1998 or are currently up for sale. Major facilities that ceased operations during 1998 that are currently up for sale are located in Huntsville, Alabama; Irvine, California; and Research Triangle Park, North Carolina. Motorola is also in the process of selling two start-up facilities in Jaguariuna, Brazil. In addition, Motorola has announced its intention to sell or shut down currently operating major facilities located in San Jose, Costa Rica; Carlisle, Pennsylvania; Paju, South Korea; and Chung- Li, Taiwan. The extent of utilization of manufacturing facilities varies from plant to plant and from time to time during the year. ITEM 3: LEGAL PROCEEDINGS Motorola is currently a named defendant in seven cases arising out of alleged groundwater, soil and air pollution in Phoenix and Scottsdale, Arizona. McIntire et al. v. Motorola remains pending in the U.S. District Court for the District of Arizona, while Baker et al. v. Motorola et al., Lofgren et al. v. Motorola et al., Bentancourt et al. v. Motorola et al., Ford et al. v. Motorola et al., Wilkins et al. v. Motorola et al and Dawson et al. v. Motorola, et al. are pending in the Arizona Superior Court, Maricopa County. The McIntire lawsuit, filed on December 20, 1991, involves approximately 920 plaintiffs who allege that the operations of Motorola at several facilities in Phoenix and Scottsdale, Arizona have caused property damage and health problems by contaminating the soil, groundwater and 13 air in the area surrounding those facilities. The Baker lawsuit, filed on February 11, 1992, is a class action, involving six representative individual named plaintiffs, alleging that Motorola and 27 other defendants contaminated the soil, air and groundwater in the Phoenix/Scottsdale area, diminishing property values and exposing members of the class to possible adverse health effects. On August 24, 1994, the Baker court certified two classes, a property damage class consisting of all persons who since 1987 were residents, property owners or lessees of property which overlies, or is adjacent to, the alleged groundwater pollution, and a medical monitoring class consisting of all persons who resided in Phoenix and/or Scottsdale for more than one year continuously during the years between 1955 and 1989, and who received potable drinking water containing trichloroethylene at a level equal to or exceeding 2.0 parts per billion, on average. The Lofgren, Bentancourt, Ford, Wilkins and Dawson lawsuits, filed on April 6, 1993, July 16, 1993, June 10, 1994, July 19, 1995 and August 7, 1997, respectively, have been consolidated. The consolidated cases involve more than 200 plaintiffs, alleging that Motorola and about 25 other defendants contaminated the soil, air and groundwater in the Phoenix/Scottsdale area, causing health problems. On June 1, 1998, the Lofgren court ruled inadmissible proffered testimony from each of the plaintiffs' medical causation experts and granted summary judgment on those personal injury claims in favor of Motorola and the other remaining defendants. An appeal is expected. All seven pending lawsuits described above seek compensatory and punitive damages. The McIntire complaint includes personal injury and property damage claims and seeks injunctive relief. The Baker complaint seeks damages for medical monitoring and alleges claims for property, business and economic loss and seeks declaratory and injunctive relief. The consolidated Lofgren cases involve claims for personal injury. A class action, In Re Nextel Communications Securities Litigation, against Nextel Communications, Inc., certain of its officers and directors and Motorola for alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5, is pending in the United States District Court for the District of New Jersey. The pending complaint, a consolidation of cases previously filed against Nextel, was filed on July 11, 1995 and maintains that the defendants artificially inflated the price of Nextel common stock through a series of alleged misrepresentations and omissions. Plaintiffs propose a class period of July 22, 1993 through January 10, 1995 and seek an unspecified amount of monetary damages. Motorola and several of its directors and officers are named defendants in a consolidated class action for alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act and SEC Rule 10b-5, Kaufman, et. al. v Motorola, Inc., et. al., which was filed on May 19, 1995 and is pending in the U.S. District Court for the Northern District of Illinois. Plaintiffs claim that Motorola and the individual defendants inflated the price of Motorola stock by failing to timely disclose a buildup of cellular phone inventory with its distributors. The district court has certified a class consisting of purchasers of Motorola common stock during the period of November 4, 1994 through February 17, 1995. Plaintiffs seek an unspecified amount of damages. Motorola has been a defendant in several cases arising out of its manufacture and sale of portable cellular telephones. Schiffner v. Motorola, Inc., filed on March 3, 1995 in the Circuit Court of Cook County, Illinois, is a purported class action by purchasers of portable cellular phones alleging economic losses. In January 1999, having exhausted all other appeals, plaintiffs filed a petition for writ of certiorari with the United States Supreme Court to review the June 1997 Illinois State Court decision to dismiss the case, with prejudice. Jerald P. Busse, et al. v. Motorola, Inc. et al., filed on October 26, 1995 in the Circuit Court of Cook County, Illinois, Chancery Division, is a purported class action alleging that defendants have failed to adequately warn consumers of the alleged dangers of cellular telephones and challenging ongoing safety studies as invasions of privacy. All claims have been dismissed on defendants' motion. Plaintiffs may appeal. Kane, et al., v. Motorola, Inc., et al., filed on December 13, 1993 in the Circuit Court of Cook County, Illinois, alleges that plaintiffs' brain cancer was caused by or aggravated by a prototype communication device. On October 16, 1998, the plaintiffs in Pennsylvania Bancshares, Inc. et al. v. Motorola, Inc., et al., a purported class action filed on October 10, 1995 in the Court of Common Pleas, Montgomery County, Pennsylvania, filed a notice of voluntary dismissal with prejudice as to all claims for monetary relief and without prejudice as to all claims for equitable relief. Plaintiffs alleged that Motorola systematically engages in deceptive trade practices, including without limitation, intentionally misrepresenting the quality of certain types of cellular telephones. The dismissal is currently before the court for decision. Silber, et al. v. Motorola, Inc., et al., filed on August 1, 1995 in the Supreme Court of The State of New York, County of Suffolk, which was transferred from the County of New York, is an action wherein it is alleged that a traffic accident was caused by the use of a cellular phone. 14 The information contained under the caption "Environmental and Legal" in Note 8, "Commitments and Contingencies," of the Notes to Consolidated Financial Statements contained in the appendix to Motorola's Proxy Statement for the 1999 annual meeting of stockholders is incorporated herein by reference. Motorola is a defendant in various other suits, claims and investigations which arise in the normal course of business. In the opinion of management, the ultimate disposition of these matters, including those matters described above in this Item 3, will not have a material adverse effect on the consolidated financial position, liquidity or results of operations of Motorola. ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable. EXECUTIVE OFFICERS OF THE REGISTRANT Following are the persons who were the executive officers of Motorola as of January 1, 1999, their ages as of January 1, 1999, their current titles and positions held during the last five years: Gary L. Tooker; age 59; Chairman of the Board since January 1997; Vice Chairman of the Board and Chief Executive Officer from December 1993 to January 1997. Christopher B. Galvin; age 48; Chief Executive Officer since January 1997; President and Chief Operating Officer from December 1993 to January 1997. Robert W. Galvin; age 76; Chairman of the Executive Committee of the Board of Directors since January 1990. Robert L. Growney; age 56; President and Chief Operating Officer since January 1997; Executive Vice President and President and General Manager, Messaging, Information and Media Sector from January 1994 to January 1997. Keith J. Bane; age 59; Executive Vice President and President, Americas Region since March 1997; Executive Vice President and Chief Corporate Staff Officer from February 1995 to March 1997; Senior Vice President and Chief Corporate Staff Officer from August 1994 to February 1995; Senior Vice President and Motorola Director of Strategy, Technology and External Relations from October 1993 to August 1994. Robert L. Barnett; age 58; Executive Vice President and President, Commercial, Government and Industrial Solutions Sector, Communications Enterprise since July 1998; Executive Vice President and President, Land Mobile Products Sector from March 1997 to July 1998; Senior Vice President and President and General Manager, Land Mobile Products Sector from March 1996 to March 1997; Corporate Vice President and General Manager, iDEN Group, Land Mobile Products Sector from May 1995 to March 1996; independent consultant to the telecommunications industry from 1992 to May 1995. Arnold S. Brenner; age 61; Executive Vice President and President, Global Government Relations and Standards since 1997; Acting President, Motorola Europe, Middle East and Africa, from April 1998 to January 1999; Executive Vice President and General Manager, Japan Group from November 1988 to 1997. Glenn A. Gienko; age 46; Executive Vice President and Motorola Director of Human Resources since May 1996; Senior Vice President and Director of Human Resources from June 1995 to May 1996; Corporate Vice President - Human Resources, General Systems Sector from February 1994 to June 1995. Merle L. Gilmore; age 50; Executive Vice President and President, Communications Enterprise since July 1998; Executive Vice President and Deputy to the Chief Executive Office for the Enterprise-Wide Communications Business Plan from April 1998 to July 1998; Executive Vice President and President, Motorola Europe, Middle East and Africa from March 1997 to April 1998; Executive Vice President and President and General Manager, Land Mobile Products Sector ("LMPS"), from July 1994 to March 1997; Senior Vice President and President and General Manager, LMPS, from June 1994 to July 1994; Senior Vice President and Assistant General Manager, LMPS, from July 1992 to June 1994. Joseph M. Guglielmi; age 57; Executive Vice President and President, Integrated Electronic Systems Sector ("IESS") since December 1998; Senior Vice President and President, IESS from October 1998 to December 1998; Senior Vice President and Office of the President, IESS from August 1998 to October 1998; Corporate Vice President and Office of the President, IESS from July 1998 to August 1998; Corporate Vice President and General 15 Manager, Motorola Computer Group from September 1995 to July 1998; Chairman and Chief Executive Officer of Taligent, Inc., a software development company, from March 1992 to August 1995. Bo Hedfors; age 54; Executive Vice President and President, Network Solutions Sector, Communications Enterprise ("NSS") since February 1999; Senior Vice President and President, NSS from December 1998 to February 1999; Corporate Vice President and President, NSS from September 1998 to December 1998; President and Chief Executive Officer of Ericsson Inc., the U.S. subsidiary of Telefon AB LM Ericsson, from 1994 to August 1998; Chief Technical Officer of Telefon AB LM Ericsson, a supplier of equipment for telecommunications systems, from 1990 to 1994. Carl F. Koenemann; age 60; Executive Vice President and Chief Financial Officer since December 1991. Ferdinand C. Kuznik; age 57; Executive Vice President and President, Personal Communications Sector, Communications Enterprise since July 1998; Executive Vice President and President, Cellular Subscriber Sector from August 1997 to July 1998; Senior Vice President and General Manager, Radio Network Solutions Group, Land Mobile Products Sector from 1994 to August 1997. A. Peter Lawson; age 52; Executive Vice President, General Counsel and Secretary since May, 1998; Senior Vice President, General Counsel and Secretary from November 1996 to May 1998; Senior Vice President and General Counsel from March 1996 to November 1996; Senior Vice President and Assistant General Counsel from November 1994 to March 1996; Corporate Vice President and Assistant General Counsel from November 1987 to November 1994. James A. Norling; age 56; Executive Vice President, Deputy to the Chief Executive Office and President, Motorola Europe, Middle East and Africa since January 1999; Executive Vice President and Deputy to the Chief Executive Office and President, Global Telecom Solutions Group from July 1998 to January 1999; Executive Vice President and President, Messaging, Information and Media Sector from January 1997 to July 1998; Executive Vice President and President, Motorola Europe, Middle East and Africa from April 1993 to January 1997. Hector Ruiz; age 53; Executive Vice President and President, Semiconductor Products Sector ("SPS") since May 1997; Executive Vice President and Office of the President, SPS from February 1997 to May 1997; Executive Vice President and General Manager, Messaging Systems Products Group, Messaging Information and Media Sector from April 1996 to February 1997; Executive Vice President and General Manager, Paging Products Group, Messaging Information and Media Sector from January 1994 to April 1996. C. D. Tam; age 54; Executive Vice President and President, Asia Pacific Region since January 1, 1999; Senior Vice President and General Manager of the Transportation Systems Group, Semiconductor Products Sector from January 1997 to December 1998; Senior Vice President and General Manager, Asia Pacific Semiconductor Group, Semiconductor Products Sector from January 1991 to December 1996. Frederick T. Tucker; age 58; Executive Vice President and Deputy to the Chief Executive Office since October 1998; Executive Vice President and Office of the President, Integrated Electronic Systems Sector ("IESS") from July 1998 to October 1998; Executive Vice President and President, IESS from September 1992 to July 1998. Richard W. Younts; age 59; Executive Vice President and Senior Advisor on Asian Affairs since December 1998; Executive Vice President and President, Asia Pacific Region from 1997 to December 1998; Executive Vice President and Corporate Executive Director International-Asia and Americas from December 1993 to 1997. The above executive officers will serve as officers of Motorola until the regular meeting of the Board of Directors in May 1999 or until their respective successors shall have been elected. Christopher B. Galvin is a son of Robert W. Galvin. There is no family relationship between any of the other executive officers listed above. PART II ITEM 5: MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Sales of Unregistered Securities In November 1998, Motorola's Board of Directors voted to permit current non- employee directors who were entitled to benefits under the retirement plan for non-employee directors to convert their accrued benefits under the 16 retirement plan into shares of common stock of Motorola, which shares would be subject to certain transfer restrictions. In December 1998, six non-employee directors elected to receive an aggregate of 4,593 shares of restricted common stock (valued in the aggregate at $264,715) in lieu of their aggregate accrued benefits under the retirement plan. Motorola issued these shares to the non- employee directors in reliance on the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended. The response to this Item incorporates by reference the information regarding the retirement plan under the caption "Director Compensation" on page 6 of Motorola's Proxy Statement for the 1999 annual meeting of stockholders. Market Information for Securities Motorola's common stock is listed on the New York, Chicago, London and Tokyo Stock Exchanges. The remainder of the response to this Item incorporates by reference the information under the caption "Quarterly and Other Financial Data" of Motorola's Consolidated Financial Statements contained in the appendix to Motorola's Proxy Statement for the 1999 annual meeting of stockholders. ITEM 6: SELECTED FINANCIAL DATA The response to this Item incorporates by reference the information under the caption "Five Year Financial Summary" contained in the appendix to Motorola's Proxy Statement for the 1999 annual meeting of stockholders. ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The response to this Item incorporates by reference the information under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in the appendix to Motorola's Proxy Statement for the 1999 annual meeting of stockholders. ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The response to this Item incorporates by reference the information under the captions "Management's Responsibility For Financial Statements," "Independent Auditors' Report," "Consolidated Statements of Operations," "Consolidated Balance Sheets," "Consolidated Statements of Stockholders' Equity," "Consolidated Statements of Cash Flows," "Notes to Consolidated Financial Statements," "Five-Year Financial Summary" and "Quarterly and Other Financial Data" of Motorola's Consolidated Financial Statements contained in the appendix to Motorola's Proxy Statement for the 1999 annual meeting of stockholders. ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. PART III ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The response to this Item required by Item 401 of Regulation S-K, with respect to directors, incorporates by reference the information under the caption "Nominees" on pages 2 through 4 of Motorola's Proxy Statement for the 1999 annual meeting of stockholders and with respect to executive officers, is contained in Part I hereof under the caption "Executive Officers of the Registrant". The response to this Item required by Item 405 of Regulation S-K incorporates by reference the information under the caption "Section 16(a) Beneficial Ownership Reporting Compliance" on page 17 of Motorola's Proxy Statement for the 1999 annual meeting of stockholders. ITEM 11: EXECUTIVE COMPENSATION The response to this Item incorporates by reference the information under the caption "Director Compensation" on pages 5 and 6 of Motorola's Proxy Statement for the 1999 annual meeting of stockholders and "Summary Compensation Table," "Stock Option Grants in 1998," "Aggregated Option Exercises in 1998 and 1998 Year-End Option Values," "Long-Term Incentive Plans - Awards in 1998," "Retirement Plans," and "Termination of Employment and Change in Control Arrangements" on pages 9 through 13 of Motorola's Proxy Statement for the 1999 annual meeting of stockholders. 17 ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The response to this Item incorporates by reference the information under the caption "Ownership of Securities" on pages 8 and 9 of Motorola's Proxy Statement for the 1999 annual meeting of stockholders. ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The response to this Item incorporates by reference the relevant information under the caption "Director Compensation" on pages 5 and 6 of Motorola's Proxy Statement for the 1999 annual meeting of stockholders. PART IV ITEM 14: EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) 1. Financial Statements See Part II, Item 8 hereof. 2. Financial Statement Schedule and Auditors' Report Title Schedule ----- -------- Valuation and Qualifying Accounts II All schedules omitted are inapplicable or the information required is shown in the Consolidated Financial Statements or notes thereto. The auditors' report of KPMG LLP with respect to the Financial Statement Schedule is located at page 19. 3. Exhibits Exhibits required to be attached by Item 601 of Regulation S-K are listed in the Exhibit Index attached hereto, which is incorporated herein by this reference. Following is a list of management contracts and compensatory plans and arrangements required to be filed as exhibits to this form by Item 14(c) hereof: Motorola Executive Incentive Plan ("MEIP") Motorola Long Range Incentive Plan of 1994 Share Option Plan of 1982 Share Option Plan of 1991 Share Option Plan of 1996 Motorola Elected Officers Supplementary Retirement Plan Executive Health Plan Accidental Death and Dismemberment Insurance for MEIP Participants Arrangement for Directors' Fees Retirement Plan for Non-Employee Directors Deferred Fee Plan for Outside Directors Motorola Non-Employee Directors Stock Plan Officers' Group Life Insurance Policy Form of Termination Agreement Policy Protecting Salary and Medical Benefits Insurance Policy for Non-Employee Directors Motorola Incentive Plan of 1998 (b) Reports on Form 8-K. Motorola filed no reports on Form 8-K during the last quarter of 1998. (c) Exhibits: See Item 14(a)3 above. 18 INDEPENDENT AUDITORS' REPORT The Board of Directors and Stockholders Motorola, Inc.: Under date of January 13, 1999, except as to Note 8, which is as of March 1, 1999, we reported on the consolidated balance sheets of Motorola, Inc. and subsidiaries as of December 31, 1998 and 1997, and the related consolidated statements of operations, stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, 1998, as contained in the 1998 proxy statement to stockholders. These consolidated financial statements and our report thereon are incorporated by reference in the annual report on Form 10-K for the year ended December 31, 1998. In connection with our audits of the aforementioned consolidated financial statements, we also have audited the related financial statement schedule as listed in Part IV, Item 14(a)2. The financial statement schedule is the responsibility of Motorola's management. Our responsibility is to express an opinion on the financial statement schedule based on our audits. In our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein /s/ KPMG LLP Chicago, Illinois January 13, 1999, except as to Note 8, which is as of March 1, 1999 19 SCHEDULE II MOTOROLA, INC. AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS THREE YEARS ENDED DECEMBER 31, 1998 (IN MILLIONS)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E -------------- -------------- -------------- ------------ ------------ ADDITIONS ----------------------------- BALANCE AT CHARGED TO CHARGED TO BALANCE AT BEGINNING OF COSTS & OTHER END OF PERIOD EXPENSES ACCOUNTS (5) DEDUCTIONS PERIOD ----------------------------------------------------------------------------- 1998 Restructuring and other charges............ $ 159 $1,980 ($22) $1,451 (1) $ 666 Allowance for doubtful accounts............ $ 173 $ 138 --- $ 91 (2) $ 220 Product and service warranties............. $ 337 $ 226 --- $ 230 (3) $ 333 Contract reserves.......................... $1,160 $ 507 --- $ 610 (4) $1,057 1997 Restructuring and other charges............ $ 0 $ 327 ($9) $ 159 (1) $ 159 Allowance for doubtful accounts............ $ 137 $ 75 --- $ 39 (2) $ 173 Product and service warranties............. $ 314 $ 218 --- $ 195 (3) $ 337 Contract reserves.......................... $ 816 $1,187 --- $ 843 (4) $1,160 1996 Allowance for doubtful accounts............ $ 123 $ 42 --- $ 28 (2) $ 137 Product and service warranties............. $ 309 $ 160 --- $ 155 (3) $ 314 Contract reserves.......................... $ 648 $ 656 --- $ 488 (4) $ 816 - --------------------------------------------------------------------------------------------------------------------------
(1) Restructuring and other accrual usage (2) Uncollectible accounts written off (3) Warranty claims paid (4) Customer claims paid/reductions in reserves (5) Reversals into income of 1997 accrual 20 CONSENT OF INDEPENDENT AUDITORS The Board of Directors Motorola, Inc.: We consent to incorporation by reference in the registration statements on Form S-8 (Nos. 33-59285, 333-03681, 333-12817, 333-51847 and 333-65941) of Motorola, Inc. of our reports dated January 13, 1999, except as to Note 8, which is as of March 1, 1999, relating to the consolidated balance sheets of Motorola, Inc. and subsidiaries as of December 31, 1998 and 1997, and the related consolidated statements of operations, stockholders' equity, and cash flows and related financial statement schedule for each of the years in the three-year period ended December 31, 1998, which reports appear in or are incorporated by reference in the annual report on Form 10-K of Motorola, Inc. for the year ended December 31, 1998. /s/ KPMG LLP Chicago, Illinois March 18, 1999 21 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Motorola, Inc. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. MOTOROLA, INC. By: /s/ CHRISTOPHER B. GALVIN --------------------------- Christopher B. Galvin Chief Executive Officer March 19, 1999 PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF MOTOROLA, INC. AND IN THE CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE Title Date --------- ----- ---- /s/ CHRISTOPHER B. GALVIN Director and Principal Executive Officer 3/4/99 - ---------------------------------- Christopher B. Galvin /s/ CARL F. KOENEMANN Principal Financial Officer 3/4/99 - ---------------------------------- Carl F. Koenemann /s/ ANTHONY M. KNAPP Principal Accounting Officer 3/9/99 - ---------------------------------- Anthony M. Knapp /s/ RONNIE C. CHAN Director 3/9/99 - ---------------------------------- Ronnie C. Chan /s/ H. LAURANCE FULLER Director 3/4/99 - ---------------------------------- H. Laurance Fuller /s/ ROBERT W. GALVIN Director 3/3/99 - ---------------------------------- Robert W. Galvin /s/ ROBERT L. GROWNEY Director 3/4/99 - ---------------------------------- Robert L. Growney /s/ ANNE P. JONES Director 3/9/99 - ----------------------------------- Anne P. Jones /s/ DONALD R. JONES Director 3/4/99 - ----------------------------------- Donald R. Jones
22
SIGNATURE Title Date --------- ----- ---- /s/ JUDY C. LEWENT Director 3/3/99 - ----------------------------------- Judy C. Lewent /s/ WALTER E. MASSEY Director 3/3/99 - ----------------------------------- Dr. Walter E. Massey /s/ THOMAS J. MURRIN Director 3/6/99 - ----------------------------------- Thomas J. Murrin /s/ NICHOLAS NEGROPONTE Director 3/4/99 - ----------------------------------- Nicholas Negroponte /s/ JOHN E. PEPPER, JR. Director 3/3/99 - ----------------------------------- John E. Pepper, Jr. /s/ SAMUEL C. SCOTT III Director 3/3/99 - ----------------------------------- Samuel C. Scott III /s/ GARY L. TOOKER Director 3/2/99 - ----------------------------------- Gary L. Tooker /s/ B. KENNETH WEST Director 3/3/99 - ----------------------------------- B. Kenneth West /s/ JOHN A. WHITE Director 3/2/99 - ----------------------------------- Dr. John A. White
23 EXHIBIT INDEX EXHIBIT NO. EXHIBIT - ----------- ------- 3.1 Restated Certificate of Incorporation of Motorola, Inc., as amended (incorporated by reference to Exhibit 3(i)(b) to Motorola's Quarterly Report on Form 10-Q for the fiscal quarter ended April 2, 1994). 3.2 Certificate of Designations, Preferences and Rights of Junior Participating Preferred Stock, Series B (incorporated by reference to Exhibit 3.3 to Motorola's Registration Statement on Form S-3 dated January 20, 1999 (Registration No. 333-70827)). * 3.3 By-Laws of Motorola, Inc., revised as of February 17, 1999. 4.1 Rights Agreement dated November 5, 1998 between Motorola, Inc., and Harris Trust and Savings Bank, as Rights Agent (incorporated by reference to Exhibit 1.1 to Amendment No. 1 to Motorola's Registration Statement on Form 8-A/A dated March 16, 1999). 4.2 LYONs Indenture dated as of September 1, 1989 between Motorola, Inc. and the First National Bank of Chicago, as Trustee (incorporated by reference to Exhibit 4(a) to Motorola's Registration Statement on Form S-3 dated August 23, 1989 (Registration No. 33-30662). 4.3 Indenture dated as of March 15, 1985 between Motorola, Inc. and Harris Trust and Savings Bank, as Trustee (incorporated by reference to Exhibit 4(C) to Motorola's Current Report on Form 8-K dated August 12, 1991). 4.4 Specimen of 8.40% Debentures due August 15, 2031 (incorporated by reference to Exhibit 4(B) to Motorola's Current Report on Form 8-K dated August 12, 1991). 4.5 Indenture dated as of October 1, 1991 between Motorola, Inc. and Harris Trust and Savings Bank, as Trustee (incorporated by reference to Exhibit 4.5 to Motorola's Annual Report on Form 10-K for the fiscal year ended December 31, 1991). 4.6 Specimen of 7.60% Notes due January 1, 2007 (incorporated by reference to Exhibit 4.6 to Motorola's Annual Report on Form 10-K for the fiscal year ended December 31, 1991). 4.7 Specimen of 6 1/2% Notes due March 1, 2008 (incorporated by reference to Exhibit 4(B) to Motorola's Current Report on Form 8-K dated March 1, 1993). 4.8 LYONs Indenture dated as of September 1, 1993 between Motorola, Inc. and the First National Bank of Chicago, as Trustee (incorporated by reference to Exhibit 4(v) to Motorola's Quarterly Report on Form 10-Q for the fiscal quarter ended October 2, 1993). 4.9 Indenture dated as of May 1, 1995 between Motorola, Inc. and Harris Trust and Savings Bank, as Trustee (incorporated by reference to Exhibit 4(d) to Motorola's Registration Statement on Form S-3 dated September 25, 1995 (Registration No. 33-56055)). 4.10 Specimen of 7 1/2% Debentures due May 15, 2025 (incorporated by reference to Exhibit 4(B) to Motorola's Current Report on Form 8-K dated May 15, 1995). 4.11 Specimen of 6 1/2% Debentures due September 1, 2025 (incorporated by reference to Exhibit 4.12 to Motorola's Annual Report on Form 10-K for the fiscal year ended December 31, 1995). 4.12 Specimen of 5.22% Debentures due October 1, 2097 (incorporated by reference to Exhibit 4 to Motorola's Quarterly Report on Form 10-Q for the fiscal quarter ended September 27, 1997). 4.13 Specimen of 5.80% Notes due October 15, 2008 (incorporated by reference to Exhibit 4 to Motorola's Quarterly Report on Form 10-Q for the fiscal quarter ended September 26, 1998). 4.14 Specimen of 6 1/2% Debentures due November 15, 2028 (incorporated by reference to Exhibit 4.9 to Motorola's Registration Statement on Form S-3 dated January 20, 1999 (Registration No. 333-70827)). 24 4.15 Certificate of Trust of Motorola Capital Trust I dated January 19, 1999 (incorporated by reference to Exhibit 4.1 to Motorola's Registration Statement on Form S-3 dated January 20, 1999 (Registration No. 333-70827)). * 4.16 Amended and Restated Declaration of Trust dated as of February 3, 1999 among Motorola, Inc., Harris Trust and Savings Bank, as Property Trustee, First Union Trust Co. N.A., as Delaware Trustee, and the Regular Trustees named therein. * 4.17 Preferred Securities Guarantee Agreement dated February 3, 1999 between Motorola, Inc. and Harris Trust and Savings Bank, as Preferred Securities Guarantee Trustee. * 4.18 Specimen of 6.68% Trust Originated Preferred Securities SM issued by Motorola Capital Trust I. * 4.19 Specimen of 6.68% Deferrable Interest Junior Subordinated Debentures due March 31, 2039. * 4.20 Indenture dated as of February 3, 1999 between Motorola, Inc. and Harris Trust and Savings Bank, as Indenture Trustee. * 4.21 First Supplemental Indenture dated as of February 3, 1999 between Motorola, Inc. and Harris Trust and Savings Bank, as Indenture Trustee. 10.1 Motorola Executive Incentive Plan as amended through February 4, 1998, (incorporated by reference to Exhibit 10.1 to Motorola's Quarterly Report on Form 10-Q for the fiscal quarter ended June 27, 1998). 10.2 Motorola Long Range Incentive Plan of 1994, as amended through February 4, 1998 (incorporated by reference to Exhibit 10.2 to Motorola's Quarterly Report on Form 10-Q for the fiscal quarter ended June 27, 1998). 10.3 Share Option Plan of 1982, as amended through March 24, 1992 (incorporated by reference to Exhibit 10.3 to Motorola's Annual Report on Form 10-K for the fiscal year ended December 31, 1990, Exhibit 10.2(a) to Motorola's Annual Report on Form 10-K for the fiscal year ended December 31, 1991 and Exhibit 10.3 to Motorola's Annual Report on Form 10-K for the fiscal year ended December 31, 1992). 10.4 Share Option Plan of 1991, as amended through August 7, 1995 (incorporated by reference to Exhibit 10.4 to Motorola's Annual Report on Form 10-K for the fiscal year ended December 31, 1993 and Exhibit 10.4 to Motorola's Report on Form 10-K for the fiscal year ended December 31, 1995). 10.5 Resolutions Amending Sections 8 and 10(2) of the Share Option Plan of 1982, and Resolutions Amending Sections 7 and 9(b) of the Share Option Plan of 1991, effective August 15, 1996 (incorporated by reference to Exhibit 10.5 to Motorola's Annual Report on Form 10-K for the fiscal year ended December 31, 1996). 10.6 Share Option Plan of 1996, as amended through May 7, 1997 (incorporated by reference to Exhibit 10 to Motorola's Quarterly Report on Form 10-Q for the fiscal quarter ended June 28, 1997). 10.7 Motorola Elected Officers Supplementary Retirement Plan, as amended through February 6, 1995 (incorporated by reference to Exhibit 10.5 to Motorola's Annual Report on Form 10-K for the fiscal year ended December 31, 1994). 10.8 Executive Health Plan (incorporated by reference to Exhibit 10.8 to Motorola's Annual Report on Form 10-K for the fiscal year ended December 31, 1996). 10.9 Accidental death and dismemberment insurance for MEIP participants (incorporated by reference to Exhibit 10.7 to Motorola's Annual Report on Form 10-K for the fiscal year ended December 31, 1990). 10.10 Arrangement for directors' fees and retirement plan for non-employee directors (description incorporated by reference from pages 5 and 6 of Motorola's Proxy Statement for the 1999 annual meeting of stockholders). 10.11 Deferred Fee Plan for Outside Directors, as amended February 6, 1996 (incorporated by reference to Exhibit 10.9 to Motorola's Annual Report on Form 10-K for the fiscal year ended December 31, 1995). 25 10.12 Motorola Non-Employee Directors Stock Plan, as amended and restated on February 4, 1998 (incorporated by reference to Exhibit 10.12 to Motorola's Quarterly Report on Form 10-Q for the fiscal quarter ended June 27, 1998). 10.13 Officers' Group Life Insurance Policy (incorporated by reference to Exhibit 10.10 to Motorola's Annual Report on Form 10-K for the fiscal year ended December 31, 1990). 10.14 Form of Termination Agreement in respect of a change in control (incorporated by reference to Exhibit 10.15 to Motorola's Annual Report on Form 10-K for the fiscal year ended December 31, 1989). 10.15 Policy protecting salary and medical benefits of employees in the event of an unsolicited change in control (incorporated by reference to Exhibit 10.16 to Motorola's Annual Report on Form 10-K for the fiscal year ended December 31, 1990). 10.16 Insurance policy covering non-employee Directors (incorporated by reference to the description on page 6 of Motorola's Proxy Statement for the 1999 annual meeting of stockholders and to Exhibit 10.16 to Motorola's Annual Report on Form 10-K for the fiscal year ended December 31, 1989). 10.17 Iridium Space System Contract between Motorola, Inc. and Iridium, Inc., as amended to date, and Iridium Communications Systems Operations and Maintenance Contract between Motorola, Inc. and Iridium, Inc., as amended to date (incorporated by reference to Exhibits 99.2 and 99.3, respectively, to Motorola's Current Report on Form 8-K dated August 2, 1993 and Exhibits 99(a) and 99(b), respectively, to Motorola's Quarterly Report on Form 10-Q for the quarter ended October 1, 1994). 10.18 Motorola Incentive Plan of 1998 (incorporated by reference to Exhibit 10 to Motorola's Quarterly Report on Form 10-Q for the fiscal quarter ended March 28, 1998). * 21 Subsidiaries of Motorola. 23 Consent of KPMG LLP. See page 21 of the Annual Report on Form 10-K of which this Exhibit Index is a part. * 27 Financial Data Schedule (filed only electronically with SEC). ____________________ * Filed herewith 26 EX-3.3 2 BY-LAWS OF MOTOROLA, INC. Exhibit 3.3 Revised as of February 17, 1999 MOTOROLA, INC. ------------- BYLAWS ------ ARTICLE I --------- Offices and Corporate Seal -------------------------- The registered office of the Corporation required by the Delaware General Corporation Law shall be 1209 Orange Street, Wilmington, Delaware, 19801, and the address of the registered office may be changed from time to time by the Board of Directors. The principal business office of the Corporation shall be located in the Village of Schaumburg, County of Cook, State of Illinois. The Corporation may have such other offices, either within or without the State of Illinois, as the Board of Directors may designate or as the business of the Corporation may require from time to time. The registered office of the Corporation required by the Illinois Business Corporation Act may be, but need not be, the same as its place of business in the State of Illinois, and the address of the registered office may be changed from time to time by the Board of Directors. The Board of Directors shall provide a corporate seal which shall be circular in form and shall have inscribed thereon the name of the Corporation and the state of incorporation and the words "Corporate Seal". ARTICLE II ---------- Board of Directors ------------------ Section 1. General Powers. The business and affairs of the Corporation --------- -------------- shall be managed by, or under the direction of, its Board of Directors. Section 2. Number, Tenure and Qualifications. The number of directors of --------- --------------------------------- the Corporation shall be sixteen (16), or such other number fixed from time to time by the Board of Directors. Each director shall hold office until his successor shall have been elected and qualified, or until his earlier death or resignation. Section 3. Vacancies. Any vacancy occurring in the Board of Directors, --------- --------- including a vacancy created by an increase in the number of directors, may be filled for the remainder of the unexpired term by the affirmative vote of a majority of the directors then in office although less than a quorum. Section 4. Compensation. Directors who also are employees of the --------- ------------ Corporation shall not receive any additional compensation for services on the Board of Directors. By resolution of the Board of Directors, a fixed sum may be allowed directors who are not employees of the Corporation for attendance at each regular or special meeting of the Board of Directors or any committee of the Board of Directors, and by resolution of the Board of Directors an additional fixed fee may be allowed directors who are not employees of the Corporation in consideration of other services and continuous interest and study of the affairs of the Corporation. Travel and other expenses actually incurred may be allowed all directors for attendance at each regular or special meeting of the Board of Directors or at any meeting of a committee of the Board of Directors or in connection with their other services to the Corporation. Nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Section 5. Committees of Directors. The Board of Directors may, by --------- ----------------------- resolution passed by a majority of the whole Board, designate one or more committees. Each committee shall consist of one or more of the directors of the Corporation, as selected by the Board of Directors, and the Board of Directors shall also designate a chairman of each committee and the members of each committee shall designate a person to act as secretary of the committee to keep the minutes of, and serve the notices for, all meetings of the committee and perform such other duties as the committee may direct. Such person may, but need not be a member of the committee. Any such committee, to the extent provided in a resolution of the Board of Directors, shall have and may exercise all the powers and authority of -2- the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power and authority of the Board of Directors in reference to amending the Certificate of Incorporation, adopting an agreement of merger or consolidation under Section 251 or 252 of the Delaware General Corporation Law, recommending to the shareholders the sale, lease or exchange of all or substantially all of the Corporation's property and assets, recommending to the shareholders a dissolution of the Corporation or a revocation of a dissolution, or amending the Bylaws of the Corporation, and, unless the resolution expressly so provides, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock or to adopt a certificate of ownership and merger pursuant to Section 253 of the Delaware General Corporation Law. Each committee of the Board of Directors may establish its own rules of procedure. Except as otherwise specified in a resolution designating a committee, one-third of the members of a committee shall be necessary to constitute a quorum of that committee for the transaction of business and the act of a majority of committee members present at a meeting at which a quorum is present shall be the act of the committee. Section 6. Validity of Contracts. No contract or other transaction --------- --------------------- entered into by the Corporation shall be affected by the fact that a director or officer of the Corporation is in any way interested in or connected with any party to such contract or transaction, or himself is a party to such contract or transaction, even though in the case of a director the vote of the director having such interest or connection shall have been necessary to obligate the Corporation upon such contract or transaction; provided, however, that in any such case (i) the material facts of such interest are known or disclosed to the directors or shareholders and the contract or transaction is authorized or approved in good faith by the shareholders or by the Board of Directors or a committee thereof through the affirmative vote of a majority of the disinterested directors (even though not a quorum), or (ii) the contract or transaction is fair to the Corporation as of the time it is authorized, approved or ratified by the shareholders, or by the Board of Directors, or by a committee thereof. ARTICLE III ----------- Shareholders' Meetings ---------------------- Section 1. Place of Meetings. The Board of Directors may designate any --------- ----------------- place, either within or without the State of Delaware, as the place of meeting for any annual meeting or for any special meeting called by the Board of Directors. If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be the principal business office of the Corporation in the State of Illinois. Section 2. Annual Meetings. The annual meeting of the shareholders shall --------- --------------- be held on the first Tuesday in the month of May in each year, at the hour of 5:00 o'clock P.M., or at such other day and hour as may be fixed by or under the authority of the Board of Directors, for the purpose of electing directors and for the transaction of such other business as may come before the meeting. If the day fixed for the annual meeting shall be a legal holiday in the state where the meeting is to be held, such meeting shall be held on the next succeeding business day. If the election of directors shall not be held on the day designated herein for the annual meeting of the shareholders, or at any adjournment thereof, the Board of Directors shall cause the election to be held at a special meeting of the shareholders as soon thereafter as is convenient. Section 3. Special Meetings. Special meetings of the shareholders, for --------- ---------------- any purpose or purposes, unless otherwise prescribed by statute, may be called by the Chairman of the Board or by the Board of Directors. Section 4. Voting - Quorum. Each outstanding share, regardless of class, --------- --------------- shall be entitled to one vote on each matter submitted to a vote at a meeting of shareholders, except to the extent that the voting rights of any class or classes are enlarged, limited or denied by the Certificate of Incorporation or in the manner therein provided. A majority of the shares entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of shareholders. If a quorum is present, the affirmative vote of a majority of the shares represented at the meeting and entitled to vote on the subject matter shall be the act of the shareholders, except that directors shall be elected by a plurality of the votes of the shares represented at the meeting and entitled to vote on the election of directors, except as otherwise required by Delaware law, the Certificate of Incorporation, or these Bylaws. No matter shall be considered at a meeting of shareholders except upon a motion duly made and seconded. If less than a majority of the outstanding shares are represented at a meeting, a majority of the shares so represented may adjourn the meeting from time to time without further notice. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally called. -3- Section 5. Adjournment of Meetings. If less than a majority of the --------- ----------------------- outstanding shares are represented at a meeting of the shareholders, a majority of the shares so represented may adjourn the meeting from time to time without further notice. The chairman of a meeting of the shareholders may adjourn the meeting from time to time without further notice, whether or not less than a majority of the outstanding shares are represented at the meeting. No notice of the time and place of adjourned meetings need be given except as required by law. In no event shall the public announcement of an adjournment of any meeting of the shareholders commence a new time period for the giving of shareholder notice of nominations or proposals for other business as described in Section 13 of Article III. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally called. Section 6. Proxies. At all meetings of shareholders, a shareholder may ---------- ------- vote by proxy executed in writing by the shareholder or by his duly authorized attorney-in-fact. No proxy shall be valid after three years from the date of its execution, unless otherwise provided in the proxy. Section 7. Notice of Meetings. Written notice stating the place, day and --------- ------------------ hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than ten days (twenty days if the shareholders are to approve a merger or consolidation or a sale, lease or exchange of all or substantially all the Corporation's assets) nor more than sixty days before the date of the meeting, either personally or by mail, by or at the direction of the Chairman of the Board, or the Secretary, or the officer or persons calling the meeting, to each shareholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail, addressed to the shareholder at his address as it appears on the records of the Corporation, with postage thereon prepaid. Section 8. Postponement of Meetings. Any previously scheduled meeting of --------- ------------------------ the shareholders may be postponed by resolution of the Board of Directors upon public notice given prior to the time previously scheduled for such meeting of the shareholders. In no event shall the public announcement of a postponement of any previously scheduled meeting of the shareholders commence a new time period for the giving of shareholder notice of nominations or proposals for other business as described in Section 13 of Article III. Section 9. Cancellation of Meetings. Any special meeting of the --------- ------------------------ shareholders may be canceled by resolution of the Board of Directors upon public notice given prior to the time previously scheduled for such meeting of the shareholders. Section 10. Voting Lists. The officer or agent having charge of the stock ---------- ------------ ledger of the Corporation shall make, at least ten days before each meeting of shareholders, a complete list of the shareholders entitled to vote at such meeting, or any adjournment thereof, arranged in alphabetical order, with the address of and the number of shares held by each; which list, for a period of ten days prior to such meeting, shall be kept at the place where the meeting is to be held, or at another place within the city where the meeting is to be held, which other place shall be specified in the notice of meeting and the list shall be subject to inspection by any shareholder for any purpose germane to the meeting, at any time during usual business hours. Such list shall also be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any shareholder during the whole time of the meeting. The original stock ledger shall be prima facie evidence as to who are the shareholders entitled to examine such list or ledger or to vote at any meeting of shareholders. Section 11. Fixing of Record Date. For the purpose of determining ---------- --------------------- shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or entitled to receive payment of any dividend, or in order to make a determination of shareholders for any other proper purpose, the Board of Directors of the Corporation may fix in advance a date as the record date for any such determination of shareholders, such date in any case to be not more than sixty days and, in case of a meeting of shareholders, not less than ten days prior to the date on which the particular action, requiring such determination of shareholders, is to be taken. If no record date is fixed for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders, or shareholders entitled to receive payment of a dividend, the close of business on the date next preceding the date on which notice of the meeting is mailed or the date on which the resolution of the Board of Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of shareholders. When a determination of shareholders entitled to vote at any meeting of shareholders has been made as provided in this Section, such determination shall apply to any adjournment thereof; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. -4- Section 12. Voting of Shares by Certain Holders. Neither treasury shares ---------- ----------------------------------- nor shares of the Corporation held by another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the Corporation, shall be entitled to vote or to be counted for quorum purposes. Nothing in this paragraph shall be construed as limiting the right of the Corporation to vote its own stock held by it in a fiduciary capacity. Shares standing in the name of another corporation, domestic or foreign, may be voted in the name of such corporation by any officer thereof or pursuant to any proxy executed in the name of such corporation by any officer of such corporation in the absence of express written notice filed with the Secretary that such officer has no authority to vote such shares. Shares held by an administrator, executor, guardian, conservator, trustee in bankruptcy, receiver or assignee for creditors may be voted by him, either in person or by proxy, without a transfer of such shares into his name. Shares standing in the name of a fiduciary may be voted by him, either in person or by proxy. A shareholder whose shares are pledged shall be entitled to vote such shares unless in the transfer by the pledgor on the books of the Corporation the pledgor has expressly empowered the pledgee to vote thereon, in which case only the pledgee, or his proxy, may represent such stock and vote thereon. Section 13. Advance Notice of Shareholder Nominations and Proposals for ---------- ----------------------------------------------------------- other Business. Nominations of persons for election to the Board of Directors - -------------- and the proposal of business to be transacted by the shareholders may be made at an annual or special meeting of the shareholders only (a) pursuant to the Corporation's notice with respect to such meeting, (b) by or at the direction of the Board of Directors or (c) by any shareholder of the Corporation who was a shareholder of record on the record date set with respect to such meeting (as provided for in Section 11 of Article III), who is entitled to vote at the meeting and who has complied with the notice procedures set forth in this Section 13. For nominations or proposals for other business to be properly brought before an annual or special meeting by a shareholder pursuant to clause (c) above, the shareholder must give timely notice thereof in writing to the Secretary of the Corporation and such business must be a proper matter for shareholder action under the Delaware General Corporation Law and a proper matter for consideration at such meeting under the Certificate of Incorporation and these Bylaws. For such notice to be timely, it must be delivered to the Secretary at the principal business office of the Corporation not earlier than the 120th day prior to the date of such meeting and (a) in the case of an annual meeting of shareholders, at least 45 days before the date on which the Corporation first mailed its proxy materials for the prior year's annual meeting of shareholders and (b) in the case of a special meeting, not later than the close of business on the later of (i) the 60th day prior to the date of such meeting or (ii) the 10th day following the day on which public announcement of the date of such meeting is first made. If such shareholder notice relates to a proposal by such shareholder to nominate one or more persons for election or re- election as a director, it shall set forth all information relating to each such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the "Exchange Act") (including, if and to the extent so required, such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected). If such shareholder notice relates to any other business that the shareholder proposes to bring before the meeting, it shall set forth a brief description of such business, the reasons for conducting such business at the meeting and any material interest in such business of such shareholder and the beneficial owner, if any, on whose behalf the proposal is made. Each such notice shall also set forth as to the shareholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such shareholder, as they appear on the Corporation's books, and of such beneficial owner and (ii) the class and number of shares of capital stock of the Corporation which are owned beneficially and of record by such shareholder and such beneficial owner. Persons nominated by shareholders to serve as directors of the Corporation who have not been nominated in accordance with this Section 13 shall not be eligible to serve as directors. Only such business shall be conducted at an annual or special meeting of shareholders as shall have been brought before the meeting in accordance with this Section 13. The chairman of the meeting shall determine whether a nomination or any business proposed to be transacted by the shareholders has been properly brought before the meeting and, if any proposed nomination or business has not been properly brought before the meeting, the chairman shall declare that such proposed business or nomination shall not be presented for shareholder action at the meeting. For purposes of this Section 13, "public announcement" shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or a comparable national news service. Notwithstanding any provision in this Section 13 to the contrary, requests for inclusion of proposals in the Corporation's proxy statement made pursuant to Rule 14a-8 under the Exchange Act shall be deemed to have been delivered in a timely manner if delivered in accordance with such Rule. Notwithstanding -5- compliance with the requirements of this Section 13, the chairman presiding at any meeting of the shareholders may, in his sole discretion, refuse to allow a shareholder or shareholder representative to present any proposal which the Corporation would not be required to include in a proxy statement under any rule promulgated by the Securities and Exchange Commission. ARTICLE IV ---------- Board of Directors' Meetings ---------------------------- Section 1. Annual Meetings. An annual meeting of the Board of Directors --------- --------------- shall be held without other notice than this Bylaw immediately after, and at the same place as, the annual meeting of shareholders. Section 2. Special Meetings. Special meetings of the Board of Directors --------- ---------------- may be called by or at the request of the Chairman of the Board or any two directors. The person or persons authorized to call special meetings of the Board of Directors may fix any place, either within or without the State of Delaware, as the place for holding any special meeting of the Board of Directors called by them. Section 3. Notice. Except as set forth in the next sentence, notice of --------- ------ any special meeting shall be given at least 24 hours prior to the meeting by written notice delivered or given personally (including by phone) or by mail or telegram or other written communication to each director at his business address or residence. If, however, the meeting is called by or at the request of the Chairman of the Board and if the Chairman of the Board decides that unusual and urgent business is to be transacted at the meeting (which decision shall be conclusively demonstrated by his giving notice of the meeting less than 24 hours prior to the meeting), then at least 2 hours' prior notice shall be given. If notice is given by telegram or courier, such notice shall be deemed to be given when the telegram is delivered to the telegraph company or courier company and any personal notice shall be deemed given when given. Any director may waive notice of any meeting. The attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting and objects thereat to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting. Section 4. Quorum. One-third of the number of directors fixed by, or --------- ------ pursuant to, Section 2 of Article II shall constitute a quorum for the transaction of business at any meeting of the Board of Directors, but if less than such one-third is present at a meeting, a majority of the directors present may adjourn the meeting from time to time without further notice. Section 5. Manner of Acting. The act of the majority of the directors --------- ---------------- present at a meeting at which a quorum is present shall be the act of the Board of Directors. Section 6. Presumption of Assent. A director of the Corporation who is --------- --------------------- present at a meeting of the Board of Directors at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless his dissent is entered in the minutes of the meeting or unless he files his written dissent to such action with the person acting as the secretary of the meeting before the adjournment thereof or forwards such dissent by registered mail to the Secretary of the Corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a director who voted in favor of such action. Section 7. Action by Directors Without a Meeting. Any action required to --------- ------------------------------------- be taken at a meeting of directors, or at a meeting of a committee of directors, or any other action which may be taken at a meeting, may be taken without a meeting if a consent in writing setting forth the action so taken shall be signed by all of the directors or members of the committee thereof entitled to vote with respect to the subject matter thereof and filed with the minutes of proceedings of the Board of Directors or committee and such consent shall have the same force and effect as a unanimous vote. Section 8. Participation in a Meeting by Telephone. Members of the Board --------- --------------------------------------- of Directors or any committee of directors may participate in a meeting of such Board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participating in a meeting pursuant to this Section 8 shall constitute presence in person at such meeting. -6- ARTICLE V --------- Officers and Chairman of the Board ---------------------------------- Section 1. Number, Election, Appointment, Removal, Vacancy. The elected --------- ----------------------------------------------- officers of the Corporation shall be aChairman, a Chief Executive Officer (the Chairman and the Chief Executive Officer may be one person), a President, one or more Vice Presidents, a Chief Financial Officer, a Treasurer, a Secretary and a Controller, each of whom shall be elected by the Board of Directors. The appointed officers of the Corporation shall be one or more Assistant Treasurers and Assistant Secretaries, each of whom shall be appointed by the Chief Executive Officer and shall serve at his pleasure. The Board of Directors may designate one or more Vice Presidents as Senior Executive Vice President, one or more Vice Presidents as Executive Vice President and one or more Vice Presidents as Senior Vice President. Such other officers as may be necessary, including one or more Vice Chairmen of the Board, one or more Officers of the Board and a Chairman of the Executive Committee may be elected by the Board of Directors. Any two or more offices may be held by the same person, except the offices of President and Secretary, and the offices of President and Vice President. The elected officers of the Corporation shall be elected annually by the Board of Directors at the first meeting of the Board of Directors held after each annual meeting of the shareholders. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as convenient. Each elected officer shall hold office until his successor shall have been duly elected or until his death or until he shall resign or shall have been removed in the manner hereinafter provided. Any officer elected by the Board of Directors may be removed by the Board of Directors whenever in its judgment the best interests of the Corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Election shall not of itself create contract rights. A vacancy in any elected office because of death, resignation, removal, disqualification or otherwise, may be filled by the Board of Directors for the unexpired portion of the term. Section 2. Chairman of the Board of Directors. At its first meeting after --------- ---------------------------------- the annual meeting of shareholders, the Board of Directors shall elect one of its own members to be the Chairman of the Board of Directors ("Chairman of the Board"). The Chairman of the Board shall work with the Board of Directors to define its structure, agenda and activities in order to fulfill its responsibilities and shall work with senior management to help ensure that matters for which management is responsible are appropriately reported to the Board of Directors. He shall preside at all meetings of the shareholders and of the Board of Directors and shall call and prescribe the content of such meetings. The Chairman of the Board shall lead the Board of Directors in its role of assessing the performance of the management of the Corporation. The Chairman of the Board shall also counsel the members of the Chief Executive Office, where appropriate, and shall perform such other duties as may be prescribed by the Board of Directors from time to time. The Chairman of the Board may designate one or more other directors to exercise the functions and to have the authority of the Chairman of the Board during the absence or disability of the Chairman of the Board and prior to any action by the Board of Directors to fill any vacancy. The Board of Directors may remove or replace the Chairman of the Board at any time and any vacancy in such position because of death, resignation, removal, disqualification or otherwise, may be filled by the Board of Directors for the unexpired portion of the term. Section 3. The Vice Chairman of the Board of Directors. The Vice Chairman ---------- -------------------------------------------- of the Board of Directors ("Vice Chairman of the Board"), in the absence or disability of the Chairman of the Board, shall preside at all meetings of the shareholders and of the Board of Directors and shall perform such duties as may be prescribed by the Board of Directors, the Chairman of the Board, the President or a Senior Executive Vice President from time to time. If there are two or more Vice Chairmen of the Board, they shall preside at meetings as prescribed by the Chairman of the Board from time to time. Section 4. Chief Executive Officer. The Chief Executive Officer ("CEO") ---------- ------------------------ shall be the senior executive officer of the Corporation and shall in general supervise and control all the business and affairs of the Corporation. He shall direct the policy of the Corporation; and he may delegate powers to any other officer of the Corporation. Except where by law the signature of such other officer is required, the CEO shall possess the same power as such other officer to sign all certificates, contracts and other instruments and documents of the Corporation which may be authorized by the Board of Directors or otherwise, and shall possess the same power as such other officer to take any action authorized by these Bylaws or by the Board of Directors or otherwise. He shall also perform such duties as may be prescribed by the Board of Directors or by the Chairman of the Board of Directors acting for the Board of Directors from time to time. Section 5. The President. The President, in the absence or disability of --------- ------------- the CEO, shall exercise the functions and shall have the authority of the CEO. The President may sign, with the Secretary or other proper -7- officer of the Corporation thereunto authorized by the Board of Directors (if the signature of the Secretary or such other officer is required), certificates for shares of the Corporation, any deeds, mortgages, bonds, contracts, and other instruments and documents which may be authorized by the Board of Directors or otherwise, except in cases where the signing and execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation, or shall be required by law to be otherwise signed or executed; and in general, shall perform all duties incident to the office of President and such other duties as may be prescribed by the Board of Directors from time to time Section 6. The Chairman of the Executive Committee, Senior Executive Vice --------- -------------------------------------------------------------- Presidents, Executive Vice Presidents, Officers of the Board, Senior Vice - ------------------------------------------------------------------------- Presidents and the Corporate Vice Presidents. The Chairman of the Executive - -------------------------------------------- Committee, Senior Executive Vice Presidents, Executive Vice Presidents, Officers of the Board, Senior Vice Presidents and the Corporate Vice Presidents, in the order designated by the Board of Directors or the Chairman of the Board, shall exercise the functions and shall have the authority of the President during the absence or disability of the President. The Chairman of the Executive Committee, each Senior Executive Vice President, Executive Vice President, Officer of the Board, Senior Vice President and Corporate Vice President shall have such powers as may be designated and shall discharge such duties as may be assigned to him from time to time by the Board of Directors or the Chief Executive Office. In addition to the duties described in the prior sentence, all these elected officers (except the Chairman of the Executive Committee) are authorized to sign and execute all agreements, contracts, leases, bids, proposals, deeds, assignments, powers of attorney, guarantee undertakings, instruments, documents, claims, including claims against the United States of America, and certifications of such claims, in the ordinary course of business of the Corporation, and to redelegate that authority in writing to others; provided, however, that only the CEO, the President, the Chief Financial Officer and the Treasurer are authorized to perform those activities set forth in the third sentence of the first paragraph of Article V, Section 7, of these Bylaws. Section 7. The Secretary. The Secretary shall keep the minutes of all --------- ------------- meetings of the Board of Directors and the minutes of all meetings of the shareholders, in books provided by the Corporation for such purpose. He shall attend to giving and serving of all notices of the Corporation whereby meetings of the Board of Directors and shareholders are assembled. He shall provide lists of shareholders and their addresses required to be prepared by the provisions of any present or future statute of the State of Delaware. He may sign, with any other officer, in the name of the Corporation, all contracts and other instruments requiring the seal of the Corporation and may affix the seal thereto. He shall have charge of such books and papers as the Board of Directors may direct. He shall in general perform all of the duties which are incident to the office of secretary of a corporation, subject at all times to the direction and control of the Board of Directors. Section 8. The Chief Financial Officer and the Treasurer. The Chief --------- --------------------------------------------- Financial Officer shall be the senior financial officer of the Corporation. The Chief Financial Officer, the CEO, the President and the Treasurer shall each individually have the power, which may be redelegated in writing, on behalf of the Corporation, to borrow funds and to otherwise incur liabilities, to sell or discount bills, receivables and other instruments and rights, to enter into and deliver repurchase, credit, guarantee, surety, loan, interest rate, currency and other agreements, which may contain covenants restricting the Corporation's ability to take certain actions or require it to take certain actions, to sign and deliver acceptances, notes and other obligations, to buy and sell foreign exchange, whether for current or future delivery, or options on foreign exchange, to purchase, sell, exchange or otherwise deal in stock or other securities, to procure letters of credit, travelers' checks or similar instruments, to open and close accounts with any banking institution or other depository of funds, to sign, manually, by facsimile signature or otherwise, checks, drafts or other orders for the payment of funds (which each such institution is hereby authorized and directed to honor), to issue written, telephonic, electronic or oral instructions for the transfer of funds by wire or other electronic means or otherwise, to enter into agreements or documents with any banking or financial institution with respect to any services, including, without limitation, electronic services, and to do all things in connection with any of these as any of them sees fit. The Chief Financial Officer, the CEO, the President and the Treasurer shall each individually also have the power, which may be redelegated in writing, on behalf of the Corporation, to guarantee, or to act as surety with respect to, any of the obligations of any entity of which any of the outstanding stock or securities is owned, directly or indirectly by the Corporation. In addition, the Chief Financial Officer, as well as each of the CEO, the President and the Treasurer, shall individually have the authority to vote all shares or securities in any entity directly or indirectly owned by the Corporation and to redelegate that authority in writing to others. The Treasurer shall have the custody of all of the funds and securities of the Corporation. He shall be empowered to endorse on behalf of the Corporation all checks, notes or other obligations and evidences of the payment of money, payable to the Corporation or coming into his possession, and shall deposit the funds arising -8- therefrom, together with all other funds of the Corporation, coming into his possession, in such banks as may be selected as the depositories of the Corporation, or properly care for them in such other manner as the Board of Directors may direct. All checks and other instruments drawn on or payable out of the funds of the Corporation and all bills, notes or other evidence of indebtedness shall be signed by such officers and employees as the Board of Directors may designate. Whenever required by the Board of Directors so to do, he shall exhibit a complete and true statement of property in his possession, custody or control. He shall provide for the entry regularly, in records belonging to the Corporation, a full and accurate account of all money received and paid on account of the Corporation, together with all other business transactions. He shall, at all reasonable times within the hours of business, exhibit his records and accounts to any director. He shall perform all duties which are incident to the office of treasurer of a corporation, subject, however, at all times to the direction and control of the Board of Directors. If the Board of Directors shall so require, he shall give bond, in such sum and with such securities as the Board of Directors may direct, for the faithful performance of his duties and for the safe custody of the funds and property of the Corporation coming into his possession. Section 9. The Controller. The Controller shall be the Chief Accounting --------- -------------- Officer of the Corporation and shall: (a) keep, or cause to be kept, correct and complete books and records of account, including full and accurate accounts of receipt and disbursements in books belonging to the Corporation; and (b) in general, perform all duties incident to the office of Controller and such other duties as from time to time may be assigned to him by the Chairman of the Board or by the Board of Directors. In addition, the Controller, the Chief Financial Officer and the Treasurer shall each individually be authorized to sign powers of attorney on behalf of the Corporation and to appoint agents and attorneys to represent the Corporation in dealings before or with the Bureau of Customs. Section 10. Statutory Duties. Each respective officer shall discharge any ---------- ---------------- and every duty, appertaining to his respective office, which is imposed on such officer by the provisions of any present or future statute of the State of Delaware. Section 11. Delegation of Duties. In case of the absence of any officer ---------- -------------------- of the Corporation, the Chairman of the Board or the Board of Directors may delegate, for the time being, the duties of such officer to any other officer or to any director. Section 12. Salaries. The salaries of the officers and the Chairman of ---------- -------- the Board shall be fixed from time to time by the Board of Directors unless such authority has been delegated by the Board of Directors, in which case, salaries shall be fixed by the person, persons or committee to whom authority has been delegated, subject to any limitations which may be contained in the resolution delegating such authority. No officer shall be prevented from receiving such salary by reason of the fact that he or she is also a director of the Corporation. Section 13. Assistant Treasurers and Assistant Secretaries. The CEO may ---------- ---------------------------------------------- appoint, from time to time, as he may see fit, and may (but shall not be required to) fix the compensation of, one or more Assistant Treasurers and Assistant Secretaries, each of whom shall hold office during the pleasure of the CEO, and shall perform such duties as he may assign. ARTICLE VI ---------- Certificates for Shares and Their Transfer ------------------------------------------ Section 1. Certificates for Shares. Certificates representing shares of --------- ----------------------- the Corporation shall be in such form as shall be determined by the Board of Directors. Such certificates shall be signed by the CEO or President, and by the Treasurer or the Secretary. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent, or registrar at the date of issue. All certificates for shares shall be consecutively numbered or otherwise identified. The name and address of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the stock ledger of the Corporation. Section 2. Transfer of Certificate. Transfer of shares of the Corporation --------- ----------------------- shall be made only upon the records of the Transfer Agent appointed for this purpose, by the owner in person or by the legal representative of such owner and, upon such transfer being made, the old certificates shall be surrendered to the Transfer Agent who shall cancel the same and thereupon issue a new certificate or certificates therefor. Whenever a transfer is made for collateral security, and not absolutely, the fact shall be so expressed in the recording of the transfer. -9- Section 3. Transfer Agent and Registrar. The Board of Directors may --------- ---------------------------- appoint a transfer agent and registrar of transfers and thereafter may require all stock certificates to bear the signature of such transfer agent and such registrar of transfers. The signature of either the transfer agent or the registrar, but not both, may be a facsimile. Section 4. Registered Holder. The Corporation shall be entitled to treat --------- ----------------- the registered holder of any shares as the absolute owner thereof and, accordingly, shall not be bound to recognize any equitable or other claim thereto, or interest therein, on the part of any other person, whether or not it shall have express or other notice thereof, save as expressly provided by the statutes of the State of Delaware. Section 5. Rules of Transfer. The Board of Directors also shall have the --------- ----------------- power and authority to make all such rules and regulations as they may deem expedient concerning the issue, transfer and registration of the certificates for the shares of the Corporation. Section 6. Lost Certificates. Any person claiming a certificate for --------- ----------------- shares of this Corporation to be lost or destroyed, shall make affidavit of the fact and lodge the same with the Secretary of the Corporation, accompanied by a signed application for a new certificate. Such person shall give to the Corporation, to the extent deemed necessary by the Secretary or Treasurer, a bond of indemnity with one or more sureties satisfactory to the Secretary, and in an amount which, in his judgment, shall be sufficient to save the Corporation from loss, and thereupon the proper officer or officers may cause to be issued a new certificate of like tenor with the one alleged to be lost or destroyed. But the Secretary may recommend to the Board of Directors that it refuse the issuance of such new certificate in the event that the applicable provisions of the Uniform Commercial Code are not met. ARTICLE VII ----------- Contracts, Loans, Checks and Deposits ------------------------------------- Section 1. Contracts. The Board of Directors may authorize, by these --------- --------- Bylaws or any resolution, any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances. Section 2. Loans. No loans shall be contracted on behalf of the --------- ----- Corporation and no evidences of indebtedness shall be issued in its name unless authorized by these Bylaws or a resolution of the Board of Directors. Such authority may be general or confined to specific instances. Section 3. Checks, Drafts, etc. All checks, drafts or other orders for --------- ------------------- the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation, shall be signed by such officer or officers, agent or agents, of the Corporation and in such manner as shall from time to time be determined by these Bylaws or a resolution of the Board of Directors. Section 4. Deposits. All funds of the Corporation not otherwise employed --------- -------- shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board of Directors may select. ARTICLE VIII ------------ Books and Records ----------------- Section 1. Location. Complete books and records of account together with --------- -------- minutes of the proceedings of the meetings of the shareholders and Board of Directors shall be kept. A record of shareholders, giving the names and addresses of all shareholders, and the number and class of the shares held by each, shall be kept by the Corporation at its registered office or principal place of business in the State of Illinois or at the office of a Transfer Agent or Registrar. ARTICLE IX ---------- Notices ------- Section 1. Manner of Notice. Whenever, under the provisions of the --------- ---------------- Certificate of Incorporation or of the Bylaws of the Corporation or of the statutes of the State of Delaware, notice is required to be given to a shareholder, to a director or to an officer, it shall not be construed to mean personal notice, unless expressly stated so to be. And any notice so required (other than notice by publication) may be given in writing by depositing the same in the United States mail, postage prepaid, directed to the shareholder, director or officer, at his, or her, address as the same -10- appears on the records of the Corporation, and the time when the same is mailed shall be deemed the time of the giving of such notice. Section 2. Waiver of Notice. Any shareholder, director or officer may, in --------- ---------------- writing, waive the giving and the mailing of any notice required to be given or mailed either by and under the statutes of the State of Delaware or by and under the Bylaws. ARTICLE X --------- Fiscal Year ----------- Section 1. Fiscal Year. The fiscal year of the Corporation shall begin on --------- ----------- the 1st day of January and terminate on the 31st day of December. ARTICLE XI ---------- Emergency Bylaws ---------------- The Emergency Bylaws provided in this Article XI shall be operative upon (a) the declaration of a civil defense emergency by the President of the United States or by concurrent resolution of the Congress of the United States pursuant to Title 50, Appendix, Section 2291 of the United States Code, or any amendment thereof, or (b) upon a proclamation of a civil defense emergency by the Governor of the State of Illinois which relates to an attack or imminent attack on the United States or any of its possessions. Such Emergency Bylaws, or any amendments to these Bylaws adopted during such emergency, shall cease to be effective and shall be suspended upon any proclamation by the President of the United States, or the passage by the Congress of a concurrent resolution, or any declaration by the Governor of Illinois that such civil defense emergency no longer exists. Section 1. Board of Directors' Meetings. During any such emergency, any --------- ---------------------------- meeting of the Board of Directors may be called by any officer of the Corporation or by any director. Notice shall be given by such person or by any officer of the Corporation. The notice shall specify the place of the meeting, which shall be at the head office of the Corporation at the time if feasible, and otherwise, any other place specified in the notice. The notice shall also specify the time of the meeting. Notice may be given only to such of the directors as it may be feasible to reach at the time and by such means as may be feasible at the time, including publication or radio. If given by mail, messenger, telephone, or telegram, the notice shall be addressed to the director at his residence or business address, or such other place as the person giving the notice shall deem most suitable. Notice shall be similarly given, to the extent feasible in the judgment of the person giving the notice, to the other directors. Notice shall be given at least two days before the meeting, if feasible in the judgment of the person giving the notice, and otherwise on any shorter time he may deem necessary. Section 2. Change of Head Office. The Board of Directors, during any such --------- --------------------- emergency may, effective in the emergency, change the head office or designate several alternative head offices, or regional offices or authorize the officers to do so. ARTICLE XII ----------- Director Emeritus ----------------- Section 1. Director Emeritus. The Board of Directors may at any time and --------- ----------------- from time to time award to former members of the Board of Directors in recognition of their past distinguished service and contribution rendered to the Corporation the honorary title "Director Emeritus." The award of this title shall not constitute an election or appointment to the Board of Directors, nor to any office of the Corporation, nor the bestowal of any duties, responsibilities or privileges associated therewith; and accordingly no "Director Emeritus" shall be deemed a "Director" as that term is used in these Bylaws. The title "Director Emeritus" shall carry no compensation, and holders thereof shall not attend any meetings of the Board of Directors or committees of the Board of Directors, except by written invitation, nor shall they be specially privy to any confidential information arising from such meeting. ARTICLE XIII ------------ Amendment of Bylaws ------------------- Section 1. Amendment of Bylaws. These Bylaws may be altered, amended or --------- ------------------- repealed and new Bylaws may be adopted at any meeting of the Board of Directors by a majority vote of the directors present at the meeting. EX-4.16 3 AMENDED & RESTATED DECLARATION OF TRUST Exhibit 4.16 AMENDED AND RESTATED DECLARATION OF TRUST MOTOROLA CAPITAL TRUST I Dated as of February 3, 1999 TABLE OF CONTENTS
Page ---- AMENDED AND RESTATED DECLARATION OF TRUST.......................................................... 1 ARTICLE I INTERPRETATION AND DEFINITIONS...................................................... 1 SECTION I.1 Interpretation and Definitions...................................................... 1 ------------------------------ ARTICLE II TRUST INDENTURE ACT................................................................. 6 SECTION II.1 Trust Indenture Act; Application.................................................... 6 -------------------------------- SECTION II.2 Lists of Holders of Securities...................................................... 6 ------------------------------ SECTION II.3 Reports by the Property Trustee..................................................... 6 ------------------------------- SECTION II.4 Periodic Reports to the Property Trustee............................................ 6 ---------------------------------------- SECTION II.5 Evidence of Compliance with Conditions Precedent.................................... 6 ------------------------------------------------ SECTION II.6 Events of Default; Waiver........................................................... 7 ------------------------- SECTION II.7 Event of Default; Notice............................................................ 8 ------------------------ ARTICLE III ORGANIZATION........................................................................ 8 SECTION III.1 Name and Organization............................................................... 8 --------------------- SECTION III.2 Office.............................................................................. 8 ------ SECTION III.3 Purpose............................................................................. 8 ------- SECTION III.4 Authority........................................................................... 9 --------- SECTION III.5 Title to Property of the Trust...................................................... 9 ------------------------------ SECTION III.6 Powers and Duties of the Regular Trustees........................................... 9 ----------------------------------------- SECTION III.7 Prohibition of Actions by the Trust and the Trustees................................ 11 ---------------------------------------------------- SECTION III.8 Powers and Duties of the Property Trustee........................................... 12 ----------------------------------------- SECTION III.9 Certain Duties and Responsibilities of the Property Trustee......................... 13 ----------------------------------------------------------- SECTION III.10 Certain Rights of Property Trustee.................................................. 14 ---------------------------------- SECTION III.11 Delaware Trustee.................................................................... 16 ---------------- SECTION III.12 Execution of Documents.............................................................. 16 ---------------------- SECTION III.13 Not Responsible for Recitals or Issuance of Securities.............................. 16 ------------------------------------------------------ SECTION III.14 Duration of Trust................................................................... 16 ----------------- SECTION III.15 Mergers............................................................................. 16 ------- SECTION III.16 Property Trustee May File Proofs of Claim........................................... 18 ----------------------------------------- ARTICLE IV SPONSOR............................................................................. 18 SECTION IV.1 Sponsor's Purchase of Common Securities............................................. 18 --------------------------------------- SECTION IV.2 Responsibilities of the Sponsor..................................................... 18 ------------------------------- SECTION IV.3 Right to Dissolve Trust............................................................. 19 ----------------------- SECTION IV.4 Direct Right of Action.............................................................. 19 ---------------------- ARTICLE V TRUSTEES............................................................................ 19 SECTION V.1 Number of Trustees.................................................................. 19 ------------------ SECTION V.2 Delaware Trustee.................................................................... 19 ---------------- SECTION V.3 Property Trustee; Eligibility....................................................... 19 ----------------------------- SECTION V.4 Regular Trustees.................................................................... 20 ---------------- SECTION V.5 Certain Qualifications of Regular Trustees and Delaware Trustee Generally........... 20 -------------------------------------------------------------------------- SECTION V.6 Initial Trustees.................................................................... 20 ---------------- SECTION V.7 Appointment, Removal and Resignation of Trustees.................................... 21 ------------------------------------------------ SECTION V.8 Vacancies among Trustees............................................................ 22 ------------------------ SECTION V.9 Effect of Vacancies................................................................. 22 ------------------- SECTION V.10 Meetings............................................................................ 22 -------- SECTION V.11 Delegation of Power................................................................. 22 ------------------- SECTION V.12 Merger, Conversion, Consolidation or Succession to Business......................... 22 ----------------------------------------------------------- ARTICLE VI DISTRIBUTIONS....................................................................... 22 SECTION VI.1 Distributions....................................................................... 22 ------------- ARTICLE VII ISSUANCE OF SECURITIES.............................................................. 23 SECTION VII.1 General Provisions Regarding Securities............................................. 23 --------------------------------------- ARTICLE VIII TERMINATION OF TRUST................................................................ 23 SECTION VIII.1 Termination of Trust................................................................ 23 -------------------- ARTICLE IX TRANSFER OF INTERESTS............................................................... 24 SECTION IX.1 Transfer of Securities.............................................................. 24 ---------------------- SECTION IX.2 Transfer and Exchange of Certificates............................................... 25 -------------------------------------
i SECTION IX.3 Deemed Security Holders............................................................. 25 ----------------------- SECTION IX.4 Book Entry Interests................................................................ 25 -------------------- SECTION IX.5 Notices to Clearing Agency.......................................................... 25 -------------------------- SECTION IX.6 Appointment of Successor Clearing Agency............................................ 26 ---------------------------------------- SECTION IX.7 Definitive Preferred Security Certificates.......................................... 26 ------------------------------------------ SECTION IX.8 Mutilated, Destroyed, Lost or Stolen Certificates................................... 26 ------------------------------------------------- ARTICLE X LIMITATION OF LIABILITY OFHOLDERS OF SECURITIES, TRUSTEES OR OTHERS......................................................................... 26 SECTION X.1 Liability........................................................................... 27 --------- SECTION X.2 Exculpation......................................................................... 27 ----------- SECTION X.3 Fiduciary Duty...................................................................... 27 -------------- SECTION X.4 Indemnification and Compensation.................................................... 28 -------------------------------- SECTION X.5 Outside Businesses.................................................................. 30 ------------------ ARTICLE XI ACCOUNTING.......................................................................... 30 SECTION XI.1 Fiscal Year......................................................................... 30 ----------- SECTION XI.2 Certain Accounting Matters.......................................................... 30 -------------------------- SECTION XI.3 Banking............................................................................. 31 ------- SECTION XI.4 Withholding......................................................................... 31 ----------- ARTICLE XII AMENDMENTS AND MEETINGS............................................................. 31 SECTION XII.1 Amendments.......................................................................... 31 ---------- SECTION XII.2 Meetings of the Holders of Securities; Action by Written Consent.................... 33 ---------------------------------------------------------------- ARTICLE XIII REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE............................................................................ 34 SECTION XIII.1 Representations and Warranties of the Property Trustee.............................. 34 ------------------------------------------------------ SECTION XIII.2 Representations and Warranties of the Delaware Trustee.............................. 34 ------------------------------------------------------ ARTICLE XIV MISCELLANEOUS.............................................................................. 35 SECTION XIV.1 Notices............................................................................ 35 ------- SECTION XIV.2 Governing Law...................................................................... 36 ------------- SECTION XIV.3 Intention of the Parties........................................................... 36 ------------------------ SECTION XIV.4 Headings........................................................................... 36 -------- SECTION XIV.5 Successors and Assigns............................................................. 36 ---------------------- SECTION XIV.6 Partial Enforceability............................................................. 36 ---------------------- SECTION XIV.7 Counterparts....................................................................... 36 ------------
CROSS - REFERENCE TABLE *
Section of Trust Indenture Act of Section of 1939, as amended Declaration - ---------------- ----------- 310 (a)........................................................................... 5.3 310 (c)........................................................................... Inapplicable 311 (c)........................................................................... Inapplicable 312 (a)........................................................................... 2.2(a) 312 (b)........................................................................... 2.2(b) 313............................................................................... 2.3 314 (a)........................................................................... 2.4 314 (b)........................................................................... Inapplicable 314 (c)........................................................................... 2.5 314 (d)........................................................................... Inapplicable 314 (f)........................................................................... Inapplicable 315 (a)........................................................................... 3.9(b) 315 (c)........................................................................... 3.9(a) 315 (d)........................................................................... 3.9(a) 316 (a)........................................................................... Annex I 316 (c)........................................................................... 3.6(e)
* This Cross - Reference Table does not constitute part of the Declaration and shall not affect the interpretation of any of its terms or provisions. ii AMENDED AND RESTATED DECLARATION OF TRUST AMENDED AND RESTATED DECLARATION OF TRUST, including Annex I and all exhibits attached hereto ("Declaration"), dated and effective as of February 3, 1999, by the Trustees (as defined herein), the Sponsor (as defined herein) and by the holders, from time to time, of undivided beneficial interests in the assets of the Trust to be issued pursuant to this Declaration; WHEREAS, three of the Trustees and the Sponsor established Motorola Capital Trust I (the "Trust"), a trust under the Delaware Business Trust Act pursuant to a Declaration of Trust dated as of January 19, 1999 (the"Original Declaration") and a Certificate of Trust filed with the Secretary of State of the State of Delaware on January 19, 1999 (the "Certificate of Trust"), for the sole purpose of issuing and selling certain securities representing undivided beneficial interests in the assets of the Trust and investing the proceeds thereof in certain Debentures (as defined herein) of the Debenture Issuer (as defined herein); WHEREAS, as of the date hereof, no beneficial interests in the Trust have been issued; and WHEREAS, all of the Trustees and the Sponsor, by this Declaration, amend and restate each and every term and provision of the Original Declaration; NOW, THEREFORE, it being the intention of the parties hereto that the Trust continue as a business trust under the Business Trust Act and that this Declaration constitute the governing instrument of such business trust, the Trustees declare that all assets contributed to the Trust will be held in trust for the benefit of the Trust and the Holders (as defined herein), from time to time, of the securities representing undivided beneficial interests in the assets of the Trust issued hereunder, subject to the provisions of this Declaration. ARTICLE I INTERPRETATION AND DEFINITIONS SECTION I.1 Interpretation and Definitions. ------------------------------ Unless the context otherwise requires: (a) terms used in this Declaration but not defined in the preamble above have the respective meanings assigned to them in this Section 1.1; (b) a term defined anywhere in this Declaration has the same meaning throughout; (c) references to "the Declaration" or "this Declaration" are to this Declaration as modified, supplemented or amended from time to time; (d) references in this Declaration to Articles and Sections are to Articles and Sections of this Declaration unless otherwise specified; (e) a term defined in the Trust Indenture Act has the same meaning when used in this Declaration unless otherwise defined in this Declaration or unless the context otherwise requires; and (f) a reference to the singular includes the plural and vice versa. "Affiliate" has the same meaning as given to that term in Rule 405 of the Securities Act or any successor rule thereunder. "Authorized Officer" of a Person means any Person that is authorized to bind such Person. 1 "Base Indenture" means the Indenture dated as of February 3, 1999 among the Debenture Issuer and Harris Trust and Savings Bank, as trustee. "Book Entry Interest" means a beneficial interest in a Global Certificate, ownership and transfers of which shall be maintained and made through book entries by a Clearing Agency as described in Section 9.4. "Business Day" means any day other than a day on which banking institutions in New York, New York or in the city of the principal Corporate Trust Office of either the Property Trustee or the Debenture Trustee are authorized or required by law to close. "Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from time to time, or any successor legislation. "Certificate" means a Common Security Certificate or a Preferred Security Certificate. "Clearing Agency" means an organization registered as a "Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting as depository for the Preferred Securities and in whose name or in the name of a nominee of that organization shall be registered a Global Certificate and which shall undertake to effect book entry transfers and pledges of the Preferred Securities. "Clearing Agency Participant" means a broker, dealer, bank, other financial institution or other Person for whom from time to time the Clearing Agency effects book entry transfers and pledges of securities deposited with the Clearing Agency. "Closing Date" means the date on which the Preferred Securities are sold pursuant to the terms of the Underwriting Agreement. "Code" means the Internal Revenue Code of 1986, as amended from time to time, or any successor legislation. A reference to a specific section of the Code refers not only to such specific section but also to any corresponding provision of any federal tax statute enacted after the date of this Declaration, as such specific section or corresponding provision is in effect on the date of application of the provisions of this Declaration containing such reference. "Commission" means the Securities and Exchange Commission. "Common Security" has the meaning specified in Section 7.1. "Common Security Certificate" means a definitive certificate in fully registered form representing a Common Security substantially in the form of Exhibit A-2. "Company Indemnified Person" means (a) any Regular Trustee; (b) any Affiliate of any Regular Trustee; (c) any officers, directors, shareholders, members, partners, employees, representatives or agents of any Regular Trustee or any Affiliate thereof; or (d) any officer, employee or agent of the Trust or its Affiliates. "Corporate Trust Office" means the office of the Property Trustee at which the corporate trust business of the Property Trustee shall, at any particular time, be principally administered, which office at the date of execution of this Declaration is located at 311 West Monroe Street, 12th Floor, Chicago, IL 60606, Attention: Corporate Trust Administration. "Covered Person" means (a) any officer, director, shareholder, partner, member, representative, employee or agent of (i) the Trust or (ii) the Trust's Affiliates; and (b) any Holder of Securities. "Debenture Issuer" means Motorola, Inc. in its capacity as issuer of the Debentures under the Indenture. "Debenture Trustee" means Harris Trust and Savings Bank, as trustee under the Indenture, until a successor is appointed thereunder, and thereafter means such successor trustee. 2 "Debentures" means the series of subordinated deferrable interest debentures to be issued by the Debenture Issuer under the Indenture to be held by the Property Trustee for the benefit of the Holders. "Definitive Preferred Security Certificates" has the meaning set forth in Section 9.4. "Delaware Trustee" has the meaning set forth in Section 5.2. "Direction" by a Person means a written direction signed: (a) if the Person is a natural person, by that Person; or (b) in any other case, in the name of such Person by one or more Authorized Officers of that Person. "Distribution" means a distribution payable to Holders of Securities in accordance with Section 6.1. "DTC" means The Depository Trust Company, the initial Clearing Agency. "Event of Default" in respect of the Securities means an Event of Default (as defined in the Indenture) has occurred and is continuing in respect of the Debentures. "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time, or any successor legislation. "Fiduciary Indemnified Person" has the meaning set forth in Section 10.4(b). "Fiscal Year" has the meaning set forth in Section 11.1. "Global Certificate" has the meaning set forth in Section 9.4. "Holder" means a Person in whose name a Certificate representing a Security is registered, such Person being a beneficial owner within the meaning of the Business Trust Act; provided, however, that in determining whether the Holders of the requisite liquidation amount of Preferred Securities have voted on any matter provided for in this Declaration, then for the purpose of such determination only (and not for any other purpose hereunder), if the Preferred Securities remain in the form of one or more Global Certificates, the term "Holders"shall mean the holder of the Global Certificate acting at the direction of the Preferred Security Beneficial Owners.. "Indemnified Person" means a Company Indemnified Person or a Fiduciary Indemnified Person. "Indenture" means the Base Indenture, any amendment thereto and any supplemental indenture thereto pursuant to which the Debentures are to be issued. "Investment Company" means an investment company as defined in the Investment Company Act and the regulations promulgated thereunder. "Investment Company Act" means the Investment Company Act of 1940, as amended from time to time, or any successor legislation. "Investment Company Event" has the meaning set forth in Annex I. "Legal Action" has the meaning set forth in Section 3.6(g). "List of Holders" has the meaning specified in Section 2.2(a). 3 "Majority in Liquidation Amount" means, except as provided in the terms of the Preferred Securities or by the Trust Indenture Act, Holder(s) of outstanding Securities, voting together as a single class, or, as the context may require, Holders of outstanding Preferred Securities or Holders of outstanding Common Securities, voting separately as a class, who are the record owners of more than 50% of the aggregate liquidation amount (including the stated amount that would be paid on redemption, liquidation, maturity or otherwise, plus accrued and unpaid Distributions to the date upon which the voting percentages are determined) of all outstanding Securities of the relevant class. "Officers' Certificate" means, with respect to any Person (other than Regular Trustees who are natural persons), a certificate signed by two Authorized Officers of such Person. Any Officers' Certificate delivered with respect to compliance with a condition or covenant provided for in this Declaration shall include: (a) a statement that each officer signing the Officers' Certificate has read the covenant or condition and the definitions relating thereto; (b) a brief statement of the nature and scope of the examination or investigation undertaken by each officer in rendering the Officers' Certificate; (c) a statement that each such officer has made such examination or investigation as, in such officer's opinion, is necessary to enable such officer to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of each such officer, such condition or covenant has been complied with; provided that the term "Officers' Certificate," when used with reference to Regular Trustees who are natural persons, shall mean a certificate signed by two of the Regular Trustees which otherwise satisfies the foregoing requirements. "Paying Agent" has the meaning specified in Section 3.8(h). "Payment Amount" has the meaning specified in Section 6.1. "Person" means any individual, corporation, estate, partnership, joint venture, association, joint stock company, limited liability company, trust, unincorporated association, or government or any agency or political subdivision thereof, or any other entity of whatever nature. "Preferred Securities Guarantee" means the guarantee agreement of the Sponsor in respect of the Preferred Securities, dated of even date herewith. "Preferred Security" has the meaning specified in Section 7.1. "Preferred Security Beneficial Owner" means, with respect to a Book Entry Interest, a Person who is the beneficial owner of such Book Entry Interest, as reflected on the books of the Clearing Agency, or on the books of a Person maintaining an account with such Clearing Agency (directly as a Clearing Agency Participant or as an indirect participant, in each case in accordance with the rules of such Clearing Agency). "Preferred Security Certificate" means a certificate representing a Preferred Security, substantially in the form of Exhibit A-1. "Property Trustee" means the Trustee meeting the eligibility requirements set forth in Section 5.3. "Property Trustee Account" has the meaning set forth in Section 3.8(c)(i). "Quorum" means a majority of the Regular Trustees or, if there are only two Regular Trustees, one of them. "Regular Trustee" means any Trustee other than the Property Trustee and the Delaware Trustee. 4 "Related Party" means, with respect to the Sponsor, any direct or indirect wholly owned subsidiary of the Sponsor or any other Person that owns, directly or indirectly, 100% of the outstanding voting securities of the Sponsor. "Responsible Officer" means, with respect to the Property Trustee, any officer within the Corporate Trust Office of the Property Trustee, including any vice-president, any assistant vice-president, the secretary, any assistant secretary, the treasurer, any assistant treasurer or other officer of the Corporate Trust Office of the Property Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of that officer's knowledge of and familiarity with the particular subject. "Rule 3a-5" means Rule 3a-5 under the Investment Company Act or any successor rule thereunder. "Securities" means the Common Securities and the Preferred Securities. "Securities Act" means the Securities Act of 1933, as amended from time to time, or any successor legislation. "Special Event" has the meaning set forth in Annex I. "Sponsor" means Motorola, Inc., a Delaware corporation, or any successor entity in a merger, consolidation or amalgamation, in its capacity as sponsor of the Trust. "Successor Delaware Trustee" has the meaning specified in Section 5.7(b). "Successor Entity" has the meaning specified in Section 3.15(b)(i). "Successor Property Trustee" has the meaning specified in Section 5.7(b). "Successor Securities" has the meaning specified in Section 3.15(b)(i) (B). "Super Majority" has the meaning set forth in Section 2.6(a) (ii). "Tax Event" has the meaning set forth in Annex I. "10% in Liquidation Amount" means, except as provided in the terms of the Preferred Securities or by the Trust Indenture Act, Holder(s) of outstanding Securities, voting together as a single class, or, as the context may require, Holders of outstanding Preferred Securities or Holders of outstanding Common Securities, voting separately as a class, who are the record owners of 10% or more of the aggregate liquidation amount (including the stated amount that would be paid on redemption, liquidation, maturity or otherwise, plus accrued and unpaid Distributions to the date upon which the voting percentages are determined) of all outstanding Securities of the relevant class. "Treasury Regulations" means the income tax regulations, including temporary and proposed regulations, promulgated under the Code by the United States Treasury, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations). "Trust Company" means First Union Trust Company, National Association or any successor Delaware Trustee in its individual capacity. "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended from time to time, or any successor legislation. "Trustee" or "Trustees" means each Person who has signed this Declaration as a trustee, in such Person's capacity as a trustee of the Trust and not in its individual capacity, so long as such Person shall continue in office in accordance with the terms hereof, and all other Persons who may from time to time be duly appointed, qualified and serving as Trustees in accordance with the provisions hereof, and references herein to a Trustee or the Trustees shall refer to such Person or Persons solely in their capacity as trustees hereunder. 5 "Underwriting Agreement" means the Underwriting Agreement for the offering and sale of Preferred Securities between the Trust, the Debenture Issuer and the underwriters designated by the Regular Trustees, dated as of January 29, 1999. ARTICLE II TRUST INDENTURE ACT SECTION II.1 Trust Indenture Act; Application. -------------------------------- (a) This Declaration is subject to the provisions of the Trust Indenture Act that are required to be part of this Declaration and shall, to the extent applicable, be governed by such provisions. (b) The Property Trustee shall be the only Trustee which is a "trustee" for the purposes of the Trust Indenture Act. (c) If and to the extent that any provision of this Declaration limits, qualifies or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall control. (d) The application of the Trust Indenture Act to this Declaration shall not affect the nature of the Securities as equity securities representing undivided beneficial interests in the assets of the Trust. SECTION II.2 Lists of Holders of Securities. ------------------------------ (a) Each of the Sponsor and the Regular Trustees on behalf of the Trust shall provide the Property Trustee with a list, in such form as the Property Trustee may reasonably require, of the names and addresses of the Holders of the Securities ("List of Holders"), (i) within ten Business Days after January 1 and June 30 of each year and current as of such date and (ii) at any other time, within 30 days of receipt by the Trust of a written request from the Property Trustee for a List of Holders as of a date no more than 14 days before such List of Holders is given to the Property Trustee; provided that neither the Sponsor nor the Regular Trustees on behalf of the Trust shall be obligated to provide such List of Holders at any time the List of Holders does not differ from the most recent List of Holders given to the Property Trustee by the Sponsor and the Regular Trustees on behalf of the Trust. The Property Trustee shall preserve, in as current a form as is reasonably practicable, all information contained in Lists of Holders given to it or which it receives in the capacity as Paying Agent (if acting in such capacity); provided that the Property Trustee may destroy any List of Holders previously given to it on receipt of a new List of Holders. (b) The Property Trustee shall comply with its obligations under, and shall be entitled to the benefits of, Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act. SECTION II.3 Reports by the Property Trustee. Within 60 days after May ------------------------------- 15 of each year, the Property Trustee shall provide to the Holders of the Preferred Securities such reports as are required by Section 313 of the Trust Indenture Act, if any, in the form and in the manner provided by Section 313 of the Trust Indenture Act. The Property Trustee shall also comply with the requirements of Section 313(d) of the Trust Indenture Act. SECTION II.4 Periodic Reports to the Property Trustee. Each of the ---------------------------------------- Sponsor and the Regular Trustees on behalf of the Trust shall provide to the Property Trustee such documents, reports and information as required by Section 314 (if any) of the Trust Indenture Act and the compliance certificate required by Section 314 of the Trust Indenture Act in the form, in the manner and at the times required by Section 314 of the Trust Indenture Act. SECTION II.5 Evidence of Compliance with Conditions Precedent. Each of ------------------------------------------------ the Sponsor and the Regular Trustees on behalf of the Trust shall provide to the Property Trustee such evidence of compliance with any conditions precedent, if any, provided for in this Declaration that relate to any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion required to be given by an officer pursuant to Section 314(c)(1) may be given in the form of an Officers' Certificate. 6 SECTION II.6 Events of Default; Waiver. ------------------------- (a) The Holders of a Majority in Liquidation Amount of the Preferred Securities may, by vote, on behalf of the Holders of all of the Preferred Securities, waive any past Event of Default in respect of the Preferred Securities and its consequences, provided that, if the underlying Event of Default under the Indenture: (i) is not waivable under the Indenture, the Event of Default under the Declaration shall also not be waivable; or (ii) requires the consent or vote of greater than a majority in principal amount of the holders of the Debentures (a "Super Majority") to be waived under the Indenture, the Event of Default under the Declaration may only be waived by the vote of the Holders of at least the proportion in liquidation amount of the Preferred Securities that the relevant Super Majority represents of the aggregate principal amount of the Debentures outstanding. The foregoing provisions of this Section 2.6(a) shall be in lieu of Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from this Declaration and the Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such default shall cease to exist, and any Event of Default with respect to the Preferred Securities arising therefrom shall be deemed to have been cured, for every purpose of this Declaration and the Preferred Securities, but no such waiver shall extend to any subsequent or other default or Event of Default with respect to the Preferred Securities or impair any right consequent thereon. Any waiver by the Holders of the Preferred Securities of an Event of Default with respect to the Preferred Securities shall also be deemed to constitute a waiver by the Holders of the Common Securities of any such Event of Default with respect to the Common Securities for all purposes of this Declaration without any further act, vote or consent of the Holders of the Common Securities. (b) The Holders of a Majority in Liquidation Amount of the Common Securities may, by vote, on behalf of the Holders of all of the Common Securities, waive any past Event of Default in respect of the Common Securities and its consequences, provided that, if the underlying Event of Default under the Indenture: (i) is not waivable under the Indenture, except where the Holders of the Common Securities are deemed to have waived such Event of Default under the Declaration as provided below in this Section 2.6(b), the Event of Default under the Declaration shall also not be waivable; or (ii) requires the consent or vote of a Super Majority to be waived under the Indenture, except where the Holders of the Common Securities are deemed to have waived such Event of Default under the Declaration as provided below in this Section 2.6(b), the Event of Default under the Declaration may only be waived by the vote of the Holders of at least the proportion in liquidation amount of the Common Securities that the relevant Super Majority represents of the aggregate principal amount of the Debentures outstanding; provided further, that each Holder of Common Securities will be deemed to have waived any such Event of Default and all Events of Default with respect to the Common Securities and the consequences thereof until all Events of Default with respect to the Preferred Securities have been cured, waived or otherwise eliminated, and until such Events of Default with respect to the Preferred Securities have been so cured, waived or otherwise eliminated, the Property Trustee will be deemed to be acting solely on behalf of the Holders of the Preferred Securities and only the Holders of the Preferred Securities will have the right to direct the Property Trustee in accordance with the terms of the Securities. The foregoing provisions of this Section 2.6(b) shall be in lieu of Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby expressly excluded from this Declaration and the Securities, as permitted by the Trust Indenture Act. Subject to the foregoing provisions of this Section 2.6(b), upon such waiver, any such default shall cease to exist and any Event of Default with respect to the Common Securities arising therefrom shall be deemed to have been cured for every purpose of this Declaration, but no such waiver shall extend to any subsequent or other default or Event of Default with respect to the Common Securities or impair any right consequent thereon. 7 (c) A waiver of an Event of Default under the Indenture by the Property Trustee at the direction of the Holders of the Preferred Securities constitutes a waiver of the corresponding Event of Default with respect to the Preferred Securities under this Declaration. The foregoing provisions of this Section 2.6(c) shall be in lieu of Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from this Declaration and the Securities, as permitted by the Trust Indenture Act. SECTION II.7 Event of Default; Notice. ------------------------ (a) The Property Trustee shall, within 90 days after the occurrence of an Event of Default, transmit by mail, first class postage prepaid, to the Holders of the Securities, notices of all defaults with respect to the Securities actually known to a Responsible Officer of the Property Trustee, unless such defaults have been cured before the giving of such notice (the term "defaults" for the purposes of this Section 2.7(a) being hereby defined to be an Event of Default as defined in the Indenture, not including any periods of grace provided for there in and irrespective of the giving of any notice provided therein); provided that, except for a default in the payment of principal of (or premium, if any) or interest on any of the Debentures or in the payment of any sinking fund installment established for the Debentures, the Property Trustee shall be protected in withholding such notice if and so long as a Responsible Officer of the Property Trustee in good faith determines that the withholding of such notice is in the interests of the Holders of the Securities. (b) The Property Trustee shall not be deemed to have knowledge of any default except: (i) a default under Sections 5.1(1) and 5.1(2) of the Indenture; or (ii) any default as to which the Property Trustee shall have received written notice or of which a Responsible Officer of the Property Trustee charged with the administration of this Declaration shall have actual knowledge. As used herein, the term "actual knowledge" means the actual fact or statement of knowing without any duty to make any investigation without regard thereto. ARTICLE III ORGANIZATION SECTION III.1 Name and Organization. The Trust hereby created is named --------------------- "Motorola Capital Trust I" as such name may be modified from time to time by the Regular Trustees following written notice to the Holders of Securities. The Trust's activities may be conducted under the name of the Trust or any other name deemed advisable by the Regular Trustees. SECTION III.2 Office. The address of the principal office of the Trust ------ is c/o Motorola, Inc., 1303 East Algonquin Road, Schaumburg, IL 60196. On ten Business Days' written notice to the Holders of Securities, the Regular Trustees may designate another principal office. SECTION III.3 Purpose. The exclusive purposes and functions of the Trust ------- are (a) to issue and sell Securities and use the gross proceeds from such sale to acquire the Debentures and (b) except as otherwise limited herein, to engage in only those other activities necessary or incidental thereto. The Trust shall not borrow money, issue debt or reinvest proceeds derived from investments, pledge any of its assets or otherwise undertake (or permit to be undertaken) any activity that would cause the Trust not to be classified for United States federal income tax purposes as a grantor trust. The Trust will be classified as a grantor trust for United States federal income tax purposes under Subpart E of Subchapter J of the Code, pursuant to which the owners of the Preferred Securities and the Common Securities will be the owners of the Trust for United States federal income tax purposes, and such owners will include directly in the gross income the income, gain, deduction or loss of the Trust as if the Trust did not exist. By the acceptance of this Trust, none of the Trustees, the Sponsor, the Holders of the Preferred Securities or Common Securities or the Preferred Securities Beneficial Owners will take any position for United States federal income tax purposes which is contrary to the classification of the Trust as a grantor trust. 8 SECTION III.4 Authority. Subject to the limitations provided in this --------- Declaration and to the specific duties of the Property Trustee, the Regular Trustees shall have exclusive and complete authority to carry out the purposes of the Trust. An action taken by the Regular Trustees in accordance with their powers shall constitute the act of and serve to bind the Trust and an action taken by the Property Trustee on behalf of the Trust in accordance with its powers shall constitute the act of and serve to bind the Trust. In dealing with the Trustees acting on behalf of the Trust, no person shall be required to inquire into the authority of the Trustees to bind the Trust. Persons dealing with the Trust are entitled to rely conclusively on the power and authority of the Trustees as set forth in this Declaration. SECTION III.5 Title to Property of the Trust. Except as provided in ------------------------------ Section 3.8 with respect to the Debentures and the Property Trustee Account or as otherwise provided in this Declaration, legal title to all assets of the Trust shall be vested in the Property Trustee for the benefit of the Trust and the Holders of Securities. The Holders shall not have legal title to any part of the assets of the Trust, but shall have an undivided beneficial interest in the assets of the Trust. SECTION III.6 Powers and Duties of the Regular Trustees. The Regular ----------------------------------------- Trustees shall have the exclusive power, duty and authority to cause the Trust to engage in the following activities: (a) to issue and sell in accordance with this Declaration (i) on the Closing Date, 20,000,000 Preferred Securities, having an aggregate liquidation amount of $500,000,000, and 618,557 Common Securities, having an aggregate liquidation amount of $15,463,925; provided, however, that the Trust may issue no more than one series of Preferred Securities and no more than one series of Common Securities; and provided further that there shall be no interest in the Trust other than the Securities, and the issuance of Securities shall be limited to a one-time simultaneous issuance of both Preferred Securities and Common Securities as provided for herein on the Closing Date as provided for in the Underwriting Agreement; (b) in connection with the issue and sale of the Preferred Securities, at the direction of the Sponsor, to: (i) execute and file with the Commission a registration statement on Form S-3 prepared by the Sponsor, including any amendments thereto, pertaining to the Preferred Securities (and any other securities of the Sponsor which the Sponsor may desire to include in such registration statement); (ii) execute and file any documents prepared by the Sponsor, or take any acts as determined by the Sponsor to be necessary, in order to qualify or register all or part of the Preferred Securities in any State in which the Sponsor has determined to qualify or register such Preferred Securities for sale; (iii) execute and file an application, prepared by the Sponsor, to The New York Stock Exchange, Inc. or any other national stock exchange or the Nasdaq Stock Market's National Market System for listing upon notice of issuance of any Preferred Securities; (iv) execute and file with the Commission a registration statement on Form 8-A, including any amendments thereto, prepared by the Sponsor, relating to the registration of the Preferred Securities under Section 12(b) of the Exchange Act; and (v) execute and enter into the Underwriting Agreement providing for the sale of the Preferred Securities; (c) to acquire the Debentures with the proceeds of the sale of the Preferred Securities and the Common Securities; provided, however, that the Regular Trustees shall cause legal title to the Debentures to be held of record in the name of the Property Trustee for the benefit of the Holders of the Preferred Securities and the Holders of the Common Securities; 9 (d) to give the Sponsor and the Property Trustee prompt written notice of the occurrence of a Special Event; provided that the Regular Trustees shall consult with the Sponsor and the Property Trustee before taking or refraining from taking any action in relation to a Special Event; (e) to establish a record date with respect to all actions to be taken hereunder that require a record date be established, including and with respect to, for the purposes of Section 316(c)of the Trust Indenture Act, Distributions, voting rights, redemptions and exchanges, and to issue relevant notices to the Holders of Preferred Securities and Holders of Common Securities as to such actions and applicable record dates; (f) to take all actions and perform such duties as may be required of the Regular Trustees pursuant to the terms of this Declaration and the Securities; (g) to bring or defend, pay, collect, compromise, arbitrate, resort to legal action or otherwise adjust claims or demands of or against the Trust ("Legal Action"), unless pursuant to Section 3.8(e), the Property Trustee has the exclusive power to bring such Legal Action; (h) to employ or otherwise engage employees and agents (who may be designated as officers with titles) and managers, contractors, advisors and consultants and pay reasonable compensation for such services; (i) to cause the Trust to comply with the Trust's obligations under the Trust Indenture Act; (j) to give the certificate required by Section 314(a)(4) of the Trust Indenture Act to the Property Trustee, which certificate may be executed by any Regular Trustee; (k) to incur expenses that are necessary, incidental or desirable to carry out any of the purposes of the Trust; (l) to act as, or appoint another Person to act as, registrar and transfer agent for the Securities; (m) to give prompt written notice to the Holders of the Securities of any notice received from the Debenture Issuer of its election (i) to defer payments of interest on the Debentures by extending the interest payment period under the Debentures as authorized by the Indenture or (ii) to extend the maturity date of the Debentures if so authorized by the Indenture, provided that any such extension of the maturity date will not adversely affect the federal income tax status of the Trust; (n) to take all action that may be necessary or appropriate for the preservation and the continuation of the Trust's valid existence, rights, franchises and privileges as a statutory business trust under the laws of the State of Delaware and of each other jurisdiction in which such existence is necessary to protect the limited liability of the Holders of the Preferred Securities or to enable the Trust to effect the purposes for which the Trust was created; (o) to take any action, not inconsistent with this Declaration or with applicable law, that the Regular Trustees determine in their discretion to be necessary or desirable in carrying out the purposes and functions of the Trust as set out in Section 3.3 or the activities of the Trust as set out in this Section 3.6, including, but not limited to: (i) causing the Trust not to be deemed to be an Investment Company required to be registered under the Investment Company Act; (ii) causing the Trust to be classified for United States federal income tax purposes as a grantor trust and causing each Holder of Securities to be treated as owning an undivided beneficial interest in the Subordinated Debentures; and (iii) cooperating with the Debenture Issuer to ensure that the Debentures will be treated as indebtedness of the Debenture Issuer for United States federal income tax purposes; 10 provided that such action does not adversely affect the interests of the Holders; (p) to take all action necessary to cause all applicable tax returns and tax information reports that are required to be filed with respect to the Trust to be duly prepared and filed by the Regular Trustees, on behalf of the Trust; (q) to execute all documents or instruments, perform all duties and powers, and do all things for and on behalf of the Trust in all matters necessary, incidental or desirable to the foregoing; (r) to give written notice to the Property Trustee of the rating assigned to the Preferred Securities, from time to time, by a "nationally recognized statistical rating organization," as that term is defined for purposes of Rule 436(g)(2) under the Securities Act promptly after such assignment and after any change thereof. The Regular Trustees must exercise the powers set forth in this Section 3.6 in a manner that is consistent with the purposes and functions of the Trust set out in Section 3.3, and the Regular Trustees shall not take any action that is in consistent with the purposes and functions of the Trust set forth in Section 3.3. Subject to this Section 3.6, the Regular Trustees shall have none of the powers or the authority of the Property Trustee set forth in Section 3.8. Any expenses incurred by the Regular Trustees pursuant to this Section 3.6 shall be reimbursed by the Debenture Issuer. SECTION III.7 Prohibition of Actions by the Trust and the Trustees. ---------------------------------------------------- (a) The Trust shall not, and the Regular Trustees and the Property Trustee shall cause the Trust not to, engage in any activity other than as required or authorized by this Declaration. In particular, the Trust shall not and the Regular Trustees and the Property Trustee shall cause the Trust not to: (i) invest any proceeds received by the Trust from holding the Debentures, but shall distribute all such proceeds to Holders of Securities pursuant to the terms of this Declaration and of the Securities; (ii) acquire any assets other than as expressly provided herein; (iii) possess Trust property for other than a Trust purpose; (iv) make any loans or incur any indebtedness other than loans represented by the Debentures; (v) possess any power or otherwise act in such a way as to vary the Trust assets or the terms of the Securities in any way whatsoever (except to the extent expressly authorized in this Declaration or by the terms of the Securities); (vi) issue any securities or other evidences of beneficial ownership of, or beneficial interest in, the Trust other than the Securities; or (vii) other than as provided in this Declaration or by the terms of the Securities, (A) direct the time, method and place of exercising any trust or power conferred upon the Debenture Trustee with respect to the Debentures, (B) waive any past default that is waivable under the Indenture, (C) exercise any right to rescind or annul any declaration that the principal of all the Debentures shall be due and payable or (D) consent to any amendment, modification or termination of the Indenture or the Debentures where such consent shall be required unless the Trust shall have received an opinion of counsel to the effect that such modification will not cause more than an insubstantial risk that for United States federal income tax purposes the Trust will not be classified as a grantor trust. SECTION III.8 Powers and Duties of the Property Trustee. ----------------------------------------- (a) The legal title to the Debentures shall be owned by and held of record in the name of the Property Trustee in trust for the benefit of the Trust and the Holders of the Securities. The right, title and interest of the Property 11 Trustee to the Debentures shall vest automatically in each Person who may hereafter be appointed as Property Trustee in accordance with Section 5.7. Such vesting and cessation of title shall be effective whether or not conveyancing documents with regard to the Debentures have been executed and delivered. (b) The Property Trustee shall not transfer its right, title and interest in the Debentures to the Regular Trustees or to the Delaware Trustee (if the Property Trustee does not also act as Delaware Trustee). (c) The Property Trustee shall: (i) establish and maintain a segregated non-interest bearing trust account (the "Property Trustee Account") in the name of and under the exclusive control of the Property Trustee on behalf of the Holders of the Securities and, upon the receipt of payments of funds made in respect of the Debentures held by the Property Trustee, deposit such funds into the Property Trustee Account and make payments to the Holders of the Preferred Securities and the Holders of the Common Securities from the Property Trustee Account in accordance with Section 6.1. Funds in the Property Trustee Account shall be held uninvested until disbursed in accordance with this Declaration. The Property Trustee Account shall be an account that is maintained with a banking institution the rating on whose long-term unsecured indebtedness is at least equal to the rating assigned to the Preferred Securities by a "nationally recognized statistical rating organization," as that term is defined for purposes of Rule 436(g)(2) under the Securities Act; (ii) engage in such ministerial activities as shall be necessary or appropriate to effect the redemption of the Preferred Securities and the Common Securities to the extent the Debentures are redeemed or mature; and (iii) upon written notice of distribution issued by the Regular Trustees in accordance with the terms of the Securities, engage in such ministerial activities as shall be necessary or appropriate to effect the distribution of the Debentures to Holders of Securities upon the liquidation and dissolution of the Trust. (d) The Property Trustee shall take all actions and perform such duties as may be specifically required of the Property Trustee pursuant to the terms of this Declaration and the Securities. (e) To the extent consistent with and not in contravention of the terms and provisions of this Declaration and the Indenture, with respect to any compromise, arbitration or adjustment of claims or demands, the Property Trustee shall take any Legal Action which arises out of or in connection with an Event of Default of which a Responsible Officer of the Property Trustee has actual knowledge or the Property Trustee's duties and obligations under this Declaration or the Trust Indenture Act. (f) The Property Trustee shall continue to serve as a Trustee until either: (i) the Trust has been completely liquidated and the proceeds of the liquidation distributed to the Holders of Securities pursuant to the terms of the Securities; or (ii) a Successor Property Trustee has been appointed and has accepted that appointment in accordance with Section 5.7. (g) The Property Trustee shall have the legal power to exercise all of the rights, powers and privileges of a holder of Debentures under the Indenture and, if an Event of Default actually known to a Responsible Officer of the Property Trustee occurs and is continuing, the Property Trustee shall, for the benefit of Holders of the Securities, enforce its rights, including, without limitation, its rights under the Indenture as holder of the Debentures and its rights under the Preferred Securities Guarantee in accordance with the terms of the Preferred Securities Guarantee, subject to the rights of the Holders pursuant to the terms of such Securities and the Preferred Securities Guarantee. 12 (h) The Property Trustee may authorize one or more Persons (each, a "Paying Agent") to pay Distributions, redemption payments or liquidation payments on behalf of the Trust with respect to all Securities and any such Paying Agent shall comply with Section 317(b) of the Trust Indenture Act. Any Paying Agent may be removed by the Property Trustee at any time and a successor Paying Agent or additional Paying Agents may be appointed at any time by the Property Trustee. In the event the Preferred Securities do not remain in the form of one or more Global Certificates, the Property Trustee will act as Paying Agent and may designate an additional or substitute Paying Agent at any time. (i) Subject to this Section 3.8, the Property Trustee shall have none of the duties, liabilities, powers or the authority of the Regular Trustees set forth in Section 3.6. The Property Trustee must exercise the powers set forth in this Section 3.8 in a manner that is consistent with the purposes and functions of the Trust set out in Section 3.3, and the Property Trustee shall not take any action that is inconsistent with the purposes and functions of the Trust set out in Section 3.3. SECTION III.9 Certain Duties and Responsibilities of the Property --------------------------------------------------- Trustee. (a) The Property Trustee, before the occurrence of any Event of Default and after the curing of all Events of Default that may have occurred, shall undertake to perform only such duties as are specifically set forth in this Declaration and no implied covenants shall be read into this Declaration against the Property Trustee. In case an Event of Default has occurred (that has not been cured or waived pursuant to Section 2.6) of which a Responsible Officer of the Property Trustee has actual knowledge, the Property Trustee shall exercise such of the rights and powers vested in it by this Declaration, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. (b) No provision of this Declaration shall be construed to relieve the Property Trustee from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (i) prior to the occurrence of an Event of Default and after the curing or waiving of all such Events of Default that may have occurred: (A) the duties and obligations of the Property Trustee shall be determined solely by the express provisions of this Declaration and in the terms of the Securities and the Property Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Declaration, and no implied covenants or obligations shall be read into this Declaration against the Property Trustee; and (B) in the absence of bad faith on the part of the Property Trustee, the Property Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Property Trustee and conforming to the requirements of this Declaration; but in the case of any such certificates or opinions that by any provision hereof are specifically required to be furnished to the Property Trustee, the Property Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Declaration; (ii) the Property Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Property Trustee, unless it shall be proved that the Property Trustee was negligent in ascertaining the pertinent facts upon which such judgment was made; (iii) the Property Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of not less than a Majority in Liquidation Amount of the Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Property Trustee, or exercising any trust or power conferred upon the Property Trustee under this Declaration; 13 (iv) no provision of this Declaration shall require the Property Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that the repayment of such funds or liability is not reasonably assured to it under the terms of this Declaration or indemnity reasonably satisfactory to the Property Trustee against such risk or liability is not reasonably assured to it; (v) the Property Trustee's sole duty with respect to the custody, safe keeping and physical preservation of the Debentures and the Property Trustee Account shall be to deal with such property in a similar manner as the Property Trustee deals with similar property for its own account, subject to the protections and limitations on liability afforded to the Property Trustee under this Declaration and the Trust Indenture Act; (vi) the Property Trustee shall have no duty or liability for or with respect to the value, genuineness, existence or sufficiency of the Debentures or the payment of any taxes or assessments levied thereon or in connection therewith; (vii) the Property Trustee shall not be liable for any interest on any money received by it except as it may otherwise agree in writing with the Sponsor. Money held by the Property Trustee need not be segregated from other funds held by it except in relation to the Property Trustee Account maintained by the Property Trustee pursuant to Section 3.8(c)(i) and except to the extent otherwise required by law; and (viii) the Property Trustee shall not be responsible for monitoring the compliance by the Regular Trustees or the Sponsor with their respective duties under this Declaration, nor shall the Property Trustee be liable for any default or misconduct of the Regular Trustees or the Sponsor. SECTION III.10 Certain Rights of Property Trustee. ---------------------------------- (a) Subject to the provisions of Section 3.9: (i) the Property Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, approval, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed, sent or presented by the proper party or parties; (ii) any direction or act of the Sponsor or the Regular Trustees contemplated by this Declaration shall be sufficiently evidenced by a Direction or an Officers' Certificate; (iii) whenever in the administration of this Declaration, the Property Trustee shall deem it desirable that a matter be proved or established before taking, suffering or omitting any action hereunder, the Property Trustee (unless other evidence is herein specifically prescribed) may, in the absence of bad faith on its part, request and conclusively rely upon an Officers' Certificate which, upon receipt of such request, shall be promptly delivered by the Sponsor or the Regular Trustees; (iv) the Property Trustee shall have no duty to see to any recording, filing or registration of any instrument (including any financing or continuation statement or any filing under tax or securities laws) or any rerecording, refiling or registration thereof; 14 (v) before the Property Trustee acts or refrains from acting, the Property Trustee may consult with counsel or other experts and the advice or opinion of such counsel and experts with respect to legal matters or advice within the scope of such experts' area of expertise shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with such advice or opinion. Such counsel may be counsel to the Sponsor or any of its Affiliates, and may include any of its employees. The Property Trustee shall have the right at anytime to seek instructions concerning the administration of this Declaration from any court of competent jurisdiction; (vi) the Property Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Declaration at the request or direction of any Holder, unless such Holder shall have provided to the Property Trustee security or indemnity, reasonably satisfactory to the Property Trustee, against the costs, expenses (including attorneys' fees and expenses and expenses of the Property Trustee's agents, nominees or custodians) and liabilities that might be incurred by it in complying with such request or direction, including such reasonable advances as may be requested by the Property Trustee; provided that, nothing contained in this Section 3.10(a)(vi) shall be taken to relieve the Property Trustee, upon the occurrence of an Event of Default, of its obligation to exercise the rights and powers vested in it by this Declaration; (vii) the Property Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Property Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit; (viii) the Property Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, custodians, nominees or attorneys and the Property Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder; (ix) any action taken by the Property Trustee or its agents hereunder shall bind the Trust and the Holders of the Securities, and the signature of the Property Trustee or its agents alone shall be sufficient and effective to perform any such action and no third party shall be required to inquire as to the authority of the Property Trustee to so act or as to its compliance with any of the terms and provisions of this Declaration, both of which shall be conclusively evidenced by the Property Trustee's or its agent's taking such action; and (x) whenever in the administration of this Declaration the Property Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any other action hereunder, the Property Trustee: (i) may request instructions from the Holders of the Securities which instructions may only be given by the Holders of the same proportion in liquidation amount of the Securities as would be entitled to direct the Property Trustee under the terms of the Securities in respect of such remedy, right or action; (ii) may refrain from enforcing such remedy or right or taking such other action until such instructions are received; and (iii) shall be protected in conclusively relying on or acting in or accordance with such instructions; (xi) the Property Trustee shall not be liable for any action taken, suffered or omitted to be taken by it without negligence, in good faith and reasonably believed by it to be authorized or within the discretion, rights or powers conferred upon it by this Declaration; and (xii) the Property Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder. 15 (b) No provision of this Declaration shall be deemed to impose any duty or obligation on the Property Trustee to perform any act or acts or exercise any right, power, duty or obligation conferred or imposed on it, in any jurisdiction in which it shall be illegal, or in which the Property Trustee shall be unqualified or incompetent in accordance with applicable law, to perform any such act or acts, or to exercise any such right, power, duty or obligation. No permissive power or authority available to the Property Trustee shall be construed to be a duty. SECTION III.11 Delaware Trustee. Notwithstanding any other provision of ---------------- this Declaration other than Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers, nor shall the Delaware Trustee have any of the duties and responsibilities of the Regular Trustees or the Property Trustee described in this Declaration, or any other duties or responsibilities except as expressly stated in this Section 3.11; provided that, the Delaware Trustee shall have the power and authority and is hereby authorized to execute and file with the Secretary of State of the State of Delaware any certificate required to be filed under the Business Trust Act. Except as set forth in Section 5.2, the Delaware Trustee shall be a Trustee for the sole and limited purpose of fulfilling the requirements of Section 3807(a) of the Business Trust Act. Notwithstanding any other provision herein or elsewhere, neither the Trust Company nor the Delaware Trustee shall have any liability to any Person for any act, omission or obligation of the Trust or any Trustee except for liability to the Trust and the Holders for the gross negligence or willful misconduct of the Delaware Trustee. SECTION III.12 Execution of Documents. Unless otherwise determined by ---------------------- the Regular Trustees, and except as otherwise required by the Business Trust Act, any one Regular Trustee is authorized to execute on behalf of the Trust any documents that the Regular Trustees have the power and authority to execute pursuant to Section 3.6; provided that the registration statement referred to in Section 3.6(b)(i), including any amendments thereto, shall be signed by a majority of the Regular Trustees. SECTION III.13 Not Responsible for Recitals or Issuance of Securities. ------------------------------------------------------ The recitals contained in this Declaration shall be taken as the statements of the Sponsor, and the Trustees do not assume any responsibility for their correctness. The Trustees make no representations as to the value or condition of the property of the Trust or any part thereof. The Trustees make no representations as to the validity or sufficiency of this Declaration or the Securities. SECTION III.14 Duration of Trust. The Trust, unless terminated pursuant ----------------- to the provisions of Article VIII hereof, shall have existence for fifty-five (55) years from the initial Closing Date. SECTION III.15 Mergers. ------- (a) The Trust may not consolidate, amalgamate, merge with or into, or be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety to any Person except as described in Section 3.15(b) and (c). (b) The Trust may, with the consent of the Regular Trustees or, if there are more than two, a majority of the Regular Trustees and without the consent of the Holders of the Securities, the Delaware Trustee or the Property Trustee, consolidate, amalgamate, merge with or into, or be replaced by a trust organized as such under the laws of any State; provided that: (i) such successor entity (the "Successor Entity") either: (A) expressly assumes all of the obligations of the Trust under the Securities; or (B) substitutes for the Preferred Securities and Common Securities other securities having substantially the same terms as the Preferred Securities and Common Securities, respectively (the "Successor Securities"), so long as the Successor Securities rank the same as the Preferred Securities and the Common Securities, respectively, rank with respect to Distributions and payments upon liquidation, redemption, maturity and otherwise; (ii) the Debenture Issuer expressly accepts a trustee of the Successor Entity that possesses the same powers and duties as the Property Trustee as the holder of the Debentures; 16 (iii) the Preferred Securities or any Successor Securities (with respect to the Preferred Securities) are listed, or any Successor Securities (with respect to the Preferred Securities) will be listed upon notification of issuance, on any national securities exchange or with any other organization on which the Preferred Securities are then listed or quoted; (iv) such merger, consolidation, amalgamation or replacement does not cause the Preferred Securities (including any Successor Securities of the Preferred Securities) to be downgraded by any nationally recognized statistical rating organization then rating the Preferred Securities; (v) such merger, consolidation, amalgamation or replacement does not adversely affect the rights, preferences and privileges of the Holders of the Securities (including any Successor Securities) in any material respect (other than with respect to any dilution of such Holders' interests in the new entity); (vi) such Successor Entity has a purpose identical to that of the Trust; (vii) prior to such merger, consolidation, amalgamation or replacement, Motorola has received an opinion of an independent counsel to the Trust experienced in such matters to the effect that, (A) such merger, consolidation, amalgamation or replacement does not adversely affect the rights, preferences and privileges of the Holders of the Securities (including any Successor Securities) in any material respect (other than with respect to any dilution of Holders' interest in the new entity), (B) following such merger, amalgamation, consolidation or replacement, neither the Trust nor the successor entity will be required to register as an investment company under the Investment Company Act and (C) the Trust will continue to be classified as a grantor trust for federal income tax purposes; (viii) the Sponsor guarantees the obligations of such Successor Entity under the Successor Securities at least to the extent provided by the Preferred Securities Guarantee; and (ix) the Regular Trustees shall have furnished the Delaware Trustee and the Property Trustee at least 5 Business Days' prior written notice of the consummation of such merger, consolidation, amalgamation or replacement; provided that failure to provide such notice shall not affect the validity of any such transaction. (c) Notwithstanding Section 3.15(b), the Trust shall not, except with the consent of Holders of 100% in liquidation amount of the Securities, consolidate, amalgamate, merge with or into, or be replaced by any other entity or permit any other entity to consolidate, amalgamate, merge with or into, or replace it if such consolidation, amalgamation, merger or replacement would cause the Trust or Successor Entity to be classified as other than a grantor trust for United States federal income tax purposes or each Holder of the Securities to be treated as owning an undivided beneficial interest in the Debentures. SECTION III.16 Property Trustee May File Proofs of Claim. In case of the ----------------------------------------- pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other similar judicial proceeding relative to the Trust or any other obligor upon the Securities or the property of the Trust or of such other obligor or their creditors, the Property Trustee (irrespective of whether any Distributions on the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Property Trustee shall have made any demand on the Trust for the payment of any past due Distributions) shall be entitled and empowered, to the fullest extent permitted by law, by intervention in such proceeding or otherwise: (a) to file and prove a claim for the whole amount of any Distributions owing and unpaid in respect of the Securities (or, if the Securities are original issue discount Securities, such portion of the liquidation amount as may be specified in the terms of such Securities) and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Property Trustee (including any claim for the reasonable compensation, expenses, 17 disbursements and advances of the Property Trustee, its agents and counsel) and of the Holders allowed in such judicial proceeding; and (b) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Property Trustee and, in the event the Property Trustee shall consent to the making of such payments directly to the Holders, to pay to the Property Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Property Trustee, its agents and counsel, and any other amounts due the Property Trustee. Nothing herein contained shall be deemed to authorize the Property Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement adjustment or compensation affecting the Securities or the rights of any Holder thereof or to authorize the Property Trustee to vote in respect of the claim of any Holder in any such proceeding. ARTICLE IV SPONSOR SECTION IV.1 Sponsor's Purchase of Common Securities. On the Closing --------------------------------------- Date, and at the same time as the Preferred Securities are sold, the Sponsor will purchase all of the Common Securities issued by the Trust, in an amount sufficient to make the aggregate liquidation value of all Common Securities purchased by the Sponsor on the Closing Date at least equal to 3% of the capital of the Trust. SECTION IV.2 Responsibilities of the Sponsor. In connection with the ------------------------------- issue and sale of the Preferred Securities, the Sponsor shall have the exclusive right and responsibility to engage in the following activities: (a) to prepare for filing by the Trust with the Commission a registration statement on Form S-3 pertaining to the Preferred Securities, including any amendments thereto (which registration statement may also include other securities of the Sponsor); (b) to determine the States in which to take appropriate action to qualify or register for sale all or part of the Preferred Securities and to do any and all such acts, other than actions which must be taken by the Trust, and advise the Trust of actions it must take, and prepare for execution and filing any documents to be executed and filed by the Trust, as the Sponsor deems necessary or advisable in order to comply with the applicable laws of any such States; (c) to prepare for filing by the Trust an application to The New York Stock Exchange, Inc. or any other national stock exchange or the Nasdaq Stock Market's National Market System for listing upon notice of issuance of any Preferred Securities; (d) to prepare for filing by the Trust with the Commission a registration statement on Form 8-A relating to the registration of the Preferred Securities under Section 12(b) of the Exchange Act, including any amendments thereto; and (e) to negotiate the terms of, and execute and deliver, the Underwriting Agreement providing for the sale of the Preferred Securities. SECTION IV.3 Right to Dissolve Trust. The Sponsor shall have the right ----------------------- at any time after the Closing Date to elect to dissolve the Trust pursuant to Article VIII hereof and to direct the Property Trustee to take such action as shall be necessary to distribute the Debentures to the Holders of the Securities in exchange for all of the Securities. SECTION IV.4 Direct Right of Action. Notwithstanding any provision of ---------------------- this Declaration to the contrary, to the extent permitted by applicable law and in accordance with the terms of the Securities, any Holder of Securities may enforce directly against the Sponsor the obligation of the Sponsor under the Indenture to duly and punctually pay 18 the principal and interest when due under the Debentures and the Sponsor irrevocably waives any right or remedy to require that any such Holder take any action against the Trust or any other Person before proceeding against the Sponsor. ARTICLE V TRUSTEES SECTION V.1 Number of Trustees. The number of Trustees initially shall ------------------ be four (4), and: (a) at any time before the issuance of any Securities, the Sponsor may, by written instrument, increase or decrease the number of Trustees; and (b) after the issuance of any Securities, the number of Trustees may be increased or decreased by vote of the Holders of a Majority in Liquidation Amount of the Common Securities voting as a class at a meeting of the Holders of the Common Securities or by written consent in lieu of such meeting; provided that, if the Property Trustee also acts as Delaware Trustee, the number of Trustees shall be at least three (3). SECTION V.2 Delaware Trustee. If required by the Business Trust Act, one ---------------- Trustee (the "Delaware Trustee") shall be: (a) a natural person who is a resident of the State of Delaware; or (b) if not a natural person, an entity which has its principal place of business in the State of Delaware, and otherwise meets the requirements of Section 3807(a) of the Business Trust Act; provided that, if the Property Trustee has its principal place of business in the State of Delaware and otherwise meets the requirements of applicable law, then the Property Trustee shall also be the Delaware Trustee, the Person theretofore serving as Delaware Trustee (if other than the Property Trustee) automatically shall cease to be a Trustee, the Property Trustee promptly shall provide to the Person theretofore serving as Delaware Trustee written notice of the same (in relying on which the Person theretofore serving as Delaware Trustee shall be fully justified and protected), the number of Trustees automatically shall be reduced by one (1), the Property Trustee promptly shall cause the certificate of trust of the Trust to be amended as necessary, and Section 3.11 shall have no application. SECTION V.3 Property Trustee; Eligibility. ----------------------------- (a) There shall at all times be one Trustee acting as Property Trustee which shall: (i) not be an Affiliate of the Sponsor; and (ii) be a corporation or trust company organized and doing business under the laws of the United States of America or any State or Territory thereof or of the District of Columbia, or a corporation or other Person permitted by the Commission to act as an institutional trustee under the Trust Indenture Act, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least 25 million U.S. dollars ($25,000,000), and subject to supervision or examination by Federal, State, Territorial or District of Columbia authority. If such corporation or trust company publishes reports of condition at least annually, pursuant to law or to the requirements of the supervising or examining authority referred to above, then for the purposes of this Section 5.3(a)(ii), the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. (b) If at any time the Property Trustee shall cease to be eligible to so act under Section 5.3(a), the Property Trustee shall immediately resign in the manner and with the effect set forth in Section 5.7(c). 19 (c) If the Property Trustee has or shall acquire any "conflicting interest" within the meaning of Section 310(b) of the Trust Indenture Act, the Property Trustee and the Holder of the Common Securities (as if it were the Obligor referred to in Section 310(b) of the Trust Indenture Act) shall in all respects comply with the provisions of Section 310(b) of the Trust Indenture Act. (d) The Preferred Securities Guarantee shall be deemed to be specifically described in this Declaration for purposes of clause (i) of the first provision contained in Section 310(b) of the Trust Indenture Act. SECTION V.4 Regular Trustees. ---------------- (a) Except as expressly set forth in this Declaration and except if a meeting of the Regular Trustees is called with respect to any matter over which the Regular Trustees have power to act, any power of the Regular Trustees may be exercised by, or with the consent of, any one such Regular Trustee. (b) Unless otherwise determined by the Regular Trustees, and except as otherwise required by the Business Trust Act or applicable law, any one Regular Trustee is authorized to execute on behalf of the Trust any documents which the Regular Trustees have the power and authority to cause the Trust to execute pursuant to Section 3.6; provided that the registration statement referred to in Section 3.6, including any amendments thereto, shall be signed by a majority of the Regular Trustees; and (c) A Regular Trustee may, by power of attorney consistent with applicable law, delegate to any other natural person over the age of 21 his or her power for the purposes of signing any documents which the Regular Trustees have power and authority to cause the Trust to execute pursuant to Section 3.6. SECTION V.5 Certain Qualifications of Regular Trustees and Delaware ------------------------------------------------------- Trustee Generally. Each Regular Trustee and the Delaware Trustee (unless the - ----------------- Property Trustee also acts as Delaware Trustee) shall be either a natural person who is at least 21 years of age or a legal entity that shall act through one or more Authorized Officers. SECTION V.6 Initial Trustees. ---------------- The initial Regular Trustees shall be: Carl F. Koenemann and Garth L. Milne. The initial Property Trustee shall be: Harris Trust and Savings Bank. The initial Delaware Trustee shall be: First Union Trust Company, National Association. SECTION V.7 Appointment, Removal and Resignation of Trustees. ------------------------------------------------ (a) Subject to Section 5.7(b), the Trustees may be appointed or removed without cause at any time: (i) until the issuance of any Securities, by written instrument executed by the Sponsor; and (ii) after the issuance of any Securities, by vote of the Holders of a Majority in Liquidation Amount of the Common Securities voting as a class at a meeting of the Holders of the Common Securities. (b) The Trustee that acts as Property Trustee shall not be removed in accordance with Section 5.7(a) until a successor Trustee possessing the qualifications to act as Property Trustee under Section 5.3 (a "Successor Property Trustee") has been appointed and has accepted such appointment by written instrument executed by such Successor Property Trustee and delivered to the Regular Trustees and the Sponsor. The Trustee that acts as Delaware Trustee shall not be removed in accordance with Section 5.7(a) until a successor Trustee possessing the qualifications to act as Delaware Trustee under Sections 5.2 and 5.5 (a "Successor Delaware Trustee") has been appointed and has accepted such appointment by written instrument executed by such Successor Delaware Trustee and delivered to the Regular Trustees and the Sponsor. 20 (c) A Trustee appointed to office shall hold office until his or its successor shall have been appointed, until his death or its dissolution or until his or its removal or resignation. Any Trustee may resign from office (without need for prior or subsequent accounting) by an instrument in writing signed by the Trustee and delivered to the Sponsor and the Trust, which resignation shall take effect upon such delivery or upon such later date as is specified therein; provided, however, that: (i) No such resignation of the Trustee that acts as the Property Trustee shall be effective: (A) until a Successor Property Trustee has been appointed and has accepted such appointment by instrument executed by such Successor Property Trustee and delivered to the Trust, the Sponsor and the resigning Property Trustee; or (B) until the assets of the Trust have been completely liquidated and the proceeds thereof distributed to the holders of the Securities; and (ii) no such resignation of the Trustee that acts as the Delaware Trustee shall be effective until a Successor Delaware Trustee has been appointed and has accepted such appointment by instrument executed by such Successor Delaware Trustee and delivered to the Trust, the Sponsor and the resigning Delaware Trustee. (d) The Holders of the Common Securities shall use their best efforts to promptly appoint a Successor Delaware Trustee or Successor Property Trustee, as the case may be, if the Property Trustee or the Delaware Trustee delivers an instrument of resignation in accordance with this Section 5.7. (e) If no Successor Property Trustee or Successor Delaware Trustee, as the case may be, shall have been appointed and accepted appointment as provided in this Section 5.7 within 60 days after delivery to the Sponsor and the Trust of an instrument of resignation, the resigning Property Trustee or Delaware Trustee, as applicable, may, at the expense of the Trust, petition any court of competent jurisdiction for appointment of a Successor Property Trustee or Successor Delaware Trustee, as applicable. Such court may thereupon, after prescribing such notice, if any, as it may deem proper, appoint a Successor Property Trustee or Successor Delaware Trustee, as the case may be. (f) No Property Trustee or Delaware Trustee shall be personally liable for the acts or omissions to act of any Successor Property Trustee or Successor Delaware Trustee, as the case may be. (g) Any successor to a Regular Trustee shall be an officer, director, employer or affiliate of the Sponsor. SECTION V.8 Vacancies among Trustees. If a Trustee ceases to hold office ------------------------ for any reason and the number of Trustees is not reduced pursuant to Section 5.1 or Section 5.2, or if the number of Trustees is increased pursuant to Section 5.1, a vacancy shall occur. A resolution certifying the existence of such vacancy by the Regular Trustees or, if there are more than two, a majority of the Regular Trustees shall be conclusive evidence of the existence of such vacancy. The vacancy shall be filled with a Trustee appointed in accordance with Section 5.7. SECTION V.9 Effect of Vacancies. The death, resignation, retirement, ------------------- removal, bankruptcy, dissolution, liquidation, incompetence or incapacity to perform the duties of a Trustee shall not operate to annul, dissolve or terminate the Trust. Whenever a vacancy in the number of Regular Trustees shall occur, until such vacancy is filled by the appointment of a Regular Trustee in accordance with Section 5.7, the Regular Trustees in office, regardless of their number, shall have all the powers granted to the Regular Trustees and shall discharge all the duties imposed upon the Regular Trustees by this Declaration. SECTION V.10 Meetings. If there is more than one Regular Trustee, meetings -------- of the Regular Trustees shall be held from time to time upon the call of any Regular Trustee. Regular meetings of the Regular Trustees may be held at a time and place fixed by resolution of the Regular Trustees. Notice of any in-person meetings of the Regular Trustees shall be hand delivered or otherwise delivered in writing (including by facsimile, with a hard copy by overnight courier) not less than 48 hours before such meeting. Notice of any telephonic meetings of the Regular Trustees shall be hand delivered or otherwise delivered in writing (including by facsimile, with a hard copy by overnight courier) not less than 21 24 hours before a meeting. Notices shall contain a brief statement of the time, place and anticipated purposes of the meeting. The presence (whether in person or by telephone) of a Regular Trustee at a meeting shall constitute a waiver of notice of such meeting except where a Regular Trustee attends a meeting for the express purpose of objecting to the transaction of any activity on the ground that the meeting has not been lawfully called or convened. Notwithstanding the foregoing, unless provided otherwise in this Declaration, any action of the Regular Trustees may be authorized and taken by any one of the Regular Trustees. In the event there is only one Regular Trustee, any and all action of such Regular Trustee shall be evidenced by a written consent of such Regular Trustee. SECTION V.11 Delegation of Power. ------------------- (a) Any Regular Trustee may, by power of attorney consistent with applicable law, delegate to any natural person over the age of 21 his, her or its power for the purpose of executing any documents contemplated in Section 3.6, including any registration statement or amendment thereto filed with the Commission, or making any other governmental filing. (b) The Regular Trustees shall have power to delegate from time to time to such of their number or to officers of the Trust the doing of such things and the execution of such instruments either in the name of the Trust or the names of the Regular Trustees or otherwise as the Regular Trustees may deem expedient, to the extent such delegation is not prohibited by applicable law or contrary to the provisions of the Trust, as set forth herein. SECTION V.12 Merger, Conversion, Consolidation or Succession to Business. ----------------------------------------------------------- Any Person into which the Property Trustee or the Delaware Trustee, as the case may be, may be merged or converted or with which either may be consolidated, or any Person resulting from any merger, conversion or consolidation to which the Property Trustee or the Delaware Trustee, as the case may be, shall be a party, or any Person succeeding to all or substantially all the corporate trust business of the Property Trustee or the Delaware Trustee, as the case may be, shall be the successor of the Property Trustee or the Delaware Trustee, as the case may be, hereunder, provided such Person shall be otherwise qualified and eligible under this Article without the execution or filing of any paper or any further act on the part of any of the parties hereto. ARTICLE VI DISTRIBUTIONS SECTION VI.1 Distributions. Holders shall receive Distributions (as ------------- defined herein) in accordance with the applicable terms of the relevant Holder's Securities. Distributions shall be made on the Preferred Securities and the Common Securities in accordance with the preferences set forth in their respective terms. If and to the extent that the Debenture Issuer makes a payment of interest (including Compounded Interest (as defined in the Indenture) and Additional Interest (as defined in the Indenture)), premium and/or principal on the Debentures held by the Property Trustee (the amount of any such payment being a "Payment Amount"), the Property Trustee shall and is directed, to the extent funds are available for that purpose, to make a distribution (a "Distribution") of the Payment Amount to Holders. ARTICLE VII ISSUANCE OF SECURITIES SECTION VII.1 General Provisions Regarding Securities. --------------------------------------- (a) The Regular Trustees shall on behalf of the Trust cause to be issued one class of preferred securities (the "Preferred Securities") representing undivided beneficial interests in the assets of the Trust having such terms as are set forth in Annex I, as such Annex I may be amended from time to time in accordance with the provisions of this Declaration and one class of common securities (the "Common Securities") representing undivided beneficial interests in the assets of the Trust having such terms as are set forth in Annex I, as such Annex I may be amended from time to time in accordance with the provisions of this Declaration. The Trust shall issue no securities or other interests in the assets of the Trust other than the Preferred Securities and the Common Securities. (b) The Certificates shall be signed on behalf of the Trust by a Regular Trustee. Such signature shall be the manual or facsimile signature of any present or any future Regular Trustee. In case any Regular Trustee of the Trust 22 who shall have signed any of the Certificates shall cease to be such Regular Trustee before the Certificates so signed shall be delivered by the Trust, such Certificates nevertheless may be delivered as though the person who signed such Certificate had not ceased to be such Regular Trustee; and any Certificate may be signed on behalf of the Trust by such persons who, at the actual date of execution of such Certificate, shall be the Regular Trustees of the Trust, although at the date of the execution and delivery of the Declaration any such person was not such a Regular Trustee. Certificates shall be printed, lithographed or engraved or may be produced in any other manner as is reasonably acceptable to the Regular Trustees, as evidenced by their execution thereof, and may have such letters, numbers or other marks of identification or designation and such legends or endorsements as the Regular Trustees may deem appropriate, or as may be required to comply with any law or with any rule or regulation of any stock exchange on which Securities may be listed, or to conform to usage. (c) The consideration received by the Trust for the issuance of the Securities shall constitute a contribution to the capital of the Trust and shall not constitute a loan to the Trust. (d) Upon issuance of the Securities as provided in this Declaration, the Securities so issued shall be deemed to be validly issued, fully paid and non- assessable and shall not be subject to any preferential subscription or pre- emptive rights (subject to Section 10.1(b) with respect to the Common Securities). (e) Every Person, by virtue of having become a Holder or a Preferred Security Beneficial Owner in accordance with the terms of this Declaration, shall be deemed to have expressly assented and agreed to the terms of, and shall be bound by, this Declaration and the terms of the Securities, the Preferred Securities Guarantee, the Indenture and the Debentures. ARTICLE VIII TERMINATION OF TRUST SECTION VIII.1 Termination of Trust. -------------------- (a) The Trust shall dissolve upon the earliest of: (i) the bankruptcy of the Holder of the Common Securities or the Sponsor; (ii) the filing of a certificate of dissolution or its equivalent with respect to the Holder of the Common Securities or the Sponsor; the filing of a certificate of cancellation with respect to the Trust or the revocation of the Holder of the Common Securities' or the Sponsor's charter and the expiration of 90 days after the date of revocation without a reinstatement thereof; (iii) upon the entry of a decree of judicial dissolution of the Holder of the Common Securities, the Sponsor or the Trust; (iv) when all of the Securities shall have been called for redemption and the amounts necessary for redemption thereof shall have been paid to the Holders in accordance with the terms of the Securities; (v) the occurrence and continuation of a Special Event pursuant to which the Trust shall have been dissolved in accordance with the terms of the Securities and all of the Debentures shall have been distributed to the Holders of Securities in exchange for all of the Securities; (vi) before the issuance of any Securities, when all of the Regular Trustees and the Sponsor shall have consented to dissolution of the Trust; (vii) the distribution of the Debentures from the Trust to the Holders of Securities in exchange for all of the Securities and in liquidation of the Trust; or (viii) the expiration of the term of the Trust as set forth in Section 3.14. 23 (b) As soon as is practicable after the occurrence of an event referred to in Section 8.1(a) and payment or making of reasonable provision for payment of all liabilities of the Trust upon completion of the winding up of the Trust, the Property Trustee shall execute and file a certificate of cancellation with the Secretary of State of the State of Delaware and thereupon the Trust shall terminate. (c) The provisions of Section 3.9 and Article X shall survive the termination of the Trust. ARTICLE IX TRANSFER OF INTERESTS SECTION IX.1 Transfer of Securities. ---------------------- (a) Securities may only be transferred, in whole or in part, in accordance with the terms and conditions set forth in this Declaration and in the terms of the Securities. Any transfer or purported transfer of any Security not made in accordance with this Declaration shall be null and void. (b) Subject to this Article IX, Preferred Securities shall be freely transferable. (c) Subject to this Article IX, the Sponsor and any Related Party may only transfer Common Securities to the Sponsor or a Related Party of the Sponsor; provided that, any such transfer is subject to the condition precedent that the transferor obtain the written opinion of qualified independent counsel experienced in such matters that such transfer would not cause more than an insubstantial risk that: (i) the Trust would not be classified for United States federal income tax purposes as a grantor trust and each Holder of Securities would not be treated as owning an undivided beneficial interest in the Debentures; and (ii) the Trust would be an Investment Company or the transferee would become an Investment Company. SECTION IX.2 Transfer and Exchange of Certificates. The Regular Trustees ------------------------------------- shall provide for the registration of Certificates and of transfers or exchanges of Certificates, which will be effected without charge but only upon payment (with such indemnity as the Regular Trustees may require) in respect of any tax or other government charges that may be imposed in relation to it. Upon surrender for registration of transfer of any Certificate, the Regular Trustees shall cause one or more new Certificates to be issued in the name of the designated transferee or transferees. Upon surrender for exchange of any Certificate, the Regular Trustees shall cause one or more new Certificates in the same aggregate liquidation amount as the Certificate surrendered for exchange to be issued in the name of the Holder of the Certificate so surrendered. Every Certificate surrendered for registration of transfer or for exchange shall be accompanied by a written instrument of transfer in form satisfactory to the Regular Trustees duly executed by the Holder or such Holder's attorney duly authorized in writing. Each Certificate surrendered for registration of transfer or for exchange shall be canceled by the Regular Trustees. A transferee of a Certificate shall be entitled to the rights and subject to the obligations of a Holder hereunder upon the receipt by such transferee of a Certificate. By acceptance of a Certificate, each transferee shall be deemed to have agreed to be bound by this Declaration. SECTION IX.3 Deemed Security Holders. The Trustees may treat the Person ----------------------- in whose name any Certificate shall be registered on the books and records of the Trust as the sole holder of such Certificate and of the Securities represented by such Certificate for purposes of receiving Distributions and for all other purposes whatsoever and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such Certificate or in the Securities represented by such Certificate on the part of any Person, whether or not the Trust shall have actual or other notice thereof. SECTION IX.4 Book Entry Interests. Unless otherwise specified in the -------------------- terms of the Preferred Securities, the Preferred Securities Certificates, on original issuance, will be issued in the form of one or more fully registered, global Preferred Security Certificates (each, a "Global Certificate"), to be delivered to DTC, the initial Clearing Agency, by, 24 or on behalf of, the Trust. Such Global Certificates shall initially be registered on the books and records of the Trust in the name of Cede & Co., the nominee of DTC, and no Preferred Security Beneficial Owner will receive a definitive Preferred Security Certificate representing such Preferred Security Beneficial Owner's interests in such Global Certificates, except as provided in Section 9.7. Unless and until definitive, fully registered Preferred Security Certificates (the "Definitive Preferred Security Certificates") have been issued to the Preferred Security Beneficial Owners pursuant to Section 9.7: (a) the provisions of this Section 9.4 shall be in full force and effect; (b) the Trust and the Trustees shall be entitled to deal with the Clearing Agency for all purposes of this Declaration (including the payment of Distributions on the Global Certificates and receiving approvals, votes or consents hereunder) as the Holder of the Preferred Securities and the sole holder of the Global Certificates and shall have no obligation to the Preferred Security Beneficial Owners; (c) to the extent that the provisions of this Section 9.4 conflict with any other provisions of this Declaration, the provisions of this Section 9.4 shall control; and (d) the rights of the Preferred Security Beneficial Owners shall be exercised only through the Clearing Agency and shall be limited to those established by law and agreements between such Preferred Security Beneficial Owners and the Clearing Agency and/or the Clearing Agency Participants. DTC will make book entry transfers among the Clearing Agency Participants and receive and transmit payments of Distributions on the Global Certificates to such Clearing Agency Participants. SECTION IX.5 Notices to Clearing Agency. Whenever a notice or other -------------------------- communication to the Preferred Security Holders is required under this Declaration, unless and until Definitive Preferred Security Certificates shall have been issued to the Preferred Security Beneficial Owners pursuant to Section 9.7, the Regular Trustees or the Property Trustee, if the Property Trustee is specifically required to give such notice, shall give all such notices and communications specified herein to be given to the Preferred Security Holders to the Clearing Agency, and shall have no notice obligations to the Preferred Security Beneficial Owners. SECTION IX.6 Appointment of Successor Clearing Agency. If any Clearing ---------------------------------------- Agency elects to discontinue its services as securities depository with respect to the Preferred Securities or if the Regular Trustees elect to have another Clearing Agency serve as securities depository with respect to the Preferred Securities, the Regular Trustees may, in their sole discretion, appoint a successor Clearing Agency with respect to such Preferred Securities. SECTION IX.7 Definitive Preferred Security Certificates. If: ------------------------------------------ (a) a Clearing Agency elects to discontinue its services as securities depository with respect to the Preferred Securities and a successor Clearing Agency is not appointed within 90 days after such discontinuance pursuant to Section 9.6; or (b) the Regular Trustees elect after consultation with the Sponsor to terminate the book entry system through the Clearing Agency with respect to the Preferred Securities, then: (i) Definitive Preferred Security Certificates shall be prepared by the Regular Trustees on behalf of the Trust with respect to such Preferred Securities; and (ii) upon surrender of the Global Certificates by the Clearing Agency, accompanied by registration instructions, the Regular Trustees shall cause Definitive Preferred Security Certificates to be delivered to the Preferred Security Beneficial Owners in accordance with the instructions of the Clearing Agency. Neither the Trustees nor the Trust shall be liable for any delay in delivery of such instructions and each of them may conclusively rely on, and shall be protected in relying on, said instructions of the Clearing Agency. The Definitive Preferred Security Certificates shall be printed, lithographed or engraved or may be produced in any other manner as is reasonably acceptable to the Regular Trustees, as evidenced by 25 their execution thereof, and may have such letters, numbers or other marks of identification or designation and such legends or endorsements as the Regular Trustees may deem appropriate, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange on which Preferred Securities may be listed, or to conform to usage. SECTION IX.8 Mutilated, Destroyed, Lost or Stolen Certificates. If: ------------------------------------------------- (a) any mutilated Certificates should be surrendered to the Regular Trustees, or if the Regular Trustees shall receive evidence to their satisfaction of the destruction, loss or theft of any Certificate; and (b) there shall be delivered to the Regular Trustees such security or indemnity as may be required by them to keep each of them, the Sponsor and the Trust harmless, then, in the absence of notice that such Certificate shall have been acquired by a protected purchaser, any Regular Trustee on behalf of the Trust shall execute and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like denomination. In connection with the issuance of any new Certificate under this Section 9.8, the Regular Trustees may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith. Any duplicate Certificate issued pursuant to this Section shall constitute conclusive evidence of an ownership interest in the relevant Securities, as if originally issued, whether or not the lost, stolen or destroyed Certificate shall be found at any time. ARTICLE X LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS SECTION X.1 Liability. --------- (a) Except as expressly set forth in this Declaration, the Debentures, the Preferred Securities Guarantee and the terms of the Securities, the Sponsor shall not be: (i) personally liable for the return of any portion of the capital contributions (or any return thereon) of the Holders of the Securities which shall be made solely from assets of the Trust; and (ii) be required to pay to the Trust or to any Holder of Securities any deficit upon dissolution of the Trust or otherwise. (b) The Sponsor shall be liable for all of the fees, costs, expenses, debts and obligations of the Trust (other than with respect to the Securities) to the extent not satisfied out of the Trust's assets. (c) Pursuant to Section 3803(a) of the Business Trust Act, the Holders of the Preferred Securities shall be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware. SECTION X.2 Exculpation. ----------- (a) No Indemnified Person shall be liable, responsible or accountable in damages or otherwise to the Trust or any Covered Person for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Indemnified Person in good faith on behalf of the Trust and in a manner such Indemnified Person reasonably believed to be within the scope of the authority conferred on such Indemnified Person by this Declaration or by law, except that an Indemnified Person shall be liable for any such loss, damage or claim incurred by reason of such Indemnified Person's gross negligence (ordinary negligence in the case of the Property Trustee) or willful misconduct with respect to such acts or omissions. 26 (b) An Indemnified Person shall be fully protected in relying in good faith upon the records of the Trust and upon such information, opinions, reports or statements presented to the Trust by any Person as to matters the Indemnified Person reasonably believes are within such other Person's professional or expert competence and who has been selected with reasonable care by or on behalf of the Trust, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, profits, losses or any other facts pertinent to the existence and amount of assets from which Distributions to Holders of Securities might properly be paid. SECTION X.3 Fiduciary Duty. -------------- (a) To the extent that, at law or in equity, an Indemnified Person has duties (including fiduciary duties) and liabilities relating thereto to the Trust or to any Covered Person, an Indemnified Person acting under this Declaration shall not be liable to the Trust or to any Covered Person for its good faith reliance on the provisions of this Declaration. The provisions of this Declaration, to the extent that they restrict the duties and liabilities of an Indemnified Person otherwise existing at law or in equity (other than the duties imposed on the Property Trustee under the Trust Indenture Act), are agreed by the parties hereto to replace such other duties and liabilities of such Indemnified Person. (b) Unless otherwise expressly provided herein: (i) whenever a conflict of interest exists or arises between any Covered Persons; or (ii) whenever this Declaration or any other agreement contemplated herein or therein provides that an Indemnified Person shall act in a manner that is, or provides terms that are, fair and reasonable to the Trust or any Holder of Securities, the Indemnified Person shall resolve such conflict of interest, take such action or provide such terms, considering in each case the relative interest of each party (including its own interest) to such conflict, agreement, transaction or situation and the benefits and burdens relating to such interests, any customary or accepted industry practices and any applicable generally accepted accounting practices or principles. In the absence of bad faith by the Indemnified Person, the resolution, action or term so made, taken or provided by the Indemnified Person shall not constitute a breach of this Declaration or any other agreement contemplated herein or of any duty or obligation of the Indemnified Person at law or in equity or otherwise; and (c) Whenever in this Declaration an Indemnified Person is permitted or required to make a decision: (i) in its "discretion" or under a grant of similar authority, the Indemnified Person shall be entitled to consider such interests and factors as it desires, including its own interests, and shall have no duty or obligation to give any consideration to any interest of or factors affecting the Trust or any other Person; or (ii) in its "good faith" or under another express standard, the Indemnified Person shall act under such express standard and shall not be subject to any other or different standard imposed by this Declaration or by applicable law. SECTION X.4 Indemnification and Compensation. -------------------------------- (a) (i) The Sponsor shall indemnify, to the fullest extent permitted by law, any Company Indemnified Person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Trust) by reason of the fact that he is or was a Company Indemnified Person against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Trust, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, 27 shall not, of itself, create a presumption that the Company Indemnified Person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Trust, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. (ii) The Sponsor shall indemnify, to the fullest extent permitted by law, any Company Indemnified Person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Trust to procure a judgment in its favor by reason of the fact that he is or was a Company Indemnified Person against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Trust and except that no such indemnification shall be made in respect of any claim, issue or matter as to which such Company Indemnified Person shall have been adjudged to be liable to the Trust unless and only to the extent that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such Court of Chancery or such other court shall deem proper. (iii) Any indemnification under paragraphs (i) and (ii) of this Section 10.4(a) (unless ordered by a court) shall be made by the Sponsor only as authorized in the specific case upon a determination that indemnification of the Company Indemnified Person is proper in the circumstances because he has met the applicable standard of conduct set forth in paragraphs (i) and (ii). Such determination shall be made (1) by the Regular Trustees by a majority vote of a quorum consisting of such Regular Trustees who were not parties to such action, suit or proceeding, (2) if such a quorum is not obtainable, or, even if obtainable, if a quorum of disinterested Regular Trustees so directs, by independent legal counsel in a written opinion or (3) by the Common Security Holder of the Trust. (iv) Expenses (including attorneys' fees) incurred by a Company Indemnified Person in defending a civil, criminal, administrative or investigative action, suit or proceeding referred to in paragraphs (i) and (ii) of this Section 10.4(a) shall be paid by the Sponsor in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such Company Indemnified Person to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Sponsor as authorized in this Section 10.4(a). Notwithstanding the foregoing, no advance shall be made by the Sponsor if a determination is reasonably and promptly made (i) by the Regular Trustees by a majority vote of a quorum of disinterested Regular Trustees, (ii) if such a quorum is not obtainable, or, even if obtainable, if a quorum of disinterested Regular Trustees so directs, by independent legal counsel in a written opinion or (iii) the Common Security Holder of the Trust, that, based upon the facts known to the Regular Trustees, counsel or the Common Security Holder at the time such determination is made, such Company Indemnified Person acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the Trust, or, with respect to any criminal proceeding, that such Company Indemnified Person believed or had reasonable cause to believe his conduct was unlawful. In no event shall any advance be made in instances where the Regular Trustees, independent legal counsel or Common Security Holder reasonably determine that such person deliberately breached his duty to the Trust or its Common or Preferred Security Holders. (v) The indemnification and advancement of expenses provided by, or granted pursuant to, the other paragraphs of this Section 10.4(a) shall not be deemed exclusive of any other rights to which those seeking indemnification and advancement of expenses may be entitled under any agreement, vote of stockholders or disinterested directors of the Debenture Issuer or Preferred Security Holders of the Trust or otherwise, both as to action in his official capacity 28 and as to action in another capacity while holding such office. All rights to indemnification under this Section 10.4(a) shall be deemed to be provided by a contract between the Debenture Issuer and each Company Indemnified Person who serves in such capacity at any time while this Section 10.4(a) is in effect. Any repeal or modification of this Section 10.4(a) shall not affect any rights or obligations then existing. (vi) The Debenture Issuer or the Trust may purchase and maintain insurance on behalf of any person who is or was a Company Indemnified Person against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Debenture Issuer would have the power to indemnify him against such liability under the provisions of this Section 10.4(a). (vii) For purposes of this Section 10.4(a), references to "the Trust" shall include, in addition to the resulting or surviving entity, any constituent entity (including any constituent of a constituent) absorbed in a consolidation or merger, so that any person who is or was a director, trustee, officer or employee of such constituent entity, or is or was serving at the request of such constituent entity as a director, trustee, member, partner, officer, employee or agent of another entity, shall stand in the same position under the provisions of this Section 10.4(a) with respect to the resulting or surviving entity as he would have with respect to such constituent entity if its separate existence had continued. (viii) The indemnification and advancement of expenses provided by, or granted pursuant to, this Section 10.4(a) shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a Company Indemnified Person and shall inure to the benefit of the heirs, executors and administrators of such a person. The obligation to indemnify as set forth in this Section 10.4(a) shall survive the satisfaction and discharge of this Declaration. (b) The Debenture Issuer agrees to indemnify the (i) Property Trustee, (ii) the Trust Company and the Delaware Trustee, (iii) any Affiliate of the Property Trustee, the Trust Company and the Delaware Trustee and (iv) any officers, directors, shareholders, members, partners, employees, representatives, custodians, nominees or agents of the Property Trustee, the Trust Company and the Delaware Trustee (each of the Persons in (i) through (iv) being referred to as a "Fiduciary Indemnified Person") for, and to hold each Fiduciary Indemnified Person harmless against, any loss, liability or expense incurred without negligence (or in the case of the Trust Company or the Delaware Trustee, gross negligence) or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder or the performance hereof or exercise of its rights hereunder, including the costs and expenses (including reasonable legal fees and expenses) of defending itself against or investigating any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. The obligation to indemnify as set forth in this Section 10.4(b) shall survive the satisfaction and discharge of this Declaration and the resignation or removal as Trustee of any Fiduciary Indemnified Person. (c) The Debenture Issuer shall pay to the Property Trustee from time to time such reasonable compensation for its services as the Company and the Property Trustee shall agree in writing from time to time. The Property Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Debenture Issuer agrees to indemnify and defend the Property Trustee, the Trust Company and the Delaware Trustee and their respective directors, officers, employees or agents for, and to hold each of them harmless against, any loss, liability or expense incurred without negligence (or in the case of the Trust Company or the Delaware Trustee, gross negligence) or bad faith on the part of the Property Trustee, the Trust Company, the Delaware Trustee or such other Person, as the case may be, arising out of or in connection with the acceptance or administration of the Trust or the performance hereof or exercise of rights hereunder, including the costs and expenses (including reasonable legal fees) of defending either of them against or investigating any claim or liability in connection with the exercise of performance of any of their respective powers or duties hereunder; the provisions of this Section 10.4(c) shall survive the resignation or removal of the Delaware Trustee or the Property Trustee or the termination of this Declaration. 29 SECTION X.5 Outside Businesses. Any Covered Person, the Sponsor, the ------------------ Trust Company, the Delaware Trustee, the Regular Trustees and the Property Trustee may engage in or possess an interest in other business ventures of any nature or description, independently or with others, similar or dissimilar to the business of the Trust, and the Trust and the Holders of Securities shall have no rights by virtue of this Declaration in and to such independent ventures or the income or profits derived therefrom, and the pursuit of any such venture, even if competitive with the business of the Trust, shall not be deemed wrongful or improper. No Covered Person, the Sponsor, the Trust Company, the Delaware Trustee, the Regular Trustees or the Property Trustee shall be obligated to present any particular investment or other opportunity to the Trust even if such opportunity is of a character that, if presented to the Trust, could be taken by the Trust, and any Covered Person, the Sponsor, the Trust Company, the Delaware Trustee, the Regular Trustees and the Property Trustee shall have the right to take for its own account (individually or as a partner or fiduciary) or to recommend to others any such particular investment or other opportunity. Any Covered Person, the Trust Company, the Delaware Trustee, the Regular Trustees and the Property Trustee may engage or be interested in any financial or other transaction with the Sponsor or any Affiliate of the Sponsor, or may act as depository for, trustee or agent for, or act on any committee or body of holders of, securities or other obligations of the Sponsor or its Affiliates. ARTICLE XI ACCOUNTING SECTION XI.1 Fiscal Year. The fiscal year ("Fiscal Year") of the Trust ----------- shall be the calendar year, or such other year as is required by the Code. SECTION XI.2 Certain Accounting Matters. -------------------------- (a) At all times during the existence of the Trust, the Regular Trustees shall keep, or cause to be kept, full books of account, records and supporting documents, which shall reflect in reasonable detail, each transaction of the Trust. The books of account shall be maintained on the accrual method of accounting, in accordance with generally accepted accounting principles. The Trust shall use the accrual method of accounting for United States federal income tax purposes. The books of account and the records of the Trust shall be examined by and reported upon as of the end of each Fiscal Year of the Trust by a firm of independent certified public accountants selected by the Regular Trustees. (b) The Regular Trustees shall cause to be duly prepared and delivered to each of the Holders of Securities, any annual United States federal income tax information statement, required by the Code, containing such information with regard to the Securities held by each Holder as is required by the Code and the Treasury Regulations. Notwithstanding any right under the Code to deliver any such statement at a later date, the Regular Trustees shall endeavor to deliver all such statements within 30 days after the end of each Fiscal Year of the Trust. (c) The Regular Trustees shall cause to be duly prepared and filed with the appropriate taxing authority, an annual United States federal income tax return, on a Form 1041 or such other form required by United States federal income tax law, and any other annual income tax returns required to be filed by the Regular Trustees on behalf of the Trust with any state or local taxing authority. SECTION XI.3 Banking. The Trust shall maintain one or more bank accounts ------- in the name and for the sole benefit of the Trust; provided, however, that all payments of funds in respect of the Debentures held by the Property Trustee shall be made directly to the Property Trustee Account and no other funds of the Trust shall be deposited in the Property Trustee Account. The sole signatories for such accounts shall be designated by the Regular Trustees; provided, however, that the Property Trustee shall designate the signatories for the Property Trustee Account. SECTION XI.4 Withholding. The Trust and the Regular Trustees shall ----------- comply with all withholding requirements under United States federal, state and local law. The Trust shall request, and the Holders shall provide to the Trust, such forms or certificates as are necessary to establish an exemption from withholding with respect to each Holder, and any representations and forms as shall reasonably be requested by the Trust to assist it in determining the extent of, and in fulfilling, its withholding obligations. The Regular Trustees shall file required forms with applicable jurisdictions and, unless an exemption from withholding is properly established by a Holder, shall remit amounts withheld with respect to the Holder to applicable jurisdictions. To the extent that the Trust is required to withhold and pay over any amounts to any authority with respect to distributions or allocations to any Holder, the amount withheld 30 shall be deemed to be a distribution in the amount of the withholding to the Holder. In the event of any claim over withholding, Holders shall be limited to an action against the applicable jurisdiction. If the amount required to be withheld was not withheld from actual Distributions made, the Trust may reduce subsequent Distributions by the amount of such withholding. To the extent the Property Trustee performs the functions provided for in this section, the Regular Trustees shall direct the Property Trustee in carrying out such functions. ARTICLE XII AMENDMENTS AND MEETINGS SECTION XII.1 Amendments. Except as otherwise provided in this ---------- Declaration or by any applicable terms of the Securities: (a) this Declaration may only be amended by: (i) a written instrument approved and executed by the Regular Trustees (or, if there are more than two Regular Trustees, a majority of the Regular Trustees); (ii) the Property Trustee if the amendment affects the rights, powers, duties, obligations or immunities of the Property Trustee; and (iii) the Person serving as Delaware Trustee if the amendment affects the rights, powers, duties, obligations, privileges, protections, benefits, indemnities or immunities of the Delaware Trustee or Trust Company; (b) no amendment shall be made, and any such purported amendment shall be void and ineffective: (i) unless, in the case of any proposed amendment, the Property Trustee shall have first received an Officers' Certificate from each of the Trust and the Sponsor that such amendment is permitted by, and conforms to, the terms of this Declaration (including the terms of the Securities); (ii) unless, in the case of any proposed amendment which affects the rights, powers, duties, obligations or immunities of the Property Trustee, the Property Trustee shall have first received: (A) an Officers' Certificate from each of the Trust and the Sponsor that such amendment is permitted by, and conforms to, the terms of this Declaration (including the terms of the Securities); and (B) an opinion of counsel (who may be counsel to the Sponsor or the Trust) that such amendment is permitted by, and conforms to, the terms of this Declaration (including the terms of the Securities); and (iii) to the extent the result of such amendment would be to: (A) cause the Trust to fail to continue to be classified for purposes of United States federal income taxation as a grantor trust; (B) reduce or otherwise adversely affect the powers of the Property Trustee in contravention of the Trust Indenture Act; (C) cause the Trust to be deemed to be an Investment Company required to be registered under the Investment Company Act; or (D) cause a Tax Event. 31 (c) subject to Section 12.1(g), at such time after the Trust has issued any Securities that remain outstanding, any amendment that would adversely affect the rights, privileges or preferences of any Holder of Securities may be effected only with such additional requirements as may be set forth in the terms of such Securities; (d) Section 9.1(c) and this Section 12.1 shall not be amended without the consent of all of the Holders of the Securities; (e) Article IV shall not be amended without the consent of the Holders of a Majority in Liquidation Amount of the Common Securities; (f) the rights of the Holders of the Common Securities under Article V to increase or decrease the number of, and appoint and remove Trustees shall not be amended without the consent of the Holders of a Majority in Liquidation Amount of the Common Securities; and (g) notwithstanding Section 12.1(c), this Declaration may be amended without the consent of the Holders of the Securities to: (i) cure any ambiguity; (ii) correct or supplement any provision in this Declaration that may be defective or inconsistent with any other provision of this Declaration; (iii) add to the covenants, restrictions or obligations of the Sponsor; (iv) to conform to any change in Rule 3a-5 or written change in interpretation or application of Rule 3a-5 by any legislative body, court, government agency or regulatory authority which amendment does not have a material adverse effect on the rights, preferences or privileges of the Holders; and (v) to modify, eliminate and add to any provision of this Declaration, provided such modification, elimination or addition would not adversely affect the rights, privileges or preferences of any Holder of the Securities. SECTION XII.2 Meetings of the Holders of Securities; Action by Written -------------------------------------------------------- Consent. - ------- (a) Meetings of the Holders of any class of Securities may be called at any time by the Regular Trustees (or as provided in the terms of the Securities) to consider and act on any matter on which Holders of such class of Securities are entitled to act under the terms of this Declaration, the terms of the Securities or the rules of any stock exchange on which the Preferred Securities are listed or admitted for trading. The Regular Trustees shall call a meeting of the Holders of such class if directed to do so by the Holders of at least 10% in Liquidation Amount of such class of Securities. Such direction shall be given by delivering to the Regular Trustees one or more calls in a writing stating that the signing Holders of Securities wish to call a meeting and indicating the general or specific purpose for which the meeting is to be called. Any Holders of Securities calling a meeting shall specify in writing the Certificates held by the Holders of Securities exercising the right to call a meeting and only those Securities specified shall be counted for purposes of determining whether the required percentage set forth in the second sentence of this paragraph has been met. (b) Except to the extent otherwise provided in the terms of the Securities, the following provisions shall apply to meetings of Holders of Securities: (i) notice of any such meeting shall be given to all the Holders of Securities having a right to vote thereat at least 7 days and not more than 60 days before the date of such meeting. Whenever a vote, consent or approval of the Holders of Securities is permitted or required under this Declaration or the rules of any stock exchange on which the Preferred Securities are listed or admitted for trading, such vote, consent or approval may be given at a meeting of the Holders of Securities. Any action that may be taken at a meeting of the Holders of 32 Securities may be taken without a meeting if a consent in writing setting forth the action so taken is signed by the Holders of Securities owning not less than the minimum amount of Securities in liquidation amount that would be necessary to authorize or take such action at a meeting at which all Holders of Securities having a right to vote thereon were present and voting. Prompt notice of the taking of action without a meeting shall be given to the Holders of Securities entitled to vote who have not consented in writing. The Regular Trustees may specify that any written ballot submitted to the Security Holders for the purpose of taking any action without a meeting shall be returned to the Trust within the time specified by the Regular Trustees; (ii) each Holder of a Security may authorize any Person to act for it by proxy on all matters in which a Holder of Securities is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting. No proxy shall be valid after the expiration of 11 months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the Holder of Securities executing such proxy. Except as otherwise provided herein, all matters relating to the giving, voting or validity of proxies shall be governed by the General Corporation Law of the State of Delaware relating to proxies, and judicial interpretations thereunder, as if the Trust were a Delaware corporation and the Holders of the Securities were stockholders of a Delaware corporation; (iii) each meeting of the Holders of the Securities shall be conducted by the Regular Trustees or by such other Person that the Regular Trustees may designate; and (iv) unless the Business Trust Act, this Declaration, the terms of the Securities, the Trust Indenture Act or the listing rules of any stock exchange on which the Preferred Securities are then listed for trading, otherwise provides, the Regular Trustees, in their sole discretion, shall establish all other provisions relating to meetings of Holders of Securities, including notice of the time, place or purpose of any meeting at which any matter is to be voted on by any Holders of Securities, waiver of any such notice, action by consent without a meeting, the establishment of a record date, quorum requirements, voting in person or by proxy or any other matter with respect to the exercise of any such right to vote. ARTICLE XIII REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE SECTION XIII.1 Representations and Warranties of the Property Trustee. ------------------------------------------------------ The Trustee that acts as initial Property Trustee represents and warrants to the Trust and to the Sponsor at the date of this Declaration, and each Successor Property Trustee represents and warrants to the Trust and the Sponsor at the time of the Successor Property Trustee's acceptance of its appointment as Property Trustee that: (a) the Property Trustee is a corporation, trust company or national banking association, duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with trust power and authority to execute and deliver, and to carry out and perform its obligations under the terms of, this Declaration; (b) the Property Trustee satisfies the requirements set forth in Section 5.3(a); (c) the execution, delivery and performance by the Property Trustee of this Declaration has been duly authorized by all necessary corporate action on the part of the Property Trustee. This Declaration has been duly executed and delivered by the Property Trustee, and it constitutes a legal, valid and binding obligation of the Property Trustee, enforceable against it in accordance with its terms, subject to applicable bankruptcy, reorganization, moratorium, insolvency and other similar laws affecting creditors' rights generally and to general principles of equity and the discretion of the court (regardless of whether the enforcement of such remedies is considered in a proceeding in equity or at law); 33 (d) the execution, delivery and performance of this Declaration by the Property Trustee does not conflict with or constitute a breach of the articles of association or incorporation, as the case may be, or the by-laws (or other similar organizational documents) of the Property Trustee; (e) no consent, approval or authorization of, or registration with or notice to, any Federal banking authority is required for the execution, delivery or performance by the Property Trustee of this Declaration. SECTION XIII.2 Representations and Warranties of the Delaware Trustee. ------------------------------------------------------ The Trustee that acts as initial Delaware Trustee represents and warrants to the Trust and to the Sponsor at the date of this Declaration, and each Successor Delaware Trustee represents and warrants to the Trust and the Sponsor at the time of the Successor Delaware Trustee's acceptance of its appointment as Delaware Trustee that: (a) the Delaware Trustee satisfies the requirements set forth in Section 5.2 and has the power and authority to execute and deliver, and to carry out and perform its obligations under the terms of, this Declaration and, if it is not a natural person, is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization; (b) the Delaware Trustee has been authorized to perform its obligations under the Certificate of Trust and this Declaration. This Declaration under Delaware law constitutes a legal, valid and binding obligation of the Delaware Trustee, enforceable against it in accordance with its terms, subject to applicable bankruptcy, reorganization, moratorium, insolvency and other similar laws affecting creditors' rights generally and to general principles of equity and the discretion of the court (regardless of whether the enforcement of such remedies is considered in a proceeding in equity or at law); and (c) no consent, approval or authorization of, or registration with or notice to, any State or Federal banking authority is required for the execution, delivery or performance by the Delaware Trustee of this Declaration. ARTICLE XIV MISCELLANEOUS SECTION XIV.1 Notices. All notices provided for in this Declaration ------- shall be in writing, duly signed by the party giving such notice, and shall be delivered, telecopied or mailed by registered or certified mail, as follows: (a) if given to the Trust, in care of the Regular Trustees at the Trust's mailing address set forth below (or such other address as the Trust may give notice of to the Property Trustee, the Delaware Trustee and the Holders of the Securities): Motorola Capital Trust I 1303 East Algonquin Road Schaumburg, Illinois 60196 Attention: General Counsel (b) if given to the Delaware Trustee, at the mailing address set forth below (or such other address as Delaware Trustee may give notice of to the Regular Trustees, the Property Trustee and the Holders of the Securities): First Union Trust Company, National Association One Rodney Square 920 King Street Wilmington, Delaware 19801 Attention: Corporate Trust Administration (c) if given to the Property Trustee, at its Corporate Trust Office (or such other address as the Property Trustee may give notice of to the Regular Trustees, the Delaware Trustee and the Holders of the Securities): 34 Harris Trust and Savings Bank 311 West Monroe Street 12th Floor Chicago, Illinois 60606 Attention: Corporate Trust Administration (d) if given to the Holder of the Common Securities, at the mailing address of the Sponsor set forth below (or such other address as the Holder of the Common Securities may give notice of to the Property Trustee, the Delaware Trustee and the Trust): Motorola, Inc. 1303 East Algonquin Road Schaumburg, Illinois 60196 Attention: General Counsel (e) if given to any other Holder, at the address set forth on the books and records of the Trust. All such notices shall be deemed to have been given when received in person, telecopied with receipt confirmed or mailed by first class mail, postage prepaid except that if a notice or other document is refused delivery or cannot be delivered because of a changed address of which no notice was given, such notice or other document shall be deemed to have been delivered on the date of such refusal or inability to deliver. SECTION XIV.2 Governing Law. This Declaration and the rights of the ------------- parties hereunder shall be governed by and interpreted in accordance with the laws of the State of Delaware and all rights and remedies shall be governed by such laws without regard to principles of conflict of laws. SECTION XIV.3 Intention of the Parties. It is the intention of the ------------------------ parties hereto that the Trust be classified for United States federal income tax purposes as a grantor trust. The provisions of this Declaration shall be interpreted to further this intention of the parties. SECTION XIV.4 Headings. Headings contained in this Declaration are -------- inserted for convenience of reference only and do not affect the interpretation of this Declaration or any provision hereof. SECTION XIV.5 Successors and Assigns. Whenever in this Declaration any ---------------------- of the parties hereto is named or referred to, the successors and assigns of such party shall be deemed to be included, and all covenants and agreements in this Declaration by the Sponsor and the Trustees shall bind and inure to the benefit of their respective successors and assigns, whether so expressed. SECTION XIV.6 Partial Enforceability. If any provision of this ---------------------- Declaration, or the application of such provision to any Person or circumstance, shall be held invalid, the remainder of this Declaration, or the application of such provision to persons or circumstances other than those to which it is held invalid, shall not be affected thereby. SECTION XIV.7 Counterparts. This Declaration may contain more than one ------------ counterpart of the signature page and this Declaration may be executed by the affixing of the signature of each of the Trustees to one of such counterpart signature pages. All of such counterpart signature pages shall be read as though one, and they shall have the same force and effect as though all of the signers had signed a single signature page. * * * * * 35 IN WITNESS WHEREOF, the undersigned have caused this Amended and Restated Declaration of Trust to be executed as of the day and year first above written. MOTOROLA, INC., as Sponsor and Debenture Issuer By: /s/ Garth L. Milne ------------------ Name: Garth L. Milne Title: Senior Vice President and Treasurer HARRIS TRUST AND SAVINGS BANK, as Property Trustee By: /s/ C. Potter ------------- Name: C. Potter Title: Assistant Vice President FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION, as Delaware Trustee By: /s/ Edward L. Truitt, Jr. ------------------------ Name: Edward L. Truitt, Jr. Title: Vice President /s/ Carl F. Koenemann --------------------- Carl F. Koenemann, as Regular Trustee /s/ Garth L. Milne ------------------ Garth L. Milne, as Regular Trustee ANNEX I TERMS OF 6.68% TRUST ORIGINATED PREFERRED SECURITIES 6.68% TRUST ORIGINATED COMMON SECURITIES Pursuant to Section 7.1 of the Amended and Restated Declaration of Trust, dated as of February 3, 1999 (as amended from time to time, the "Declaration"), the designation, rights, privileges, restrictions, preferences and other terms and provisions of the Preferred Securities and Common Securities are set forth below (each capitalized term used but not defined herein having the meaning set forth in the Declaration or, if not defined in the Declaration, as defined in the Prospectus referred to below): 1. Designation and Number. ---------------------- (a) PREFERRED SECURITIES. Up to 20,000,000 Preferred Securities of the Trust with an aggregate liquidation amount with respect to the assets of the Trust of up to Five Hundred Million Dollars ($500,000,000) and a liquidation amount with respect to the assets of the Trust of $25 per Preferred Security, are hereby designated for the 36 purposes of identification only as "6.68% Trust Originated Preferred SecuritiesSM (TOPrSSM)" (the "Preferred Securities"). The Preferred Security Certificates evidencing the Preferred Securities shall be substantially in the form of Exhibit A-1 to the Declaration, with such changes and additions thereto or deletions therefrom as may be required by ordinary usage, custom or practice or to conform to the rules of any stock exchange on which the Preferred Securities are listed. (b) COMMON SECURITIES. Up to 618,557 Common Securities of the Trust with an aggregate liquidation amount with respect to the assets of the Trust of up to Fifteen Million Four Hundred Sixty-Three Thousand Nine Hundred Twenty-Five Dollars ($15,463,925) and a liquidation amount with respect to the assets of the Trust of $25 per Common Security, are hereby designated for the purposes of identification only as "6.68% Trust Originated Common Securities" (the "Common Securities"). The Common Security Certificates evidencing the Common Securities shall be substantially in the form of Exhibit A-2 to the Declaration, with such changes and additions thereto or deletions therefrom as may be required by ordinary usage, custom or practice. 2. Distributions. ------------- (a) Distributions payable on each Security will be fixed at a rate per annum of 6.68% (the "Coupon Rate") of the stated liquidation amount of $25 per Security, such rate being the rate of interest payable on the Debentures to be held by the Property Trustee. Distributions in arrears will bear interest thereon from and including the last day of such quarter at the Coupon Rate compounded quarterly (to the extent permitted by applicable law). The term "Distributions" as used herein includes such cash distributions and any such interest payable unless otherwise stated. A Distribution is payable only to the extent that payments are made in respect of the Debentures held by the Property Trustee and to the extent the Property Trustee has funds available therefor. The amount of Distributions payable for any period will be computed for any full quarterly Distribution period on the basis of a 360-day year of twelve 30-day months, and for any period shorter than a full quarterly Distribution period for which Distributions are computed, Distributions will be computed on the basis of the actual number of days elapsed per 90-day quarter. (b) Distributions on the Securities will be cumulative, will accrue from February 3, 1999, and will be payable quarterly in arrears, on March 31, June 30, September 30 and December 31 of each year, commencing on March 31, 1999, except as otherwise described below. The Debenture Issuer has the right under the Indenture to defer payments of interest on the Debentures by extending the interest payment period at any time and from time to time for a period not exceeding 20 consecutive quarters (each such period, an "Extension Period"), during which Extension Period no interest shall be due and payable on the Debentures, provided that no Extension Period shall last beyond the date of maturity of the Debentures. As a consequence of such deferral, Distributions will also be deferred. Despite such deferral, quarterly Distributions will continue to accrue with interest thereon (to the extent permitted by applicable law) at the Coupon Rate compounded quarterly during any such Extension Period. Prior to the termination of any such Extension Period, the Debenture Issuer may further extend such Extension Period, provided that such Extension Period, together with all such previous and further extensions thereof, may not exceed 20 consecutive quarters and may not extend beyond the date of maturity of the Debentures. Payments of deferred Distributions will be payable to Holders of record of the Securities as they appear on the books and records of the Trust on the record date for Distributions due at the end of such Extension Period. Upon the termination of any Extension Period and the payment of all amounts then due, the Debenture Issuer may commence a new Extension Period, subject to the above requirements. (c) Distributions on the Securities will be payable to the Holders thereof as they appear on the books and records of the Trust on the relevant record dates. While the Preferred Securities remain in global form, the relevant record dates shall be one Business Day prior to the relevant payment dates which payment dates correspond to the interest payment dates on the Debentures. Subject to any applicable laws and regulations and the provisions of the Declaration, each such payment in respect of the Preferred Securities will be made as described under the heading "Description of the Preferred Securities -- Book-Entry Issuance -- The Depository Trust Company" in the Prospectus dated January 29, 1999 (the "Prospectus") included in the Registration Statement on Form S-3 of the Sponsor and the Trust. The relevant record dates for the Common Securities shall be the same record date as for the Preferred Securities. If the Preferred Securities shall not continue to remain in global form, the relevant record dates for the Preferred Securities shall conform to the rules of any securities exchange on which the Preferred Securities are listed and, if none, shall be selected by the Regular Trustees, which dates shall be at least ten Business Days but less than 60 Business Days before the relevant payment dates, which payment dates correspond to the interest payment dates on the Debentures. 37 Distributions payable on any Securities that are not punctually paid on any Distribution payment date, as a result of the Debenture Issuer having failed to make a payment under the Debentures, will cease to be payable to the Person in whose name such Securities are registered on the relevant record date, and such defaulted Distribution will instead be payable to the Person in whose name such Securities are registered on the special record date or other specified date determined in accordance with the Indenture. If any date on which Distributions are payable on the Securities is not a Business Day, then payment of the Distribution payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day is in then next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date. (d) In the event that there is any money or other property held by or for the Trust that is not accounted for hereunder, such property shall be distributed Pro Rata (as defined herein) among the Holders of the Securities. 3. Liquidation Distribution Upon Dissolution. ----------------------------------------- (a) In the event of any voluntary or involuntary liquidation, dissolution, winding-up or termination of the Trust, the Holders of the Securities on the date of the liquidation, dissolution, winding-up or termination, as the case may be, will be entitled to receive solely out of the assets of the Trust available for distribution to Holders of Securities, after satisfaction of all claims and obligations of the Trust in accordance with Section 3808(e) of the Business Trust Act, an amount equal to the aggregate of the stated liquidation amount of $25 per Security plus accrued and unpaid Distributions thereon to the date of payment (such amount being the "Liquidation Distribution"), unless, in connection with such liquidation, dissolution, winding-up or termination, Debentures in an aggregate principal amount equal to the aggregate stated liquidation amount of such Securities, with an interest rate equal to the Coupon Rate of, and bearing accrued and unpaid interest in an amount equal to the accrued and unpaid Distributions on, such Securities, shall be distributed on a Pro Rata basis to the Holders of the Securities in exchange for such Securities in accordance with Section 4(e) hereof. (b) If, upon any such dissolution, the Liquidation Distribution can be paid only in part because the Trust has insufficient assets available to pay in full the aggregate Liquidation Distribution, then the amounts payable directly by the Trust on the Securities shall be paid on a Pro Rata basis. 4. Redemption and Distribution. --------------------------- (a) Upon the repayment of the Debentures in whole or in part, whether at maturity or upon acceleration, redemption (such redemption being either at the option of the Debenture Issuer on or after February 3, 2004 or at the option of the Debenture Issuer in connection with the occurrence of a Special Event as described below) or otherwise, the proceeds from such repayment or redemption shall be simultaneously applied to redeem Securities having an aggregate liquidation amount equal to the aggregate principal amount of the Debentures so repaid or redeemed at a redemption price of $25 per Security plus an amount equal to accrued and unpaid Distributions thereon at the date of the redemption, payable in cash (the "Redemption Price"). Holders will be given not less than 30 nor more than 60 days notice of such redemption, except in the case of payments upon maturity. (b) If fewer than all the outstanding Securities are to be so redeemed, the Common Securities and the Preferred Securities will be redeemed Pro Rata and the Preferred Securities to be redeemed will be as described in Section 4(f)(ii) below. (c) If, at any time, a Tax Event or an Investment Company Event (each as defined below, and each a "Special Event") shall occur and be continuing, the Debenture Issuer shall have the right, upon not less than 30 nor more than 60 days notice, to redeem the Debentures in whole or in part for cash within 90 days following the occurrence of such Special Event, and, following such redemption, Securities with an aggregate liquidation amount equal to the aggregate principal amount of the Debentures so redeemed shall be redeemed by the Trust at the Redemption Price on a Pro Rata basis in accordance with Section 8 hereof. The Common Securities will be redeemed Pro Rata with the Preferred Securities, except that if an Event of Default has occurred and is continuing, the Preferred Securities will have priority over the Common Securities with respect to payment of the Redemption Price. 38 "Tax Event" means that the Regular Trustees shall have received an opinion of an independent tax counsel experienced in such matters to the effect that, as a result of (i) any amendment to, or change (including any announced prospective change) in, the laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein, or (ii) any official administrative pronouncement or judicial decision interpreting or applying such laws or regulations, which amendment or change is effective or such pronouncement or decision is announced on or after the date of original issuance of the Preferred Securities, there is more than an insubstantial risk that (A) the Trust is, or will be within 90 days after the date thereof, subject to United States federal income tax with respect to interest accrued or received on the Debentures, (B) the Trust is, or will be within 90 days after the date thereof, subject to more than a de minimis amount of taxes, duties or other governmental charges or (C) interest payable by the Debenture Issuer to the Trust on the Debentures is not, or within 90 days of the date thereof, will not be deductible, in whole or in part, by the Debenture Issuer for United States federal income tax purposes. "Investment Company Event" means that the Regular Trustees shall have received an opinion of an independent counsel experienced in practice under the Investment Company Act to the effect that, as a result of the occurrence of a change in law or regulation or a change in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority(a "Change in 1940 Act Law"), there is a more than an insubstantial risk that the Trust is or will be considered an "investment company" which is required to be registered under the Investment Company Act, which Change in 1940 Act Law becomes effective on or after the date of original issuance of the Preferred Securities. (d) The Trust may not redeem fewer than all the outstanding Securities unless all accrued and unpaid Distributions have been paid on all Securities for all quarterly Distribution periods terminating on or before the date of redemption. (e) In the event that the Sponsor makes the election referred to in Section 8.1(a)(v) of the Declaration, the Regular Trustees shall dissolve the Trust and, after satisfaction of creditors, cause Debentures, held by the Property Trustee, having an aggregate principal amount equal to the aggregate stated liquidation amount of, with an interest rate identical to the Coupon Rate of, and accrued and unpaid interest equal to accrued and unpaid Distributions on and having the same record date for payment, as the Securities, to be distributed to the Holders of the Securities in liquidation of such Holders' interests in the Trust on a Pro Rata basis in accordance with Section 8 hereof. On and from the date fixed by the Regular Trustees for any distribution of Debentures and dissolution of the Trust: (i) the Securities will no longer be deemed to be outstanding and (ii) the Clearing Agency or its nominee (or any successor Clearing Agency or its nominee) will receive one or more global certificate or certificates representing the Debentures to be delivered upon such distribution, and having an aggregate principal amount equal to the aggregated stated liquidation amount of, with an interest rate identical to the Coupon Rate of, and accrued and unpaid interest equal to accrued and unpaid Distributions on such Securities. Any certificates representing Securities, except for certificates representing Preferred Securities held by the Clearing Agency or its nominee (or any successor Clearing Agency or its nominee), will be deemed to represent beneficial interests in the Debentures having an aggregate principal amount equal to the aggregated stated liquidation amount of, with an interest rate identical to the Coupon Rate of, and accrued and unpaid interest equal to accrued and unpaid Distributions on such Securities until such certificates are presented to the Debenture Issuer or its agent for transfer or reissue. If the Debentures are distributed to Holders of the Securities, pursuant to the terms of the Indenture, the Debenture Issuer will use its best efforts to have the Debentures listed on the New York Stock Exchange or on such other exchange as the Preferred Securities were listed immediately prior to the distribution of the Debentures. (f) Redemption or Distribution Procedures. ------------------------------------- (i) Notice of any redemption of, or notice of distribution of Debentures in exchange for, the Securities (a "Redemption/Distribution Notice") will be given by the Trust by mail to each Holder of Securities to be redeemed or exchanged not fewer than 30 nor more than 60 days before the date fixed for redemption or exchange thereof which, in the case of a redemption, will be the date fixed for redemption of the Debentures. For purposes of the calculation of the date of redemption or exchange and the dates on which notices are given pursuant to this Section 4(f)(i), a Redemption/Distribution Notice shall be deemed to be given on the day such notice is first mailed by first-class mail, postage prepaid, to Holders of Securities. Each Redemption/Distribution Notice shall be addressed to the Holders of Securities at the address 39 of each such Holder appearing in the books and records of the Trust. No defect in the Redemption/Distribution Notice or in the mailing of either thereof with respect to any Holder shall affect the validity of the redemption or exchange proceedings with respect to any other Holder. (ii) In the event that fewer than all the outstanding Securities are to be redeemed, the Preferred Securities to be redeemed shall be redeemed Pro Rata from each Holder of Preferred Securities, it being understood that, in respect of Preferred Securities registered in the name of and held of record by the Clearing Agency or its nominee (or any successor Clearing Agency or its nominee), the distribution of the proceeds of such redemption will be made to each Clearing Agency Participant (or Person on whose behalf such nominee holds such securities) in accordance with the procedures applied by such agency or nominee. (iii) If Securities are to be redeemed and the Trust gives a Redemption/Distribution Notice (which notice will be irrevocable), then (A) while the Preferred Securities are in global form, with respect to the Preferred Securities, by 12:00 noon, New York City time, on the redemption date, provided that the Debenture Issuer has paid the Property Trustee a sufficient amount of cash in connection with the related redemption or maturity of the Debentures, the Property Trustee will deposit irrevocably with the Clearing Agency or its nominee (or successor Clearing Agency or its nominee) funds sufficient to pay the applicable Redemption Price with respect to the Preferred Securities and will give the Clearing Agency irrevocable instructions and authority to pay the Redemption Price to the Holders of the Preferred Securities, and (B) with respect to Preferred Securities issued in definitive form and Common Securities, provided that the Debenture Issuer has paid the Property Trustee a sufficient amount of cash in connection with the related redemption or maturity of the Debentures, the Property Trustee will pay the relevant Redemption Price to the Holders of such Securities by check mailed to the address of the relevant Holder appearing on the books and records of the Trust on the redemption date. If a Redemption/Distribution Notice shall have been given and funds deposited as required, then immediately prior to the close of business on the date of such deposit, Distributions will cease to accrue on the Securities so called for redemption and all rights of Holders of such Securities so called for redemption will cease, except the right of the Holders of such Securities to receive the Redemption Price, but without interest on such Redemption Price. Neither the Regular Trustees nor the Trust shall be required to register or cause to be registered the transfer of any Securities that have been so called for redemption. If any date fixed for redemption of Securities is not a Business Day, then payment of the Redemption Price payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day falls in the next calendar year, such payment will be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date fixed for redemption. If the Debenture Issuer fails to repay the Debentures on the date of redemption or on maturity or if payment of the Redemption Price in respect of any Securities is improperly withheld or refused and not paid either by the Property Trustee or by the Sponsor as guarantor pursuant to the relevant Securities Guarantee, Distributions on such Securities will continue to accrue at the then applicable rate from the original redemption date to the actual date of payment, in which case the actual payment date will be considered the date fixed for redemption for purposes of calculating the Redemption Price. (iv) Redemption/Distribution Notices shall be sent by the Regular Trustees on behalf of the Trust to (A) in respect of the Preferred Securities, the Clearing Agency or its nominee (or any successor Clearing Agency or its nominee) if the Global Certificates have been issued or, if Definitive Preferred Security Certificates have been issued, to the Holders thereof, and (B) in respect of the Common Securities to the Holder thereof. 40 (v) Subject to the foregoing and applicable law (including, without limitation, United States federal securities laws), the Sponsor or any of its subsidiaries may at any time and from time to time purchase outstanding Preferred Securities by tender offer, in the open market or by private agreement. 5. Voting Rights - Preferred Securities. ------------------------------------ (a) Except as provided under Sections 5(b) and 7 and as otherwise required by law and the Declaration, the Holders of the Preferred Securities will have no voting rights. (b) Subject to the requirements set forth in this paragraph, the Holders of a Majority in Liquidation Amount of the Preferred Securities, voting separately as a class, may direct the time, method and place of conducting any proceeding for any remedy available to the Property Trustee, or direct the exercise of any trust or power conferred upon the Property Trustee under the Declaration, including the right to direct the Property Trustee, as Holder of the Debentures, to: (i) exercise the remedies available under the Indenture with respect to the Debentures; (ii) waive any past default and its consequences that is waivable under the Indenture; or (iii) exercise any right to rescind or annul a declaration that the principal of all the Debentures shall be due and payable, or consent to any amendment, modification or termination of the Indenture or the Debentures, where such consent would be required; provided that where a consent or action under the Indenture would require the consent or act of the Holders of greater than a majority in principal amount of Debentures affected thereby (a "Super Majority"), the Property Trustee may only give such consent or take such action at the written direction of the Holders of at least the proportion in liquidation amount of the Preferred Securities which the relevant Super Majority represents of the aggregate principal amount of the Debentures outstanding. The Property Trustee shall not revoke any action previously authorized or approved by a vote of the Holders of the Preferred Securities. Other than with respect to directing the time, method and place of conducting a proceeding for any remedy available to the Property Trustee or the Debenture Trustee as set forth above, the Property Trustee shall not take any action in accordance with the directions of the Holders of the Preferred Securities under this paragraph unless the Property Trustee has obtained an opinion of tax counsel to the effect that for the purposes of United States federal income tax the Trust will not be classified as other than a grantor trust on account of such action. If the Property Trustee fails to enforce its rights with respect to the Debentures held by the Trust to the fullest extent permitted by law, any Holder of the outstanding Preferred Securities may, to the extent permitted by applicable law, institute legal proceedings directly against the Debenture Issuer to enforce the Property Trustee's rights under the Debentures without first instituting any legal proceedings against the Property Trustee or any other person or entity. Notwithstanding the foregoing, if an Event of Default under the Declaration has occurred and is continuing and such event is attributable to the failure of the Debenture Issuer to pay interest or principal on the Debentures issued to the Trust on the date such interest or principal is otherwise payable, then a Holder of Preferred Securities may institute a proceeding directly against the Debenture Issuer for enforcement of payment to the Holder of the Preferred Securities of the principal of or interest on the Debentures on or after the respective due dates specified in the Debentures, and the amount of the payment will be based on the Holder's pro rata share of the amount due and owing on all of the Preferred Securities. Any approval or direction of Holders of Preferred Securities may be given at a separate meeting of Holders of Preferred Securities convened for such purpose, at a meeting of all of the Holders of Securities in the Trust or pursuant to written consent. The Regular Trustees will cause a notice of any meeting at which Holders of Preferred Securities are entitled to vote, or of any matter upon which action by written consent of such Holders is to be taken, to be mailed to each Holder of Preferred Securities. Each such notice will include a statement setting forth (i) the date of such meeting or the date by which such action is to be taken, (ii) a description of any resolution proposed for adoption at such meeting on which such Holders are entitled to vote or of such matter upon which written consent is sought and (iii) instructions for the delivery of proxies or consents. No vote or consent of the Holders of the Preferred Securities will be required for the Trust to redeem and cancel Preferred Securities or to distribute the Debentures in accordance with the Declaration and the terms of the Securities. Notwithstanding that Holders of Preferred Securities are entitled to vote or consent under any of the circumstances described above, any of the Preferred Securities that are owned by the Sponsor or any Affiliate of the Sponsor shall not be entitled to vote or consent and shall, for purposes of such vote or consent, be treated as if they were not outstanding. 41 6. Voting Rights - Common Securities. --------------------------------- (a) Except as provided under Sections 6(b) and (c) and as otherwise required by law and the Declaration, the Holders of the Common Securities will have no voting rights. (b) The Holders of the Common Securities are entitled, in accordance with Article V of the Declaration, to vote to appoint, remove or replace any Trustee or to increase or decrease the number of Trustees. (c) Subject to Section 2.6 of the Declaration and only after any Event of Default with respect to the Preferred Securities has been cured, waived or otherwise eliminated and subject to the requirements set forth in this paragraph, the Holders of a Majority in Liquidation Amount of the Common Securities, voting separately as a class, may direct the time, method and place of conducting any proceeding for any remedy available to the Property Trustee, or direct the exercise of any trust or power conferred upon the Property Trustee under the Declaration, including the right to direct the Property Trustee, as Holder of the Debentures, to: (i) exercise the remedies available under the Indenture with respect to the Debentures; (ii) waive any past default and its consequences that is waivable under the Indenture; or (iii) exercise any right to rescind or annul a declaration that the principal of all the Debentures shall be due and payable, or consent to any amendment, modification or termination of the Indenture or the Debentures, where such consent would be required; provided that, where a consent or action under the Indenture would require the consent or act of a Super Majority of the Holders of the Debentures affected thereby, the Property Trustee may only give such consent or take such action at the written direction of the Holders of at least the proportion in liquidation amount of the Common Securities which the relevant Super Majority represents of the aggregate principal amount of the Debentures outstanding. The Property Trustee shall not revoke any action previously authorized or approved by a vote of the Holders of the Common Securities. Other than with respect to directing the time, method and place of conducting a proceeding for any remedy available to the Property Trustee or the Debenture Trustee as set forth above, the Property Trustee shall not take any action in accordance with the directions of the Holders of the Common Securities under this paragraph unless the Property Trustee has obtained an opinion of tax counsel to the effect that for the purposes of United States federal income tax the Trust will not be classified as other than a grantor trust on account of such action. If the Property Trustee fails to enforce its rights with respect to the Debentures held by the Trust, any Holder of Common Securities may, to the extent permitted by applicable law, institute legal proceedings directly against the Debenture Issuer to enforce the Property Trustee's rights under the Debentures without first instituting any legal proceedings against the Property Trustee or any other person or entity. Notwithstanding the foregoing, if an Event of Default under the Declaration has occurred and is continuing and such event is attributable to the failure of the Debenture Issuer to pay interest or principal on the Debentures issued to the Trust on the date such interest or principal is otherwise payable, then a Holder of Common Securities may institute a proceeding directly against the Debenture Issuer for enforcement of payment to the Holder of the Common Securities of the principal of or interest on the Debentures on or after the respective due dates specified in the Debentures, and the amount of the payment will be based on the Holder's pro rata share of the amount due and owing on all of the Common Securities. Any approval or direction of Holders of Common Securities may be given at a separate meeting of Holders of Common Securities convened for such purpose, at a meeting of all of the Holders of Securities in the Trust or pursuant to written consent. The Regular Trustees will cause a notice of any meeting at which Holders of Common Securities are entitled to vote, or of any matter upon which action by written consent of such Holders is to be taken, to be mailed to each Holder of Common Securities. Each such notice will include a statement setting forth: (i) the date of such meeting or the date by which such action is to be taken; (ii) a description of any resolution proposed for adoption at such meeting on which such Holders are entitled to vote or of such matter upon which written consent is sought; and (iii) instructions for the delivery of proxies or consents. No vote or consent of the Holders of the Common Securities will be required for the Trust to redeem and cancel Common Securities or to distribute the Debentures in accordance with the Declaration and the terms of the Securities. 7. Amendments to Declaration and Indenture. --------------------------------------- 42 (a) In addition to any requirements under Section 12.1 of the Declaration, if any proposed amendment to the Declaration provides for, or the Regular Trustees otherwise propose to effect, (i) any action that would adversely affect the powers, preferences or special rights of the Securities, whether by way of amendment to the Declaration or otherwise, or (ii) the dissolution, winding-up or termination of the Trust, other than as described in Section 8.1 of the Declaration, then the Holders of outstanding Securities voting together as a single class will be entitled to vote on such amendment or proposal (but not on any other amendment or proposal) and such amendment or proposal shall not be effective except with the approval of the Holders of at least a Majority in Liquidation Amount of the Securities affected thereby, voting together as a single class; provided, however, if any amendment or proposal referred to in clause (i) above would adversely affect only the Preferred Securities or only the Common Securities, then only the affected class will be entitled to vote on such amendment or proposal and such amendment or proposal shall not be effective except with the approval of a Majority in Liquidation Amount of such class of Securities. (b) In the event the consent of the Property Trustee as the holder of the Debentures is required under the Indenture with respect to any amendment, modification or termination of the Indenture or the Debentures, the Property Trustee shall request the written direction of the Holders of the Securities with respect to such amendment, modification or termination and shall vote with respect to such amendment, modification or termination as directed by a Majority in Liquidation Amount of the Securities voting together as a single class; provided, however, that where a consent under the Indenture would require the consent of a Super Majority of the Holders of the Debentures, the Property Trustee may only give such consent at the direction of the Holders of at least the proportion in liquidation amount of the Securities which the relevant Super Majority represents of the aggregate principal amount of the Debentures outstanding; provided, further, that the Property Trustee shall not take any action in accordance with the directions of the Holders of the Securities under this Section 7(b) unless the Property Trustee has obtained an opinion of tax counsel to the effect that for the purposes of United States federal income tax the Trust will not be classified as other than a grantor trust on account of such action. 8. Pro Rata. -------- A reference in these terms of the Securities to any payment, distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder of Securities according to the aggregate liquidation amount of the Securities held by the relevant Holder in relation to the aggregate liquidation amount of all Securities outstanding unless, in relation to a payment, an Event of Default under the Declaration has occurred and is continuing, in which case any funds available to make such payment shall be paid first to each Holder of the Preferred Securities pro rata according to the aggregate liquidation amount of Preferred Securities held by the relevant Holder relative to the aggregate liquidation amount of all Preferred Securities outstanding, and only after satisfaction of all amounts owed to the Holders of the Preferred Securities, to each Holder of Common Securities pro rata according to the aggregate liquidation amount of Common Securities held by the relevant Holder relative to the aggregate liquidation amount of all Common Securities outstanding. When the Property Trustee is making payments on the Securities, it is entitled to assume that no Event of Default has occurred and is continuing unless the Event of Default is actually known to a Responsible Officer of the Property Trustee. 9. Ranking. ------- The Preferred Securities rank pari passu and payment thereon shall be made Pro Rata with the Common Securities except that, where an Event of Default occurs and is continuing under the Indenture in respect of the Debentures held by the Property Trustee, the rights of Holders of the Common Securities to payment in respect of Distributions and payments upon liquidation, redemption and otherwise are subordinated to the rights to payment of the Holders of the Preferred Securities. 10. Listing. ------- The Regular Trustees shall use their best efforts to cause the Preferred Securities to be listed for quotation on The New York Stock Exchange, Inc. 11. Acceptance of Securities Guarantee and Indenture. ------------------------------------------------ 43 Each Holder of Preferred Securities and Common Securities, by the acceptance thereof, agrees to the provisions of the Preferred Securities Guarantee, including the subordination provisions therein and to the provisions of the Indenture and the Debentures. 12. No Preemptive Rights. -------------------- The Holders of the Securities shall have no preemptive rights to subscribe for any additional securities. 13. Miscellaneous. ------------- These terms constitute a part of the Declaration. The Sponsor will provide a copy of the Declaration, the Preferred Securities Guarantee and the Indenture to a Holder without charge on written request to the Sponsor at its principal place of business. 44 EXHIBIT A-1 FORM OF PREFERRED SECURITY CERTIFICATE This Preferred Security Certificate is a Global Certificate within the meaning of the Declaration hereinafter referred to and is registered in the name of The Depository Trust Company (the "Depository") or a nominee of the Depository. This Preferred Security Certificate is exchangeable for Preferred Securities registered in the name of a person other than the Depository or its nominee only in the limited circumstances described in the Declaration and no transfer of this Preferred Security Certificate (other than a transfer of this Preferred Security Certificate as a whole by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository) may be registered except in limited circumstances. Unless this Preferred Security Certificate is presented by an authorized representative of the Depository to the Trust or its agent for registration of transfer, exchange or payment, and any Preferred Security Certificate issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of the Depository (and any payment hereon is made to Cede & Co. or to such other entity as is requested by an authorized representative of the Depository), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein. Certificate Number Number of Preferred Securities - -1- -20,000,000- CUSIP NO. [________] Certificate Evidencing Preferred Securities of MOTOROLA CAPITAL TRUST I 6.68% Trust Originated Preferred Securities(SM) ("TOPrS"(SM)) (liquidation amount $25 per Preferred Security) MOTOROLA CAPITAL TRUST I, a statutory business trust formed under the laws of the State of Delaware (the "Trust"), hereby certifies that Cede & Co. (the "Holder") is the registered owner of Twenty Million (20,000,000) preferred securities of the Trust representing undivided beneficial interests in the assets of the Trust designated the 6.68% Trust Originated Preferred SecuritiesSM (liquidation amount $25 per Preferred Security) (the "Preferred Securities"). The Preferred Securities are transferable on the books and records of the Trust, in person or by a duly authorized attorney, upon surrender of this certificate duly endorsed and in proper form for transfer. The designation, rights, privileges, restrictions, preferences and other terms and provisions of the Preferred Securities represented hereby are issued and shall in all respects be subject to the provisions of the Amended and Restated Declaration of Trust of the Trust dated as of February 3, 1999, as the same may be amended from time to time (the "Declaration"), including the designation of the terms of the Preferred Securities as set forth in Annex I to the Declaration. Capitalized terms used herein but not defined herein shall have the respective meanings given them in the Declaration. The Holder is entitled to the benefits of the Preferred Securities Guarantee to the extent provided therein. The Sponsor will provide a copy of the Declaration, the Preferred Securities Guarantee and the Indenture to the Holder without charge upon written request to the Sponsor at its principal place of business. Upon receipt of this certificate, the Holder is bound by the Declaration and is entitled to the benefits thereunder. By acceptance, the Holder agrees to treat, for United States federal income tax purposes, the Debentures as indebtedness and the Preferred Securities as evidence of indirect beneficial ownership in the Debentures. 45 IN WITNESS WHEREOF, the Trust has executed this certificate this ____ day of _____________, 1999. MOTOROLA CAPITAL TRUST I By:___________________________________ Name: Title: Distributions payable on each Preferred Security will be fixed at a rate per annum of 6.68% (the "Coupon Rate") of the stated liquidation amount of $25 per Preferred Security, such rate being the rate of interest payable on the Debentures to be held by the Property Trustee. Distributions in arrears for more than one quarter will bear interest thereon compounded quarterly at the Coupon Rate (to the extent permitted by applicable law). The term "Distributions" as used herein includes such cash distributions and any such interest payable unless otherwise stated. A Distribution is payable only to the extent that payments are made in respect of the Debentures held by the Property Trustee and to the extent the Property Trustee has funds available therefor. The amount of Distributions payable for any period will be computed for any full quarterly Distribution period on the basis of a 360-day year of twelve 30-day months, and for any period shorter than a full quarterly Distribution period for which Distributions are computed, Distributions will be computed on the basis of the actual number of days elapsed per 90-day quarter. Except as otherwise described below, distributions on the Preferred Securities will be cumulative, will accrue from the date of original issuance and will be payable quarterly in arrears, on March 31, June 30, September 30 and December 31 of each year, commencing on March 31, 1999, which payment dates shall correspond to the interest payment dates on the Debentures. The Debenture Issuer has the right under the Indenture to defer payments of interest by extending the interest payment period from time to time on the Debentures for a period not exceeding 20 consecutive quarters or extending beyond the Maturity Date of the Debentures (each, an "Extension Period") and, as a consequence of any such deferral, Distributions will also be deferred. Despite such deferral, quarterly Distributions will continue to accrue with interest thereon (to the extent permitted by applicable law) at the Coupon Rate compounded quarterly during any such Extension Period. Prior to the termination of any such Extension Period, the Debenture Issuer may further extend such Extension Period; provided that such Extension Period together with all such previous and further extensions thereof may not exceed 20 consecutive quarters and may not extend beyond the Maturity Date of the Debentures. Payments of accrued Distributions will be payable to Holders as they appear on the books and records of the Trust on the record date after the end of the Extension Period. Upon the termination of any Extension Period and the payment of all amounts then due, the Debenture Issuer may commence a new Extension Period, subject to the above requirements. The Preferred Securities shall be redeemable as provided in the Declaration. ASSIGNMENT FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred Security Certificate to: ________________________________________________________________________________ ________________________________________________________________________________ (Insert assignee's social security or tax identification number) ________________________________________________________________________________ ________________________________________________________________________________ (Insert address and zip code of assignee) and irrevocably appoints________________________________________________________ ________________________________________________________________________________ agent to transfer this Preferred Security Certificate on the books of the Trust. The agent may substitute another to act for him or her. 46 Date:________________ Signature:_____________________ (Sign exactly as your name appears on the other side of this Preferred Security Certificate) 47 EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE Certificate Number Number of Common Securities Certificate Evidencing Common Securities of MOTOROLA CAPITAL TRUST I 6.68% Trust Originated Common Securities (liquidation amount $25 per Common Security) MOTOROLA CAPITAL TRUST I, a statutory business trust formed under the laws of the State of Delaware (the "Trust"), hereby certifies that _______________ (the "Holder") is the registered owner of common securities of the Trust representing common undivided beneficial interests in the assets of the Trust designated the 6.68% Trust Originated Common Securities (liquidation amount $25 per Common Security) (the "Common Securities"). The Common Securities are transferable on the books and records of the Trust, in person or by a duly authorized attorney, upon surrender of this certificate duly endorsed and in proper form for transfer. The designation, rights, privileges, restrictions, preferences and other terms and provisions of the Common Securities represented hereby are issued and shall in all respects be subject to the provisions of the Amended and Restated Declaration of Trust of the Trust dated as of February 3, 1999, as the same may be amended from time to time (the "Declaration"), including the designation of the terms of the Common Securities as set forth in Annex I to the Declaration. Capitalized terms used herein but not defined shall have the meaning given them in the Declaration. The Sponsor will provide a copy of the Declaration and the Indenture to a Holder without charge upon written request to the Sponsor at its principal place of business. Upon receipt of this certificate, the Holder is bound by the Declaration and is entitled to the benefits thereunder. By acceptance, the Holder agrees to treat, for United States federal income tax purposes, the Debentures as indebtedness and the Common Securities as evidence of indirect beneficial ownership in the Debentures. IN WITNESS WHEREOF, the Trust has executed this certificate this _____ day of ________________, 199___. MOTOROLA CAPITAL TRUST I By:_______________________________ Name:_____________________________ Title: Regular Trustee [FORM OF REVERSE OF SECURITY] 48 Distributions payable on each Common Security will be fixed at a rate per annum of 6.68% (the "Coupon Rate") of the stated liquidation amount of $25 per Common Security, such rate being the rate of interest payable on the Debentures to be held by the Property Trustee. Distributions in arrears for more than one quarter will bear interest thereon compounded quarterly at the Coupon Rate (to the extent permitted by applicable law). The term "Distributions" as used herein includes such cash distributions and any such interest payable unless otherwise stated. A Distribution is payable only to the extent that payments are made in respect of the Debentures held by the Property Trustee and to the extent the Property Trustee has funds available therefor. The amount of Distributions payable for any period will be computed for any full quarterly Distribution period on the basis of a 360-day year of twelve 30-day months, and for any period shorter than a full quarterly Distribution period for which Distributions are computed, Distributions will be computed on the basis of the actual number of days elapsed per 90-day quarter. Except as otherwise described below, distributions on the Common Securities will be cumulative, will accrue from the date of original issuance and will be payable quarterly in arrears, on March 31, June 30, September 30 and December 31 of each year, commencing on March 31, 1999, to Holders of record on a date to be selected by the Regular Trustees, which dates shall be at least one Business Day but less than 60 Business Days before the relevant payment dates, which payment dates shall correspond to the interest payment dates on the Debentures. The Debentures Issuer has the right under the Indenture to defer payments of interest by extending the interest payment period from time to time on the Debentures for a period not exceeding 20 consecutive quarters (each an "Extension Period") and, as a consequence of such deferral, Distributions will also be deferred. Despite such deferral, quarterly Distributions will continue to accrue with interest thereon (to the extent permitted by applicable law) at the Coupon Rate compounded quarterly during any such Extension Period. Prior to the termination of any such Extension Period, the Debenture Issuer may further extend such Extension Period; provided that such Extension Period together with all such previous and further extensions thereof may not exceed 20 consecutive quarters. Payments of accrued Distributions will be payable to Holders as they appear on the books and records of the Trust on the first record date after the end of the Extension Period. Upon the termination of any Extension Period and the Payment of all amounts then due, the Debenture Issuer may commence a new Extension Period, subject to the above requirements. The Common Securities shall be redeemable as provided in the Declaration. ASSIGNMENT FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security Certificate to: ____________________________________________________________ ____________________________________________________________ (Insert assignee's social security or tax identification number) ____________________________________________________________ ____________________________________________________________ (Insert address and zip code of assignee) and irrevocably appoints _______________________________________________________________ _____________________________________________________ agent to transfer this Common Security Certificate on the books of the Trust. The agent may substitute another to act for him or her. Date: __________________ Signature: _____________ (Sign exactly as your name appears on the other side of this Common Security Certificate) 49 EX-4.17 4 PREF SEC GUAR AGREEMENT DATED 2/3/99 EXHIBIT 4.17 - -------------------------------------------------------------------------------- PREFERRED SECURITIES GUARANTEE AGREEMENT MOTOROLA CAPITAL TRUST I Dated as of February 3, 1999 CROSS REFERENCE TABLE* Section of Trust Section of Indenture Act of Guarantee 1939, as amended Agreement - ---------------- --------- 310(a)....................................................................4.1(a) 310(b)....................................................................4.1(c) 310(c).............................................................Inapplicable 311(a)....................................................................2.2(b) 311(b)....................................................................2.2(b) 311(c).............................................................Inapplicable 312(a)....................................................................2.2(a) 312(b)....................................................................2.2(b) 312(c)......................................................................2.9 313(a)......................................................................2.3 313(b)......................................................................2.3 313(c)......................................................................2.3 313(d)......................................................................2.3 314(a)......................................................................2.4 314(b).............................................................Inapplicable 314(c)......................................................................2.5 314(d).............................................................Inapplicable 314(e)......................................................................2.5 314(f).............................................................Inapplicable 315(a)............................................................3.1(d); 3.2(a) 315(b)....................................................................2.7(a) 315(c)....................................................................3.1(c) 315(d)....................................................................3.1(d) 316(a)...............................................................2.6; 5.4(a) 317(a).................................................................2.10; 5.4 318(a)....................................................................2.1(b) * This Cross-Reference Table does not constitute part of the Guarantee Agreement and shall not have any bearing upon the interpretation of any of its terms or provisions. i TABLE OF CONTENTS
Page ---- ARTICLE I INTERPRETATION AND DEFINITIONS........................................................ 1 SECTION I.1 Interpretation and Definitions.................................................. 1 ARTICLE II TRUST INDENTURE ACT................................................................... 3 SECTION II.1 Trust Indenture Act; Application................................................ 3 SECTION II.2 Lists of Holders of Preferred Securities........................................ 3 SECTION II.3 Reports by Preferred Guarantee Trustee.......................................... 4 SECTION II.4 Periodic Reports to Preferred Guarantee Trustee................................. 4 SECTION II.5 Evidence of Compliance with Conditions Precedent................................ 4 SECTION II.6 Guarantee Event of Default; Waiver.............................................. 4 SECTION II.7 Guarantee Event of Default; Notice.............................................. 5 SECTION II.8 Conflicting Interests........................................................... 5 ARTICLE III POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE.............................. 5 SECTION III.1 Powers and Duties of Preferred Guarantee Trustee............................... 5 SECTION III.2 Certain Rights of Preferred Guarantee Trustee.................................. 6 SECTION III.3 Not Responsible for Recitals or Issuance of Guarantee.......................... 8 ARTICLE IV PREFERRED GUARANTEE TRUSTEE........................................................... 8 SECTION IV.1 Preferred Guarantee Trustee; Eligibility....................................... 8 SECTION IV.2 Appointment, Removal and Resignation of Preferred Guarantee Trustee............ 8 ARTICLE V GUARANTEE............................................................................. 9 SECTION V.1 Guarantee...................................................................... 9 SECTION V.2 Waiver of Notice and Demand.................................................... 9 SECTION V.3 Obligations Not Affected....................................................... 9 SECTION V.4 Rights of Holders.............................................................. 10 SECTION V.5 Guarantee of Payment........................................................... 10 SECTION V.6 Subrogation.................................................................... 10 ARTICLE VI LIMITATION OF TRANSACTIONS; SUBORDINATION............................................. 11 SECTION VI.1 Limitation of Transactions..................................................... 11 SECTION VI.2 Ranking........................................................................ 11 ARTICLE VII TERMINATION........................................................................... 11 SECTION VII.1 Termination.................................................................... 12 ARTICLE VIII INDEMNIFICATION...................................................................... 12 SECTION VIII.1 Exculpation................................................................... 12 SECTION VIII.2 Indemnification............................................................... 12 ARTICLE IX [INTENTIONALLY OMITTED].............................................................. 12 ARTICLE X MISCELLANEOUS........................................................................ 12 SECTION X.1 Successors and Assigns.......................................................... 12 SECTION X.2 Amendments...................................................................... 12 SECTION X.3 Notices......................................................................... 13 SECTION X.4 Benefit......................................................................... 13 SECTION X.5 Governing Law................................................................... 13
ii PREFERRED SECURITIES GUARANTEE AGREEMENT This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated as of February 3, 1999, is executed and delivered by Motorola, Inc., a Delaware corporation (the "Guarantor"), and Harris Trust and Savings Bank, as trustee (the "Preferred Guarantee Trustee"), for the benefit of the Holders (as defined herein) from time to time of the Preferred Securities (as defined herein) of Motorola Capital Trust I, a Delaware statutory business trust (the "Issuer"). WHEREAS, pursuant to the Declaration (as defined herein), the Issuer is issuing up to 20,000,000 preferred securities, having an aggregate liquidation amount of $500,000,000, designated the 6.68% Trust Originated Preferred Securities (the "Preferred Securities"). WHEREAS, as incentive for the Holders to purchase the Preferred Securities, the Guarantor desires irrevocably and unconditionally to agree, to the extent set forth in this Preferred Securities Guarantee, to pay to the Holders of the Preferred Securities the Guarantee Payments (as defined herein) and to make certain other payments on the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the purchase by each Holder of Preferred Securities, which purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor executes and delivers this Preferred Securities Guarantee for the benefit of the Holders. ARTICLE I INTERPRETATION AND DEFINITIONS SECTION I.1 Interpretation and Definitions. ------------------------------ In this Preferred Securities Guarantee, unless the context otherwise requires: (a) capitalized terms used in this Preferred Securities Guarantee but not defined in the preamble above have the respective meanings assigned to them in this Section 1.1 or as otherwise defined herein; (b) a term defined anywhere in this Preferred Securities Guarantee has the same meaning throughout; (c) all references to "the Preferred Securities Guarantee" or "this Preferred Securities Guarantee" are to this Preferred Securities Guarantee as modified, supplemented or amended from time to time; (d) all references in this Preferred Securities Guarantee to Articles and Sections are to Articles and Sections of this Preferred Securities Guarantee, unless otherwise specified; (e) a term defined in the Trust Indenture Act has the same meaning when used in this Preferred Securities Guarantee unless otherwise defined in this Preferred Securities Guarantee or unless the context otherwise requires; and (f) a reference to the singular includes the plural and vice versa. "Affiliate" has the same meaning as given to that term in Rule 405 of the Securities Act of 1933, as amended, or any successor rule thereunder. "Base Indenture" means the Indenture dated February 3, 1999 among the Guarantor (the "Debenture Issuer") and Harris Trust and Savings Bank, as trustee. "Business Day" means any day other than a day on which banking institutions in New York, New York or in the city of the Corporate Trust Office are authorized or required by law to close. "Common Securities" means the securities representing common undivided beneficial interests in the assets of the Issuer. 1 "Corporate Trust Office" means the office of the Preferred Guarantee Trustee at which the corporate trust business of the Preferred Guarantee Trustee shall, at any particular time, be principally administered, which office at the date of execution of this Preferred Securities Guarantee is located at 311 West Monroe Street, 12th Floor, Chicago, Illinois, 60606, Attention: Corporate Trust Administration. "Covered Person" means any Holder or beneficial owner of Preferred Securities. "Debentures" means the series of subordinated deferrable interest debentures to be issued by the Guarantor designated the 6.68% Deferrable Interest Junior Subordinated Debentures due 2039 held by the Property Trustee (as defined in the Declaration) of the Issuer. "Declaration" means the Amended and Restated Declaration of Trust, dated as of February 3, 1999, as amended, modified or supplemented from time to time, among the trustees of the Issuer named therein, the Guarantor, as sponsor, and the Holders from time to time of undivided beneficial interests in the assets of the Issuer. "Guarantee Event of Default" means a default by the Guarantor on any of its payment or other obligations under this Preferred Securities Guarantee. "Guarantee Payments" means the following payments or distributions, without duplication, with respect to the Preferred Securities, to the extent not paid or made by the Issuer: (i) any accrued and unpaid Distributions (as defined in the Declaration) that are required to be paid on the Preferred Securities to the extent the Issuer shall have funds available therefor, (ii) the redemption price, including all accrued and unpaid Distributions to the date of redemption (the "Redemption Price") to the extent the Issuer has funds available therefor, with respect to any Preferred Securities called for redemption by the Issuer and (iii) upon a voluntary or involuntary dissolution, winding-up or termination of the Issuer (other than in connection with the distribution of Debentures to the Holders in exchange for Preferred Securities as provided in the Declaration or the redemption of all the Preferred Securities upon maturity or redemption of the Debentures as provided in the Declaration), the lesser of (a) the aggregate of the liquidation amount and all accrued and unpaid Distributions on the Preferred Securities to the date of payment, to the extent the Issuer shall have funds available therefor or (b) the amount of assets of the Issuer remaining available for distribution to Holders in liquidation of the Issuer (in either case, the "Liquidation Distribution"). If an Event of Default (as defined in the Declaration) has occurred and is continuing, the rights of holders of the Common Securities to receive payments are subordinated to the rights of Holders of Preferred Securities to receive Guarantee Payments under this Preferred Securities Guarantee. "Holder" shall mean any holder, as registered on the books and records of the Issuer of any Preferred Securities; provided, however, that, in determining whether the holders of the requisite percentage of Preferred Securities have given any request, notice, consent or waiver hereunder, "Holder" shall not include the Guarantor or any Affiliate of the Guarantor; provided further, that in determining whether the Holders of the requisite liquidation amount of Preferred Securities have voted on any matter provided for in this Preferred Securities Guarantee, then for the purpose of such determination only (and not for any other purpose hereunder), if the Preferred Securities remain in the form of one or more Global Certificates (as defined in the Declaration), the term "Holders" shall mean the holder of the Global Certificate acting at the direction of the Preferred Security Beneficial Owners (as defined in the Declaration). "Indemnified Person" means the Preferred Guarantee Trustee, any Affiliate of the Preferred Guarantee Trustee, or any officers, directors, shareholders, members, partners, employees, representatives, nominees, custodians or agents of the Preferred Guarantee Trustee. "Indenture" means the Base Indenture and any indenture supplemental thereto pursuant to which the Debentures are to be issued to the Property Trustee (as defined in the Declaration) of the Issuer. "LYONS(TM)" means Debt of the Company in respect of the Company's Liquid Yield Option(TM) Notes due 2009 (the "2009 LYONs") and the Company's Liquid Yield Option(TM) Notes due 2013 ("the 2013 LYONs"). "Majority in Liquidation Amount of the Preferred Securities" means, except as provided in the terms of the Preferred Securities or by the Trust Indenture Act, Holder(s) of outstanding Preferred Securities, voting separately as a class, who are the record holders of more than 50% of the aggregate liquidation amount (including the stated amount 2 that would be paid on redemption, liquidation or otherwise, plus accrued and unpaid Distributions to the date upon which the voting percentages are determined) of all outstanding Preferred Securities. In determining whether the Holders of the requisite amount of Preferred Securities have voted, Preferred Securities which are owned by the Guarantor or any Affiliate of the Guarantor or any other obligor on the Preferred Securities shall be disregarded (to the extent known to be so owned by the Preferred Guarantee Trustee) for the purpose of any such determination. "Officers' Certificate" means, with respect to any Person, a certificate signed by two Authorized Officers (as defined in the Declaration) of such Person. Any Officers' Certificate delivered with respect to compliance with a condition or covenant provided for in this Preferred Securities Guarantee shall include: (a) a statement that each officer signing the Officers' Certificate has read the covenant or condition and the definitions relating thereto; (b) a brief statement of the nature and scope of the examination or investigation undertaken by each officer in rendering the Officers' Certificate; (c) a statement that each such officer has made such examination or investigation as, in such officer's opinion, is necessary to enable such officer to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of each such officer, such condition or covenant has been complied with. "Person" means any individual, corporation, estate, partnership, joint venture, association, joint stock company, limited liability company, trust, unincorporated association, or government or any agency or political subdivision thereof, or any other entity of whatever nature. "Preferred Guarantee Trustee" means Harris Trust and Savings Bank until a Successor Preferred Guarantee Trustee has been appointed and has accepted such appointment pursuant to the terms of this Preferred Securities Guarantee and thereafter means each such Successor Preferred Guarantee Trustee. "Responsible Officer" means, with respect to the Preferred Guarantee Trustee, any officer whose principal office is the Corporate Trust Office of the Preferred Guarantee Trustee, including any vice-president, any assistant vice- president, the secretary, any assistant secretary, the treasurer, any assistant treasurer or other officer whose principal office is the Corporate Trust Office of the Preferred Guarantee Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of that officer's knowledge of and familiarity with the particular subject. "Successor Preferred Guarantee Trustee" means a successor Preferred Guarantee Trustee possessing the qualifications to act as Preferred Guarantee Trustee under Section 4.1. "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended from time to time, or any successor legislation. ARTICLE II TRUST INDENTURE ACT SECTION II.1 Trust Indenture Act; Application. -------------------------------- (a) This Preferred Securities Guarantee is subject to the provisions of the Trust Indenture Act that are required to be part of this Preferred Securities Guarantee and shall, to the extent applicable, be governed by such provisions. (b) If and to the extent that any provision of this Preferred Securities Guarantee limits, qualifies or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall control. SECTION II.2 Lists of Holders of Preferred Securities. ---------------------------------------- (a) The Guarantor shall provide the Preferred Guarantee Trustee with a list, in such form as the Preferred Guarantee Trustee may reasonably require, of the names and addresses of the Holders of the Preferred Securities ("List 3 of Holders"), (i) within one Business Day after January 1 and June 30 of each year and current as of such date and (ii) at any other time, within 30 days of receipt by the Guarantor of a written request from the Preferred Guarantee Trustee for a List of Holders as of a date no more than 14 days before such List of Holders is given to the Preferred Guarantee Trustee; provided, that the Guarantor shall not be obligated to provide such List of Holders at any time when the List of Holders does not differ from the most recent List of Holders given to the Preferred Guarantee Trustee by the Guarantor. The Preferred Guarantee Trustee shall preserve, in as current a form as is reasonably practicable, all information contained in Lists of Holders given to it, provided that it may destroy any List of Holders previously given to it on receipt of a new List of Holders. (b) The Preferred Guarantee Trustee shall comply with its obligations under Section 311(a), 311(b) and Section 312(b) of the Trust Indenture Act. SECTION II.3 Reports by Preferred Guarantee Trustee. Within 60 days -------------------------------------- after May 15 of each year (commencing with the year of the first anniversary of the issuance of the Preferred Securities), the Preferred Guarantee Trustee shall provide to the Holders of the Preferred Securities such reports as are required by Section 313 of the Trust Indenture Act, if any, in the form and in the manner provided by Section 313 of the Trust Indenture Act. The Preferred Guarantee Trustee shall also comply with the requirements of Section 313(d) of the Trust Indenture Act. SECTION II.4 Periodic Reports to Preferred Guarantee Trustee. The ----------------------------------------------- Guarantor shall provide to the Preferred Guarantee Trustee such documents, reports and information as required by Section 314 of the Trust Indenture Act (if any) and the compliance certificate required by Section 314 of the Trust Indenture Act in the form, in the manner and at the times required by Section 314 of the Trust Indenture Act. SECTION II.5 Evidence of Compliance with Conditions Precedent. The ------------------------------------------------ Guarantor shall provide to the Preferred Guarantee Trustee such evidence of compliance with any conditions precedent provided for in this Preferred Securities Guarantee that relate to any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion required to be given by an officer pursuant to Section 314(c)(1) may be given in the form of an Officers' Certificate. SECTION II.6 Guarantee Event of Default; Waiver. The Holders of a ---------------------------------- Majority in Liquidation Amount of the Preferred Securities may, by vote, on behalf of the Holders of all of the Preferred Securities, waive any past Guarantee Event of Default and its consequences. Upon such waiver, any such Guarantee Event of Default shall cease to exist, and any Guarantee Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Preferred Securities Guarantee, but no such waiver shall extend to any subsequent or other default or Guarantee Event of Default or impair any right consequent thereon. SECTION II.7 Guarantee Event of Default; Notice. ---------------------------------- (a) The Preferred Guarantee Trustee shall, within 90 days after the occurrence of a Guarantee Event of Default, transmit by mail, first class postage prepaid, to the Holders of the Preferred Securities, notices of all Guarantee Events of Default actually known to a Responsible Officer of the Preferred Guarantee Trustee, unless such defaults have been cured before the giving of such notice; provided, that the Preferred Guarantee Trustee shall be protected in withholding such notice if and so long as a Responsible Officer of the Preferred Guarantee Trustee in good faith determines that the withholding of such notice is in the interests of the Holders of the Preferred Securities. (b) The Preferred Guarantee Trustee shall not be deemed to have knowledge of any Guarantee Event of Default unless the Preferred Guarantee Trustee shall have received written notice thereof, or a Responsible Officer of the Preferred Guarantee Trustee charged with the administration of the Declaration shall have obtained actual knowledge thereof. SECTION II.8 Conflicting Interests. The Declaration shall be deemed to --------------------- be specifically described in this Preferred Securities Guarantee for the purposes of clause (i) of the first proviso contained in Section 310(b) of the Trust Indenture Act. 4 ARTICLE III POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE SECTION III.1 Powers and Duties of Preferred Guarantee Trustee. ------------------------------------------------ (a) This Preferred Securities Guarantee shall be held by the Preferred Guarantee Trustee on behalf of the Issuer for the benefit of the Holders of the Preferred Securities, and the Preferred Guarantee Trustee shall not transfer this Preferred Securities Guarantee to any Person except a Holder of Preferred Securities exercising the rights of such Holder pursuant to Section 5.4(b) or to a Successor Preferred Guarantee Trustee on acceptance by such Successor Preferred Guarantee Trustee of its appointment to act as Successor Preferred Guarantee Trustee. The right, title and interest of the Preferred Guarantee Trustee in and to this Preferred Securities Guarantee shall automatically vest in any Successor Preferred Guarantee Trustee, and such vesting and cessation of title shall be effective whether or not conveyancing documents have been executed and delivered pursuant to the appointment of such Successor Preferred Guarantee Trustee. (b) If a Guarantee Event of Default actually known to a Responsible Officer of the Preferred Guarantee Trustee has occurred and is continuing, the Preferred Guarantee Trustee shall enforce this Preferred Securities Guarantee for the benefit of the Holders of the Preferred Securities. (c) The Preferred Guarantee Trustee, before the occurrence of any Guarantee Event of Default and after the curing of all Guarantee Events of Default that may have occurred, shall undertake to perform only such duties as are specifically set forth in this Preferred Securities Guarantee, and no implied covenants shall be read into this Preferred Securities Guarantee against the Preferred Guarantee Trustee. In case a Guarantee Event of Default has occurred (that has not been cured or waived pursuant to Section 2.6) and is actually known to a Responsible Officer of the Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall exercise such of the rights and powers vested in it by this Preferred Securities Guarantee, and use the same degree of care and skill in its exercise thereof, as a prudent individual would exercise or use under the circumstances in the conduct of his or her own affairs. (d) No provision of this Preferred Securities Guarantee shall be construed to relieve the Preferred Guarantee Trustee from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (i) prior to the occurrence of any Guarantee Event of Default and after the curing or waiving of all such Guarantee Events of Default that may have occurred: (A) the duties and obligations of the Preferred Guarantee Trustee shall be determined solely by the express provisions of this Preferred Securities Guarantee, and the Preferred Guarantee Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Preferred Securities Guarantee, and no implied covenants or obligations shall be read into this Preferred Securities Guarantee against the Preferred Guarantee Trustee; and (B) in the absence of bad faith on the part of the Preferred Guarantee Trustee, the Preferred Guarantee Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Preferred Guarantee Trustee and conforming to the requirements of this Preferred Securities Guarantee; but in the case of any such certificates or opinions that by any provision hereof are specifically required to be furnished to the Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Preferred Securities Guarantee; (ii) the Preferred Guarantee Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Preferred Guarantee Trustee, unless it shall be proved 5 that the Preferred Guarantee Trustee was negligent in ascertaining the pertinent facts upon which such judgment was made; (iii) the Preferred Guarantee Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of not less than a Majority in Liquidation Amount of the Preferred Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Preferred Guarantee Trustee, or exercising any trust or power conferred upon the Preferred Guarantee Trustee under this Preferred Securities Guarantee; and (iv) no provision of this Preferred Securities Guarantee shall require the Preferred Guarantee Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if there are reasonable grounds for believing that the repayment of such funds or liability is not reasonably assured to the Preferred Guarantee Trustee under the terms of this Preferred Securities Guarantee or indemnity, reasonably satisfactory to the Preferred Guarantee Trustee, against such risk or liability is not reasonably assured to it. SECTION III.2 Certain Rights of Preferred Guarantee Trustee. --------------------------------------------- (a) Subject to the provisions of Section 3.1: (i) The Preferred Guarantee Trustee may conclusively rely, and shall be fully protected in acting or refraining from acting upon, any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed, sent or presented by the proper party or parties. (ii) Any direction or act of the Guarantor contemplated by this Preferred Securities Guarantee shall be sufficiently evidenced by an Officers' Certificate. (iii) Whenever, in the administration of this Preferred Securities Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a matter be proved or established before taking, suffering or omitting any action hereunder, the Preferred Guarantee Trustee (unless other evidence is herein specifically prescribed) may, in the absence of bad faith on its part, request and conclusively rely upon an Officers' Certificate which, upon receipt of such request, shall be promptly delivered by the Guarantor. (iv) The Preferred Guarantee Trustee shall have no duty to see to any recording, filing or registration of any instrument (or any rerecording, refiling or reregistration thereof). (v) Before the Preferred Guarantee Trustee acts or refrains from acting, the Preferred Guarantee Trustee may consult with counsel and the written advice or opinion of such counsel with respect to legal matters shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with such advice or opinion. Such counsel may be counsel to the Guarantor or any of its Affiliates and may include any of its employees. The Preferred Guarantee Trustee shall have the right at any time to seek instructions concerning the administration of this Preferred Securities Guarantee from any court of competent jurisdiction. (vi) The Preferred Guarantee Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Preferred Securities Guarantee at the request or direction of any Holder, unless such Holder shall have offered to the Preferred Guarantee Trustee such security and indemnity, reasonably satisfactory to the Preferred Guarantee Trustee, against the costs, expenses (including attorneys' fees and expenses and the expenses of the Preferred 6 Guarantee Trustee's agents, nominees or custodians) and liabilities that might be incurred by it in complying with such request or direction, including such reasonable advances as may be requested by the Preferred Guarantee Trustee; provided that nothing contained in this Section 3.2(a)(vi) shall be taken to relieve the Preferred Guarantee Trustee, upon the occurrence of a Guarantee Event of Default, of its obligation to exercise the rights and powers vested in it by this Preferred Securities Guarantee. (vii) The Preferred Guarantee Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Preferred Guarantee Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit. (viii) The Preferred Guarantee Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, nominees, custodians or attorneys, and the Preferred Guarantee Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder. (ix) Any action taken by the Preferred Guarantee Trustee or its agents hereunder shall bind the Holders of the Preferred Securities, and the signature of the Preferred Guarantee Trustee or its agents alone shall be sufficient and effective to perform any such action. No third party shall be required to inquire as to the authority of the Preferred Guarantee Trustee to so act or as to its compliance with any of the terms and provisions of this Preferred Securities Guarantee, both of which shall be conclusively evidenced by the Preferred Guarantee Trustee's or its agent's taking such action. (x) Whenever in the administration of this Preferred Securities Guarantee the Preferred Guarantee Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any other action hereunder, the Preferred Guarantee Trustee (i) may request instructions from the Holders of a Majority in Liquidation Amount of the Preferred Securities, (ii) may refrain from enforcing such remedy or right or taking such other action until such instructions are received and (iii) shall be protected in conclusively relying on or acting in accordance with such instructions. (xi) The Preferred Guarantee Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder. (xii) The permissive rights of the Preferred Guarantee Trustee to do things enumerated in this Indenture shall not be construed as a duty. (b) No provision of this Preferred Securities Guarantee shall be deemed to impose any duty or obligation on the Preferred Guarantee Trustee to perform any act or acts or exercise any right, power, duty or obligation conferred or imposed on it in any jurisdiction in which it shall be illegal, or in which the Preferred Guarantee Trustee shall be unqualified or incompetent in accordance with applicable law, to perform any such act or acts or to exercise any such right, power, duty or obligation. No permissive power or authority available to the Preferred Guarantee Trustee shall be construed to be a duty. SECTION III.3 Not Responsible for Recitals or Issuance of Guarantee. The ----------------------------------------------------- recitals contained in this Preferred Securities Guarantee shall be taken as the statements of the Guarantor, and the Preferred Guarantee Trustee does not assume any responsibility for their correctness. The Preferred Guarantee Trustee makes no representation as to the validity or sufficiency of this Preferred Securities Guarantee. ARTICLE IV PREFERRED GUARANTEE TRUSTEE 7 SECTION IV.1 Preferred Guarantee Trustee; Eligibility. ---------------------------------------- (a) There shall at all times be a Preferred Guarantee Trustee which shall: (i) not be an Affiliate of the Guarantor; and (ii) be a corporation or trust company organized and doing business under the laws of the United States of America or any State or Territory thereof or of the District of Columbia, or a corporation or Person permitted by the Securities and Exchange Commission to act as an institutional trustee under the Trust Indenture Act, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least 25 million U.S. dollars ($25,000,000), and subject to supervision or examination by Federal, State, Territorial or District of Columbia authority. If such corporation or trust company publishes reports of condition at least annually, pursuant to law or to the requirements of the supervising or examining authority referred to above, then, for the purposes of this Section 4.1(a)(ii), the combined capital and surplus of such corporation or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. (b) If at any time the Preferred Guarantee Trustee shall cease to be eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall immediately resign in the manner and with the effect set out in Section 4.2(c). (c) If the Preferred Guarantee Trustee has or shall acquire any "conflicting interest" within the meaning of Section 310(b) of the Trust Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all respects comply with the provisions of Section 310(b) of the Trust Indenture Act. (d) Any corporation into which the Preferred Guarantee Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Preferred Guarantee Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Preferred Guarantee Trustee, shall be a Successor Preferred Guarantee Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. SECTION IV.2 Appointment, Removal and Resignation of Preferred Guarantee ----------------------------------------------------------- Trustee. - ------- (a) Subject to Section 4.2(b), the Preferred Guarantee Trustee (or Successor Preferred Guarantee Trustee, as the case may be) may be appointed or removed without cause at any time by the Guarantor. (b) The Preferred Guarantee Trustee (or Successor Preferred Guarantee Trustee, as the case may be) shall not be removed in accordance with Section 4.2(a) until a Successor Preferred Guarantee Trustee has been appointed and has accepted such appointment by written instrument executed by such Successor Preferred Guarantee Trustee and delivered to the Guarantor. (c) The Preferred Guarantee Trustee (or Successor Preferred Guarantee Trustee, as the case may be) appointed to office shall hold office until a Successor Preferred Guarantee Trustee shall have been appointed or until its removal or resignation. The Preferred Guarantee Trustee (or Successor Preferred Guarantee Trustee, as the case may be) may resign from office (without need for prior or subsequent accounting) by an instrument in writing executed by the Preferred Guarantee Trustee (or Successor Preferred Guarantee Trustee, as the case may be) and delivered to the Guarantor, which resignation shall not take effect until a Successor Preferred Guarantee Trustee has been appointed and has accepted such appointment by instrument in writing executed by such Successor Preferred Guarantee Trustee and delivered to the Guarantor and the resigning Preferred Guarantee Trustee (or Successor Preferred Guarantee Trustee, as the case may be). 8 (d) If no Successor Preferred Guarantee Trustee shall have been appointed and accepted appointment as provided in this Section 4.2 within 60 days after delivery to the Guarantor of an instrument of resignation, the resigning Preferred Guarantee Trustee (or Successor Preferred Guarantee Trustee, as the case may be) may petition any court of competent jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such court may thereupon, after prescribing such notice, if any, as it may deem proper, appoint a Successor Preferred Guarantee Trustee. (e) No Preferred Guarantee Trustee shall be liable for the acts or omissions to act of any Successor Preferred Guarantee Trustee. (f) Upon termination of this Preferred Securities Guarantee or removal or resignation of the Preferred Guarantee Trustee (or Successor Preferred Guarantee Trustee, as the case may be) pursuant to this Section 4.2, the Guarantor shall pay to the Preferred Guarantee Trustee (or Successor Preferred Guarantee Trustee, as the case may be) all amounts owing for fees and reimbursement of expenses which have accrued to the date of such termination, removal or resignation. ARTICLE V GUARANTEE SECTION V.1 Guarantee. The Guarantor irrevocably and unconditionally --------- agrees to pay in full the Guarantee Payments (without duplication of amounts theretofore paid by the Issuer), as and when due, to the Holders of record as of the date upon which such Guarantee Payments are due, regardless of any defense, right of set-off or counterclaim that the Issuer may have or assert. The Guarantor's obligation to make a Guarantee Payment may be satisfied by direct payment of the required amounts by the Guarantor to the Holders or by causing the Issuer to pay such amounts to the Holders. SECTION V.2 Waiver of Notice and Demand. The Guarantor hereby waives --------------------------- notice of acceptance of this Preferred Securities Guarantee and of any liability to which it applies or may apply, presentment, demand for payment, any right to require a proceeding first against the Issuer or any other Person before proceeding against the Guarantor, protest, notice of nonpayment, notice of dishonor, notice of redemption and all other notices and demands. Notwithstanding anything to the contrary herein, the Guarantor retains all of its rights to (i) extend the interest payment period on the Debentures and the Guarantor shall not be obligated hereunder to make any Guarantee Payments during any Extended Interest Payment Period (as defined in the Indenture) with respect to the Distributions (as defined in the Declaration) on the Preferred Securities and (ii) redeem or change the maturity date of the Debentures, in each case to the extent permitted by the Indenture. SECTION V.3 Obligations Not Affected. The obligations, covenants, ------------------------ agreements and duties of the Guarantor under this Preferred Securities Guarantee shall be absolute and unconditional and shall remain in full force and effect until the entire liquidation amount of all outstanding Preferred Securities shall have been paid and such obligation shall in no way be affected or impaired by reason of the happening from time to time of any event, including without limitation, the following, whether or not with notice to, or the consent of, the Guarantor: (a) The release or waiver, by operation of law or otherwise, of the performance or observance by the Issuer of any express or implied agreement, covenant, term or condition relating to the Preferred Securities to be performed or observed by the Issuer; (b) The extension of time for the payment by the Issuer of all or any portion of the Distributions, Redemption Price, Liquidation Distribution or any other sums payable under the terms of the Preferred Securities or the extension of time for the performance of any other obligation under, arising out of, or in connection with, the Preferred Securities (other than an extension of time for payment of Distributions, Redemption Price, Liquidation Distribution or other sum payable that results from the extension of any interest payment period on the Debentures or any change to the maturity date of the Debentures permitted by the Indenture); (c) Any failure, omission, delay or lack of diligence on the part of the Property Trustee or the Holders to enforce, assert or exercise any right, privilege, power or remedy conferred on the Property Trustee or the Holders pursuant to the terms of the Preferred Securities, or any action on the part of the Issuer granting indulgence or extension of any kind; 9 (d) The voluntary or involuntary liquidation, dissolution, sale of any collateral, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of debt of, or other similar proceedings affecting, the Issuer or any of the assets of the Issuer; (e) Any invalidity of, or defect or deficiency in, the Preferred Securities; (f) The settlement or compromise of any obligation guaranteed hereby or hereby incurred; or (g) Any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a guarantor, it being the intent of this Section 5.3 that the obligations of the Guarantor hereunder shall be absolute and unconditional under any and all circumstances. There shall be no obligation of the Preferred Guarantee Trustee or the Holders to give notice to, or obtain consent of, the Guarantor or any other Person with respect to the happening of any of the foregoing. No set-off, counterclaim, reduction or diminution of any obligation, or any defense of any kind or nature that the Guarantor has or may have against any Holder shall be available hereunder to the Guarantor against such Holder to reduce the payments to it under this Preferred Securities Guarantee. SECTION V.4 Rights of Holders. ----------------- (a) The Holders of a Majority in Liquidation Amount of the Preferred Securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Preferred Guarantee Trustee in respect of this Preferred Securities Guarantee or to direct the exercise of any trust or power conferred upon the Preferred Guarantee Trustee under this Preferred Securities Guarantee. (b) If the Preferred Guarantee Trustee fails to enforce this Preferred Securities Guarantee, then any Holder of Preferred Securities may institute a legal proceeding directly against the Guarantor to enforce the Preferred Guarantee Trustee's rights under this Preferred Securities Guarantee without first instituting a legal proceeding against the Issuer, the Preferred Guarantee Trustee or any other Person or entity. Notwithstanding the foregoing, if the Guarantor has failed to make a Guarantee Payment, a Holder of Preferred Securities may directly institute a proceeding against the Guarantor for enforcement of the Preferred Securities Guarantee for such payment to the Holder of the Preferred Securities of the principal of or interest on the Debentures on or after the respective due dates specified in the Debentures, and the amount of the payment will be based on the Holder's pro rata share of the amount due and owing on all of the Preferred Securities. The Guarantor hereby waives any right or remedy to require that any action on this Preferred Securities Guarantee be brought first against the Issuer or any other Person or entity before proceeding directly against the Guarantor. SECTION V.5 Guarantee of Payment. This Preferred Securities Guarantee -------------------- creates a guarantee of payment and not of collection. SECTION V.6 Subrogation. The Guarantor shall be subrogated to all (if ----------- any) rights of the Holders of Preferred Securities against the Issuer in respect of any amounts paid to such Holders by the Guarantor under this Preferred Securities Guarantee; provided, however, that the Guarantor shall not (except to the extent required by mandatory provisions of law) be entitled to enforce or exercise any right that it may acquire by way of subrogation or any indemnity, reimbursement or other agreement, in all cases as a result of payment under this Preferred Securities Guarantee, if, at the time of any such payment, any amounts are due and unpaid under this Preferred Securities Guarantee. If any amount shall be paid to the Guarantor in violation of the preceding sentence, the Guarantor agrees to hold such amount in trust for the Holders and to pay over such amount to the Preferred Guarantee Trustee for the benefit of the Holders. SECTION V.7 Independent Obligations. The Guarantor acknowledges that its ----------------------- obligations hereunder are independent of the obligations of the Issuer with respect to the Preferred Securities, and that the Guarantor shall be liable as principal and as debtor hereunder to make Guarantee Payments pursuant to the terms of this Preferred Securities Guarantee notwithstanding the occurrence of any event referred to in subsections (a) through (g), inclusive, of Section 5.3 hereof. 10 SECTION V.8 Waiver Under Indenture and Declaration. Any waiver by the -------------------------------------- Holders of any right under the Indenture or the Declaration shall constitute a waiver of their rights hereunder to the full extent of such waiver. ARTICLE VI LIMITATION OF TRANSACTIONS; SUBORDINATION SECTION VI.1 Limitation of Transactions. So long as any Preferred -------------------------- Securities remain outstanding, if there shall have occurred a Guarantee Event of Default or an event of default under the Declaration, then, prior to the payment of all accrued interest on outstanding Debentures, the Guarantor may not (a) declare or pay dividends on, make a distribution with respect to, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock, (b) make any payment of interest, principal or premium, if any, on, or repay, repurchase or redeem, any debt securities issued by the Guarantor that rank equal with or junior to the Debentures or (c) make guarantee payments with respect to the foregoing (other than as set forth in this Preferred Securities Guarantee); provided, however, that the restriction in clause (a) does not apply to (i) purchases or acquisitions of the Guarantor's capital stock in connection with the satisfaction of its obligations under any employee benefit plans, stock option plans, employee stock purchase plans or direct reinvestment plans as may be in effect from time to time or the satisfaction of its obligations pursuant to any contract or security outstanding on the date of such event requiring the Guarantor to purchase its capital stock (other than a contractual obligation ranking equal with or junior to the Debentures), (ii) reclassifications of the Guarantor's capital stock or the exchange or conversion of one class or series of the Guarantor's capital stock, provided that such reclassification, exchange or conversion does not result in a change in the priority vis-a-vis the Preferred Securities of any class or series of capital stock that is being so reclassified or that is the subject of such exchange or conversion, (iii) purchases of fractional interests in shares of the Guarantor's capital stock pursuant to the conversion or exchange provisions of such capital stock or the security bring converted or exchanged, (iv) stock dividends paid by the Guarantor where the dividend stock is the same stock as that on which the dividend is being paid or (v) redemptions or purchases of any rights pursuant to purchase rights contained in any rights agreement as shall be in effect from time to time, which purchase rights are substantially similar to those contained in the Guarantor's current rights agreement. SECTION VI.2 Ranking. This Preferred Securities Guarantee will ------- constitute an unsecured obligation of the Guarantor and will rank (i) subordinate and junior in right of payment to all other liabilities of the Guarantor, including all series of the Guarantor's outstanding LYONSTM, except those liabilities of the Guarantor made equal or subordinate by their terms, (ii) equal with the most senior preferred or preference stock now or hereafter issued by the Guarantor and with any guarantee now or hereafter entered into by the Guarantor in respect of any preferred or preference stock of any Affiliate of the Guarantor, (iii) senior to the Guarantor's common stock and (iv) effectively subordinated to the liabilities and obligations of the Guarantor's Subsidiaries to the same extent as the Debentures as described in the Indenture. If an Event of Default has occurred and is continuing under the Declaration, the rights of the holders of the Common Securities to receive any payments shall be subordinated to the rights of the Holders of Preferred Securities to receive Guarantee Payments hereunder. ARTICLE VII TERMINATION SECTION VII.1 Termination. This Preferred Securities Guarantee shall ----------- terminate upon (i) full payment of the Redemption Price of all Preferred Securities, (ii) upon the distribution of the Debentures to the Holders of all of the Preferred Securities or (iii) upon full payment of the amounts payable in accordance with the Declaration upon liquidation of the Issuer. Notwithstanding the foregoing, this Preferred Securities Guarantee will continue to be effective or will be reinstated, as the case may be, if at any time any Holder of Preferred Securities must restore payment of any sums paid under the Preferred Securities or under this Preferred Securities Guarantee. ARTICLE VIII INDEMNIFICATION SECTION VIII.1 Exculpation. ----------- 11 (a) No Indemnified Person shall be liable, responsible or accountable in damages or otherwise to the Guarantor or any Covered Person for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Indemnified Person in good faith in accordance with this Preferred Securities Guarantee and in a manner that such Indemnified Person reasonably believed to be within the scope of the authority conferred on such Indemnified Person by this Preferred Securities Guarantee or by law, except that an Indemnified Person shall be liable for any such loss, damage or claim incurred by reason of such Indemnified Person's negligence or willful misconduct with respect to such acts or omissions. (b) An Indemnified Person shall be fully protected in relying in good faith upon the records of the Guarantor and upon such information, opinions, reports or statements presented to the Guarantor by any Person as to matters the Indemnified Person reasonably believes are within such other Person's professional or expert competence and who has been selected with reasonable care by or on behalf of the Guarantor, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, profits, losses, or any other facts pertinent to the existence and amount of assets from which Distributions to Holders of Preferred Securities might properly be paid. SECTION VIII.2 Indemnification. The Guarantor agrees to indemnify each --------------- Indemnified Person for, and to hold each Indemnified Person harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses (including reasonable legal fees and expenses) of defending itself against, or investigating, any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. The obligation to indemnify as set forth in this Section 8.2 shall survive the termination of this Preferred Securities Guarantee. ARTICLE IX [INTENTIONALLY OMITTED] ARTICLE X MISCELLANEOUS SECTION X.1 Successors and Assigns. All guarantees and agreements ---------------------- contained in this Preferred Securities Guarantee shall bind the successors, assigns, receivers, trustees and representatives of the Guarantor and shall inure to the benefit of the Holders of the Preferred Securities then outstanding. SECTION X.2 Amendments. Except with respect to any changes that do not ---------- adversely affect the rights of the Holders (in which case no consent of the Holders will be required), this Preferred Securities Guarantee may only be amended with the prior approval of the Holders of at least a Majority in Liquidation Amount of the Preferred Securities. The provisions of Section 12.2 of the Declaration with respect to meetings of, and action by written consent of, the Holders of the Securities apply to the giving of such approval. SECTION X.3 Notices. All notices provided for in this Preferred ------- Securities Guarantee shall be in writing, duly signed by the party giving such notice, and shall be delivered, telecopied or mailed by registered or certified mail, as follows: (a) If given to the Preferred Guarantee Trustee, at the Preferred Guarantee Trustee's mailing address set forth below (or such other address as the Preferred Guarantee Trustee may give notice of to the Guarantor and the Holders of the Preferred Securities): Harris Trust and Savings Bank, 311 West Monroe Street, 12th Floor, Chicago, IL 60606 Attention: Corporate Trust Administration. (b) If given to the Guarantor, at the Guarantor's mailing address set forth below (or such other address as the Guarantor may give notice of to the Preferred Guarantee Trustee and the Holders of the Preferred Securities): Motorola, Inc., 1303 East Algonquin Road, Schaumburg, IL 60196 Attention: General Counsel. (c) If given to any Holder of Preferred Securities, at the address set forth on the books and records of the Issuer. 12 All such notices shall be deemed to have been given when received in person, telecopied with receipt confirmed, or mailed by first class mail, postage prepaid, except that if a notice or other document is refused delivery or cannot be delivered because of a changed address of which no notice was given, such notice or other document shall be deemed to have been delivered on the date of such refusal or inability to deliver. SECTION X.4 Benefit. This Preferred Securities Guarantee is solely for ------- the benefit of the Holders of the Preferred Securities and, subject to Section 3.1(a), is not transferable separately from the Preferred Securities. SECTION X.5 Governing Law. THIS PREFERRED SECURITIES GUARANTEE SHALL BE ------------- GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 13 IN WITNESS WHEREOF, this Preferred Securities Guarantee is executed as of the day and year first above written. MOTOROLA, INC., as Guarantor By: /s/ Garth L. Milne ------------------------------------------ Name: Garth L. Milne Title: Senior Vice President and Treasurer HARRIS TRUST AND SAVINGS BANK, as Preferred Guarantee Trustee By: /s/ C. Potter ------------------------------------------ Name: C. Potter Title: Assistant Vice President 14 EX-4.18 5 SPEC OF 6.68% TRUST ORIG PREF SECURITIES EXHIBIT 4.18 SPECIMEN OF PREFERRED SECURITY CERTIFICATE This Preferred Security Certificate is a Global Certificate within the meaning of the Declaration hereinafter referred to and is registered in the name of The Depository Trust Company (the "Depository") or a nominee of the Depository. This Preferred Security Certificate is exchangeable for Preferred Securities registered in the name of a person other than the Depository or its nominee only in the limited circumstances described in the Declaration and no transfer of this Preferred Security Certificate (other than a transfer of this Preferred Security Certificate as a whole by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository) may be registered except in limited circumstances. Unless this Preferred Security Certificate is presented by an authorized representative of the Depository to the Trust or its agent for registration of transfer, exchange or payment, and any Preferred Security Certificate issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of the Depository (and any payment hereon is made to Cede & Co. or to such other entity as is requested by an authorized representative of the Depository), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein. Certificate Number Number of Preferred Securities - -1- -20,000,000- CUSIP NO. [ ] Certificate Evidencing Preferred Securities of MOTOROLA CAPITAL TRUST I 6.68% Trust Originated Preferred Securities(SM) ("TOPrS"(SM)) (liquidation amount $25 per Preferred Security) MOTOROLA CAPITAL TRUST I, a statutory business trust formed under the laws of the State of Delaware (the "Trust"), hereby certifies that Cede & Co. (the "Holder") is the registered owner of Twenty Million (20,000,000) preferred securities of the Trust representing undivided beneficial interests in the assets of the Trust designated the 6.68% Trust Originated Preferred SecuritiesSM (liquidation amount $25 per Preferred Security) (the "Preferred Securities"). The Preferred Securities are transferable on the books and records of the Trust, in person or by a duly authorized attorney, upon surrender of this certificate duly endorsed and in proper form for transfer. The designation, rights, privileges, restrictions, preferences and other terms and provisions of the Preferred Securities represented hereby are issued and shall in all respects be subject to the provisions of the Amended and Restated Declaration of Trust of the Trust dated as of February 3, 1999, as the same may be amended from time to time (the "Declaration"), including the designation of the terms of the Preferred Securities as set forth in Annex I to the Declaration. Capitalized terms used herein but not defined herein shall have the respective meanings given them in the Declaration. The Holder is entitled to the benefits of the Preferred Securities Guarantee to the extent provided therein. The Sponsor will provide a copy of the Declaration, the Preferred Securities Guarantee and the Indenture to the Holder without charge upon written request to the Sponsor at its principal place of business. Upon receipt of this certificate, the Holder is bound by the Declaration and is entitled to the benefits thereunder. By acceptance, the Holder agrees to treat, for United States federal income tax purposes, the Debentures as indebtedness and the Preferred Securities as evidence of indirect beneficial ownership in the Debentures. IN WITNESS WHEREOF, the Trust has executed this Preferred Securities Certificate this 3rd day of February, 1999. MOTOROLA CAPITAL TRUST I By: ----------------------------- Name: Title: Distributions payable on each Preferred Security will be fixed at a rate per annum of 6.68% (the "Coupon Rate") of the stated liquidation amount of $25 per Preferred Security, such rate being the rate of interest payable on the Debentures to be held by the Property Trustee. Distributions in arrears for more than one quarter will bear interest thereon compounded quarterly at the Coupon Rate (to the extent permitted by applicable law). The term "Distributions" as used herein includes such cash distributions and any such interest payable unless otherwise stated. A Distribution is payable only to the extent that payments are made in respect of the Debentures held by the Property Trustee and to the extent the Property Trustee has funds available therefor. The amount of Distributions payable for any period will be computed for any full quarterly Distribution period on the basis of a 360-day year of twelve 30-day months, and for any period shorter than a full quarterly Distribution period for which Distributions are computed, Distributions will be computed on the basis of the actual number of days elapsed per 90-day quarter. Except as otherwise described below, distributions on the Preferred Securities will be cumulative, will accrue from the date of original issuance and will be payable quarterly in arrears, on March 31, June 30, September 30 and December 31 of each year, commencing on March 31, 1999, which payment dates shall correspond to the interest payment dates on the Debentures. The Debenture Issuer has the right under the Indenture to defer payments of interest by extending the interest payment period from time to time on the Debentures for a period not exceeding 20 consecutive quarters or extending beyond the Maturity Date of the Debentures (each, an "Extension Period") and, as a consequence of any such deferral, Distributions will also be deferred. Despite such deferral, quarterly Distributions will continue to accrue with interest thereon (to the extent permitted by applicable law) at the Coupon Rate compounded quarterly during any such Extension Period. Prior to the termination of any such Extension Period, the Debenture Issuer may further extend such Extension Period; provided that such Extension Period together with all such previous and further extensions thereof may not exceed 20 consecutive quarters and may not extend beyond the Maturity Date of the Debentures. Payments of accrued Distributions will be payable to Holders as they appear on the books and records of the Trust on the record date after the end of the Extension Period. Upon the termination of any Extension Period and the payment of all amounts then due, the Debenture Issuer may commence a new Extension Period, subject to the above requirements. The Preferred Securities shall be redeemable as provided in the Declaration. ASSIGNMENT FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred Security Certificate to: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Insert assignee's social security or tax identification number) ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- (Insert address and zip code of assignee) and irrevocably appoints _______________________________________________________ - -------------------------------------------------------------------------------- agent to transfer this Preferred Security Certificate on the books of the Trust. The agent may substitute another to act for him or her. Date:_________________ Signature:__________________ (Sign exactly as your name appears on the other side of this Preferred Security Certificate) 2 EX-4.19 6 SPEC OF 6.68% DEF INT JUN SUB DEB. EXHIBIT 4.19 SPECIMEN OF DEFERRABLE INTEREST JUNIOR SUBORDINATED DEBENTURES This Debenture is one of a duly authorized series of Debentures (herein sometimes referred to as the "Debentures") of Motorola, Inc., a Delaware corporation (the "Company," which term includes any successor corporation under the Indenture hereinafter referred to), specified in and all issued or to be issued in one or more series under and pursuant to an Indenture dated as of February 3, 1999 (as originally executed or as it may from time to time be supplemented or amended by one or more supplemental indentures, including the First Supplemental Indenture dated as of February 3, 1999, the "Indenture"), duly executed and delivered between the Company and Harris Trust and Savings Bank, as Trustee (in such capacity, the "Trustee"), to which a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders of the Debentures, and to all of which provisions the Holder of this Debenture by acceptance hereof, assents and agrees. By the terms of the Indenture, the Debentures are issuable in series that may vary as to amount, date of maturity, rate of interest and in other respects as provided in the Indenture. This series of Debentures is limited in aggregate principal amount as specified in said Indenture. Defined terms used but not otherwise defined in this Debenture have the meanings set forth in the Indenture. This Debenture is in Global form within the meaning of the Indenture hereinafter referred to and is registered in the name of a Depository or a nominee of a Depository. Unless and until it is exchanged in whole or in part for securities in certificated form in the limited circumstances described in the indenture, this security may not be transferred except as a whole by the depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository or by the Depository or any such nominee to a successor Depository or a nominee of such successor Depository. Unless this Debenture is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), to the issuer or its agent for registration of transfer, exchange or payment, and any Debenture issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of DTC (and any payment hereon is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein. MOTOROLA, INC. 6.68% DEFERRABLE INTEREST JUNIOR SUBORDINATED DEBENTURE DUE MARCH 31, 2039 No. 1 REGISTERED $515,463,925 The Company, for value received, hereby promises to pay to Harris Trust and Savings Bank, as Property Trustee under that certain Amended and Restated Declaration of Trust, dated as of February 3, 1999, among the Trustees of Motorola Capital Trust I named therein, the Company and the holders from time to time of undivided beneficial interests in the assets of Motorola Capital Trust I, or registered assigns, the principal sum of Five Hundred Fifteen Million Four Hundred Sixty Three Thousand Nine Hundred Twenty Five Dollars ($515,463,925) on March 31, 2039 (or on such date that is no earlier than February 3, 2004 or such date that is no later than the earlier of: (i) March 31, 2048 or (ii) the Interest Deduction Date, if the Company elects to shorten or extend the Maturity Date as further described herein), and to pay interest on said principal sum from the date of issuance, or from the most recent interest payment date (each such date, an "Interest Payment Date") to which interest has been paid or duly provided for, quarterly (subject to deferral as set forth herein) in arrears on March 31, June 30, September 30 and December 31 of each year commencing March 31,1999, at the rate of 6.68% per annum until the principal hereof shall have become due and payable, and on any overdue principal and (without duplication and to the extent that payment of such interest is enforceable under applicable law) on any overdue installment of interest at the same rate per annum compounded quarterly. The amount of interest payable on any Interest Payment Date shall be computed on the basis of a 360-day year of twelve 30-day months, and for any period shorter than a full quarter on the basis of the actual number of days elapsed in such 90-day quarter. The principal of and the interest on this Debenture shall become due and payable, in the manner, with the effect and subject to the conditions and limitations provided in the Indenture. The indebtedness evidenced by this Debenture is, to the extent provided in the Indenture, subordinate and junior in right of payment to the prior payment in full of all Senior Debt, and this Debenture is issued subject to the provisions of the Indenture with respect thereto. Each Holder of this Debenture, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on his or her behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination so provided and (c) appoints the Trustee his or her attorney-in- fact for any and all such purposes. Each Holder hereof, by his or her acceptance hereof, hereby waives all notice of the acceptance of the subordination provisions contained herein and in the Indenture by each holder of Senior Debt, whether now outstanding or hereafter incurred, and waives reliance by each such holder upon said provisions. No reference herein to the Indenture and no provision of this Debenture or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Debenture at the time and place and at the rate and in the money herein prescribed. All terms used in this Debenture that are defined in the Indenture shall have the meanings assigned to them in the Indenture. The provisions of this Debenture are continued on the reverse side hereof and such continued provisions shall for all purposes have the same effect as though fully set forth at this place. * * * * * * * * * IN WITNESS WHEREOF, the Company has caused this Debenture to be duly executed under its corporate seal. Dated: February 3, 1999. MOTOROLA, INC. By:______________________________________ Name: Title: CERTIFICATE OF AUTHENTICATION This is one of the Debentures referred to in the within-mentioned Indenture. HARRIS TRUST AND SAVINGS BANK, as Trustee By:______________________________________ Authorized Signatory Except as provided in the next paragraph with respect to the occurrence of a Special Event, the Debentures may not be redeemed by the Company prior to February 3, 2004. The Company shall have the right to redeem this Debenture, in whole or in part at any time and from time to time on or after February 3, 2004 (an "Optional Redemption"), at a redemption price equal to 100% of the principal amount to be redeemed plus any accrued and unpaid interest thereon (including any Compounded Interest, if any), to the date of such redemption (the "Optional Redemption Price"). Any 2 redemption pursuant to this paragraph will be made upon not less than 30 days nor more than 60 days notice to the Holder(s) of the Debentures at the Optional Redemption Price, in the manner, with the effect and subject to the conditions and limitations provided in the Indenture. If, at any time, a Tax Event or an Investment Company Event (each, as defined in the Indenture, a "Special Event") shall occur and be continuing, the Company shall have the right, upon not less than 30 nor more than 60 days' notice, to redeem the Debentures in whole or in part for cash at the Optional Redemption Price within 90 days following the occurrence of such Special Event, in the manner, with the effect and subject to the conditions and limitations provided in the Indenture. The Company shall have the right at any time during the term of the Debentures from time to time to extend the interest payment period of such Debentures for up to 20 consecutive quarters, in the manner, with the effect and subject to the conditions and limitations provided in the Indenture. The Company will have at any time the right to dissolve the Trust and cause the Debentures to be distributed to the holders of the Trust Securities in liquidation of the Trust, in the manner, with the effect and subject to the conditions and limitations provided in the Indenture. In case an Event of Default, as defined in the Indenture, shall have occurred and be continuing, the principal of all of the Debentures may be declared, and upon such declaration shall become, due and payable, in the manner, with the effect and subject to the conditions and limitations provided in the Indenture. No recourse shall be had for the payment of the principal of or the interest on this Debenture or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture, against any incorporator, stockholder, officer or director, past, present or future, as such, of the Company or of any predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issuance hereof, expressly waived and released. The Company and the Holder agree (i) that for United States federal, state and local tax purposes it is intended that the Debenture constitute indebtedness and (ii) to file all United States federal, state and local tax returns and reports on such basis (unless the Company or the Holder, as the case may be, shall have received an opinion of independent nationally recognized tax counsel to the effect that as a result of a change in law after the date of the issuance of the Debenture the Company or the Holder, as the case may be, is prohibited from filing on such basis). This Debenture shall not be entitled to any benefit under the Indenture hereinafter referred to, be valid or become obligatory for any purpose until the Certificate of Authentication hereon shall have been signed by or on behalf of the Trustee. 3 EX-4.20 7 INDENTURE DATED 2/3/99 - MOTOROLA & HARRIS TRUST EXHIBIT 4.20 MOTOROLA, INC. TO HARRIS TRUST AND SAVINGS BANK, AS TRUSTEE __________________________________________________ INDENTURE DATED AS OF FEBRUARY 3, 1999 __________________________________________________ SUBORDINATED DEBT SECURITIES TABLE OF CONTENTS ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION...................................... 1 SECTION I.1 Definitions......................................................................... 1 SECTION I.2 Compliance Certificates and Opinions................................................ 8 SECTION I.3 Form of Documents Delivered to Trustee.............................................. 9 SECTION I.4 Acts of Holders; Record Dates....................................................... 9 SECTION I.5 Notices, Etc., to Trustee and Company............................................... 11 SECTION I.6 Notice to Holders; Waiver........................................................... 11 SECTION I.7 Conflict with Trust Indenture Act................................................... 12 SECTION I.8 Effect of Headings and Table of Contents............................................ 12 SECTION I.9 Successors and Assigns.............................................................. 12 SECTION I.10 Separability Clause................................................................. 12 SECTION I.11 Benefits of Indenture............................................................... 12 SECTION I.12 Governing Law....................................................................... 12 SECTION I.13 Legal Holidays...................................................................... 12 SECTION I.14 Counterparts........................................................................ 12 ARTICLE II SECURITY FORMS............................................................................... 12 SECTION II.1 Forms Generally..................................................................... 12 SECTION II.2 Form of Trustee's Certificate of Authentication.................................... 13 SECTION II.3 Securities Issuable in Global Form.................................................. 13 ARTICLE III THE SECURITIES............................................................................... 14 SECTION III.1 Amount Unlimited; Issuable in Series................................................ 14 SECTION III.2 Denominations....................................................................... 16 SECTION III.3 Execution, Authentication, Delivery and Dating...................................... 16 SECTION III.4 Temporary Securities................................................................ 18 SECTION III.5 Registration, Registration of Transfer and Exchange................................. 19 SECTION III.6 Mutilated, Destroyed, Lost and Stolen Securities.................................... 22 SECTION III.7 Payment of Interest; Interest Rights Preserved; Optional Interest Reset............. 23 SECTION III.8 Optional Extension of Maturity...................................................... 25 SECTION III.9 Persons Deemed Owners............................................................... 25 SECTION III.10 Cancellation........................................................................ 25 SECTION III.11 Computation of Interest............................................................. 26 SECTION III.12 Currency and Manner of Payments in Respect of Securities............................ 26 SECTION III.13 Appointment and Resignation of Successor Exchange Rate Agent........................ 28 SECTION III.14 CUSIP Numbers....................................................................... 29 SECTION III.15 Certification by a Person Entitled to Delivery of Bearer Security................... 29 SECTION III.16 Judgments........................................................................... 29 ARTICLE IV SATISFACTION AND DISCHARGE................................................................... 29 SECTION IV.1 Satisfaction and Discharge of Indenture............................................. 29 SECTION IV.2 Application of Trust Money.......................................................... 30 ARTICLE V REMEDIES..................................................................................... 30 SECTION V.1 Events of Default................................................................... 30 SECTION V.2 Acceleration........................................................................ 31 SECTION V.3 Other Remedies...................................................................... 32 SECTION V.4 Waiver of Past Defaults............................................................. 32 SECTION V.5 Control by Majority................................................................. 32 SECTION V.6 Limitation on Suits................................................................. 32 SECTION V.7 Rights of Holders to Receive Payment................................................ 33 SECTION V.8 Collection Suit by Trustee.......................................................... 33 SECTION V.9 Trustee May File Proofs of Claim.................................................... 33 SECTION V.10 Priorities.......................................................................... 33 SECTION V.11 Undertaking for Costs............................................................... 34 SECTION V.12 Waiver of Stay, Extension or Usury Laws............................................. 34 ARTICLE VI THE TRUSTEE.................................................................................. 34 SECTION VI.1 Certain Duties and Responsibilities................................................. 34 SECTION VI.2 Notice of Defaults................................................................. 34 SECTION VI.3 Certain Rights of Trustee........................................................... 35
i SECTION VI.4 Not Responsible for Recitals or Issuance of Securities............................... 36 SECTION VI.5 May Hold Securities.................................................................. 36 SECTION VI.6 Money Held in Trust.................................................................. 36 SECTION VI.7 Compensation and Reimbursement....................................................... 36 SECTION VI.8 Disqualification; Conflicting Interests.............................................. 37 SECTION VI.9 Corporate Trustee Required; Eligibility.............................................. 37 SECTION VI.10 Resignation and Removal; Appointment of Successor.................................... 37 SECTION VI.11 Acceptance of Appointment by Successor............................................... 38 SECTION VI.12 Merger, Conversion, Consolidation or Succession to Business.......................... 39 SECTION VI.13 Preferential Collection of Claims Against Company.................................... 39 SECTION VI.14 Appointment of Authenticating Agent.................................................. 39 ARTICLE VII HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY............................................. 40 SECTION VII.1 Company to Furnish Trustee Names And Addresses of Holders............................ 40 SECTION VII.2 Preservation of Information; Communications to Holders............................... 40 SECTION VII.3 Reports by Trustee................................................................... 41 SECTION VII.4 Reports by Company................................................................... 41 ARTICLE VIII CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE.......................................... 41 SECTION VIII.1 Company May Consolidate, Etc., Only on Certain Terms................................. 41 SECTION VIII.2 Successor Person Substituted......................................................... 42 ARTICLE IX SUPPLEMENTAL INDENTURES SECTION............................................................... 42 SECTION IX.1 Supplemental Indentures Without Consent of Holders................................... 42 SECTION IX.2 Supplemental Indentures With Consent of Holders...................................... 43 SECTION IX.3 Execution of Supplemental Indentures................................................. 44 SECTION IX.4 Effect of Supplemental Indentures.................................................... 44 SECTION IX.5 Conformity With Trust Indenture Act.................................................. 44 SECTION IX.6 Reference in Securities to Supplemental Indentures................................... 44 SECTION IX.7 Notice of Supplemental Indenture..................................................... 44 ARTICLE X COVENANTS..................................................................................... 44 SECTION X.1 Payment of Principal, Premium And Interest........................................... 44 SECTION X.2 Maintenance of Office or Agency...................................................... 44 SECTION X.3 Money For Securities Payments to Be Held in Trust.................................... 45 SECTION X.4 Purchase of Securities by Company or Subsidiary...................................... 46 SECTION X.5 Payment of Additional Amounts........................................................ 46 SECTION X.6 Statement by Officers as to Default.................................................. 47 SECTION X.7 Existence............................................................................ 47 SECTION X.8............................................................................................ 47 SECTION X.9............................................................................................ 47 SECTION X.10 [INTENTIONALLY OMITTED].............................................................. 47 SECTION X.11 [INTENTIONALLY OMITTED].............................................................. 47 SECTION X.12 [INTENTIONALLY OMITTED].............................................................. 47 ARTICLE XI REDEMPTION OF SECURITIES...................................................................... 47 SECTION XI.1 Applicability of Article............................................................. 47 SECTION XI.2 Election to Redeem; Notice to Trustee................................................ 47 SECTION XI.3 Selection by Trustee of Securities to Be Redeemed.................................... 47 SECTION XI.4 Notice of Redemption................................................................. 48 SECTION XI.5 Deposit of Redemption Price.......................................................... 49 SECTION XI.6 Securities Payable on Redemption Date................................................ 49 SECTION XI.7 Securities Redeemed in Part.......................................................... 49 ARTICLE XII SINKING FUNDS................................................................................. 49 SECTION XII.1 Applicability of Article............................................................. 49 SECTION XII.2 Satisfaction of Sinking Fund Payments with Securities................................ 50 SECTION XII.3 Redemption of Securities for Sinking Fund............................................ 50 ARTICLE XIII REPAYMENT AT THE OPTION OF HOLDERS............................................................ 50 SECTION XIII.1 Applicability of Article............................................................. 50 SECTION XIII.2 Repayment of Securities.............................................................. 50 SECTION XIII.3 Exercise of Option; Notice........................................................... 50 SECTION XIII.4 Election of Repayment by Remarketing Entities........................................ 51 SECTION XIII.5 Securities Payable on the Repayment Date............................................. 51 ARTICLE XIV MEETINGS OF HOLDERS OF SECURITIES............................................................. 51 SECTION XIV.1 Purposes for Which Meetings May Be Called............................................ 51
ii SECTION XIV.2 Call, Notice and Place of Meetings................................................... 51 SECTION XIV.3 Persons Entitled to Vote at Meetings................................................. 52 SECTION XIV.4 Quorum; Action....................................................................... 52 SECTION XIV.5 Determination of Voting Rights; Conduct and Adjournment of Meetings................. 53 SECTION XIV.6 Counting Votes and Recording Action of Meetings...................................... 53 ARTICLE XV DEFEASANCE AND COVENANT DEFEASANCE............................................................ 53 SECTION XV.1 Company's Option to Effect Defeasance or Covenant Defeasance......................... 54 SECTION XV.2 Defeasance and Discharge............................................................. 54 SECTION XV.3 Covenant Defeasance.................................................................. 54 SECTION XV.4 Conditions to Defeasance or Covenant Defeasance...................................... 54 SECTION XV.5 Deposited Money and U.S. Government Obligations to Be Held in Trust; Other Miscellaneous Provisions....................................................... 55 SECTION XV.6 Reinstatement........................................................................ 56 ARTICLE XVI SUBORDINATION OF SECURITIES................................................................... 56 SECTION XVI.1 Securities Subordinate to Senior Indebtedness........................................ 56 SECTION XVI.2 Payment Over of Proceeds Upon Dissolution, Etc....................................... 56 SECTION XVI.3 Acceleration of Securities........................................................... 57 SECTION XVI.4 Default on Senior Indebtedness....................................................... 58 SECTION XVI.5 Payment Permitted If No Default...................................................... 58 SECTION XVI.6 Subrogation to Rights of Holders of Senior Indebtedness.............................. 59 SECTION XVI.7 Provisions Solely to Define Relative Rights.......................................... 59 SECTION XVI.8 Trustee to Effectuate Subordination.................................................. 59 SECTION XVI.9 No Waiver of Subordination Provisions................................................ 59 SECTION XVI.10 Notice to Trustee.................................................................... 60 SECTION XVI.11 Reliance on Judicial Order or Certificate of Liquidating Agent....................... 60 SECTION XVI.12 Trustee Not Fiduciary for Holders of Senior Indebtedness............................. 60 SECTION XVI.13 Rights of Trustee as Holder of Senior Indebtedness; Preservation of Trustee's Rights. 61 SECTION XVI.14 Article Sixteen Applicable to Paying Agents.......................................... 61
iii THIS INDENTURE, dated as of February 3, 1999, is between Motorola, Inc., a corporation duly organized and existing under the laws of the State of Delaware (herein called the "Company"), having its principal office at 1303 East Algonquin Road, Schaumburg, Illinois 60196, and Harris Trust and Savings Bank, an Illinois banking corporation, as Trustee (herein called the "Trustee"). RECITALS OF THE COMPANY The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its subordinated debentures, notes or other evidences of indebtedness (herein called the "Securities") to be issued in one or more series as in this Indenture provided. All things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done. Now, THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually agreed, for the equal and proportionate benefit of all Holders of the Securities or of series thereof, as follows: ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION SECTION I.1 DEFINITIONS. For all purposes of this Indenture, except as ----------- otherwise expressly provided or unless the context otherwise requires: (1) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; (2) all other terms used herein which are defined in the TIA, or by Commission rule or regulation under the TIA, either directly or by reference therein, as in force at the date as of which this instrument was executed, except as provided in Section 9.5, have the meanings assigned to them therein; the terms "cash transaction" and "self-liquidating paper," as used in TIA Section 311, shall have the meanings assigned to them in the rules of the Commission adopted under the Trust Indenture Act; and the following TIA terms used in this Indenture have the following meanings: "Indenture Securities" means the Securities; "Indenture Security Holder" means the Holder; "Indenture to be Qualified" means this Indenture; "Indenture Trustee" or "Institutional Trustee" means the Trustee; and "Obligor" on the indenture securities means the Company; (3) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles; and, except as otherwise herein expressly provided, the term "generally accepted accounting principles" with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted in the United States at the date of such computation; (4) the words "Article" and "Section" refer to an Article and Section, respectively, of this Indenture; and 1 (5) the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. Certain terms, used principally in Article Three, are defined in that Article. "Act," when used with respect to any Holder, has the meaning specified in Section 1.4. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, partnerships or other ownership interests, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Attributable Debt" shall mean, as to any particular lease under which any Person is at the time liable, at any date as of which the amount thereof is to be determined, the total net amount of rent required to be paid by such Person under such lease during the remaining term thereof, discounted from the respective due dates thereof to such date at the rate per annum borne by the Securities compounded annually. The net amount of rent required to be paid under any such lease for any such period shall be the aggregate amount of the rent payable by the lessee with respect to such period after excluding amounts required to be paid on account of maintenance and repairs, insurance, taxes, assessments, water rates and similar charges. In the case of any lease which is terminable by the lessee upon the payment of a penalty, such net amount shall also include the amount of such penalty, but no rent shall be considered as required to be paid under such lease subsequent to the first date upon which it may be so terminated. "Authenticating Agent" means any Person authorized by the Trustee pursuant to Section 6.14 to act on behalf of the Trustee to authenticate Securities of one or more series. "Authorized Newspaper" means a newspaper in an official language of the country of publication or in the English language customarily published on each Business Day, whether or not published on Saturdays, Sundays or holidays, and of general circulation in the place in connection with which the term is used or in the financial community of such place. Where successive publications are required to be made in Authorized Newspapers, the successive publications may be made in the same or in different newspapers in the same city meeting the foregoing requirements and in each case on any Business Day. "Bearer Security" means any Security established pursuant to Section 2.1 which is payable to bearer including, without limitation, unless the context otherwise indicates, a Security in global bearer form. "Board of Directors" or "Board" means either the board of directors of the Company or any duly authorized committee of that board. "Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee. Where any provision of this Indenture refers to action to be taken pursuant to a Board Resolution (including the establishment of any series of the Securities and the forms and terms thereof), such action may be taken by any committee of the Board or the Company or any officer or employee of the Company authorized to take such action by a Board Resolution. "Business Day," when used with respect to any Place of Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in that Place of Payment or in the City of Chicago, Illinois, are authorized or obligated by law or executive order to close. "Capital Stock" for any corporation means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interest in (however designated) stock issued by that corporation. 2 "CEDEL" or "CEDEL S.A." means Centrale de Livraison de Valeurs Mobilieres S.A., or its successor. "Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time. "Company" means the Person named as the "Company" in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor Person. "Company Request" or "Company Order" means a written request or order signed in the name of the Company by its Chief Executive Officer, its President or a Vice President, and by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to the Trustee. "Consolidated Net Tangible Assets" shall mean the aggregate amount of assets (less applicable reserves and other properly deductible items) after deducting therefrom (a) all current liabilities (excluding any constituting Funded Debt by reason of their being renewable or extendible), and (b) all goodwill, trade names, trademarks, patents, unamortized debt discount and expense and other like intangibles, all as set forth on the most recent balance sheet of the Company and its consolidated subsidiaries and computed in accordance with generally accepted accounting principles. "Conversion Date" has the meaning specified in Section 3.12(d). "Conversion Event" means the cessation of use of (i) a Foreign Currency both by the government of the country which issued such currency and for the settlement of transactions by a central bank or other public institutions of or within the international banking community, (ii) the Euro both within the European Monetary System and for the settlement of transactions by public institutions of or within the European Communities or (iii) any currency unit (or composite currency) other than the Euro for the purposes for which it was established. "Corporate Trust Office" means the principal office of the Trustee in the City of Chicago, Illinois or in New York, New York at which at any particular time its corporate trust business shall be administered. "corporation" means a corporation, association, company, joint stock company or business trust. "coupon" means any interest coupon appertaining to a Bearer Security. "Currency" means any currency or currencies, composite currency or currency unit or currency units, including, without limitation, the Euro, issued by the government of one or more countries or by any reorganized confederation or association of such governments. "Covenant Defeasance" has the meaning specified in Section 15.3. "Debt" means with respect to any person at any date, without duplication, (i) all obligations of such person for borrowed money, (ii) all obligations of such person evidenced by bonds, debentures, notes or other similar instruments, (iii) all Debt of others secured by a lien on any asset of such person, whether or not such Debt is assumed by such person, (iv) all obligations of such person pursuant to capitalized leases, and (v) all Debt of others for the payment of which such person is responsible or liable as obligor or guarantor. "Defaulted Interest" has the meaning specified in Section 3.7. "Defeasance" has the meaning specified in Section 15.2. "Defeasible Series" has the meaning specified in Section 15.1. 3 "Depositary" means, with respect to the Securities of any series issuable or issued in whole or in part in the form of one or more Global Securities, the Person designated as Depositary by the Company pursuant to Section 3.1 until a successor Depositary shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Depositary" shall mean or include each person who is then a Depositary hereunder, and if at any time there is more than one such Person, "Depositary" as used with respect to the Securities of any such series shall mean the Depositary with respect to the Securities of that series. "Designated Currency" has the meaning specified in Section 3.12. "Domestic Subsidiary" shall mean a Subsidiary of the Company except a Subsidiary of the Company (a) which neither transacts any substantial portion of its business nor regularly maintains any substantial portion of its fixed assets within the States of the United States, or (b) which is engaged primarily in financing the operations of the Company or its Subsidiaries, or both, outside the States of the United States. "Dollar" or "$" means a dollar or other equivalent within the coin or currency of the United States as at the time of payment is legal tender for the payment of public and private debts. "Euro" means the Common Currency of the European monetary union as defined and revised from time to time by the Council of the European Communities. "Euroclear" means Morgan Guarantee Trust Company of New York, Brussels Office, as operator of the Euroclear System. "European Communities" means the European Economic Community, the European Coal and Steel Community and the European Atomic Energy Community. "European Monetary System" means the European Monetary System established by the Resolution of December 5, 1978 of the Council of the European Communities. "Event of Default" has the meaning specified in Section 5.1. "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time, and any successor thereto, and the rules and regulations promulgated thereunder. "Exchange Date" shall have the meaning specified in Section 3.4. "Exchange Rate Agent" shall have the meaning specified as contemplated in Section 3.1. "Exchange Rate Officer's Certificate" means a certificate setting forth the applicable Market Exchange Rate or applicable bid quotation and the amounts payable in Dollars and Foreign Currencies in respect of the principal of (and premium, if any) and interest on Securities denominated in Euro and other composite Currency or Foreign Currency, and signed by the Chief Executive Officer, the President, any Vice President, the Treasurer or any Assistant Treasurer of the Company or the Exchange Rate Agent appointed pursuant to Section 3.1, and delivered to the Trustee. "Foreign Currency" means any Currency, including, without limitation, the Euro issued by the government of one or more countries other than the United States or by any recognized confederation or association of such governments. "Funded Debt" shall mean all indebtedness for money borrowed having a maturity of more than 12 months from the date of the most recent balance sheet of the Company and its consolidated subsidiaries or having a maturity of less than 12 months but by its terms being renewable or extendible beyond 12 months from the date of such balance sheet at the option of the borrower. 4 "Global Security" means a Security evidencing all or part of a series of Securities, authenticated and delivered to the Depositary for such series or its nominee, and registered in the name of such Depositary or nominee in accordance with Section 3.3. "Holder" means, with respect to a Registered Security, a Person in whose name a Registered Security is registered in the Security Register and, with respect to a Bearer Security, the bearer thereof. "Indenture" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this instrument, and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this instrument and any such supplemental indenture, respectively. The term "Indenture" shall also include the terms of particular series of Securities established as contemplated by Section 3.1. "Indexed Security" means a Security as to which all or certain interest payments and/or the principal amount payable at Maturity are determined by reference to prices, changes in prices, or differences between prices, or securities or Currencies as specified pursuant to Section 3.1 hereof. "Interest," when used with respect to an Original Issue Discount Security which by its terms bears interest only after Maturity, means interest payable after Maturity. "Interest Payment Date," when used with respect to any Security, means the Stated Maturity of an installment of interest on such Security, and, when used with respect to a Security which provides for the payment of additional amounts pursuant to Section 10.5, includes such additional amounts. "Market Exchange Rate" means, unless otherwise specified with respect to any Securities pursuant to Section 3.1, (i) for any conversion involving a Currency unit on the one hand and Dollars or any Foreign Currency on the other, the exchange rate between the relevant Currency unit and Dollars or such Foreign Currency calculated by the method specified pursuant to Section 3.1 for the Securities of the relevant series, (ii) for any conversion of Dollars into any Foreign Currency, the noon buying rate for such Foreign Currency for cable transfers quoted in New York City as certified for customs purposes by the Federal Reserve Bank of New York and (iii) for any conversion of one Foreign Currency into Dollars or another Foreign Currency, the spot rate at noon local time in the relevant market at which, in accordance with normal banking procedures, the Dollars or Foreign Currency into which conversion is being made could be purchased with the Foreign Currency from which conversion is being made from major banks located in either New York City, London or any other principal market for Dollars or such purchased Foreign Currency, in each case determined by the Exchange Rate Agent. Unless otherwise specified with respect to any Securities pursuant to Section 3.1, in the event of the unavailability of any of the exchange rates provided for in the foregoing clauses (i), (ii) and (iii), the Exchange Rate Agent shall use, in its sole discretion and without liability on its part, such quotation of the Federal Reserve Bank of New York as of the most recent available date, or quotations from one or more major banks in New York City, London or other principal market for such currency or currency unit in question, or such other quotations as the Exchange Rate Agent shall deem appropriate. Unless otherwise specified by the Exchange Rate Agent, if there is more than one market for dealing in any currency or currency unit by reason of foreign exchange regulations or otherwise, the market to be used in respect of such currency or currency unit shall be that upon which a nonresident issuer of securities designated in such currency or currency unit would purchase such currency or currency unit in order to make payments in respect of such securities. "Maturity," when used with respect to any Security, means the date on which the principal of such Security or an installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise. "Notice of Default" means a written notice of the kind specified in Section 5.1(4). 5 "Officers' Certificate" means a certificate signed by the Chief Executive Officer, the President or any elected Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary or any Assistant Secretary, of the Company, and delivered to the Trustee, which shall comply with Section 1.2 to the extent applicable. "Opinion of Counsel" means a written opinion of counsel, who may be counsel for the Company, and who shall be reasonably satisfactory to the Trustee, which shall comply with Section 1.2 to the extent applicable. "Original Issue Discount Security" means any Security which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 5.2. "Outstanding," when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except: (1) Securities theretofore canceled by the Trustee or delivered to the Trustee for cancellation; (2) Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities in accordance with Section 4.1; provided that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; (3) Securities as to which Defeasance has been effected pursuant to Section 15.2; and (4) Securities which have been paid pursuant to Section 3.6 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company; Provided, however, that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder or are present at a meeting of Holders for quorum purposes, and for the purpose of making the calculations required by TIA Section 313, (A) the principal amount of an Original Issue Discount Security that may be counted in making such determination or calculation and that shall be deemed to be Outstanding for such purpose shall be equal to the amount of principal thereof that would be (or shall have been declared to be) due and payable, at the time of such determination, upon a declaration of acceleration of the Maturity thereof pursuant to Section 5.2, (B) the principal amount of any Security denominated in a Foreign Currency that may be counted in making such determination or calculation and that shall be deemed Outstanding for such purpose shall be equal to the Dollar equivalent, determined as of the date such Security is originally issued by the Company as set forth in an Exchange Rate Officer's Certificate delivered to the Trustee, of the principal amount (or in the case of an Original Issue Discount Security or Indexed Security, the Dollar equivalent as of such date of original issuance of the amount determined as provided in clause (A) above or (C) below respectively) of such Security, (C) the principal amount of any Indexed Security that may be counted in making such determination or calculation and that shall be deemed outstanding for such purpose shall be equal to the principal face amount of such Indexed Security at original issuance, unless otherwise provided with respect to such Security pursuant to Section 3.1, and (D) Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which the Trustee knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor. 6 "Paying Agent" means any Person authorized by the Company to pay the principal of (or any premium) or interest on any Securities on behalf of the Company. "Person" means any individual, corporation, partnership, joint venture, trust, unincorporated organization or government or any agency or political subdivision thereof. "Place of Payment," when used with respect to the Securities of any series, means the place or places where the principal of and any premium and interest on the Securities of that series are payable as specified as contemplated by Sections 3.1 and 10.2. "Predecessor Security" of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 3.6 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security. "Principal Property" means any single parcel of real estate, manufacturing plant or warehouse owned or leased by the Company or any Domestic Subsidiary which is located within the United States and the gross book value (without deduction of any depreciation reserves) of which on the date as of which the determination is being made exceeds 1% of Consolidated Net Tangible Assets, other than any such manufacturing plant or warehouse or portion thereof (a) which is a pollution control or other facility financed by obligations issued by a state or local government unit and described in Sections 141(a), 142(a)(5), 142(a)(6) or 144(a) of the Internal Revenue Code, or any successor provision thereof, or (b) which, in the opinion of the Board of Directors, is not of material importance to the total business conducted by the Company and its subsidiaries as an entirety. "Redemption Date," when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture. "Redemption Price," when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture. "Registered Security" means any Security in the form of Registered Securities established pursuant to Section 2.1 which is registered in the Security Register. "Regular Record Date" for the interest payable on any Interest Payment Date on the Registered Securities of any series means the date specified for that purpose as contemplated by Section 3.1. "Remarketing Entity," when used with respect to Securities of any series which are repayable at the option of the Holders thereof before their Stated Maturity, means any person designated by the Company to purchase any such Securities. "Repayment Date," when used with respect to any Security to be repaid upon exercise of option for repayment by the Holder, means the date fixed for such repayment. "Repayment Price," when used with respect to any Security to be repaid upon exercise of option for repayment by the Holder, means the price at which it is to be repaid pursuant to this Indenture. "Securities" has the meaning stated in the first recital of this Indenture and more particularly means any Securities authenticated and delivered under this Indenture. "Security Register" and "Security Registrar" have the respective meanings specified in Section 3.5. "Senior Indebtedness" means all Debt of the Company, whether now existing or hereafter created, but excluding trade accounts payable arising in the ordinary course of business, and includes all series of the Company's outstanding Liquid Yield Option(TM) Notes. Without limiting the generality of the foregoing, "Senior Indebtedness" shall 7 include the principal of, premium, if any, and interest on: (i) all Debt of the Company outstanding, created, incurred or assumed, which is for money borrowed, or evidenced by a note or similar instrument given in connection with acquisition of any business properties or assets, including securities; (ii) any Debt of any other Person of the kinds described in the preceding clause (i) for the payment of which the Company is responsible or liable as guarantor or otherwise; and (iii) amendments, renewals, extensions and refundings of any such Debt, unless in any instrument or instruments evidencing or securing such Debt or pursuant to which the same is outstanding, or in any such amendment, renewal, extension or refunding, it is expressly provided that such Debt is not senior in right of payment to the subordinated debentures, notes or other evidences of indebtedness, as applicable. "Senior Indebtedness" does not include any Debt of the Company to any of its Subsidiaries. The Senior Indebtedness shall continue to be Senior Indebtedness and entitled to the benefits of the subordination provisions irrespective of any amendment, modification or waiver of any term of the Senior Indebtedness or extension or renewal of the Senior Indebtedness. "Special Record Date" for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 3.7. "Stated Maturity," when used with respect to any Security or any installment of principal thereof or interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable. "Subsidiary" shall mean a corporation a majority of the outstanding voting stock of which is owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries. For the purposes of this definition, the term "voting stock" means stock having ordinary voting power for the election of directors irrespective of whether or not stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency. "Trustee" means the Person named as the "Trustee" in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean or include each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, "Trustee" as used with respect to the Securities of any series shall mean each Trustee with respect to Securities of that series. "Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 and the rules and regulations promulgated thereunder as in force at the date as of which this instrument was executed, except as provided in Section 9.5; provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, "Trust Indenture Act" or "TIA" means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended and the rules and regulations promulgated thereunder. "United States" means the United States of America (including the District of Columbia) and its possessions and territories and other areas subject to its jurisdiction (including the Commonwealth of Puerto Rico). "United States Alien" means any Person who, for United States Federal income tax purposes, is a foreign corporation, a non-resident alien individual, a non-resident alien fiduciary of a foreign estate or trust, or a foreign partnership one or more of the members of which is, for United States Federal income tax purposes, a foreign corporation, a non-resident alien individual or a non-resident alien fiduciary of a foreign estate or trust. "U.S. Government Obligations" means securities which are (i) direct obligations of the United States for the payment of which its full faith and credit is pledged or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States, which, in either case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933, as amended) as custodian with respect to any such U.S. Government Obligation or a specific payment of interest on or principal of any such U.S. Government Obligation held by such custodian for the account of the holder of a depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect 8 of the U.S. Government Obligation or the specific payment of interest on or principal of the U.S. Government Obligation evidenced by such depository receipt. "Valuation Date" has the meaning specified in Section 3.12(c). "Vice President," when used with respect to the Company or the Trustee, means any elected vice president, whether or not designated by a word or words added before the title "vice president". SECTION I.2 COMPLIANCE CERTIFICATES AND OPINIONS. Upon any application or ------------------------------------ request by the Company to the Trustee to take any action under any provision of this Indenture (other than delivery of any Security to the Trustee for authentication pursuant to Section 3.3 which shall be accompanied with a Company Order), the Company shall furnish to the Trustee: (a) an Officers' Certificate stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and (b) an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have been complied with. In the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, however, no additional certificate or opinion need be furnished. Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include: (1) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of each such individual, such condition or covenant has been complied with. SECTION I.3 FORM OF DOCUMENTS DELIVERED TO TRUSTEE. In any case where -------------------------------------- several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument. SECTION I.4 ACTS OF HOLDERS; RECORD DATES. ----------------------------- 9 (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing. If Securities of a series are issuable in whole or in part as Bearer Securities, any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may, alternatively, be embodied in and evidenced by the record of Holders of Securities voting in favor thereof, either in person or by proxies duly appointed in writing, at any meeting of Holders of Securities duly called and held in accordance with the provisions of Article Fourteen, or a combination of such instruments and any such record. Except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are received by the Trustee and, where it is hereby expressly required, delivered to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.1) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section. The record of any meeting of Holders of Securities shall be proved in the manner provided in Section 14.6. The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient. (b) The ownership of Registered Securities shall be proved by the Security Register. (c) The ownership, principal amount and serial numbers of Bearer Securities held by any Person, and the date of holding the same, may be proved by the production of such Bearer Securities or by a certificate executed, as depositary, by any trust company, bank, banker or other depositary, wherever situated, if such certificate shall be deemed by the Trustee to be satisfactory, showing that at the date therein mentioned such Person had on deposit with such depositary, or exhibited to it, the Bearer Securities in the amount and with the serial numbers therein described; or such facts may be proved by the certificate or affidavit of the Person holding such Bearer Securities, if such certificate or affidavit is deemed by the Trustee to be satisfactory. The Trustee and the Company may assume that such ownership of any Bearer Security continues until (1) another certificate or affidavit bearing a later date issued in respect of the same Bearer Security is produced, (2) such Bearer Security is produced to the Trustee by some other person, (3) such Bearer Security is surrendered in exchange for a Registered Security or (4) such Bearer Security is no longer Outstanding. The fact and date of execution of any such instrument or writing, the authority of the Person executing the same and the principal amount and serial numbers of Bearer Securities held by the Person so executing such instrument or writing and the date of holding the same may also be proved in any other manner which the Trustee deems sufficient; and the Trustee may in any instance require further proof with respect to any of the matters referred to in this Section. (d) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee, any Security Registrar, any Paying Agent, any Authenticating Agent or the Company in reliance thereon, whether or not notation of such action is made upon such Security. (e) If the Company shall solicit from the Holders of Registered Securities any request, demand, authorization, direction, notice, consent, waiver or other Act, the Company may, at its option, in or pursuant to a Board Resolution, fix in advance a record date for the determination of Holders entitled to give such request, demand, authorization, direction, notice, consent, waiver or other Act, but the Company shall have no obligation to do so. Notwithstanding TIA Section 316(c), such record date shall be the record date specified in or pursuant to such Board Resolution, which shall be a date not earlier than the date 30 days prior to the first solicitation of Holders generally in 10 connection therewith and not later than the date such solicitation is completed. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other Act may be given before or after such record date, but only the Holders of record at the close of business on such record date shall be deemed to be Holders for the purposes of determining whether Holders of the requisite proportion of Outstanding Securities have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other Act, and for that purpose the Outstanding Securities shall be computed as of such record date; provided that no such authorization, agreement or consent by the Holders on such record date shall be deemed effective unless it shall become effective pursuant to the provisions of this Indenture not later than eleven months after the record date. Without limiting the foregoing, a Holder entitled hereunder to give or take any action hereunder with regard to any particular Security may do so with regard to all or any part of the principal amount of such Security or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to all or any different part of such principal amount. SECTION I.5 NOTICES, ETC., TO TRUSTEE AND COMPANY. Any request, demand, ------------------------------------- authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with, (1) the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate Trust Office, Attention: Indenture Trust Division, or (2) the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Company addressed to it at the address of its principal office specified in the first paragraph of this instrument or at any other address previously furnished in writing to the Trustee by the Company. SECTION I.6 NOTICE TO HOLDERS; WAIVER. Where this Indenture provides for ------------------------- notice of any event to Holders of Registered Securities by the Company or the Trustee, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each such Holder affected by such event, at his address as it appears in the Security Register, not later than the latest date, if any, and not earlier than the earliest date, if any, prescribed for the giving of such notice. In any case where notice to Holders of Registered Securities is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders of Registered Securities or the sufficiency of any notice to Holders of Bearer Securities given as provided herein. Any notice mailed to a Holder in the manner herein prescribed shall be conclusively deemed to have been received by such Holder, whether or not such Holder actually receives such notice. If by reason of the suspension of or irregularities in regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification to Holders of Registered Securities as shall be made with the approval of the Trustee shall constitute a sufficient notification to such Holders for every purpose hereunder. Except as otherwise expressly provided herein or otherwise specified with respect to any Securities pursuant to Section 3.1, where this Indenture provides for notice to Holders of Bearer Securities of any event, such notice shall be sufficiently given if published in an Authorized Newspaper in the City of New York and, if the Securities of such series are then listed on the International Stock Exchange of the United Kingdom and the Republic of Ireland and such stock exchange shall so require, in London, and, if the Securities of such series are then listed on the Luxembourg Stock Exchange and such stock exchange shall so require, in Luxembourg and, if the Securities of such series are than listed on any other stock exchange outside the United States and such stock exchange shall so require, in any other required city outside the United States or, if not practicable, in Europe on a Business Day at least twice, the first such publication to be not later than the latest date and not earlier than the earliest date prescribed for the giving of such notice, and in such other city or cities as may be specified in such Securities on a Business Day, such publication to be not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. Any such notice shall be 11 deemed to have been given on the date of such publication or, if published more than once, on the date of the first such publication. If by reason of the suspension of publication of any Authorized Newspaper or Authorized Newspapers or by reason of any other cause it shall be impracticable to publish any notice to Holders of Bearer Securities as provided above, then such notification to Holders of Bearer Securities as shall be given with the approval of the Trustee shall constitute sufficient notice to such Holders for every purpose hereunder. Neither the failure to give notice by publication to Holders of Bearer Securities as provided above, nor any defect in any notice so published, shall affect the sufficiency of such notice with respect to other Holders of Bearer Securities or the sufficiency of any notice to Holders of Registered Securities given as provided herein. Any request, demand, authorization, direction, notice, consent or waiver required or permitted under this Indenture shall be in the English language, except that any published notice may be in an official language of the country of publication. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. SECTION I.7 CONFLICT WITH TRUST INDENTURE ACT. This Indenture is subject --------------------------------- to and shall be governed by the provisions of the TIA that are required to be a part of this Indenture. If any provision hereof limits, qualifies or conflicts with a provision of the TIA that is required under such Act to be a part of and govern this Indenture, the TIA provision shall control. If any provision of this Indenture modifies or excludes any provision of the TIA that may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be. SECTION I.8 EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and ---------------------------------------- Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. SECTION I.9 SUCCESSORS AND ASSIGNS. All covenants and agreements in this ---------------------- Indenture by the Company shall bind its successors and assigns, whether so expressed or not. SECTION I.10 SEPARABILITY CLAUSE. In case any provision in this ------------------- Indenture or in the Securities or coupons shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. SECTION I.11 BENEFITS OF INDENTURE. Nothing in this Indenture or in the --------------------- Securities or coupons, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, any Paying Agent, Security Registrar and Authenticating Agent and the Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture. SECTION I.12 GOVERNING LAW. This Indenture and the Securities and ------------- coupons shall be governed by and construed in accordance with the law of the State of New York, but without regard to principles of conflicts of law. SECTION I.13 LEGAL HOLIDAYS. In any case where any Interest Payment -------------- Date, Redemption Date, Repayment Date, Stated Maturity or Maturity of any Security shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Indenture or of the Securities or coupons (other than a provision of the Securities of any series which specifically states that such provision shall apply in lieu of this Section)) payment of interest or principal (and premium, if any) need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the Interest Payment Date or Redemption Date, Repayment Date, Stated Maturity or Maturity, provided that no interest shall accrue for the period from and after such Interest Payment Date, Redemption Date, Repayment Date, Stated Maturity or Maturity, as the case may be. 12 SECTION I.14 COUNTERPARTS. This Indenture may be executed in any number ------------ of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same Indenture. ARTICLE II SECURITY FORMS SECTION II.1 FORMS GENERALLY. The Registered Securities, if any, and the --------------- Bearer Securities and related coupons, if any, of each series shall be in substantially the form (including temporary or permanent global form) as shall be established by or pursuant to a Board Resolution or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or market or as may, consistently herewith, be determined by the officers executing such Securities or coupons, as evidenced by their execution of the Securities or coupons. If the form of Securities of any series or coupons is established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Company Order contemplated by Section 3.3 for the authentication and delivery of such Securities or coupons. Unless otherwise specified as contemplated by Section 3.1, Bearer Securities other than Securities in temporary or permanent global form shall have coupons attached. The definitive Securities and coupons, if any, shall be printed, lithographed or engraved or produced by any combination of these methods on steel engraved borders or may be produced in any other manner permitted by the rules of any securities exchange on which the Securities may be listed, all as determined by the officers executing such Securities or coupons, as evidenced by their execution of such Securities or coupons. SECTION II.2 FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. The ------------------------------------------------ Trustee's certificate of authentication on each Security shall be in substantially the following form: This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. as Trustee By ______________________________________ [AUTHORIZED OFFICER] SECTION II.3 SECURITIES ISSUABLE IN GLOBAL FORM. If Securities of or ---------------------------------- within a series are issuable in global form, as specified as contemplated by Section 3.1, then, notwithstanding clause (9) of Section 3.1 and the provisions of Section 3.2, any such Global Security shall represent such of the Outstanding Securities of such series as shall be specified therein and may provide that it shall represent the aggregate amount of Outstanding Securities of such series from time to time endorsed thereon and that the aggregate amount of Outstanding Securities of such series represented thereby may from time to time be increased or decreased to reflect exchanges. Any endorsement of a Global Security to reflect the amount, or any increase or decrease in the amount, of Outstanding Securities represented thereby shall be made by the Trustee in such manner and upon instructions given by such Person or Persons as shall be specified therein or in the Company Order to be delivered to the Trustee pursuant to Section 3.3 or 3.4. Subject to the provisions of Section 3.3 and, if applicable, Section 3.4, the Trustee shall deliver and redeliver any Security in permanent global form in the manner and upon instructions given by the Person or Persons specified therein or in the applicable Company Order. If a Company Order pursuant to Section 3.3 or 3.4 has been, or simultaneously is, delivered, any instructions by the Company with respect to endorsement, delivery or redelivery of a Security in global form shall be in writing but need not comply with Section 1.2 and need not be accompanied by an Opinion of Counsel. 13 The provisions of the last sentence of Section 3.3(g) shall apply to any Security represented by a Security in global form if such Security was never issued and sold by the Company and the Company delivers to the Trustee the Security in global form together with written instructions (which need not comply with Section 1.2 and need not be accompanied by an Opinion of Counsel) with regard to the reduction in the principal amount of Securities represented thereby, together with the written statement contemplated by the last sentence of Section 3.3(g). Notwithstanding the provisions of Section 3.7, unless otherwise specified as contemplated by Section 3.1, payment of principal of (and premium, if any) and interest, if any, on any permanent Global Security shall be made to the Person or Persons specified therein. Notwithstanding the provisions of Section 3.9 and except as provided in the preceding paragraph, the Company, the Trustee and any agent of the Company and the Trustee shall treat as the Holder of such principal amount of Outstanding Securities represented by a permanent Global Security (i) in the case of a permanent Global Security in registered form, the Holder of such permanent Global Security in registered form, or (ii) in the case of a permanent Global Security in bearer form, Euroclear or CEDEL. ARTICLE III THE SECURITIES SECTION III.1 AMOUNT UNLIMITED; ISSUABLE IN SERIES. The aggregate ------------------------------------ principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited. The Securities shall rank equally and pari passu and may be issued in one or more series. There shall be established in or pursuant to a Board Resolution, and, subject to Section 3.3 set forth, or determined in the manner provided, in an Officers' Certificate, or established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series, any or all of the following, as applicable (each of which (except for the matters in clauses (1) and (2)), if so provided, may be determined by the Company with respect to unissued Securities, of the series when issued from time to time): (1) the title of the Securities of the series (which shall distinguish the Securities of the series from Securities of any other series); (2) any limit upon the aggregate principal amount of the Securities of the series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 3.4, 3.5, 3.6, 9.6, 11.7 or 13.3 and except for any Securities which, pursuant to Section 3.3, are deemed never to have been authenticated and delivered hereunder); (3) the date or dates, or the method by which such date or dates will be determined or extended, on which the principal of the Securities (and premium, if any), of the series is payable; (4) the rate or rates at which the Securities of the series shall bear interest, or the method or methods by which such rate or rates shall be determined, if any, the date or dates from which such interest shall accrue, or the method by which such date or dates will be determined or extended, the Interest Payment Dates on which any such interest shall be payable and the Regular Record Date for any interest payable on any Registered Security on any Interest Payment Date, the circumstances, if any, in which the Company may defer interest payments and the manner of computing interest if other than as specified in Section 3.11; (5) the place or places where, subject to the provisions of Section 10.2, the principal of (and premium, if any) and interest, if any, on Securities of the series shall be payable, any Registered Securities of the series may be surrendered for registration of transfer, Securities of the series may be surrendered or 14 exchanged and notices and demands to or upon the Company in respect of the Securities of the series and this Indenture may be served and where notices to Holders pursuant to Section 1.6 will be published; (6) the period or periods within which or the date or dates on which, the price or prices at which and the terms and conditions upon which Securities of the series may be redeemed, in whole or in part, at the option of the Company; (7) the obligation, if any, of the Company to redeem, repay or purchase Securities of the series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the period or periods within which, the price or prices at which, the period or periods within which, and the other terms and conditions upon which Securities of the series shall be redeemed, repaid or purchased, in whole or in part, pursuant to such obligation; (8) whether Securities of the series are to be issuable as Registered Securities, Bearer Securities or both, whether Securities of the series are to be issuable with or without coupons or both, the terms upon which Bearer Securities of the series may be exchanged for Registered Securities of the series (and vice versa) if other than as provided in Sections 3.4 and 3.5, and, in the case of Bearer Securities (or any temporary Global Security representing the same), the date as of which such Bearer Securities shall be dated if other than the date of original issuance of the first Security of such series of like tenor and term to be issued; (9) whether the Securities of the series shall be issued in whole or in part in the form of a Global Security or Securities and, in such case, the Depositary for such Global Security or Securities, whether such global form shall be permanent or temporary and, if so, whether beneficial owners of interests in any such permanent Global Security may exchange such interests for Securities of such series in certificated form and of like tenor of any authorized form and denomination and the circumstances under which any such exchanges may occur, if other than in the manner provided in this Article Three, and, if applicable, the Exchange Date; (10) whether, and under what conditions, additional amounts will be payable to Holders of Securities of the series pursuant to Section 10.5; (11) the denominations in which any Registered Securities of the series shall be issuable, if other than denominations of $1,000 and any integral multiple thereof, and the denominations in which any Bearer Securities of such series shall be issuable, if other than the denominations of $5,000 and any integral multiple thereof; (12) if other than Dollars, the Currency or Currencies of denomination of the Securities of any series, which may be in any Foreign Currency or any composite Currency or index, including but not limited to the Euro, and, if any such Currency of denomination is a composite Currency other than the Euro, the agency or organization, if any, responsible for overseeing such composite Currency; (13) that either or both of Section 15.2 or 15.3 shall apply to the Securities of the series; (14) if other than Dollars, the Currency, Currencies or currency units in which payment of the principal of (and any premium) and interest on any Securities of the series shall be payable and the Currency or Currencies, if any, in which payment of the principal of (and premium, if any) or the interest on Registered Securities at the election of each of the Holders thereof, may also be payable and the periods within which and the terms and conditions upon which such election is to be made and the time and manner of determining the exchange rate between Currency or Currencies in which such Securities are denominated or stated to be paid and the Currency or Currencies in which such Securities are to be paid, in each case in accordance with, in addition to or in lieu of Section 3.12; (15) if the amount of payments of principal of (or premium, if any) or interest on any Securities of the series may be determined with reference to an index, the manner in which such amounts shall be determined; 15 (16) the Person to whom any interest on any Registered Security of the series shall be payable, if other than the Person in whose name such Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, the manner in which, or the Person to whom, any interest on any Bearer Security of the series shall be payable, if other than upon presentation and surrender of the coupons appertaining thereto as they severally mature, and the extent to which, or the manner in which, any interest payable on a temporary Global Security on an Interest Payment Date will be paid if other than in the manner provided in Section 3.4; (17) the designation of the initial Exchange Rate Agent, if any; (18) if the Securities of the series are to be convertible into or exchangeable for any securities of any Person (including the Company), the terms and conditions upon which such Securities will be so convertible or exchangeable; (19) if other than the principal amount thereof, the portion of the principal amount of Securities of the series which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 5.2; and (20) if other than the Trustee, the identity of the Security Registrar and/or Paying Agent; (21) the terms of any pledge of property made to secure the obligations of the Company under the Securities of any series and the circumstances, if any, under which such pledge may be released and the limitations, if any, on recourse against the Company on Securities of such series; and (22) any other terms of the series (which terms shall not be inconsistent with the provisions of this Indenture, except as permitted by Section 9.1(5)). Except as set forth below, all Securities of any one series and the coupons appertaining to Bearer Securities of such series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to such Board Resolution and (subject to Section 3.3) set forth, or determined in the manner provided, in such Officers' Certificate or in any indenture supplemental hereto. Securities of any particular series may be issued at various times, with different dates on which the principal or any installment of principal is payable, with different rates of interest, if any, or different methods by which rates of interest may be determined, with different dates on which such interest may be payable and with different Redemption or Repayment Dates and may be denominated in different Currencies or payable in different Currencies. If any of the terms of the Securities of any series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers' Certificate setting forth the terms of the series. SECTION III.2 DENOMINATIONS. Securities of each series shall be issuable in ------------- such form and denominations as shall be specified in the form of Security for such series approved or established pursuant to Section 2.1 or in the Officers' Certificate delivered pursuant to Section 3.1. In the absence of any specification with respect to the Securities of any series, the Registered Securities of such series, if any (other than Registered Securities in global form, which may be in any denomination), shall be issuable in denominations of $1,000 and any integral multiples thereof and the Bearer Securities of such series, if any (other than Bearer Securities in global form, which may be in any denomination), shall be issuable in denominations of $5,000 and any integral multiple thereof. SECTION III.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING. ---------------------------------------------- (a) The Securities shall be executed on behalf of the Company by its Chief Executive Officer, its President, its Treasurer or one of its Vice Presidents, under its corporate seal reproduced thereon and shall be attested by its Secretary or one of its Assistant Secretaries. The signature of any of these officers on the Securities may be manual or facsimile. Coupons shall bear the facsimile signature of an authorized officer of the Company. 16 Securities or coupons bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or coupons or did not hold such offices at the date of such Securities or coupons. (b) At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series, executed by the Company, to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities, and, except as otherwise provided in this Article Three, the Trustee in accordance with the Company Order shall authenticate and deliver such Securities; provided, however, that, in connection with its original issuance, no Bearer Security shall be mailed or otherwise delivered to any location in the United States; and provided further that, unless otherwise specified with respect to any series of Securities pursuant to Section 3.1, a Bearer Security may be delivered in connection with its original issuance only if the Person entitled to receive such Bearer Security shall have furnished a certificate in the form set forth in Exhibit A-1 to this Indenture or such other certificate as may be specified with respect to any series of Securities pursuant to Section 3.1, dated no earlier than 15 days prior to the earlier of the date on which such Bearer Security is delivered and the date on which any temporary Security first becomes exchangeable for such Bearer Security in accordance with the terms of such temporary Security and this Indenture. If any Security shall be represented by a permanent Global Bearer Security, then, for purposes of this Section 3.3 and Section 3.4, the notation of a beneficial owner's interest therein upon original issuance of such Security or upon exchange of a portion of a temporary Global Security shall be deemed to be delivery in connection with its original issuance of such beneficial owner's interest in such permanent Global Security. Except as permitted by Section 3.6, the Trustee shall not authenticate and deliver any Bearer Security unless all appurtenant coupons for interest then matured have been detached and canceled. If all the Securities of any series are not to be issued at one time and if the Board Resolution or supplemental indenture establishing such series shall so permit, such Company Order may set forth procedures acceptable to the Trustee for the issuance of such Securities and determining the terms of particular Securities of such series, such as interest rate, maturity date, date of issuance and date from which interest shall accrue. If the form or terms of the Securities of the series have been established in or pursuant to one or more Board Resolutions as permitted by Sections 2.1 and 3.1, in authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 6.1) shall be fully protected in relying upon, an Opinion of Counsel stating, (A) if the form of such Securities and coupons, if any, has been established by or pursuant to a Board Resolution as permitted by Section 2.1, that such form has been established in conformity with the provisions of this Indenture; (B) if the terms of such Securities and coupons, if any, have been established by or pursuant to a Board Resolution as permitted by Section 3.1, that such terms have been established in conformity with the provisions of this Indenture; and (C) that such Securities and coupons, if any, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Company, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles and except further as enforcement thereof may be limited by (1) requirements that a claim with respect to any Securities denominated other than in Dollars (or a Foreign Currency or Currency unit judgment in respect of such claim) be converted into Dollars at a rate of exchange prevailing on a date determined pursuant to applicable law or (2) governmental authority to limit, delay or prohibit the making of payments in Foreign Currencies or Currency units or payments outside the United States. (c) If the Company shall establish pursuant to Section 3.1 that the Securities of a series are to be issued in whole or in part in the form of one or more Global Securities, then the Company shall execute and the Trustee shall, in accordance with this Section 3.3, Section 3.4, if and to the extent applicable, and the Company Order with respect to such series, authenticate and deliver one or more Global Securities in permanent or temporary form that (i) shall 17 represent and shall be denominated in an aggregate principal amount of the Outstanding Securities of such series to be represented by one or more Global Securities, (ii) shall be registered in the name of the Depositary for such Global Security or Securities or the nominee of such Depositary and (iii) shall be delivered by the Trustee to such Depositary or pursuant to such Depositary's instructions. (d If such form or terms have been so established, the Trustee shall not be required to authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee's own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee. (e Notwithstanding the provisions of Section 3.1 and this Section 3.3, if all Securities of a series are not to be originally issued at one time, it shall not be necessary to deliver the Officers' Certificate otherwise required pursuant to Section 3.1 or the Company Order and Opinion of Counsel otherwise required pursuant to such preceding paragraph at or prior to the time of authentication of each Security of such series if such documents are delivered at or prior to the authentication upon original issuance of the first Security of such series to be issued. (f Each Registered Security shall be dated the date of its authentication. Each Bearer Security shall be dated the date contemplated by Section 3.1. (g No Security or attached coupon shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless executed and issued by the Company and there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder and is entitled to the benefits of this Indenture. Except as permitted by Section 3.6, the Trustee shall not authenticate and deliver any Bearer Security unless all appurtenant coupons for interest then matured have been detached and canceled. Notwithstanding the foregoing, if any Security shall have been authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Security to the Trustee for cancellation as provided in Section 3.10, for all purposes of this Indenture such Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture. (h Each Depositary designated pursuant to Section 3.1 for a Global Security must, at the time of its designation and at all times while it serves as Depositary, be a clearing agency registered under the Exchange Act and any other applicable statute or regulation. (i The Securities may contain such notations, legends or endorsements required by law, stock exchange rule or usage. SECTION III.4 TEMPORARY SECURITIES. -------------------- (a Pending the preparation of definitive Securities of any series, the Company may execute, and upon receipt of a Company Order the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued, in registered form, or, if authorized, in bearer form with one or more coupons or without coupons, and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as conclusively evidenced by their execution of such Securities. In the case of Securities of any series, such temporary Securities may be in global form. Except in the case of temporary Securities in global form (which shall be exchanged in accordance with Section 3.4(b) or as otherwise provided in or pursuant to a Board Resolution), or as otherwise provided in or pursuant to a Board Resolution, if temporary Securities of any series are issued, the Company will cause definitive Securities of that series to be prepared without unreasonable delay. After the preparation of definitive Securities of such series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series upon surrender of the temporary Securities of such series at the office or agency of the Company in a Place of Payment for that series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities of any series 18 (accompanied by any non-matured coupons appertaining thereto), the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of definitive Securities of the same series of authorized denominations; provided, however, that unless otherwise contemplated or specified with respect to any series of Securities pursuant to Section 3.1, no definitive Bearer Security shall be delivered in exchange for a temporary Registered Security; and provided further that a Bearer Security shall be delivered in exchange for a Bearer Security only in compliance with the applicable conditions set forth in Sections 3.3, 3.4 and 3.5. Until so exchanged, the temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of such series. (b Unless otherwise provided in or pursuant to a Board Resolution, this Section 3.4(b) shall govern the exchange of temporary Securities issued in global form. If temporary Securities of any series are issued in global form, any such temporary Global Security shall, unless otherwise provided therein, be delivered to the London office of a Depositary, for the benefit of Euroclear and CEDEL, for credit to the respective accounts of the beneficial owners of such Securities (or to such other accounts as they may direct). Without unnecessary delay but in any event not later than the date specified in, or determined pursuant to the terms of, any such temporary Global Security (the "Exchange Date"), the Company shall deliver to the Trustee definitive Securities, in aggregate principal amount equal to the principal amount of such temporary Global Security, executed by the Company. On or after the Exchange Date, such temporary Global Security shall be surrendered by the Depositary to the Trustee, as the Company's agent for such purpose, to be exchanged, in whole or from time to time in part, for definitive Securities without charge, and upon receipt of a Company Order, the Trustee shall authenticate and deliver, in exchange for each portion of such temporary Global Security, an equal aggregate principal amount of definitive Securities of the same series of authorized denominations and of like tenor as the portion of such temporary Global Security to be exchanged. The definitive Securities to be delivered in exchange for any such temporary Global Security shall be in bearer form, registered form, permanent global bearer form or permanent global registered form, or any combination thereof, as specified as contemplated by Section 3.1, and, if any combination thereof is so specified, as requested by the beneficial owner thereof; provided, however, that, unless otherwise specified in such temporary Global Security, upon such presentation by the Depositary, such temporary Global Security is accompanied by a certificate dated the Exchange Date or a subsequent date and signed by Euroclear as to the portion of such temporary Global Security held for its account then to be exchanged and a certificate dated the Exchange Date or a subsequent date and signed by CEDEL as to the portion of such temporary Global Security held for its account then to be exchanged, each in the form, set forth in Exhibit A-2 to this Indenture or in such other form as may be established pursuant to Section 3.1; and provided further that definitive Bearer Securities shall be delivered in exchange for a portion of a temporary Global Security only in compliance with the requirements of Section 3.3, 3.4 and Section 3.5, as applicable. Unless otherwise specified in such temporary Global Security, the interest of a beneficial owner of Securities of a series in a temporary Global Security shall be exchanged for definitive Securities of the same series and of like tenor following the Exchange Date when the account holder instructs Euroclear or CEDEL, as the case may be, to request such exchange on his behalf and delivers to Euroclear or CEDEL, as the case may be, a certificate in the form set forth in Exhibit A-1 to this Indenture (or in such other form as may be established pursuant to Section 3.1), dated no earlier than 15 days prior to the Exchange Date, copies of which certificate shall be available from the officers of Euroclear and CEDEL, the Trustee, any Authenticating Agent appointed for such series of Securities and each Paying Agent. Unless otherwise specified in such temporary Global Security, any such exchange shall be made free of charge to the beneficial owners of such temporary Global Security, except that a Person receiving definitive Securities must bear the cost of insurance, postage, transportation and the like unless such Person takes delivery of such definitive Securities in person at the offices of Euroclear or CEDEL. Definitive Securities in bearer form to be delivered in exchange for any portion of a temporary Global Security shall be delivered only outside the United States. Until exchanged in full as hereinabove provided, the temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of the same series and of like tenor authenticated and delivered hereunder, except that, unless otherwise specified as contemplated by Section 3.1, interest payable on a temporary Global Security on an Interest Payment Date for Securities of such series occurring prior to the applicable Exchange Date shall be payable to Euroclear and CEDEL on such Interest Payment Date upon delivery by Euroclear and CEDEL to the Trustee of a certificate or certificates in the form set forth in Exhibit A-2 to this Indenture (or in such other forms as may be established pursuant to Section 3.1), for credit without further interest on or after such Interest Payment Date to the respective accounts of Persons who are the beneficial owners of such temporary Global Security on such Interest Payment Date and who have each delivered to Euroclear or CEDEL, as the case may be, a certificate dated no earlier than 15 days prior to the Interest Payment Date occurring prior to such Exchange Date in the form set forth as Exhibit A-1 to this Indenture 19 (or in such other forms as may be established pursuant to Section 3.1). Notwithstanding anything to the contrary herein contained, the certifications made pursuant to this paragraph shall satisfy the certification requirements of the preceding two paragraphs of this Section 3.4(b) and of Section 3.3(b) of this Indenture and the interests of the Persons who are the beneficial owners of the temporary Global Security with respect to which such certification was made will be exchanged for definitive Securities of the same series and of like tenor on the Exchange Date or the date of certification if such date occurs after the Exchange Date, without further act or deed by such beneficial owners. Except as otherwise provided in this paragraph, no payments of principal (or premium, if any) or interest, if any, owing with respect to a beneficial interest in a temporary Global Security will be made unless and until such interest in such temporary Global Security shall have been exchanged for an interest in a definitive Security. Any interest so received by Euroclear and CEDEL and not paid as herein provided shall be returned to the Trustee prior to the expiration of two years after such Interest Payment Date in order to be repaid to the Company. SECTION III.5 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE. The --------------------------------------------------- Company shall cause to be kept at one of the offices or agencies to be maintained by the Company in accordance with the provisions of this Section 3.5 and Section 10.2, with respect to the Securities of each series which are Registered Securities, a register (herein sometimes referred to as the "Security Register") in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Registered Securities and of transfers of Registered Securities. Pursuant to Section 3.1, the Company shall appoint, with respect to Securities of each series which are Registered Securities, a "Security Registrar" for the purpose of registering such Securities and transfers and exchanges of such Securities as herein provided. The Trustee, at its Corporate Trust Office, is initially appointed "Security Registrar" for such Registered Securities. Upon surrender for registration of transfer of any Registered Security of any series at the office or agency of the Company maintained for such purpose, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Registered Securities of the same series of any authorized denomination or denominations, of like tenor and terms and aggregate principal amount, all as requested by the transferor. At the option of the Holder, Registered Securities of any series may be exchanged for other Registered Securities of the same series of any authorized denomination or denominations, of like tenor and terms and aggregate principal amount, upon surrender of the Registered Securities to be exchanged at such office or agency. Unless otherwise specified with respect to any series of Securities as contemplated by Section 3.1, Bearer Securities may not be issued in exchange for Registered Securities. At the option of the Holder, Registered Securities or Bearer Securities of any series may be issued in exchange for Bearer Securities (except as otherwise specified as contemplated by Section 3.1 with respect to a Bearer Security in global form) of the same series, of any authorized denominations and of like tenor and terms and aggregate principal amount, upon surrender of the Bearer Securities to be exchanged at any such office or agency with all unmatured coupons and all matured coupons in default thereto appertaining. If the Holder of a Bearer Security is unable to produce any such unmatured coupon or coupons or matured coupon or coupons in default, such exchange may be effected if the Bearer Securities are accompanied by payment in funds acceptable to the Company and the Trustee in an amount equal to the face amount of such missing coupon or coupons, or the surrender of such missing coupon or coupons may be waived by the Company and the Trustee if there be furnished to them such security or indemnity as they may require to save each of them and any Paying Agent harmless. If thereafter the Holder of such Security shall surrender to any Paying Agent any such missing coupon in respect of which such a payment shall have been made, such Holder shall be entitled to receive the amount of such payment; provided, however, that, except as otherwise provided in Section 10.2, interest represented by coupons shall be payable only upon presentation and surrender of those coupons at an office or agency located outside the United States. Notwithstanding the foregoing, in case a Bearer Security of any series is surrendered at any such office or agency in a permitted exchange for a Registered Security of the same series and like tenor and terms after the close of business at such office or agency of (i) any Regular Record Date and before the 20 opening of business at such office or agency on the relevant Interest Payment Date or (ii) any Special Record Date and before the opening of business at such office or agency on the related date for payment of Defaulted Interest, such Bearer Security shall be surrendered without the coupon relating to such Interest Payment Date or proposed date of payment, as the case may be, and interest or Defaulted Interest, as the case may be, will not be payable on such Interest Payment Date or proposed date for payment as the case may be, in respect of the Registered Security issued in exchange for such Bearer Security, but will be payable only to the Holder of such coupon when due in accordance with the provisions of this Indenture. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive. If at any time the Depositary for the Securities of a series notifies the Company that it is unwilling or unable to continue as Depositary for the Securities of such series or if at any time the Depositary for the Securities of such series shall no longer be eligible under Section 3.3(h), the Company shall appoint a successor Depositary with respect to the Securities of such series. If a successor Depositary for the Securities of such series is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such ineligibility, the Company's election pursuant to Section 3.1(9) shall no longer be effective with respect to the Securities of such series and the Company will execute, and the Trustee, upon receipt of a Company Order for the authentication and delivery of definitive Securities of such series, will authenticate and deliver, Securities of such series in definitive form in an aggregate principal amount equal to the principal amount of the Global Security or Securities representing such series in exchange for such Global Security or Securities. The Company may at any time and in its sole discretion determine that the Securities of any series issued in the form of one or more Global Securities shall no longer be represented by such Global Security or Securities. In such event the Company will execute, and the Trustee, upon receipt of a Company Order for the authentication and delivery of definitive Securities of such series, will authenticate and deliver, Securities of such series in definitive form and in an aggregate principal amount equal to the principal amount of the Global Security or Securities representing such series in exchange for such Global Security or Securities. If specified by the Company pursuant to Section 3.1 with respect to a series of Securities, the Depositary for such series of Securities may surrender a Global Security for such series of Securities in exchange in whole or in part for Securities of such series of like tenor and terms and in definitive form on such terms as are acceptable to the Company and such Depositary. Thereupon, the Company shall execute, and upon receipt of a Company Order, the Trustee shall authenticate and deliver, without service charge, (A to each Person specified by such Depositary a new Security or Securities of the same series, of like tenor and terms and of any authorized denominations as requested by such person in aggregate principal amount equal to and in exchange for such Person's beneficial interest in the Global Security; and (B to such Depositary a new Global Security of like tenor and terms and in a denomination equal to the difference, if any, between the principal amount of the surrendered Global Security and the aggregate principal amount of Securities delivered to Holders thereof. In any exchange provided for in any of the preceding three paragraphs, the Company will execute and upon receipt of a Company Order, the Trustee will authenticate and deliver Securities (a) in definitive registered form in authorized denominations, if the Securities of such series are issuable as Registered Securities, (b) in definitive bearer form in authorized denominations, with coupons attached, if the Securities of such series are issuable as Bearer Securities or (c) as either Registered or Bearer Securities, as shall be specified by the beneficial owner thereof, if the Securities of such series are issuable in either form; provided, however, that no definitive Bearer Security shall be delivered in exchange for a temporary Global Security unless the Company or its agent shall have received from the person entitled to receive the definitive Bearer Security a certificate substantially in the form set forth in Exhibit A-1 and, if applicable, A-2 hereto; and provided further that delivery of a Bearer Security shall occur only outside the United States; and provided further that no definitive Bearer Security will be issued if the Company has reason to know that any such certificate is false. 21 Upon the exchange of a Global Security for Securities in definitive form, such Global Security shall be canceled by the Trustee. Registered Securities issued in exchange for a Global Security pursuant to this Section shall be registered in such names and in such authorized denominations as the Depositary for such Global Security, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Registered Securities to the persons in whose names such Securities are so registered. The Trustee shall deliver Bearer Securities issued in exchange for a Global Security pursuant to this Section to the persons, and in such authorized denominations, as the Depositary for such Global Security, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee; provided, however, that no definitive Bearer Security shall be delivered in exchange for a temporary Global Security unless the Company or its agent shall have received from the person entitled to receive the definitive Bearer Security a certificate substantially in the form set forth in Exhibit A-1 and, if applicable, A-2 hereto; and provided further that delivery of a Bearer Security shall occur only outside the United States; and provided further that no definitive Bearer Security will be issued if the Company has reason to know that any such certificate is false. All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange. Every Registered Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company, the Security Registrar or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing. No service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer, registration of transfer or exchange of Securities, other than exchanges of Securities expressly provided in this Indenture to be made at the Company's own expense or without expense or without charge to the Holders. The Company shall not be required (i) to issue, register the transfer of or exchange Securities of any particular series to be redeemed for a period of fifteen days preceding the first publication of the relevant notice of redemption or, if Registered Securities are outstanding and there is no publication, the mailing of the relevant notice of redemption of Securities of such series selected for redemption under Section 11.3 and ending at the close of business on the day of such mailing, (ii) to register the transfer of or exchange any Registered Security so selected for redemption in whole or in part, except the unredeemed portion of such Registered Security being redeemed in part or (iii) to exchange any Bearer Security so selected for redemption except that such a Bearer Security may be exchanged for a Registered Security of like tenor and terms of that series, provided that such Registered Security shall be simultaneously surrendered for redemption. Notwithstanding anything herein to the contrary, the exchange of Bearer Securities into Registered Securities shall be subject to applicable laws and regulations in effect at the time of exchange; neither the Company, the Trustee nor the Security Registrar shall exchange any Bearer Securities into Registered Securities if it has received an Opinion of Counsel that as a result of such exchanges the Company would suffer adverse consequences under the United States Federal income tax laws and regulations then in effect and the Company has delivered to the Trustee a Company Order directing the Trustee not to make such exchanges thereafter unless and until the Trustee receives a subsequent Company Order to the contrary. The Company shall deliver copies of such Company Orders to the Security Registrar. SECTION III.6 MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES. If (i) ------------------------------------------------ any mutilated Security or Security with a mutilated coupon is surrendered to a Paying Agent outside the United States or, in the case of a Registered Security, to the Trustee or (ii) the Company and the Trustee receive evidence to their satisfaction of the loss, destruction or theft of any Security or coupon together with, in proper cases, such security or indemnity as may be required by the Company or the Trustee to save each of them or any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute 22 and the Trustee shall authenticate and deliver in exchange therefor (together with all coupons not destroyed, lost or stolen) a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding with coupons corresponding to any coupons appertaining to the surrendered Security; provided, that any such Bearer Security will be delivered only in compliance with Section 3.3, 3.4 and 3.5, as applicable. In case any such mutilated, destroyed, lost or stolen Security or coupon has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, with coupons corresponding to the coupons, if any, appertaining to such mutilated, destroyed, lost or stolen Security or to the Security to which such mutilated, destroyed, lost or stolen coupon appertains, pay such Security or coupon; provided, however, that payment of principal of (and premium, if any) and interest, if any, on Bearer Securities shall, except as otherwise provided in Section 10.2, be payable only at an office or agency located outside the United States and, unless otherwise specified as contemplated by Section 3.1, any interest on Bearer Securities shall be payable only upon presentation and surrender of the coupons appertaining thereto. Upon the issuance of any new Security or coupon under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. Every new Security of any series, with its coupons, if any, issued pursuant to this Section in lieu of any destroyed, lost or stolen Security, or in exchange for a Security to which a destroyed, lost or stolen coupon appertains, shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security and its coupons, if any, or the destroyed, lost or stolen coupon shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of that Series and their coupons, if any, duly issued hereunder. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities or coupons. SECTION III.7 PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED; OPTIONAL -------------------------------------------------------- INTEREST RESET. - -------------- (a Except as otherwise specified with respect to a series of Securities in accordance with the provision of Section 3.1, interest, if any, on any Registered Security that is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest at the office or agency of the Company maintained for such purpose pursuant to Section 10.2; provided, however, that each installment of interest, if any, on any Registered Security may at the Company's option be paid by (i) mailing a check for such interest, payable to or upon the written order of the Person entitled thereto pursuant to Section 3.9, to the address of such Person as it appears on the Security Register or (ii) transfer to an account maintained by the payee inside the United States. Unless otherwise provided as contemplated by Section 3.1 with respect to the Securities of any series, payment of interest, if any, may be made, in the case of a Bearer Security, at the Holder's option by (i) check in the Currency designated for such payment pursuant to the terms of the Bearer Security presented or mailed to an address outside the United States or (ii) transfer to an account in such Currency maintained by the payee with a bank located outside the United States. Unless otherwise provided as contemplated by Section 3.01, every permanent Global Security will provide that interest, if any, payable on any Interest Payment Date will be paid to each of Euroclear and CEDEL with respect to that portion of such permanent Global Security held for its account by the Depositary, for the purpose of permitting each of Euroclear and CEDEL to credit the interest, if any, received by it in respect of such permanent Global Security to the accounts of the beneficial owners thereof. In case a Bearer Security of any series is surrendered in exchange for a Registered Security of such series after the close of business (at an office or agency in a Place of Payment for such series) on any Regular Record Date and before the opening of business (at such office or agency) on the next succeeding Interest Payment Date, such Bearer 23 Security shall be surrendered without the coupon relating to such Interest Payment Date and interest will not be payable on such Interest Payment Date in respect of the Registered Security issued in exchange for such Bearer Security, but will be payable only to the Holder of such coupon when due in accordance with the provisions of this Indenture. (b Except as otherwise specified with respect to a series of Securities in accordance with the provisions of Section 3.1, any interest on any Registered Security of any series that is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease to be payable to the registered Holder thereof on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in clause (1) or (2) below: (1 The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Registered Securities of such series (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Registered Security of such series and the date of the proposed payment (which shall not be less than 20 days after such notice is received by the Trustee), and at the same time the Company shall deposit with the Trustee an amount of money in the Currency in which the Securities of such series are payable (except as otherwise specified pursuant to Section 3.1 for the Securities of such series and except, if applicable, as provided in Sections 3.12(b), 3.12(d) and 3.12(e)) equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit on or prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder of Registered Securities of such series at his address as it appears in the Security Register not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in whose names the Registered Securities of such series (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following clause (2). In case a Bearer Security of any series is surrendered at the office or agency in a Place of Payment for such series in exchange for a Registered Security of such series after the close of business at such office or agency on any Special Record Date and before the opening of business at such office or agency on the related proposed date for payment of Defaulted Interest, such Bearer Security shall be surrendered without the coupon relating to such proposed date of payment and Defaulted Interest will not be payable on such proposed date of payment in respect of the Registered Security issued in exchange for such Bearer Security, but will be payable only to the Holder of such coupon when due in accordance with the provisions of this Indenture. (2 The Company may make payment of any Defaulted Interest on the Registered Securities of any series in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee. The provisions of this Section 3.7(b) may be made applicable to any series of Securities pursuant to Section 3.1 (with such modifications, additions or substitutions as may be specified pursuant to such Section 3.1). The interest rate (or the spread or spread multiplier used to calculate such interest rate, if applicable) on any Security of such series may be reset by the Company on the date or dates specified on the face of such Security (each an "Optional Reset Date"). The Company may exercise such option with respect to such Security by notifying the Trustee of such exercise at least 45 but not more than 60 days prior to an Optional Reset Date for such Security. Not later than 40 days prior to each Optional Reset Date, the Trustee shall transmit, in the manner provided for in Section 1.6, to the Holder of any such Security a notice (the "Reset Notice") indicating whether the Company has elected to reset the interest rate (or the spread or spread multiplier used to calculate such interest rate, if applicable), and if so (i) such new interest rate (or such new 24 spread or spread multiplier, if applicable) and (ii) the provisions, if any, for redemption during the period from such Optional Reset Date to the next Optional Reset Date or, if there is no such next Optional Reset Date, to the Stated Maturity of such Security (each such period a "Subsequent Interest Period"), including the date or dates on which or the period or periods during which and the price or prices at which such redemption may occur during the Subsequent Interest Period. Notwithstanding the foregoing, not later than 20 days prior to the Optional Reset Date, the Company may, at its option, revoke the interest rate (or the spread or spread multiplier used to calculate such interest rate, if applicable) provided for in the Reset Notice and establish an interest rate (or a spread or spread multiplier used to calculate such interest rate, if applicable) that is higher than the interest rate (or the spread or spread multiplier, if applicable) provided for in the Reset Notice, for the Subsequent Interest Period by causing the Trustee to transmit, in the manner provided for in Section 1.6, notice of such higher interest rate (or such higher spread or spread multiplier, if applicable) to the Holder of any such Security. Such notice shall be irrevocable. All Securities with respect to which the interest rate (or the spread or spread multiplier used to calculate such interest rate, if applicable) is reset on an Optional Reset Date, and with respect to which the Holders of such Securities have not tendered such Securities for repayment (or have validly revoked any such tender) pursuant to the next succeeding paragraph, will bear such higher interest rate (or such higher spread or spread multiplier, if applicable). The Holder of any such Security will have the option to elect repayment by the Company of the principal of such Security on each Optional Reset Date at a price equal to the principal amount thereof plus interest accrued to such Optional Reset Date. In order to obtain repayment on an Optional Reset Date, the Holder must follow the procedures set forth in Article Thirteen for repayment at the option of Holders except that the period for delivery or notification to the Trustee shall be at least 25 but not more than 35 days prior to such Optional Reset Date and except that, if the Holder has tendered any Security for repayment pursuant to the Reset Notice, the Holder may, by written notice to the Trustee, revoke such tender or repayment until the close of business on the tenth day before such Optional Reset Date. (a Subject to the foregoing provisions of this Section 3.7 and Section 3.5, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security. SECTION III.8 OPTIONAL EXTENSION OF MATURITY. The provisions of this ------------------------------ Section 3.8 may be made applicable to any series of Securities pursuant to Section 3.1 (with such modifications, additions or substitutions as may be specified pursuant to such Section 3.1). The Stated Maturity of any Security of such series may be extended at the option of the Company for the period or periods specified on the face of such Security (each, an "Extension Period") up to but not beyond the date (the "Final Maturity") set forth on the face of such Security. The Company may exercise such option with respect to any Security by notifying the Trustee of such exercise at least 30 but not more than 60 days prior to the Stated Maturity of such Security in effect prior to the exercise of such option (the "Original Stated Maturity"). If the Company exercises such option, the Trustee shall transmit, in the manner provided for in Section 1.6, to the Holder of any such Security not later than 40 days prior to the Original Stated Maturity a notice (the "Extension Notice") indicating (i) the election of the Company to extend the Stated Maturity, (ii) the new Stated Maturity, (iii) the interest rate, if any, applicable to the Extension Period and (iv) the provisions, if any, for redemption during such Extension Period. Upon the Trustee's transmittal of the Extension Notice, the Stated Maturity of such Security shall be extended automatically and, except as modified by the Extension Notice and as described in the next paragraph, such Security will have the same terms as prior to the transmittal of such Extension Notice. Notwithstanding the foregoing, not later than 20 days before the Original Stated Maturity of such Security, the Company may, at its option, revoke the interest rate provided for in the Extension Notice and establish a higher interest rate for the Extension Period by causing the Trustee to transmit, in the manner provided for in Section 1.6, notice of such higher interest rate to the Holder of any such Security. Such notice shall be irrevocable. All Securities with respect to which the Stated Maturity is extended will bear such higher interest rate. If the Company extends the Stated Maturity of any Security, the Holder will have the option to elect repayment of such Security by the Company on the Original Stated Maturity at a price equal to the principal amount thereof, plus interest accrued to such date. In order to obtain repayment on the Original Stated Maturity once the Company has 25 extended the Stated Maturity thereof, the Holder must follow the procedures set forth in Article Thirteen for repayment at the option of Holders, except that the period for delivery or notification to the Trustee shall be at least 25 but not more than 35 days prior to the Original Stated Maturity and except that, if the Holder has tendered any Security for repayment pursuant to an Extension Notice, the Holder may by written notice to the Trustee revoke such tender for repayment until the close of business on the tenth day before the Original Stated Maturity. SECTION III.9 PERSONS DEEMED OWNERS. Prior to due presentment of a --------------------- Registered Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Registered Security is registered as the owner of such Security for the purpose of receiving payment of principal of (and premium, if any) and (subject to Section 3.5 and 3.7) any interest on such Registered Security and for all other purposes whatsoever, whether or not such Registered Security is overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary. Title to any Bearer Security and any coupons appertaining thereto shall pass by delivery. The Company, the Trustee and any agent of the Company or the Trustee may treat the bearer of any Bearer Security and the bearer of any coupon as the absolute owner of such Security or coupon for the purpose of receiving payment thereof or on account thereof and for all other purposes whatsoever, whether or not such Security or coupon be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary. None of the Company, the Trustee, any Paying Agent or the Security Registrar will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a Global Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. Notwithstanding the foregoing, with respect to any Global Security, nothing herein shall prevent the Company, the Trustee, or any agent of the Company or the Trustee, from giving effect to any written certification, proxy or other authorization furnished by any Depositary, as a Holder, with respect to such Global Security or impair, as between such Depositary and owners of beneficial interests in such Global Security, the operation of customary practices governing the exercise of the rights of such Depositary (or its nominee) as Holder of such Global Security. SECTION III.10 CANCELLATION. All Securities and coupons surrendered for ------------ payment, redemption, repayment at the option of the Holder, registration of transfer or exchange or for credit against any sinking fund payment shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly canceled by it. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Trustee (or to any other Person for delivery to the Trustee) for cancellation any Securities previously authenticated hereunder which the Company has not issued and sold, and all Securities so delivered shall be promptly canceled by the Trustee. If the Company shall so acquire any of the Securities, however, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by such Securities unless and until the same are surrendered to the Trustee for cancellation. No Securities shall be authenticated in lieu of or in exchange for any Securities canceled as provided in this Section, except as expressly permitted by this Indenture. All canceled Securities and coupons held by the Trustee shall be disposed of as directed by a Company Order. SECTION III.11 COMPUTATION OF INTEREST. Except as otherwise specified ----------------------- as contemplated by Section 3.1 for Securities of any series, interest on the Securities of each series shall be computed on the basis of a 360-day year of twelve 30-day months. SECTION III.12 CURRENCY AND MANNER OF PAYMENTS IN RESPECT OF SECURITIES. -------------------------------------------------------- (a Unless otherwise specified with respect to any Securities pursuant to Section 3.1, with respect to Registered Securities of any series not permitting the election provided for in paragraph (b) below or the Holders of which have not made the election provided for in paragraph (b) below, and with respect to Bearer Securities of any series, except as provided in paragraph (d) below, payment of the principal of (and premium, if any) and interest, if any, on any Registered or Bearer Security of such series will be made in the Currency in which such Registered Security or 26 Bearer Security, as the case may be, is payable. The provisions of this Section 3.12 may be modified or superseded with respect to any Securities pursuant to Section 3.1. (b It may be provided pursuant to Section 3.1 with respect to Registered Securities of any series that Holders shall have the option, subject to paragraphs (d) and (e) below, to receive payments of principal of (or premium, if any) or interest, if any, on such Registered Securities in any of the Currencies which may be designated for such election by delivering to the Trustee for such series of Registered Securities a written election with signature guarantees and in the applicable form established pursuant to Section 3.1, not later than the close of business on the Election Date (as defined below) immediately preceding the applicable payment date. If a Holder so elects to receive such payments in any such Currency, such election will remain in effect for such Holder or any transferee of such Holder until changed by such Holder or such transferee by written notice to the Trustee for such series of Registered Securities (but any such change must be made not later than the close of business on the Election Date immediately preceding the next payment date to be effective for the payment to be made on such payment date and no such change of election may be made with respect to payments to be made on any Registered Security of such series with respect to which an Event of Default has occurred or with respect to which the Company has deposited funds pursuant to Article Four or Fifteen or with respect to which a notice of redemption has been given by the Company or a notice of option to elect repayment has been sent by such Holder or such transferee). Any Holder of any such Registered Security who shall not have delivered any such election to the Trustee of such series of Registered Securities not later than the close of business on the applicable Election Date will be paid the amount due on the applicable payment date in the relevant Currency as provided in Section 3.12(a). The Trustee for each such series of Registered Securities shall notify the Exchange Rate Agent as soon as practicable after the Election Date of the aggregate principal amount of Registered Securities for which Holders have made such written election. (c Unless otherwise specified pursuant to Section 3.1, if the election referred to in paragraph (b) above has been provided for pursuant to Section 3.1, then, unless otherwise specified pursuant to Section 3.1, not later than the fourth Business Day after the Election Date for each payment date for Registered Securities of any series, the Exchange Rate Agent will deliver to the Company a written notice specifying the Currency in which Registered Securities of such series are payable, the respective aggregate amounts of principal of (and premium, if any) and interest, if any, on the Registered Securities to be paid on such payment date, specifying the amounts in such Currency so payable in respect of the Registered Securities as to which the Holders of Registered Securities denominated in any Currency shall have elected to be paid in another Currency as provided in paragraph (b) above. If the election referred to in paragraph (b) above has been provided for pursuant to Section 3.1 and if at least one Holder has made such election, then, unless otherwise specified pursuant to Section 3.1, on the second Business Day preceding such payment date the Company will deliver to the Trustee for such series of Registered Securities an Exchange Rate Officer's Certificate in respect of the Dollar or Foreign Currency or Currencies amount receivable by Holders of Registered Securities who have elected payment in a Currency as provided in paragraph (b) above. Such amounts shall be determined by the Company on the basis of the applicable Market Exchange Rate in effect on the second Business Day (the "Valuation Date") immediately preceding each payment date, and such determination shall be conclusive and binding for all purposes, absent manifest error. (d If a Conversion Event occurs with respect to a Foreign Currency in which any of the Securities are denominated or payable other than pursuant to an election provided for pursuant to paragraph (b) above, then with respect to each date for the payment of principal of (and premium, if any) and interest, if any, on the applicable Securities denominated or payable in such Foreign Currency occurring after the last date on which such Foreign Currency was used (the "Conversion Date"), the Dollar shall be the currency of payment for use on each such payment date. Unless otherwise specified pursuant to Section 3.1, the Dollar amount to be paid by the Company to the Trustee of each such series of Securities and by such Trustee or any Paying Agent to the Holders of such Securities with respect to such payment date shall be, in the case of a Foreign Currency other than a currency unit, the Dollar Equivalent of the Foreign Currency (as defined below) or, in the case of a currency unit, the Dollar Equivalent of the Currency Unit (as defined below), in each case as determined by the Exchange Rate Agent in the manner provided in paragraph (f) or (g) below. (e Unless otherwise specified pursuant to Section 3.1, if the Holder of a Registered Security denominated in any Currency shall have elected to be paid in another Currency as provided in paragraph (b) above, and a Conversion 27 Event occurs with respect to such elected Currency, such Holder shall receive payment in the Currency in which payment would have been made in the absence of such election; and if a Conversion Event occurs with respect to the Currency in which payment would have been made in the absence of such election, such Holder shall receive payment in Dollars as provided in paragraph (d) of this Section 3.12. (f "Dollar Equivalent" when used with respect to any Foreign Currency shall be determined by the Exchange Rate Agent and shall be obtained for each subsequent payment date by converting the specified Foreign Currency into Dollars at the Market Exchange Rate on the Conversion Date. (g "Dollar Equivalent" when used with respect to any Currency Unit shall be determined by the Exchange Rate Agent and subject to the provisions of paragraph (h) below shall be the sum of each amount obtained by converting the Specified Amount (as defined below) of each Component Currency (as defined below) into Dollars at the Market Exchange Rate for such Component Currency on the Valuation Date with respect to each payment. (h For purposes of this Section 3.12, the following terms shall have the following meanings: A "Component Currency" shall mean any currency which, on the Conversion Date, was a Component Currency of the relevant currency unit, including, but not limited to, the Euro. A "Specified Amount" of a Component Currency shall mean the number of units of such Component Currency or fractions thereof which were represented in the relevant currency unit, including, but not limited to, the Euro, on the Conversion Date. If after the Conversion Date the official unit of any Component Currency is altered by way of combination or subdivision, the Specified Amount of such Component Currency shall be divided or multiplied in the same proportion. If after the Conversion Date two or more Component Currencies are consolidated into a single currency, the respective Specified Amounts of such Component Currencies shall be replaced by an amount in such single currency equal to the sum of the respective Specified Amounts of such consolidated Component Currencies expressed in such single currency, and such amount shall thereafter be a Specified Amount and such single currency shall thereafter be a Component Currency. If after the Conversion Date any Component Currency shall be divided into two or more currencies, the Specified Amount of such Component Currency shall be replaced by amounts of such two or more currencies, having an aggregate Dollar Equivalent value at the Market Exchange Rate on the date of such replacement equal to the Dollar Equivalent of the Specified Amount of such former Component Currency at the Market Exchange Rate immediately before such division, and such amounts shall thereafter be Specified Amounts and such currencies shall thereafter be Component Currencies. If, after the Conversion Date of the relevant currency unit, including, but not limited to, the Euro, a Conversion Event (other than any event referred to above in this definition of "Specified Amount") occurs with respect to any Component Currency of such currency unit and is continuing on the applicable Valuation Date, the Specified Amount of such Component Currency shall, for purposes of calculating the Dollar Equivalent of the Currency Unit, be converted into Dollars at the Market Exchange Rate in effect on the Conversion Date of such Component Currency. "Election Date" shall mean the Regular Record Date for the applicable series of Registered Securities or at least 16 days prior to Maturity, as the case may be, or such other prior date for any series of Registered Securities as specified pursuant to Section 3.1(14) by which the written election referred to in Section 3.12(b) may be made. All decisions and determinations of the Exchange Rate Agent regarding the Dollar Equivalent of the Foreign Currency, the Dollar Equivalent of the Currency Unit, the Market Exchange Rate and changes in the Specified Amounts as specified above shall be in its sole discretion and shall, in the absence of manifest error, be conclusive for all purposes and irrevocably binding upon the Company, the Trustee for the appropriate series of Securities and all Holders of such Securities denominated or payable in the relevant Currency. The Exchange Rate Agent shall promptly give written notice to the Company and the Trustee for the appropriate series of Securities of any such decision or determination. In the event that the Company determines in good faith that a Conversion Event has occurred with respect to a Foreign Currency, the Company will immediately give written notice thereof to the Trustee of the appropriate series of Securities and to the Exchange Rate Agent (and such Trustee will promptly thereafter give notice in the manner provided in Section 1.6 to the affected Holders) specifying the Conversion Date. In the event the Company so 28 determines that a Conversion Event has occurred with respect to the Euro or any other currency unit in which Securities are denominated or payable, the Company will immediately give written notice thereof to the Trustee of the appropriate series of Securities and to the Exchange Rate Agent (and such Trustee will promptly thereafter give notice in the manner provided in Section 1.6 to the affected Holders) specifying the Conversion Date and the Specified Amount of each Component Currency on the Conversion Date. In the event the Company determines in good faith that any subsequent change in any Component Currency as set forth in the definition of Specified Amount above has occurred, the Company will similarly give written notice to the Trustee of the appropriate series of Securities and to the Exchange Rate Agent (and such Trustee will promptly thereafter give notice in the manner provided in Section 1.6 to the affected Holders). The Trustee of the appropriate series of Securities shall be fully justified and protected in relying and acting upon information received by it from the Company and the Exchange Rate Agent and shall not otherwise have any duty or obligation to determine the accuracy or validity of such information independent of the Company or the Exchange Rate Agent. SECTION III.13 APPOINTMENT AND RESIGNATION OF SUCCESSOR EXCHANGE RATE ------------------------------------------------------ AGENT. - ----- (a Unless otherwise specified pursuant to Section 3.1, if and so long as the Securities of any series (i) are denominated in a Foreign Currency or (ii) may be payable in a Foreign Currency, or so long as it is required under any other provision of this Indenture, then the Company will maintain with respect to each such series of Securities, or as so required, at least one Exchange Rate Agent. The Company will cause the Exchange Rate Agent to make the necessary foreign exchange determinations at the time and in the manner specified pursuant to Section 3.1 for the purpose of determining the applicable rate of exchange and, if applicable, for the purpose of converting the issued Foreign Currency into the applicable payment Currency for the payment of principal (and premium, if any) and interest, if any, pursuant to Section 3.12. (b) No resignation of the Exchange Rate Agent and no appointment of a successor Exchange Rate Agent pursuant to this Section shall become effective until the acceptance of appointment by the successor Exchange Rate Agent as evidenced by a written instrument delivered to the Company and the Trustee of the appropriate series of Securities accepting such appointment executed by the successor Exchange Rate Agent. (c) If the Exchange Rate Agent shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of the Exchange Rate Agent for any cause, with respect to the Securities of one or more series, the Company, by or pursuant to a Board Resolution, shall promptly appoint a successor Exchange Rate Agent or Exchange Rate Agents with respect to the Securities of that or those series (it being understood that any such successor Exchange Rate Agent may be appointed with respect to the Securities of one or more or all of such series and that, unless otherwise specified pursuant to Section 3.1, at any time there shall only be one Exchange Rate Agent with respect to the Securities of any particular series that are originally issued by the Company on the same date and that are initially denominated and/or payable in the same Currency). SECTION III.14 CUSIP NUMBERS. The Company in issuing the Securities may ------------- use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall indicate the "CUSIP" numbers of the Securities in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness or accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. SECTION III.15 CERTIFICATION BY A PERSON ENTITLED TO DELIVERY OF BEARER -------------------------------------------------------- SECURITY. Whenever any provision of this Indenture or a Security contemplates - -------- that certification be given by a Person entitled to delivery of a Bearer Security, such certification shall be provided substantially in the form of Exhibit A-1 and, if applicable, A-2 hereto, with only such changes as shall be approved by the Company and consented to by the Trustee whose consent shall not unreasonably be withheld. SECTION III.16 JUDGMENTS. The Company may provide, pursuant to Section --------- 3.1, for the Securities of any series that, to the fullest extent possible under applicable law and except as may otherwise be specified as contemplated 29 in Section 3.1, (a) the obligation, if any, of the Company to pay the principal of (and premium, if any) and interest on the Securities of any series and any appurtenant coupons in a Foreign Currency, composite Currency or Dollars (the "Designated Currency") as may be specified pursuant to Section 3.1 is of the essence and agrees that judgments in respect of such Securities shall be given in the Designated Currency; (b) the obligation of the Company to make payments in the Designated Currency of the principal of (and premium, if any) and interest on such Securities and any appurtenant coupons shall, notwithstanding any payment in any other currency (whether pursuant to a judgment or otherwise), be discharged only to the extent of the amount in the Designated Currency that the Holder receiving such payment may, in accordance with normal banking procedures, purchase with the sum paid in such other currency (after any premium and cost of exchange) in the country of issue of the Designated Currency in the case of Foreign Currency or Dollars or in the international banking community in the case of a composite currency on the Business Day immediately following the day of such payment; (c) if the amount in the Designated Currency that may be purchased falls short of the amount originally due for any reason, the Company shall pay such additional amounts needed to compensate for any short fall; and (d) any obligation of the Company not discharged by such payment shall be due as a separate and independent obligation and, until discharged as provided herein, shall continue in full force and effect. ARTICLE IV SATISFACTION AND DISCHARGE SECTION IV.1 SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture --------------------------------------- shall upon Company Request cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Securities herein expressly provided for and rights to receive payments of principal (and premium, if any) and interest thereon and any right to receive additional amounts, as provided in Section 10.5), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when (1) either i) all Securities theretofore authenticated, issued and delivered and all coupons appertaining thereto (other than (i) coupons appertaining to Bearer Securities surrendered in exchange for Registered Securities and maturing after such exchange, surrender of which is not required or has been waived as provided in Section 3.5; (ii) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 3.6; (iii) coupons appertaining to Bearer Securities called for redemption or surrendered for repayment and maturing after the relevant Redemption Date or Repayment Date, as appropriate, surrender of which has been waived as provided in Section 11.6 or 13.3; and (iv) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 10.3), have been delivered to the Trustee for cancellation; or ii) all such Securities and, in the case of (B) (i) or (ii) below, any coupons appertaining thereto, not theretofore delivered to the Trustee for cancellation (a) have become due and payable, or (b) will become due and payable at their Stated Maturity within one year, or (c) if redeemable at the option of the Company, are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, and the Company, in the case of (B) (i), (ii) or (iii) above, has deposited or caused to be deposited with the Trustee as trust funds in trust an amount sufficient to pay and discharge the entire indebtedness on such Securities and such coupons not theretofore delivered to the Trustee for cancellation, for principal (and any premium , if any) and interest to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity or Redemption Date, or any Repayment Dates as the case may be; 30 (2) the Company has paid or caused to be paid all other sums payable hereunder by the Company; and (3) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with. Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 6.7, the obligations of the Trustee to any Authenticating Agent under Section 6.14 and, if money shall have been deposited with the Trustee pursuant to subclause (B) of clause (1) of this Section, the obligations of the Trustee under Section 4.2 and the last paragraph of Section 10.3 shall survive. SECTION IV.2 APPLICATION OF TRUST MONEY. -------------------------- (a) Subject to the provisions of the last paragraph of Section 10.3, all money deposited with the Trustee pursuant to Section 4.1 or 15.4 shall be held in trust and applied by it, in accordance with the provisions of the Securities, the coupons and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto of the principal (and premium, if any) and interest for whose payment such money has been deposited with the Trustee. (b) If the Trustee or the Paying Agent is unable to apply any money in accordance with this Article Four with respect to the Securities of any series by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company's obligations under this Indenture and the Securities of such series shall be revived and reinstated as though no deposit had occurred pursuant to this Article Four with respect to Securities of such series until such time as the Trustee or Paying Agent is permitted to apply all money held in trust pursuant to this Section 4.2 with respect to Securities of such series in accordance with this Article Four; provided, however, that if the Company makes any payment of principal (or premium, if any) or interest on any Security of such series following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of Securities of such series to receive payment from the money so held in trust. ARTICLE V REMEDIES SECTION V.1 EVENTS OF DEFAULT. An "Event of Default" with respect to ----------------- Securities of any series occurs if: (1) the Company defaults in the payment of any installment of interest upon any Security of that series or of any coupon appertaining thereto when it becomes due and payable, and continuance of such default for a period of 30 days, whether or not such payment shall be prohibited by Article Sixteen; or (2) the Company defaults in the payment of the principal of (or premium, if any, on) any Security of that series at its Maturity, whether or not such payment shall be prohibited by Article Sixteen; or (3) the Company defaults in the deposit of any sinking fund payment, when and as due by the terms of a Security of that series, whether or not such payment shall be prohibited by Article Sixteen; or (4) the Company fails to comply with any of its agreements in the Securities or this Indenture (other than a covenant or warranty a default in whose performance or whose breach is elsewhere in this Section specifically dealt with or which has expressly been included in this Indenture solely for the benefit of series of Securities other than that series), and such failure continues for 60 days after receipt by the Company of a Notice of Default; or 31 (5) a decree or order by a court having jurisdiction in the premises shall have been entered adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization of the Company under any Bankruptcy Law, and such decree or order shall have continued undischarged and unstayed for a period of 60 days; or a decree or order of a court having jurisdiction in the premises for the appointment of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of the Company or of its property, or for the winding-up or liquidation of its affairs, shall have been entered, and such decree or order shall have remained in force undischarged and unstayed for a period of 60 consecutive days; or (6) the Company shall institute proceedings to be adjudicated a voluntary bankrupt, or shall consent to the filing of a bankruptcy proceeding against it, or shall file a petition or answer or consent seeking reorganization under any Bankruptcy Law, or shall consent to the filing of any such petition, or shall consent to the appointment of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of it or of its property or shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts generally as they become due; or (7) any other Event of Default as provided with respect to Securities of any particular series occurs. "Bankruptcy Law" means Title 11, United States Code, or any similar Federal or state law for the relief of debtors. "Custodian" means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law. A Default under clause (4) above is not an Event of Default until the Trustee notifies the Company, or the Holders of at least 25% in principal amount of the Outstanding Securities for that series notify the Company and the Trustee, of the Default and the Company does not cure such Default (and such Default is not waived) within the time specified in clause (4) above after receipt of such notice. Any such notice must specify the Default, demand that it be remedied and state that such notice is a Notice of Default. SECTION V.2 ACCELERATION . If an Event of Default with respect to ------------ Securities of any series at the time Outstanding (other than an Event of Default specified in Section 5.4(5) or (6)) occurs and is continuing, then in every such case the Trustee by notice to the Company, or the Holders of at least 25% in principal amount of the Outstanding Securities of that series by notice to the Company and the Trustee, may declare the principal amount (or, if any of the Securities of that series are Original Issue Discount Securities or Indexed Securities, such portion of the principal amount of such Securities as may be specified in the terms hereof) of all of the Outstanding Securities of that series to be immediately due and payable. Upon any such declaration, such principal amount (or specified amount) shall be due and payable immediately. If an Event of Default specified in Section 5.1(5) or (6) occurs and is continuing, the principal amount (or, if any of the Securities of that series are Original Issue Discount Securities or Indexed Securities, such portion of the principal amount of such Securities as may be specified in the terms hereof) of all of the Outstanding Securities of that series shall become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders of that series. The Holders of a majority of the principal amount of the Outstanding Securities of that series, by notice to the Trustee (and without notice to any other Holder of that series) may rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default have been cured or waived except nonpayment of the amounts specified in Section 5.1(1) or (2) that have become due solely as a result of acceleration and if all amounts due to the Trustee under Section 6.7 have been paid. No such rescission shall affect any subsequent Default or impair any right consequent thereto. SECTION V.3 OTHER REMEDIES. If an Event of Default with respect to -------------- Securities of any series at the time outstanding (such Securities being referred to herein as "Defaulted Securities") occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of the principal (and premium, if any) and interest, if any, or to enforce the performance of any provision of the Defaulted Securities or this Indenture. The Trustee may maintain a proceeding even if the Trustee does not possess any of the Defaulted Securities or does not produce any of the Defaulted Securities in the proceeding. A delay or omission by the Trustee or any Holder 32 in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of, or acquiescence in, the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative. SECTION V.4 WAIVER OF PAST DEFAULTS. The Holders of a majority in ----------------------- principal amount of the Outstanding Defaulted Securities by notice to the Trustee (and without notice to any other Holder), may waive an existing Default and its consequences except (1) an Event of Default described in Section 5.1(1) or (2), or (2) a Default in respect of a provision that under Section 9.2 cannot be amended without the consent of each Holder affected. When a Default is waived, it is deemed cured, but no such waiver shall extend to any subsequent or other Default or impair any consequent right. This Section 5.4 shall be in lieu of Section 316(a)1(B) of the TIA and such Section 316(a)1(B) is hereby expressly excluded from this Indenture, as permitted by the TIA. SECTION V.5 CONTROL BY MAJORITY. The Holders of a majority in principal ------------------- amount of the Outstanding Securities of a series may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or that the Trustee determines in good faith is unduly prejudicial to the rights of other Holders (it being understood that the Trustee shall have no duty to ascertain whether or not such actions or forebearances are unduly prejudicial to such Holders) of that series or would involve the Trustee in personal liability unless the Trustee is offered indemnity satisfactory to it. This Section 5.5 shall be in lieu of Section 316(a)1(A) of the TIA and such Section 316(a)1(A) is hereby expressly excluded from this Indenture, as permitted by the TIA. SECTION V.6 LIMITATION ON SUITS. A Holder may not pursue any remedy ------------------- with respect to this Indenture or the Securities of a series or any related coupons unless: (1) the Holder has previously given to the Trustee written notice stating that an Event of Default is continuing; (2) the Holders of at least 25% in principal amount of the Outstanding Securities of that series make a written request to the Trustee to pursue the remedy; (3) such Holder or Holders offer to the Trustee reasonable security or indemnity against any loss, liability or expense satisfactory to the Trustee; (4) the Trustee does not comply with the request within 60 days after receipt of the notice, the request and the offer of security or indemnity; and (5) the Holders of a majority in principal amount of the Outstanding Securities of that series do not give the Trustee a direction inconsistent with the request during such 60-day period. A Holder of any Outstanding Securities of any series may not use this Indenture to prejudice the rights of any other Holder of Outstanding Securities of the same series or to obtain a preference or priority over any other Holder of Outstanding Securities of the same series. SECTION V.7 RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding any ------------------------------------ other provision of this Indenture, but subject to Article Sixteen, the right of any Holder to receive payment of the principal of (and premium, if any) or interest, if any, in respect of the Securities held by such Holder, on or after the Stated Maturity or to bring suit for the enforcement of any such payment on or after such Stated Maturity shall not be impaired or affected adversely without the consent of each such Holder. SECTION V.8 COLLECTION SUIT BY TRUSTEE. If an Event of Default -------------------------- described in Section 5.1(1), (2) or (3) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount owing with respect to the Defaulted Securities and the amounts provided for in Section 6.7; subject, however, to Article Sixteen. 33 SECTION V.9 TRUSTEE MAY FILE PROOFS OF CLAIM. In case of the pendency -------------------------------- of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor upon the Securities of a series or the property of the Company or of such other obligor or their creditors, the Trustee (irrespective of whether the principal (and premium, if any) or interest, if any, in respect of the Securities of that series shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of any such amount) shall be entitled and empowered, by intervention in such proceeding or otherwise, (a) to file and prove a claim for the whole amount of the principal (or in the case of Original Issue Discount Securities or Indexed Securities, such portion of the principal as may be provided in the terms thereof) (and premium, if any) or interest, if any, and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of the Holders allowed in such judicial proceeding, and (b) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any Custodian, receiver, assignee, trustee, liquidator, sequestrator or similar official in any such judicial proceeding is hereby authorized by each Holder of Securities of that series to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders of Securities of that series, to pay the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 6.7. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding, provided, however, that the Trustee may, on behalf of the Holders, vote for the election of a trustee in bankruptcy or similar official and may be a member of any creditors' committee. SECTION V.10 PRIORITIES. If the Trustee collects any money pursuant to ---------- this Article Five in respect of a series of Securities, it shall pay out the money in the following order: FIRST: to the Trustee for costs and expenses of collection, including all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses and disbursements of the Trustee, its agents and counsel and for other amounts due under Section 6.7; SECOND: to holders of Senior Indebtedness to the extent required by Article Sixteen; THIRD: to Holders for amounts due and unpaid on the Securities of that series for the principal (and premium, if any) or interest, if any, as the case may be, ratably, without preference or priority of any kind, according to such amounts due and payable on the Securities of that series. The Holders of each series of Securities denominated in Euro, any other composite Currency or a Foreign Currency and any matured coupons relating thereto shall be entitled to receive a ratable portion of the amount determined by the Exchange Rate Agent by converting the principal amount Outstanding of such series of Securities and matured but unpaid interest on such series of Securities in the Currency in which such series of Securities is denominated into Dollars at the Exchange Rate as of the date of declaration of acceleration of the Maturity of the Securities; and FOURTH: the balance, if any, to the Company. The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section 5.10. At least 15 days before such record date, the Company shall mail to each Holder and the Trustee a notice that states the record date, the payment date and amount to be paid. SECTION V.11 UNDERTAKING FOR COSTS. In any suit for the enforcement of --------------------- any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may 34 require the filing by any party litigant (other than the Trustee) in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 5.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 5.7 or a suit by Holders of more than 10% in principal amount of the Outstanding Securities of that series. This Section 5.11 shall be in lieu of Section 315(e) of the TIA and such Section 315(e) is hereby expressly excluded from this Indenture as permitted by the TIA. SECTION V.12 WAIVER OF STAY, EXTENSION OR USURY LAWS. The Company --------------------------------------- covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury or other law wherever enacted, now or at any time hereafter in force, which would prohibit or forgive the Company from paying all or any portion of the principal (and premium, if any) or any interest on any such amounts, as contemplated herein, or which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such laws and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. ARTICLE VI THE TRUSTEE SECTION VI.1 CERTAIN DUTIES AND RESPONSIBILITIES. The duties and ----------------------------------- responsibilities of the Trustee shall be as provided by Section 315 and 316 of the Trust Indenture Act and this Indenture. Except during the continuance of an Event of Default, (i) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of statements and correctness of the opinions expressed therein, upon any statements, certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture. Notwithstanding the foregoing, no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 6.1. SECTION VI.2 NOTICE OF DEFAULTS. If a default occurs hereunder with ------------------- respect to Securities of any series, the Trustee shall give the Holders of Securities of such series notice of such default as and to the extent provided by Section 315(b) of the Trust Indenture Act; provided, however, that in the case of any default of the character specified in Section 5.1(4) with respect to Securities of such series, no such notice to Holders shall be given until at least 30 days after the occurrence thereof. For the purpose of this Section 6.2, the term "default" means any event which is, or after notice or lapse of time or both would become, an Event of Default with respect to Securities of such series. SECTION VI.3 CERTAIN RIGHTS OF TRUSTEE. Subject to the provisions of ------------------------- Section 6.1: (a) the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, Officers' Certificate or other certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; 35 (b) any instruction, request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors shall be sufficiently evidenced by a Board Resolution; (c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting to take any action hereunder, the Trustee (unless other evidence is herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers' Certificate; (d) before the Trustee acts or refrains from acting, the Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; (e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders of Securities of any series or any related coupons pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; (f) prior to the occurrence of an Event of Default hereunder and after the curing or waiving of all Events of Default, the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, Officers' Certificate, or other certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, appraisal, bond, debenture, note, coupon, security, or other paper or document unless requested in writing so to do by the Holders of not less than a majority in aggregate principal amount of the Securities then outstanding; provided that, if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require reasonable indemnity against such expenses or liabilities as a condition to proceeding; the reasonable expenses of every such examination shall be paid by the Company or, if advanced by the Trustee, shall be repaid by the Company upon demand; (g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys reasonably acceptable to the Company and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder. (h) the Trustee shall not be responsible for the computation of any adjustment to the Conversion Price or for any determination as to whether an adjustment is required; (i) the Trustee shall not be liable for any action taken or omitted by it in good faith and believed by it to be authorized or within the discretion, rights or powers conferred upon it by this Indenture; (j) the Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder; (k) the Trustee shall not be bound to ascertain or inquire as to the performance or observance of any covenants, conditions, or agreements on the part of the Company, except as otherwise set forth herein, but the Trustee may require of the Company full information and advice as to the performance of the covenants, conditions and agreements contained herein and shall be entitled in connection herewith to examine the books, records and premises of the Company; (l) the permissive rights of the Trustee to do things enumerated in this Indenture shall not be construed as a duty and the Trustee shall not be answerable for other than its negligence or willful default; and (m) except for (i) a default under Section 5.1(1) or (2) hereof, or (ii) any other event of which the Trustee has "actual knowledge" and which event, with the giving of notice or the passage of time or both, would constitute an Event of Default under this Indenture, the Trustee shall not be deemed to have notice of any default or event unless specifically notified in writing of such event by the Company or the Holders of not less than 25% in aggregate principal 36 amount of the Securities Outstanding; as used herein, the term "actual knowledge" means the actual fact or statement of knowing, without any duty to make any investigation with regard thereto. SECTION VI.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES. The ------------------------------------------------------ recitals contained herein and in the Securities, except the Trustee's certificates of authentication, and in any coupons, shall be taken as the statements of the Company, and the Trustee or any Authenticating Agent assumes no responsibility for their correctness. The Trustee shall not be responsible for and makes no representations as to the validity or sufficiency of this Indenture or of the Securities or any coupons. The Trustee or any Authenticating Agent shall not be accountable for the use or application by the Company or any Paying Agent of Securities or the proceeds thereof. SECTION VI.5 MAY HOLD SECURITIES. The Trustee, any Authenticating ------------------- Agent, any Paying Agent, any Security Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and coupons and, subject to Sections 6.8 and 6.13, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent. SECTION VI.6 MONEY HELD IN TRUST. Money held by the Trustee in trust ------------------- hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed to in writing by the Company and the Trustee. SECTION VI.7 COMPENSATION AND REIMBURSEMENT. The Company agrees: ------------------------------ (1) to pay to the Trustee from time to time, and the Trustee shall be entitled to, reasonable compensation as the Company and the Trustee shall from time to time agree in writing for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (2) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its gross negligence or willful misconduct; and (3) to indemnify the Trustee for, and to hold it harmless against, any loss, liability or expense incurred without gross negligence or willful misconduct on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses of defending itself against or investigating any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. The obligations of the Company under this Section 6.7 to compensate the Trustee, to pay or reimburse the Trustee for expenses, disbursements and advances and to indemnify and hold harmless the Trustee shall constitute additional indebtedness hereunder and shall survive the satisfaction and discharge of this Indenture. As security for the performance of such obligations of the Company, the Trustee shall have a claim prior to the Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust for the payment of principal of (and premium, if any, on) or interest on particular Securities, and the Securities are hereby subordinated to such prior claim. When the Trustee incurs expenses or renders services in connection with an Event of Default specified in Article Five hereof, the expenses (including reasonable fees and expenses of its counsel) and the compensation for the service in connection therewith are intended to constitute expense of administration under any applicable bankruptcy law. The Trustee shall give the Company notice of any claim or liability for which the Trustee might be entitled to indemnification under subparagraph (3) of this Section 6.7 within a reasonable amount of time after a trust officer of the Trustee becomes aware of such claim or liability. 37 SECTION VI.8 DISQUALIFICATION; CONFLICTING INTERESTS. If the Trustee has --------------------------------------- or shall acquire a conflicting interest within the meaning of Section 310(b) of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture. To the extent permitted by such Act, the Trustee shall not be deemed to have a conflicting interest by virtue of being a trustee under the Indentures, dated as of March 15, 1985, October 1, 1991 and May 1, 1995, between the Company and the Trustee. Nothing herein shall prevent the Trustee from filing with the Commission the application referred to in the penultimate paragraph of Section 310(b) of the Trust Indenture Act. SECTION VI.9 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. There shall at all --------------------------------------- times be a Trustee hereunder which shall be a Person that is eligible pursuant to Section 310(a) of the Trust Indenture Act to act as such and has a combined capital and surplus of at least $25,000,000 and its Corporate Trust Office is in The City of New York, New York or in the City of Chicago, Illinois. The Trustee hereby represents and warrants that it is currently in compliance and at all times will remain in compliance with the foregoing requirements of this Section 6.9. If such Person publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. Neither the Company nor any Affiliate of the Company shall serve as Trustee hereunder. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section 6.9, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. SECTION VI.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. No ------------------------------------------------- resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 6.11. The Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Company. If the instrument of acceptance by a successor Trustee required by Section 6.11 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series. The Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series, delivered to the Trustee and to the Company. If at any time: (1) the Trustee shall fail to comply with Section 310(b) of the Trust Indenture Act pursuant to Section 6.8 hereof after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or (2) the Trustee shall cease to be eligible under Section 6.9 and shall fail to resign after written request therefor by the Company or by any such Holder, or (3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, or (4) the Trustee shall commence a voluntary case under the Federal bankruptcy laws, as now or hereafter constituted, or any other applicable Federal or state bankruptcy, insolvency or similar law or shall consent to the appointment of or taking possession by a receiver, custodian, liquidator, assignee, trustee, sequestrator (or other similar official) of the Trustee or its property or affairs, or shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts generally as they become due, or shall take corporate action in furtherance of any such action, 38 then, in any such case, (i) the Company by a Board Resolution may remove the Trustee with respect to all Securities, or (ii) subject to Section 5.14, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, or the Trustee, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a successor Trustee or Trustees. If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series) and shall comply with the applicable requirements of Section 6.11. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 6.11, become the successor Trustee with respect to the Securities of such series and to that extent supersede the successor Trustee appointed by the Company. If no successor Trustee with respect to the Securities of any series shall have been so appointed by the Company or the Holders and accepted appointment in the manner required by Section 6.11, any Holder who has been a bona fide Holder of a Security of such series for at least six months may, on behalf of himself and all others similarly situated, or the Trustee, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series. The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series to all Holders of Securities of such series in the manner provided in Section 1.6. Each notice shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office. SECTION VI.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. In case of the -------------------------------------- appointment hereunder of a successor Trustee with respect to all Securities, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates; but, on request of the 39 Company or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates. Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in the first two paragraphs of this Section 6.11, as the case may be. No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article and under the Trust Indenture Act. SECTION VI.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS. ----------------------------------------------------------- Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article and under the Trust Indenture Act, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities. SECTION VI.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. If and ------------------------------------------------- when the Trustee shall be or become a creditor of the Company (or any other obligor upon the Securities), the Trustee shall be subject to the provisions of Section 311(a) of the Trust Indenture Act regarding the collection of claims against the Company (or any such other obligor), excluding any creditor relationships described in Section 311(b) of the Trust Indenture Act. A Trustee who resigned or has been removed shall be subject to Section 311(a) of the Trust Indenture Act to the extent indicated therein. SECTION VI.14 APPOINTMENT OF AUTHENTICATING AGENT. The Trustee may appoint ----------------------------------- an Authenticating Agent or Agents with respect to one or more series of Securities which shall be authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon original issue and exchange, registration of transfer or partial redemption thereof or pursuant to Section 3.6, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee's certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or State authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then, for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section 6.14, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section. Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section 6.14, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent. An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice 40 thereof to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section 6.14, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall mail written notice of such appointment by first-class mail, postage prepaid, to all Holders of Securities of the series with respect to which such Authenticating Agent will serve, as their names and addresses appear in the Security Register. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section 6.14. The Trustee agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section, and the Trustee shall be entitled to be reimbursed for such payments, subject to the provisions of Section 6.7. If an appointment with respect to one or more series is made pursuant to this Section 6.14, the Securities of such series may have endorsed thereon, in addition to the Trustee's certificate of authentication, an alternative certificate of authentication in the following form: This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. AS TRUSTEE BY ____________________________ AS AUTHENTICATING AGENT BY ____________________________ AUTHORIZED OFFICER ARTICLE VII HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY SECTION VII.1 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS. --------------------------------------------------------- The Company will furnish or cause to be furnished to the Trustee: (a) semi-annually, not later than 15 days after each Regular Record Date for each series of Securities at the time Outstanding, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of Registered Securities of such series as of the preceding Regular Record Date (or a date to be determined pursuant to Section 3.1 for Original Issue Discount Securities), and (b) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished; EXCLUDING from any such list names and addresses received by the Trustee in its capacity as Security Registrar. SECTION VII.2 PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS. ------------------------------------------------------ The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Registered Holders contained in the most recent list furnished to the Trustee as provided in Section 7.1 and the names and addresses of Holders received by the Trustee in its capacity as Security Registrar. The Trustee may destroy any list 41 furnished to it as provided in Section 7.1 upon receipt of a new list so furnished. The Trustee shall preserve for at least two years the names and addresses of Holders of Bearer Securities filed with the Trustee by such Holders. The rights of the Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corresponding rights and privileges of the Trustee, shall be as provided by Section 312(b) of the Trust Indenture Act. Every Holder of Securities or coupons, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the Trust Indenture Act. SECTION VII.3 REPORTS BY TRUSTEE. The Trustee shall transmit to Holders ------------------ such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to Section 313 of the Trust Indenture Act at the times and in the manner provided pursuant thereto, if so required. A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which any Securities are listed, with the Commission and with the Company. The Company will notify the Trustee when any Securities are listed on any stock exchange. SECTION VII.4 REPORTS BY COMPANY. The Company shall file with the ------------------ Trustee and the Commission, and transmit to Holders, such information, documents and other reports, and such summaries thereof, as may be required pursuant to Section 314(a) of the Trust Indenture Act at the times and in the manner provided pursuant to the TIA; provided that any such information, documents or reports required to be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within 15 days after the same is so required to be filed with the Commission. ARTICLE VIII CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE SECTION VIII.1 COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS. The ---------------------------------------------------- Company shall not consolidate with or merge into any other Person or convey, transfer or lease all or substantially all of its properties and assets to any Person, and the Company shall not permit any Person to consolidate with or merge into the Company or convey, transfer or lease all or substantially all of its properties and assets to the Company, unless: (1) in case the Company shall consolidate with or merge into another Person or convey, transfer or lease all or substantially all of its properties and assets to any Person, the Person formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, all or substantially all of the properties and assets of the Company shall be a corporation, partnership or trust, shall be organized and validly existing under the laws of the United States of America, any State thereof or the District of Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of (and premium, if any) and interest on all the Securities and the performance or observance of every covenant of this Indenture on the part of the Company to be performed or observed; (2) immediately after giving effect to such transaction and treating any indebtedness which becomes an obligation of the Company or any Subsidiary as a result of such transaction as having been incurred by the Company or such Subsidiary at the time of such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing; (3) if, as a result of any such consolidation or merger or such conveyance, transfer or lease, properties or assets of the Company would become subject to a mortgage, pledge, lien, security interest or other 42 encumbrance which would not be permitted by this Indenture, the Company or such successor Person, as the case may be, shall take such steps as shall be necessary to effectively secure the Securities equally and ratably with (or prior to) all indebtedness secured thereby; and (4) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with. SECTION VIII.2 SUCCESSOR PERSON SUBSTITUTED. Upon any consolidation of the ---------------------------- Company with, or merger of the Company into any other Person or any conveyance, transfer or lease of all or substantially all of the properties and assets of the Company in accordance with Section 8.1, the successor Person formed by such consolidation or into which the Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein, and thereafter the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities and coupons. Upon delivery of an Opinion of Counsel reasonably satisfactory to the Trustee, the Trustee shall enter into a supplemental indenture to evidence the succession and substitution of such successor person and the discharge and release of the Company. ARTICLE IX SUPPLEMENTAL INDENTURES SECTION SECTION IX.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS. Without -------------------------------------------------- the consent of any Holders of Securities or coupons, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes: (1) to evidence the succession of another Person to the Company and the assumption by any such successor of the covenants of the Company herein and in the Securities; or (2) to add to the covenants of the Company for the benefit of the Holders of all or any series of Securities or coupons (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein conferred upon the Company; or (3) to add any additional Events of Default (and if such Events of Default are to be applicable to less than all series of Securities, stating that such Events of Default are expressly being included solely to be applicable to such series): or (4) to add to, change or eliminate any of the provisions of this Indenture to provide that Bearer Securities may be registrable as to principal, to change or eliminate any restrictions on the payment of principal (or premium, if any) on Registered Securities or of principal (or premium, if any) or any interest on Bearer Securities, to permit Bearer Securities to be issued in exchange for Registered Securities of other authorized denominations or to permit or facilitate the issuance of Securities in uncertificated form; provided that any such action shall not adversely affect the interests of the Holders of Securities of any series or any related coupons in any material respect; or (5) to add to, change or eliminate any of the provisions of this Indenture in respect of one or more series of Securities, provided that any such addition, change or elimination (i) shall neither (A) apply to any Security of any series created prior to the execution of such supplemental indenture and entitled to the benefit of such provision nor (B) modify the rights of the Holder of any such Security with respect to such provision or (ii) shall become effective only when there is no Outstanding Security; or 43 (6) to establish the form or terms of Securities of any series as permitted by Sections 2.1 and 3.1; or (7) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 6.11; or (8) to cure any ambiguity, to correct or supplement any provision herein which may be inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture; provided that such action pursuant to this clause (9) shall not adversely affect the interests of the Holders of Securities of any series or any appurtenant coupons in any material respect; or (9) to comply with the requirements of the Commission in order to effect or maintain the qualification of this Indenture under the Trust Indenture Act. SECTION IX.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS. With the ----------------------------------------------- consent of the Holders of a majority in principal amount of the Outstanding Securities of each series affected by such supplemental indenture, by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities of such series under this Indenture; provided, however, that no such supplemental indenture shall without the consent of the Holder of each Outstanding Security affected thereby: (1) change the Stated Maturity of the principal of, or any installment of principal of or interest on, any Security, or reduce the principal amount thereof (or premium, if any) or the rate of interest thereon or any premium payable upon the redemption thereof, or repayment thereof, or change any obligation of the Company to pay additional amounts pursuant to Section 10.5 (except as contemplated by Section 8.1(1) and permitted by Section 9.1(1)) or reduce the amount of the principal of an Original Issue Discount Security that would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 5.2, or change any Place of Payment where, or the Currency in which, any Security (or premium, if any) or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption or repayment, on or after the Redemption Date or Repayment Date, as applicable); or (2) reduce the percentage in principal amount of the Outstanding Securities of any series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture or reduce the quorum or voting requirements of Section 14.4; or (3) modify any of the provisions of this Section 9.2 or Section 5.13, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby, provided, however, that this clause shall not be deemed to require the consent of any Holder with respect to changes in the references to "the Trustee" and concomitant changes in this Section 9.2, or the deletion of this proviso, in accordance with the requirements of Section 6.11 and 9.1(8); or (4) modify any of the provisions of this Indenture relating to the subordination of the Securities in a manner adverse to the Holders without the consent of all Holders. A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series. A supplemental indenture may not make any change that adversely affects the 44 rights under Article Sixteen of any holder of Senior Indebtedness then outstanding unless the requisite holders of such Senior Indebtedness consent to such change pursuant to the terms of such Senior Indebtedness. It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. SECTION IX.3 EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or ------------------------------------ accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 6.1) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. SECTION IX.4 EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution of --------------------------------- any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby. SECTION IX.5 CONFORMITY WITH TRUST INDENTURE ACT. Every supplemental ----------------------------------- indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act as then in effect. SECTION IX.6 REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES. Securities -------------------------------------------------- of any series authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company or the Trustee shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series. SECTION IX.7 NOTICE OF SUPPLEMENTAL INDENTURE. Promptly after the -------------------------------- execution by the Company and the Trustee of any supplemental indenture pursuant to Section 9.2, the Company shall transmit to the Holders a notice setting forth the substance of such supplemental indenture. ARTICLE X COVENANTS SECTION X.1 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. The Company ------------------------------------------ covenants and agrees for the benefit of each series of Securities that it will duly and punctually pay the principal of (and premium, if any) and interest on the Securities of that series in accordance with the terms of the Securities, any appurtenant coupons and this Indenture. Any interest due on Bearer Securities on or before Maturity, other than additional amounts, if any, payable as provided in Section 10.5 in respect of principal of (or premium, if any, on) such a Security, shall be payable only upon presentation and surrender of the several coupons for such interest installments as are evidenced thereby as they severally mature. Unless otherwise specified with respect to Securities of any series pursuant to Section 3.1, at the option of the Company, all payments of principal may be paid by check to the registered Holder of the Registered Security or other person entitled thereto against surrender of such Security. Unless otherwise specified as contemplated by Section 3.1 with respect to any series of Securities, any interest due on Bearer Securities on or before Maturity shall be payable only upon presentation and surrender of the several coupons for such interest installments as are evidenced thereby as they severally mature. SECTION X.2 MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain ------------------------------- in each Place of Payment for any series of Securities an office or agency where Securities of that series (but, except as otherwise provided below, unless such Place of Payment is located outside the United States, not Bearer Securities) may be presented or surrendered for payment, where Securities of that series may be surrendered for registration of transfer or exchange and 45 where notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be served. If Securities of a series are issuable as Bearer Securities, the Company will maintain, subject to any laws or regulations applicable thereto, an office or agency in a Place of Payment for such series which is located outside the United States where Securities of such series and the related coupons may be presented and surrendered for payment (including payment of any additional amounts payable on Securities of such series pursuant to Section 10.5); provided, however, that if the Securities of such series are listed on The Stock Exchange of the United Kingdom and the Republic of Ireland or the Luxembourg Stock Exchange or any other stock exchange located outside the United States and such stock exchange shall so require, the Company will maintain a Paying Agent in London or Luxembourg or any other required city located outside the United States, as the case may be, so long as the Securities of such series are listed on such exchange. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands, except that Bearer Securities of that series and the related coupons may be presented and surrendered for payment (including payment of any additional amounts payable on Bearer Securities of that series pursuant to Section 10.5) at the place specified for the purpose pursuant to Section 3.1(5). No payment of principal of, (or premium, if any) or interest on Bearer Securities shall be made at any office or agency of the Company in the United States or by check mailed to any address in the United States or by transfer to an account maintained with a bank located in the United States; provided, however, payment of principal of and any premium and interest denominated in Dollars (including additional amounts payable in respect thereof) on any Bearer Security may be made at an office or agency of, and designated by, the Company located in the United States if (but only if) payment of the full amount of such principal, premium, interest or additional amounts in Dollars at all offices outside the United States maintained for the purpose by the Company in accordance with this Indenture is illegal or effectively precluded by exchange controls or other similar restrictions and the Trustee receives an Opinion of Counsel that such payment within the United States is legal. Unless otherwise provided as contemplated by Section 3.1 with respect to any series of Securities, at the option of the Holder of any Bearer Security or related coupon, payment may be made by check in the Currency designated for such payment pursuant to the terms of such Bearer Security presented or mailed to an address outside the United States or by transfer to an account in such Currency maintained by the payee with a bank located outside the United States. The Company may also from time to time designate one or more other offices or agencies where the Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in each Place of Payment for Securities of any series for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. SECTION X.3 MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST. If the ------------------------------------------------- Company, a Subsidiary or any of their respective Affiliates, shall at any time act as its own Paying Agent with respect to any series of Securities, it will, on or before each due date of the principal of (or premium, if any) or interest on any of the Securities of that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal (and premium, if any) and interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act. Whenever the Company shall have one or more Paying Agents for any series of Securities, it will, prior to each due date of the principal of (or premium, if any) or interest on any Securities of that series, and any appurtenant coupons, deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be held as provided by the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act. The Company will cause each Paying Agent for any series of Securities other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section 10.3, that such Paying Agent will (i) comply with the provisions of the Trust Indenture Act applicable to it as a Paying Agent and (ii) during the continuance of any default by the Company (or any other obligor upon the 46 Securities of that series) in the making of any payment in respect of the Securities of that series and any appurtenant coupons, and upon the written request of the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying Agent for payment in respect of the Securities of that series. The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money. Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of (or premium, if any) or interest on any Security of any series or any related coupons and remaining unclaimed for two years after such principal (or premium) or interest has become due and payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in the Borough of Manhattan, The City of New York, New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company. SECTION X.4 PURCHASE OF SECURITIES BY COMPANY OR SUBSIDIARY. If and so ----------------------------------------------- long as the Securities of a series are listed on The Stock Exchange of the United Kingdom and the Republic of Ireland and such stock exchange shall so require, the Company will not, and will not permit any Subsidiary to, purchase any Securities of that series by private treaty at a price (exclusive of expenses and accrued interest) which exceeds 120% of the mean of the nominal quotations of the Securities of that series as shown in The Stock Exchange Daily Official List for the last trading day preceding the date of purchase. SECTION X.5 PAYMENT OF ADDITIONAL AMOUNTS. If the Securities of a series ----------------------------- provide for the payment of additional amounts, the Company will pay to the Holder of any Security of any series or any coupon appertaining thereto additional amounts upon the terms and subject to the conditions provided therein. Whenever in this Indenture there is mentioned, in any context, the payment of the principal of (or premium, if any) or interest on, or in respect of, any Security of any series, of any related coupon or the net proceeds received on the sale or exchange of any Security of any series, such mention shall be deemed to include mention of the payment of additional amounts provided for in the terms of such Securities and this Section 10.5 to the extent that, in such context, additional amounts are, were or would be payable in respect thereof pursuant to the provisions of this Section and express mention of the payment of additional amounts (if applicable) in any provisions hereof shall not be construed as excluding additional amounts in those provisions hereof where such express mention is not made. If the Securities of a series provide for the payment of additional amounts, at least 10 days prior to the first Interest Payment Date with respect to that series of Securities (or if the Securities of that series will not bear interest prior to Maturity, the first day on which a payment of principal (and premium, if any) is made), and at least 10 days prior to each date of payment of principal (and premium, if any) or interest if there has been any change with respect to the matters set forth in the below-mentioned Officers' Certificate, the Company will furnish the Trustee and the Company's Paying Agent or Paying Agents, if other than the Trustee, with an Officer's Certificate instructing the Trustee and such Paying Agent or Paying Agents whether such payment of principal of (and premium, if any) or interest on the Securities of that series shall be made to Holders of Securities of that series or the related coupons who are United States Aliens without withholding for or on account of any tax, assessment or other governmental charge described in the Securities of that series. If any such withholding shall be required, then such Officers' Certificate shall specify by country the amount, if any, required to be withheld on such payments to such Holders of Securities or coupons and the Company will pay to the Trustee or such Paying Agent the additional amounts, if any, required by the terms of such Securities and the first paragraph of this Section 10.5. The Company covenants to indemnify the Trustee and any Paying Agent 47 for, and to hold them harmless against, any loss, liability or expense reasonably incurred without negligence or bad faith on their part arising out of or in connection with actions taken or omitted by any of them in reliance on any Officers' Certificate furnished pursuant to this Section 10.5. SECTION X.6 STATEMENT BY OFFICERS AS TO DEFAULT. ----------------------------------- (a) The Company will deliver to the Trustee, within 120 days after the end of each fiscal year of the Company ending after the date hereof, an Officers' Certificate, stating whether or not to the best knowledge of the signers thereof the Company is in default in the performance and observance of any of the terms, provisions and conditions of this Indenture (without regard to any period of grace or requirement of force provided hereunder), and if the Company shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge. (b) The Company shall deliver to the Trustee as soon as possible, and in any event within five days after the Company becomes aware or should reasonably have become aware of the occurrence of any Default or Event of Default, an Officers' Certificate specifying such Default or Event of Default, the period of existence thereof and what action the Company is taking or proposes to take with respect thereto. SECTION X.7 EXISTENCE. Subject to Article Eight, the Company will do or --------- cause to be done all things necessary to preserve and keep in full force and effect its existence, rights (charter and statutory) and franchises; provided, however, that the Company shall not be required to preserve any such right or franchise if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and that the loss thereof is not disadvantageous in any material respect to the Holders. SECTION X.8 [INTENTIONALLY OMITTED]. SECTION X.9 [INTENTIONALLY OMITTED]. SECTION X.10 [INTENTIONALLY OMITTED]. SECTION X.11 [INTENTIONALLY OMITTED]. SECTION X.12 [INTENTIONALLY OMITTED]. ARTICLE XI REDEMPTION OF SECURITIES SECTION XI.1 APPLICABILITY OF ARTICLE. Securities of any series which ------------------------ are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 3.1 for Securities of any series) in accordance with this Article. SECTION XI.2 ELECTION TO REDEEM; NOTICE TO TRUSTEE. The election of the ------------------------------------- Company to redeem any Securities shall be evidenced by a Board Resolution. In case of any redemption at the election of the Company of less than all the Securities of any series, the Company shall, at least 60 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date, of the principal amount of Securities of such series to be redeemed and, if applicable, of the tenor of the Securities to be redeemed. In the case of any redemption of Securities prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officers' Certificate evidencing compliance with such restriction. SECTION XI.3 SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED. Except ------------------------------------------------- as otherwise specified or contemplated by Section 3.1 for Securities of any series, if less than all the Securities of any series are to be redeemed 48 (unless all of the Securities of such series and of a specified tenor are to be redeemed), the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series not previously called for redemption, by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions (equal to the minimum authorized denomination for Securities of that series or any integral multiple thereof) of the principal amount of Securities of such series of a denomination larger than the minimum authorized denomination for Securities of that series (so long as such method is not prohibited by the rules of any stock exchange on which the Securities are then listed). If less than all of the Securities of such series and of a specified tenor are to be redeemed, the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series and specified tenor not previously called for redemption in accordance with the preceding sentence. The Trustee shall promptly notify the Company in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the principal amount thereof to be redeemed. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed. SECTION XI.4 NOTICE OF REDEMPTION. Notice of redemption shall be given -------------------- in the manner provided in Section 1.6 not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed. All notices of redemption shall state: (1) the Redemption Date, (2) the Redemption Price, (3) if less than all the Outstanding Securities of any series are to be redeemed, the identification (and, in the case of partial redemption of any Securities, the principal amounts) of the particular Securities to be redeemed, (4) that, on the Redemption Date, the Redemption Price will become due and payable upon each such Security to be redeemed and, if applicable, that interest thereon will cease to accrue on and after said date, (5) the Place or Places of Payment where such Securities, together in the case of Bearer Securities with all coupons appertaining thereto, if any, maturing after the Redemption Date, are to be surrendered for payment of the Redemption Price and accrued interest, if any, (6) that the redemption is for a sinking fund, if such is the case, (7) that Bearer Securities may be surrendered for payment only at such place or places outside of the United States, except as otherwise specified in Section 10.2 and unless otherwise specified in such notice, Bearer Securities of any series, if any, surrendered for redemption must be accompanied by all coupons maturing subsequent to the date fixed for redemption or the amount of any such missing coupon or coupons will be deducted from the Redemption Price, unless security or indemnity satisfactory to the Company, the Trustee for such series and any Paying Agent is furnished, (8) if Bearer Securities of any series are to be redeemed and any Registered Securities of such series are not to be redeemed, and if such Bearer Securities may be exchanged for Registered Securities not subject to redemption on this Redemption Date pursuant to Section 3.5 or otherwise, the last date, as determined by the Company, on which such exchanges may be made, and (9) the CUSIP number of such Security, if any. Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company's request, by the Trustee in the name and at the expense of the Company and shall be 49 irrevocable. Failure to give such notice to the Holder of any Security or any defect in such notice given to the Holder of any Security shall not affect the validity of the proceedings for any other Security or part thereof. SECTION XI.5 DEPOSIT OF REDEMPTION PRICE. Prior to any Redemption Date, --------------------------- the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 10.3) an amount of money in the Currency in which such Securities are payable sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued interest on, all the Securities which are to be redeemed on that date. SECTION XI.6 SECURITIES PAYABLE ON REDEMPTION DATE. Notice of redemption ------------------------------------- having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest) such Securities shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the Redemption Price, together with accrued interest to the Redemption Date; provided, however, that installments of interest on Bearer Securities whose Stated Maturity is on or prior to the Redemption Date shall be payable only upon presentation and surrender of coupons for such interest (at an office or agency located outside the United States except as otherwise provided in Section 10.2) and provided further, that, unless otherwise specified in Section 3.1, installments of interest on Registered Securities whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Registered Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 3.7. If any Bearer Security surrendered for redemption shall not be accompanied by all appurtenant coupons maturing after the Redemption Date, such Bearer Security may be paid after deducting from the Redemption Price an amount equal to the face amount of all such missing coupons, or the surrender of such missing coupon or coupons may be waived by the Company and the Trustee if there be furnished to them such security or indemnity as they may require to save each of them and any Paying Agent harmless. If thereafter the Holder of such Bearer Security shall surrender to the Trustee or any Paying Agent any such missing coupon in respect of which a deduction shall have been made from the Redemption Price, such Holder shall be entitled to receive the amount so deducted without interest thereon; provided, however, that interest represented by coupon shall be payable only upon presentation and surrender of those coupons at an office or agency located outside of the United States except as otherwise provided in Section 10.2. If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal (and premium, if any) shall, until paid, bear interest from the Redemption Date at the rate prescribed therefor in the Security. SECTION XI.7 SECURITIES REDEEMED IN PART. Any Registered Security which --------------------------- is to be redeemed only in part shall be surrendered at a Place of Payment therefor (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Registered Security or Securities of the same series and of like tenor, of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered. ARTICLE XII SINKING FUNDS SECTION XII.1 APPLICABILITY OF ARTICLE. The provisions of this Article ------------------------ shall be applicable to any sinking fund for the retirement of Securities of a series except as otherwise specified as contemplated by Section 3.1 for Securities of such series. The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a "mandatory sinking fund payment", and any payment in excess of such minimum amount provided for by the terms of Securities of any series is herein referred to as an "optional sinking fund payment". If 50 provided for by the terms of Securities of any series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 12.2. Each sinking fund payment shall be applied to the redemption of Securities of any series as provided for by the terms of Securities of such series. SECTION XII.2 SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES. The ----------------------------------------------------- Company may (1) deliver Outstanding Securities of a series (other than any previously called for redemption), together with any unmatured coupons appertaining to any Bearer Securities of such series and (2) apply as a credit Securities of a series which have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to the Securities of such series required to be made pursuant to the terms of such Securities as provided for by the terms of such series; provided that such Securities have not been previously so credited. Such Securities shall be received and credited for such purpose by the Trustee at the Redemption Price specified in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly. SECTION XII.3 REDEMPTION OF SECURITIES FOR SINKING FUND. Not less than 60 ----------------------------------------- days prior to each sinking fund payment date for any series of Securities (unless a shorter period is satisfactory to the Trustee), the Company will deliver to the Trustee an Officers' Certificate specifying the amount of the next ensuing sinking fund payment for that series pursuant to the terms of that series, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting Securities of that series pursuant to Section 12.2 and will also deliver to the Trustee any Securities to be so delivered. Not less than 30 nor more than 60 days before each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking fund payment date (unless a shorter period is satisfactory to the Trustee) in the manner specified in Section 11.3 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 11.4. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 11.6 and 11.7. ARTICLE XIII REPAYMENT AT THE OPTION OF HOLDERS SECTION XIII.1 APPLICABILITY OF ARTICLE. Securities of any series which ------------------------ are repayable at the option of the Holders thereof before their Stated Maturity shall be repaid in accordance with their terms and (except as otherwise specified pursuant to Section 3.1 for Securities of such series) in accordance with this Article. SECTION XIII.2 REPAYMENT OF SECURITIES. Each Security which is subject to ----------------------- repayment in whole or in part at the option of the Holder thereof on a Repayment Date shall, unless otherwise provided in its terms, be repaid at the applicable Repayment Price together with interest accrued to such Repayment Date as specified pursuant to Section 3.1. SECTION XIII.3 EXERCISE OF OPTION; NOTICE. Each Holder desiring to -------------------------- exercise such Holder's option for repayment shall, as conditions to such repayment, surrender the Security to be repaid in whole or in part together with written notice of the exercise of such option at any office or agency of the Company in a Place of Payment, not less than 30 nor more than 45 days prior to the Repayment Date; provided, however, that surrender of Bearer Securities together with written notice of exercise of such option shall be made at an office or agency located outside the United States except as otherwise provided in Section 10.2. Such notice, which shall be irrevocable, shall specify the principal amount of such Security to be repaid, which shall be equal to the minimum authorized denomination for such Security or an integral multiple thereof, and shall identify the Security to be repaid and, in the case of a partial repayment of the Security, shall specify the denominations of the Security or Securities of the same series to be issued to the Holder for the portion of the principal of the Security surrendered which is not to be repaid. If any Bearer Security surrendered for repayment shall not be accompanied by all unmatured coupons and all matured coupons in default, such Bearer Security may be paid after deducting from the Repayment Price an amount 51 equal to the face amount of all such missing coupons, or the surrender of such missing coupon or coupons may be waived by the Company and the Trustee if there be furnished to them such security or indemnity as they may require to save each of them and any Paying Agent harmless. If thereafter the Holder of such Bearer Security shall surrender to the Trustee or any Paying Agent any such missing coupon in respect of which a deduction shall have been made from the Repayment Price, such Holder shall be entitled to receive the amount so deducted without interest thereon; provided, however, that interest represented by coupons shall be payable only at an office or agency located outside the United States except as otherwise provided in Section 10.2. The Company shall execute and the Trustee, upon Company Order, shall authenticate and deliver without service charge to the Holder of any Registered Security so surrendered a new Registered Security or Securities of the same series, of any authorized denomination specified in the foregoing notice, in an aggregate principal amount equal to any portion of the principal of the Registered Security so surrendered which is not to be repaid. The Company shall execute and the Trustee, upon Company Order, shall authenticate and deliver without service charge to the Holder of any Bearer Security so surrendered a new Registered Security or Securities or new Bearer Security or Securities (and all appurtenant unmatured coupons and matured coupons in default) or any combination thereof of the same series of any authorized denomination or denominations specified in the foregoing notice, in an aggregate principal amount equal to any portion of the principal of the Security so surrendered which is not to be paid; provided, however, that the issuance of a Registered Security therefor shall be subject to applicable laws and regulations in effect at the time of the exchange; neither the Company, the Trustee nor the Security Registrar shall issue Registered Securities for Bearer Securities if it has received an Opinion of Counsel that as a result of such issuance the Company would suffer adverse consequences under the United States Federal income tax laws then in effect and the Company has delivered to the Trustee a Company Order directing the Trustee not to make such issuances thereafter unless and until the Trustee receives a subsequent Company Order to the contrary. The Company shall deliver copies of such Company Order to the Security Registrar. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the repayment of Securities shall relate, in the case of any Security repaid or to be repaid in part, to the portion of the principal of such Security which has been or is to be repaid. SECTION XIII.4 ELECTION OF REPAYMENT BY REMARKETING ENTITIES. The Company --------------------------------------------- may elect with respect to Securities of any series which are repayable at the option of the Holders thereof before their Stated Maturity, at any time prior to any Repayment Date to designate one or more Remarketing Entities to purchase, at a price equal to the Repayment Price, Securities of such series from the Holders thereof who give notice and surrender their Securities in accordance with Section 13.3. SECTION XIII.5 SECURITIES PAYABLE ON THE REPAYMENT DATE. Notice of ---------------------------------------- exercise of the option of repayment having been given and the Securities so to be repaid having been surrendered as aforesaid, such Securities shall, unless purchased in accordance with Section 13.4, on the Repayment Date become due and payable at the price therein specified and from and after the Repayment Date such Securities shall cease to bear interest and shall be paid on the Repayment Date, and the coupons for such interest appertaining to Bearer Securities so to be repaid, except to the extent provided above, shall be void, unless the Company shall default in the payment of such price in which case the Company shall continue to be obligated for the principal amount of such Securities and shall be obligated to pay interest on such principal amount at the rate borne by such Securities from time to time until payment in full of such principal amount. ARTICLE XIV MEETINGS OF HOLDERS OF SECURITIES SECTION XIV.1 PURPOSES FOR WHICH MEETINGS MAY BE CALLED. ----------------------------------------- 52 If Securities of a series are issuable in whole or in part as Bearer Securities, a meeting of Holders of Securities of such series may be called at any time and from time to time pursuant to this Article to make, give or take any request, demand, authorization, direction, notice, consent, waiver or other Act provided by this Indenture to be made, given or taken by Holders of Securities of such series. SECTION XIV.2 CALL, NOTICE AND PLACE OF MEETINGS. ---------------------------------- (a) The Trustee may at any time call a meeting of Holders of Securities of any series issuable as Bearer Securities for any purpose specified in Section 14.1, to be held at such time and at such place in the Borough of Manhattan, The City of New York, in the City of Chicago, Illinois or in London as the Trustee shall determine. Notice of every meeting of Holders of Securities of any series, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting, shall be given, in the manner provided in Section 1.6, not less than 21 no more than 180 days prior to the date fixed for the meeting. (b) In case at any time the Company, pursuant to a Board Resolution, or the Holders of at least 10% in principal amount of the Outstanding Securities of any series shall have requested the Trustee to call a meeting of the Holders of Securities of such series for any purpose specified in Section 14.1, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have made the first publication of the notice of such meeting within 21 days after receipt of such request or shall not thereafter proceed to cause the meeting to be held as provided herein, then the Company or the Holders of Securities of such series in the amount above specified, as the case may be, may determine the time and the place in the Borough of Manhattan, The City of New York, in the City of Chicago, Illinois or in London for such meeting and may call such meeting for such purposes by giving notice thereof as provided in subsection (a) of this Section. SECTION XIV.3 PERSONS ENTITLED TO VOTE AT MEETINGS. To be entitled to ------------------------------------ vote at any meeting of Holders of Securities of any series, a Person shall be (1) a Holder of one or more Outstanding Securities of such series or (2) a Person appointed by an instrument in writing as proxy for a Holder or Holders of one or more Outstanding Securities of such series by such Holder or Holders. The only Persons who shall be entitled to be present or to speak at any meeting of Holders of Securities of any series shall be the Persons entitled to vote at such meeting and their counsel, any representatives of the Trustee and its counsel and any representatives of the Company and its counsel. SECTION XIV.4 QUORUM; ACTION. The Persons entitled to vote a majority in -------------- principal amount of the Outstanding Securities of a series shall constitute a quorum for a meeting of Holders of securities of such series; provided, however, that if any action is to be taken at such meeting with respect to a consent which this Indenture expressly provides may be given by the Holders of a majority in principal amount of the Outstanding Securities of a series, the Persons entitled to vote a majority in principal amount of the Outstanding Securities of such series shall constitute a quorum. In the absence of a quorum within 30 minutes of the time appointed for any such meeting, the meeting shall, if convened at the request of Holders of Securities of such series, be dissolved. In the absence of a quorum in any other case the meeting may be adjourned for a period of not less than 10 days as determined by the chairperson of the meeting prior to the adjournment of such meeting. In the absence of a quorum at any such adjourned meeting, such adjourned meeting may be further adjourned for a period of not less than 10 days as determined by the chairperson of the meeting prior to the adjournment of such adjourned meeting. Notice of this reconvening of any adjourned meeting shall be given as provided in Section 14.2(a), except that such notice need be given only once not less than five days prior to the date on which the meeting is scheduled to be reconvened. Notice of the reconvening of an adjourned meeting shall state expressly the percentage, as provided above, of the principal amount of the Outstanding Securities of such series which shall constitute a quorum. Except as limited by the proviso to Section 9.2, any resolution presented to a meeting or adjourned meeting duly reconvened at which a quorum is present as aforesaid may be adopted only by the affirmative vote of the Holders of majority in principal amount of the Outstanding Securities of that series, provided, however, that, except as limited by the proviso to Section 9.2, any resolution with respect to any consent or waiver which this Indenture expressly provides may be given by the Holders of a majority in principal amount of the Outstanding Securities of a series may be adopted at a meeting or an adjourned meeting duly reconvened and at which a quorum is present as aforesaid only by the affirmative vote of the Holders of a majority in principal amount of the Outstanding Securities of that series; and 53 provided, further, that, except as limited by the proviso to Section 9.2, any resolution with respect to any request, demand, authorization, direction, notice, consent, waiver or other Act which this Indenture expressly provides may be made, given or taken by the Holders of a specified percentage, which is less than a majority, in principal amount of the Outstanding Securities of a series may be adopted at a meeting or an adjourned meeting duly reconvened and at which a quorum is present as aforesaid by the affirmative vote of the Holders of such specified percentage in principal amount of the Outstanding Securities of that series. Any resolution passed or decision taken at any meeting of Holders of Securities of any series duly held in accordance with this Section shall be binding on all the Holders of Securities of such series and the related coupons, whether or not present or represented at the meeting. SECTION XIV.5 DETERMINATION OF VOTING RIGHTS; CONDUCT AND ADJOURNMENT OF ----------------------------------------------------------- MEETINGS. - -------- (a) Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Holders of Securities of such series in regard to proof of the holding of Securities of such series and of the appointment of proxies and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall deem appropriate. Except as otherwise permitted or required by any such regulations, the holding of Securities shall be proved in the manner specified in Section 1.4 and the appointment of any proxy shall be proved in the manner specified in Section 1.4 or, in the case of Bearer Securities, by having the signature of the person executing the proxy witnessed or guaranteed by any trust company, bank or banker authorized by Section 1.4 to certify to the holding of Bearer Securities. Such regulations may provide that written instruments appointing proxies, regular on their face, may be presumed valid and genuine without the proof specified in Section 1.4 or other proof. (A) The Trustee shall, by an instrument in writing, appoint a temporary chairperson of the meeting, unless the meeting shall have been called by the Company or by Holders of Securities as provided in Section 14.2(b), in which case the Company or the Holders of Securities of the series calling the meeting, as the case may be, shall in like manner appoint a temporary chairperson. A permanent chairperson and a permanent secretary of the meeting shall be elected by vote of the Persons entitled to vote a majority in principal amount of the Outstanding Securities of such series represented at the meeting. (b) At any meeting each Holder of a Security of such series or proxy shall be entitled to one vote for each $1.00 principal amount (or the equivalent in Euro, any other composite currency or a Foreign Currency) of Securities of such series held or represented by him; provided, however, that no vote shall be cast or counted at any meeting in respect of any Security challenged as not Outstanding and ruled by the chairperson of the meeting not to be Outstanding. The chairperson of the meeting shall have no right to vote, except as a Holder of a Security of such series or proxy. (c) Any meeting of Holders of Securities of any series duly called pursuant to Section 14.2 at which a quorum is present may be adjourned from time to time by Persons entitled to vote a majority in principal amount of the Outstanding Securities of such series represented at a meeting; and the meeting may be held as so adjourned without further notice. SECTION XIV.6 COUNTING VOTES AND RECORDING ACTION OF MEETINGS. The vote ----------------------------------------------- upon any resolution submitted to any meeting of Holders of Securities of any series shall be by written ballots on which shall be subscribed the signatures of the Holders of Securities of such series or of their representatives by proxy and the principal amounts and serial numbers of the Outstanding Securities of such series held or represented by them. The permanent chairperson of the meeting shall appoint two inspectors of vote who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in triplicate of all votes cast at the meeting. A record, at least in triplicate, of the proceedings of each meeting of Holders of Securities of any series shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was given as provided in Section 14.2 and, if applicable, Section 14.1. Each copy shall be signed and verified by the affidavits of the permanent chairperson and secretary of the meeting and one such copy shall be delivered to the Company, and 54 another to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting. Any record so signed and verified shall be conclusive evidence of the matters therein stated. ARTICLE XV DEFEASANCE AND COVENANT DEFEASANCE SECTION XV.1 COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE. ------------------------------------------------------------ The Company may elect, at its option by Board Resolution at any time, to have either Section 15.2 or Section 15.3 applied to the Outstanding Securities of any series designated pursuant to Section 3.1 as being defeasible, and any related coupon, pursuant to this Article Fifteen (hereinafter called a "Defeasible Series"), upon compliance with the conditions set forth below in this Article Fifteen. SECTION XV.2 DEFEASANCE AND DISCHARGE. Upon the Company's exercise of the ------------------------ option provided in Section 15.1 to have this Section 15.2 applied to the Outstanding Securities of any Defeasible Series, the Company shall be deemed to have been discharged from its obligations with respect to the Outstanding Securities of such series and any related coupons as provided in this Section on and after the date the conditions set forth in Section 15.4 are satisfied (hereinafter called "Defeasance"). For this purpose, such Defeasance means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by the Outstanding Securities of such series and to have satisfied all its other obligations under the Securities of such series and this Indenture insofar as the Securities of such series are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), subject to the following which shall survive until otherwise terminated or discharged hereunder (1) the rights of Holders of Securities of such series to receive, solely from the trust fund described in Section 15.4 and as more fully set forth in such Section, payments in respect of the principal of (and premium, if any) and interest on such Securities of such series when payments are due, (2) the Company's obligations with respect to the Securities of such series under Sections 3.4, 3.5, 3.6, 10.2, 10.3 and any additional amounts under Section 10.5, (3) the rights, powers, trusts, duties and immunities of the Trustee hereunder and (4) this Article Fifteen. Subject to compliance with this Article Fifteen, the Company may exercise its option provided in Section 15.1 to have this Section 15.2 applied to the Outstanding Securities of any Defeasible Series notwithstanding the prior exercise of its option provided in Section 15.1 to have Section 15.3 applied to the Outstanding Securities of such series and any related coupons. SECTION XV.3 COVENANT DEFEASANCE. Upon the Company's exercise of the ------------------- option provided in Section 15.1 to have this Section 15.3 applied to the Outstanding Securities of any Defeasible Series and any related coupons, (1) the Company shall be released from its obligations under Section 10.7 and Section 8.1 and (2) the occurrence of any event specified in Sections 5.1(3), 5.1(4) (with respect to any of Section 10.7 and Section 8.1) and 5.1(7) shall be deemed not to be or result in an Event of Default, in each case with respect to the Outstanding Securities of such series as provided in this Section 15.3 on and after the date the conditions set forth in Section 15.4 are satisfied (hereinafter called "Covenant Defeasance"). For this purpose, such Covenant Defeasance means that the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such specified Section (to the extent so specified in the case of Section 5.1(4)), whether directly or indirectly by reason of any reference elsewhere herein to any such Section or by reason of any reference in any such Section to any other provision herein or in any other document, but the remainder of this Indenture and the Securities of such series shall be unaffected thereby. SECTION XV.4 CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE. The ----------------------------------------------- following shall be the conditions to application of either Section 15.2 or Section 15.3 to the Outstanding Securities of any Defeasible Series: (1) The Company shall irrevocably have deposited or caused to be deposited with the Trustee (or another trustee that satisfies the requirements contemplated by Section 6.9 and agree to comply with the provisions of this Article Fifteen applicable to it) as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of Outstanding Securities of such series, (A) money in an amount (in such Currency in which such Securities and 55 any coupons appertaining thereto are then specified as payable at Stated Maturity), (B) U.S. Government Obligations that through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment, money in an amount, or (C) a combination thereof, in each case sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge, and which shall be applied by the Trustee (or any such other qualifying Trustee) to pay and discharge, the principal of (and premium, if any) and interest on the Securities of such series on the respective Stated Maturities, in accordance with the terms of this Indenture and the Securities of such series. (2) In the case of an election under Section 15.2, the Company shall have delivered to the Trustee an Opinion of Counsel stating that (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date first set forth hereinabove, there has been a change in the applicable Federal income tax law, in either case (A) or (B) to the effect that, and based thereon such opinion shall confirm that, the Holders of the Outstanding Securities of such series will not recognize gain or loss for Federal income tax purposes as a result of the deposit, Defeasance and discharge to be effected with respect to the Securities of such series and will be subject to Federal income tax on the same amount, in the same manner and at the same times as would be the case if such deposit, Defeasance and discharge were not to occur. (3) In the case of an election under Section 15.3, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of the Outstanding Securities of such series will not recognize gain or loss for Federal income tax purposes as result of the deposit and Covenant Defeasance to be effected with respect to the Securities of such series and will be subject to Federal income tax on the same amount, in the same manner and at the same times as would be the case if such deposit and Covenant Defeasance were not to occur. (4) The Company shall have delivered to the Trustee an Officers' Certificate to the effect that the Securities of such series, if then listed on any securities exchange, will not be delisted as a result of such deposit. (5) No Event of Default or event that (after notice of lapse of time or both) would become an Event of Default shall have occurred and be continuing at the time of such deposit or, with regard to any Event of Default or any such event specified in Sections 5.1(5) and (6), at any time on or prior to the 90th day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until after such 90th day). (6) Such Defeasance or Covenant Defeasance shall not cause the Trustee to have a conflicting interest within the meaning of the Trust Indenture Act. (7) Such Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any other agreement or instrument to which the Company is a party or by which it is bound. (8) Such Defeasance or Covenant Defeasance shall not result in the trust arising from such deposit constituting an investment company within the meaning of the Investment Company Act of 1940, as amended, unless such trust shall be qualified or exempt from regulation thereunder. (9) The Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent with respect to such Defeasance or Covenant Defeasance have been complied with. SECTION XV.5 DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD IN ------------------------------------------------------------- TRUST; OTHER MISCELLANEOUS PROVISIONS. Subject to the provisions of the last - ------------------------------------- paragraph of Section 10.3, all money and U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee or other qualifying trustee (solely for purposes of this Section 15.5 and Section 15.6, the Trustee and any such other trustee are referred to collectively 56 as the "Trustee") pursuant to Section 15.4 in respect of the Securities of any Defeasible Series and any related coupons shall be held in trust and applied by the Trustee, in accordance with the provisions of the Securities and the related coupons, if any, of such series and this Indenture, to the payment, either directly or through any such Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Holders of Securities of such series, of all sums due and to become due thereon in respect of principal and any premium and interest, but money so held in trust need not be segregated from other funds except to the extent required by law. Unless otherwise specified with respect to any Security pursuant to Section 3.1, if, after a deposit referred to in Section 15.4(a) has been made, (a) the Holder of a Security in respect of which such deposit was made is entitled to, and does, elect pursuant to Section 3.12(b) or the terms of such Security to receive payment in a Currency other than that in which the deposit pursuant to Section 15.4(a) has been made in respect of such Security, or (b) a Conversion Event occurs as contemplated in Section 3.12(d) or 3.12(e) or by the terms of any Security in respect of which the deposit pursuant to Section 15.4(a) has been made, the indebtedness represented by such Security and any coupons appertaining thereto shall be deemed to have been, and will be, fully discharged and satisfied through the payment of the principal of (and premium, if any) and interest, if any, on such Security as the same becomes due out of the proceeds yielded by converting (from time to time as specified below in the case of any such election) the amount or other property deposited in respect of such Security into the Currency in which such Security becomes payable as a result of such election or Conversion Event based on the applicable Market Exchange Rate for such Currency in effect on the second Business Day prior to each payment date, except, with respect to a Conversion Event, for such Currency in effect (as nearly as feasible) at the time of the Conversion Event. The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government Obligations deposited pursuant to Section 15.4 or the principal and interest received in respect thereof other than any such tax, fee or other charge that by law is for the account of the Holders of Outstanding Securities. Anything in this Article Fifteen to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon Company Request any money or U.S. Government Obligations held by it as provided in Section 15.4 with respect to Securities of any Defeasible Series that, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Defeasance or Covenant Defeasance with respect to the Securities of such series. SECTION XV.6 REINSTATEMENT. If the Trustee or the Paying Agent is unable ------------- to apply any money in accordance with this Article Fifteen with respect to the Securities of any series by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company's obligations under this Indenture and the Securities of such series shall be revived and reinstated as though no deposit had occurred pursuant to this Article Fifteen with respect to Securities of such series until such time as the Trustee or Paying Agent is permitted to apply all money held in trust pursuant to Section 15.5 with respect to Securities of such series in accordance with this Article Fifteen; provided, however, that if the Company makes any payment of principal of (or premium, if any) or interest on any Security of such series following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of Securities of such series to receive such payment from the money so held in trust. ARTICLE XVI SUBORDINATION OF SECURITIES SECTION XVI.1 SECURITIES SUBORDINATE TO SENIOR INDEBTEDNESS. The Company --------------------------------------------- covenants and agrees, and each Holder of a Security by such Holder's acceptance thereof likewise covenants and agrees, that, to the extent and in the manner hereinafter set forth in this Article Sixteen, the indebtedness represented by the Securities and the payment of the principal of (and premium, if any) and interest, if any, in respect of each and all of the Securities are 57 hereby expressly made subordinate and subject in right of payment to the prior payment in full of all Senior Indebtedness. SECTION XVI.2 PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC. Upon any ---------------------------------------------- distribution of assets of the Company in the event of (a) any insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding in connection therewith, relative to the Company or to its creditors, as such, or to its assets, or (b) any liquidation, dissolution or other winding up of the Company, whether voluntary or involuntary and whether or not involving insolvency or bankruptcy, or (A) any assignment for the benefit of creditors or any other marshalling of assets and liabilities of the Company, then and in such event (i) the holders of Senior Indebtedness shall be entitled to receive payment in full of all amounts due or to become due on or in respect of all Senior Indebtedness, or provision shall be made for such payment in cash, before the Holders of the Securities of a series are entitled to receive any payment on account of the principal (and premium, if any), or interest, if any, in respect of the Securities of that series; and (ii) any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, by set-off or otherwise, to which the Holders or the Trustee would be entitled but for the provisions of this Article Sixteen, including any such payment or distribution which may be payable or deliverable by reason of the payment of any other Debt of the Company being subordinated to the payment of the Securities of a series, shall be paid by the liquidating trustee or agent or other person making such payment or distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee or otherwise, directly to the holders of Senior Indebtedness or their representative or representatives or to the trustee or trustees under any indenture under which any instruments evidencing any of such Senior Indebtedness may have been issued, ratably according to the aggregate amounts remaining unpaid on account of the principal of (and premium, if any) and interest on the Senior Indebtedness held or represented by each, to the extent necessary to make payment in full of all Senior Indebtedness remaining unpaid, after giving effect to any concurrent payment or distribution to the holders of such Senior Indebtedness. In the event that, notwithstanding the foregoing provisions of this Section 16.2, the Trustee or the Holder of any Security of a series shall receive any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, including any such payment or distribution which may be payable or deliverable by reason of the payment of any other Debt of the Company being subordinated to the payment of the Securities of that series, before all Senior Indebtedness is paid in full or payment thereof provided for, and if such fact shall then have been made known to the Trustee, or, as the case may be, such Holder, then and in such event such payment or distribution shall be paid over or delivered forthwith to the trustee in bankruptcy, receiver, liquidating trustee, Custodian, assignee, agent or other person making payment or distribution of assets of the Company for application to the payment of all Senior Indebtedness remaining unpaid, to the extent necessary to pay all Senior Indebtedness in full, after giving effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness. For purposes of this Article Sixteen only, the words "Cash, Property or Securities" shall not be deemed to include shares of Capital Stock of the Company as reorganized or readjusted, or securities of the Company or any other corporation provided for by a plan of reorganization or readjustment the payment of which is subordinated, at least to the extent provided in this Article Sixteen with respect to the Securities of the applicable series, to the payment of all Senior Indebtedness which may at the time be outstanding; provided, however, that (i) Senior Indebtedness is assumed by the new corporation, if any, resulting from any such reorganization or readjustment, and (ii) the rights of the holders of the Senior Indebtedness are not, without the consent of such holders, altered by such reorganization or readjustment. 58 The consolidation of the Company with, or the merger of the Company into, another person or the liquidation or dissolution of the Company following the conveyance or transfer of all or substantially all of its assets to another person upon the terms and conditions set forth in Article Eight shall not be deemed a dissolution, winding up, liquidation, reorganization, assignment for the benefit of creditors or marshalling of assets and liabilities of the Company for the purposes of this Section 16.2 if the person formed by such consolidation or into which the Company is merged or the person which acquires by conveyance or transfer all or substantially all of the assets of the Company, as the case may be, shall, as a part of such consolidation, merger, conveyance or transfer, comply with the conditions set forth in Article Eight. SECTION XVI.3 ACCELERATION OF SECURITIES. In the event that any -------------------------- Securities of a series are declared due and payable before their Stated Maturity pursuant to Section 5.2, then and in such event the Company shall promptly notify holders of Senior Indebtedness of such acceleration. The Company may not pay the Securities of that series until 120 days have passed after such acceleration occurs and may thereafter pay the Securities of that series if this Article Sixteen permits the payment at that time. In the event that, notwithstanding the foregoing, the Company shall make any payment to the Trustee or the Holder of any Securities prohibited by the foregoing provisions of this Section 16.3, and if such facts then shall have been known or thereafter shall have been made known to the Trustee as provided in Section 16.10 or such Holder, as the case may be, pursuant to the terms of this Indenture, then and in such event such payment shall be paid over and delivered forthwith to the Company by or on behalf of the person holding such payment for the benefit of the holders of Senior Indebtedness. The provisions of this Section 16.3 shall not apply to any payment with respect to which Section 16.2 would be applicable. SECTION XVI.4 DEFAULT ON SENIOR INDEBTEDNESS. The Company may not make any ------------------------------ payment of the principal (and premium, if any) or interest, if any, in respect of the Securities of a series and may not acquire any Securities of that series for cash or property if: (1) a default on Senior Indebtedness occurs and is continuing that permits holders of such Senior Indebtedness to accelerate its maturity; and (2) the default is the subject of judicial proceedings or the Company receives a notice of default thereof from any person who may give such notice pursuant to the instrument evidencing or document governing such Senior Indebtedness. If the Company receives any such notice, then a similar notice received within nine months thereafter relating to the same default on the same issue of Senior Indebtedness shall not be effective for purposes of this Section 16.4. The Company may resume payments on the Securities of that series and may acquire Securities of that series if and when: i) the default is cured or waived; or ii) 120 or more days pass after the receipt by the Company of the notice described in clause (2) above and the default is not then the subject of judicial proceedings; and this Article Sixteen otherwise permits the payment or acquisition at that time. In the event that, notwithstanding the foregoing, the Company shall make any payment to the Trustee or the Holder of any Security prohibited by the foregoing provisions of this Section 16.4, and if such fact then shall have been known or thereafter shall have been made known to the Trustee or such Holder, as the case may be, pursuant to the terms of this Indenture, then and in such event such payment shall be paid over and delivered forthwith to the Company by or on behalf of the person holding such payment for the benefit of the holders of the Senior Indebtedness. Nothing contained in this Article Sixteen or elsewhere in this Indenture or in any of the Securities shall prevent the conversion by a Holder of any Securities for Capital Stock in accordance with any provisions for conversion of such 59 Securities for Capital Stock in the event of an occurrence of the events described in clauses (1) and (2) of this Section 16.4. The provisions of this Section 16.4 shall not apply to any payment with respect to which Section 16.2 would be applicable. SECTION XVI.5 PAYMENT PERMITTED IF NO DEFAULT. Nothing contained in this ------------------------------- Article Sixteen or elsewhere in this Indenture or in any of the Securities of a series shall prevent (a) the Company, at any time except during the pendency of any case, proceeding, dissolution, liquidation or other winding up, assignment for the benefit of creditors or other marshalling of assets and liabilities of the Company referred to in Section 16.2 or under the conditions described in Section 16.3 or 16.4, from making payments at any time of the principal (and premium, if any), or interest, if any, as the case may be, in respect of the Securities of that series, or (b) the application by the Trustee or the retention by any Holder of any money deposited with it hereunder to the payment of or on account of the principal (and premium, if any), or interest, if any, as the case may be, in respect of the Securities of that series if the Trustee did not have, at the time provided in the proviso to the first paragraph of Section 16.10, notice that such payment would have been prohibited by the provisions of this Article Sixteen. SECTION XVI.6 SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS. ------------------------------------------------------- Subject to the payment in full of all Senior Indebtedness, the Holders of the Securities of a series shall be subrogated to the extent of the payments or distributions made to the holders of such Senior Indebtedness pursuant to the provisions of this Article Sixteen to the rights of the holders of such Senior Indebtedness to receive payments or distributions of cash, property or securities applicable to the Senior Indebtedness until the principal (and premium, if any) or interest, if any, as the case may be, in respect of the Securities of that series shall be paid in full. For purposes of such subrogation, no payments or distributions to the holders of the Senior Indebtedness of any cash, property or securities to which the Holders of the Securities of that series or the Trustee would be entitled except for the provisions of this Article Sixteen, and no payments pursuant to the provisions of this Article Sixteen to the Company or to the holders of Senior Indebtedness by Holders of the Securities of that series or the Trustee, shall, as between the Company, its creditors other than holders of Senior Indebtedness and the Holders of the Securities of that series, be deemed to be a payment or distribution by the Company to or on account of the Senior Indebtedness. SECTION XVI.7 PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS. The provisions ------------------------------------------- of this Article Sixteen are and are intended solely for the purpose of defining the relative rights of the Holders of the Securities of each series, on one hand, and the holders of Senior Indebtedness, on the other hand. Nothing contained in this Article Sixteen or elsewhere in this Indenture or in the Securities of a series is intended to or shall (a) impair, as between the Company and the Holders of the Securities of that series, the obligation of the Company, which is absolute and unconditional, to pay to the Holders of the Securities of that series the principal (and premium, if any) and interest, if any, as the case may be, in respect of the Securities of that series as and when the same shall become due and payable in accordance with the terms of the Securities of that series and this Indenture and which, subject to the rights under this Article Sixteen of the holders of Senior Indebtedness, is intended to rank equally with all other general obligations of the Company; or (b) affect the relative rights against the Company of the Holders of the Securities of that series and creditors of the Company other than holders of Senior Indebtedness; or (C) prevent the Trustee or the Holder of any Security of that series from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this Article Sixteen of the holders of Senior Indebtedness to receive cash, property or securities otherwise payable or deliverable to the Trustee or such Holder. SECTION XVI.8 TRUSTEE TO EFFECTUATE SUBORDINATION. Each Holder of a ----------------------------------- Security by such Holder's acceptance thereof authorizes and directs the Trustee on such Holder's behalf to take such action as may be necessary or appropriate to effectuate the subordination provided in this Article Sixteen and appoints the Trustee such Holder's attorney-in-fact for any and all such purposes. 60 SECTION XVI.9 NO WAIVER OF SUBORDINATION PROVISIONS. No right of any ------------------------------------- present or future holder of any Senior Indebtedness to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or failure to act, in good faith, by any such holder, or by any noncompliance by the Company with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof any such holder may have or be otherwise charged with. Without in any way limiting the generality of the foregoing paragraph, the holders of Senior Indebtedness may, at any time and, from time to time, without the consent of, or notice to, the Trustee or the Holders of the Securities of that series, without incurring responsibility to the Holders of the Securities of that series and without impairing or releasing the subordination provided in this Article Sixteen or the obligations hereunder of the Holders of the Securities of that series to the holders of such Senior Indebtedness, do any one or more of the following: (i) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, such Senior Indebtedness, or otherwise amend or supplement in any manner such Senior Indebtedness or any instrument evidencing the same or any agreement under which such Senior Indebtedness is outstanding; (ii) sell, exchange, release or otherwise dispose of any property pledged, mortgaged or otherwise securing such Senior Indebtedness; (iii) release any person liable in any manner for the collection of such Senior Indebtedness; and (iv) exercise or refrain from exercising any rights against the Company or any other person. SECTION XVI.10 NOTICE TO TRUSTEE. The Company shall give prompt written ----------------- notice to the Trustee of any fact known to the Company which would prohibit the making of any payment to or by the Trustee in respect of the Securities of a series. Failure to give such notice shall not affect the subordination of the Securities of that series to Senior Indebtedness. Notwithstanding the provisions of this Article Sixteen or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts which would prohibit the making of any payment to or by the Trustee in respect of the Securities of a series, unless and until the Trustee shall have received written notice thereof at the address specified in Section 1.1 from the Company or a holder of Senior Indebtedness or from any trustee or agent therefor; and, prior to the receipt of any such written notice, the Trustee, subject to the provisions of Article Six, shall be entitled in all respects to assume that no such facts exist; provided, however, that if a Trust Officer of the Trustee shall not have received, at least three Business Days prior to the date upon which by the terms hereof any such money may become payable for any purpose (including, without limitation, the payment of the principal (and premium, if any), or interest, if any, as the case may be, in respect of any Security of that series), the notice with respect to such money provided for in this Section 16.10, then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such money and to apply the same to the purpose for which such money was received and shall not be affected by any notice to the contrary which may be received by it within three Business Days prior to such date. Subject to the provisions of Article Six, the Trustee shall be entitled to rely on the delivery to it of a written notice by a person representing himself to be a holder of Senior Indebtedness (or a trustee or agent on behalf of such holder) to establish that such notice has been given by a holder of Senior Indebtedness (or a trustee or agent on behalf of any such holder). In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any person as a holder of Senior Indebtedness to participate in any payment or distribution pursuant to this Article Sixteen, the Trustee may request such person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness held by such person, the extent to which such person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such person under this Article Sixteen, and if such evidence is not furnished, the Trustee may defer any payment which it may be required to make for the benefit of such person pursuant to the terms of this Indenture pending judicial determination as to the right of such person to receive such payment. SECTION XVI.11 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING -------------------------------------------------------- AGENT. Upon any payment or distribution of assets of the Company referred to - ----- in this Article Sixteen, the Trustee, subject to the provisions of Article Six, and the Holders of the Securities of a series shall be entitled to conclusively rely upon any order or decree entered by any court of competent jurisdiction in which such insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution, winding up or similar case or proceeding is pending, or a certificate of the trustee in bankruptcy, liquidating trustee, Custodian, receiver, assignee for the benefit of creditors, agent or other person making 61 such payment or distribution, delivered to the Trustee or to the Holders of Securities of that series, for the purpose of ascertaining the persons entitled to participate in such payment or distribution, the holders of Senior Indebtedness and other indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article Sixteen. SECTION XVI.12 TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS. -------------------------------------------------------- The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness and shall not be liable to any such holders if the Trustee shall in good faith mistakenly pay over or distribute to Holders of Securities of that series or to the Company or to any other person cash, property or securities to which any holders of Senior Indebtedness shall be entitled by virtue of this Article Sixteen or otherwise. The Trustee shall not be charged with knowledge of the existence of Senior Indebtedness or of any facts that would prohibit any payment hereunder unless a Trust Officer of the Trustee shall have received notice to that effect at the address of the Trustee set forth in Section 1.1. With respect to the holders of Senior Indebtedness, the Trustee undertakes to perform or to observe only such of its covenants or obligations as are specifically set forth in this Article Sixteen and no implied covenants or obligations with respect to holders of Senior Indebtedness shall be read into this Indenture against the Trustee. SECTION XVI.13 RIGHTS OF TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS; --------------------------------------------------- PRESERVATION OF TRUSTEE'S RIGHTS. The Trustee in its individual capacity - -------------------------------- shall be entitled to all the rights set forth in this Article Sixteen with respect to any Senior Indebtedness which may at any time be held by it, to the same extent as any other holder of Senior Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of its rights as such holder. Nothing in this Article Sixteen shall apply to claims of, or payments to, the Trustee under or pursuant to Section 6.7. SECTION XVI.14 ARTICLE SIXTEEN APPLICABLE TO PAYING AGENTS. In case at ------------------------------------------- any time any Paying Agent other than the Trustee shall have been appointed by the Company and be then acting hereunder, the term "Trustee" as used in this Article Sixteen shall in such case (unless the context otherwise requires) be construed as extending to and including such Paying Agent within its meaning as fully for all intents and purposes as if such Paying Agent were named in this Article Sixteen in addition to or in place of the Trustee; provided, however, that Sections 16.10 and 16.12 shall not apply to the Company or any Affiliate of the Company if it or such Affiliate acts as Paying Agent. IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written. MOTOROLA, INC. By: /s/ Carl F. Koenemann ---------------------------------------- HARRIS TRUST AND SAVINGS BANK, as Trustee By: /s/ C. Potter ---------------------------------------- 62 STATE OF ILLINOIS COUNTY OF COOK On the 28th. day of January, before me personally came Carl F. Koenemann, to me known, who, being by me duly sworn, did depose and say that he is Executive Vice President and Chief Financial Officer of Motorola, Inc., one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority. STATE OF ILLINOIS COUNTY OF COOK On the 1st day of February, before me personally came C. Potter, to me known, who, being by me duly sworn, did depose and say that he is Assistant Vice President of Harris Trust and Savings Bank, one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority. 63 EXHIBIT A FORMS OF CERTIFICATION EXHIBIT A-1 FORM OF CERTIFICATE TO BE GIVEN BY PERSON ENTITLED TO RECEIVE BEARER SECURITY OR TO OBTAIN INTEREST PAYABLE PRIOR TO THE EXCHANGE DATE CERTIFICATE [Insert title or sufficient description of Securities to be delivered] This is to certify that, as of the date hereof, and except as set forth below, the above-captioned Securities held by you for our account (i) are owned by person(s) that are not citizens or residents of the United States, domestic partnerships, domestic corporations or any estate or trust the income of which is subject to United States federal income taxation regardless of its source ("United States person(s)"), (ii) are owned by United States persons(s) that are (a) foreign branches of United States financial institutions (financial institutions, as defined in United States Treasury Regulations Section 1.165- 12(c)(1)(v) are herein referred to as "financial institutions") purchasing for their own account or for resale, or (b) United States person(s) who acquired the Securities through foreign branches of United States financial institutions and who hold the Securities through such United States financial institutions on the date hereof(and in either case(a) or (b), each such United States financial institution hereby agrees, on its own behalf or through its agent, that you may advise Motorola, Inc. or its agent that such financial institution will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the United States Internal Revenue Code of 1986, as amended, and the regulations thereunder), or (iii) are owned by United States or foreign financial institution(s) for purposes of resale during the restricted period (as defined in United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7), and, in addition, if the owner is a United States or foreign financial institution described in clause (iii) above (whether or not also described in clause(i) or (ii)), this is to further certify that such financial institution has not acquired the Securities for purposes of resale directly or indirectly to a United States person or to a person within the United States. As used herein, "UNITED STATES" means the United States of America (including the States and the District of Columbia), its territories, its possessions and other areas subject to its jurisdiction (including the Commonwealth of Puerto Rico). We undertake to advise you promptly by tested telex on or prior to the date on which you intend to submit your certification relating to the above-captioned Securities held by you for our account in accordance with your Operating Procedures if any applicable statement herein is not correct on such date, and in the absence of any such notification it may be assumed that this certification applies as of such date. This certificate excepts and does not relate to [U.S.$]___________ of such interest in the above-captioned Securities in respect of which we are not able to certify and as to which we understand an exchange for an interest in a permanent Global Security or an exchange for and delivery of definitive Securities (or, if relevant, collection of any interest) cannot be made until we do so certify. We understand that this certificate may be required in connection with certain tax legislation in the United States. If administrative or legal proceedings are commenced or threatened in connection with which this certificate is or would be relevant, we irrevocably authorize you to produce this certificate or a copy thereof to any interested party in such proceedings. Dated: , 19__ 64 [To be dated no earlier than the 15th day prior to (i) the Exchange Date or (ii) the relevant Interest Payment Date occurring prior to the Exchange Date, as applicable] [Name of Person Making Certification] (Authorized Signatory) Name: Title: 65 EXHIBIT A-2 FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR AND CEDEL S.A. IN CONNECTION WITH THE EXCHANGE OF A PORTION OF A TEMPORARY GLOBAL SECURITY OR TO OBTAIN INTEREST PAYABLE PRIOR TO THE EXCHANGE DATE CERTIFICATE [Insert title or sufficient description of Securities to be delivered] This is to certify that, based solely on written certifications that we have received in writing, by tested telex or by electronic transmission from each of the persons appearing in our records as persons entitled to a portion of the principal amount set forth below (our "Member Organizations") substantially in the form attached hereto, as of the date hereof, [U.S.$] principal amount of the above-captioned Securities (i) is owned by person(s) that are not citizens or residents of the United States, domestic partnerships, domestic corporations or any estate or trust the income of which is subject to United States Federal income taxation regardless of its source ("United States person(s)"), (ii) is owned by United States person(s) that are (a) foreign branches of United States financial institutions (financial institutions, as defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(v) are herein referred to as "financial institutions") purchasing for their own account or for resale, or (b) United States person(s) who acquired the Securities through foreign branches of United States financial institutions and who hold the Securities through such United States financial institutions on the date hereof (and in either case (a) or (b), each such financial institution has agreed, on its own behalf or through its agent, that we may advise Motorola, Inc. or its agent that such financial institution will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and the regulations thereunder), or (iii) is owned by United States or foreign financial institution(s) for purposes of resale during the restricted period (as defined in United States Treasury Regulations Section 1.163-5(c)(2) (i)(D)(7)), and, to the further effect, that financial institutions described in clause (iii) above (whether or not also described in clause (i) or (ii)) have certified that they have not acquired the Securities for purposes of resale directly or indirectly to a United States person or to a person within the United States. As used herein, "United States" means the United States of America (including the States and the District of Columbia), its territories, its possessions and other areas subject to its jurisdiction (including the Commonwealth of Puerto Rico). We further certify that (i) we are not making available herewith for exchange (or, if relevant, collection of any interest) any portion of the temporary Global Security representing the above-captioned Securities excepted in the above-referenced certificates of Member Organizations and (ii) as of the date hereof we have not received any notification from any of our Member Organizations to the effect that the statements made by such Member Organizations with respect to any portion of the part submitted herewith for exchange (or, if relevant, collection of any interest) are no longer true and cannot be relied upon as of the date hereof. We understand that this certification is required in connection with certain tax legislation in the United States. If administrative or legal proceedings are commenced or threatened in connection with which this certificate is or would be relevant, we irrevocably authorize you to produce this certificate or a copy thereof to any interested party in such proceedings. Dated: ______________, 19__ [To be dated no earlier than the Exchange Date or the relevant Interest Payment Date occurring prior to the Exchange Date, as applicable] 66 [Morgan Guaranty Trust Company of New York, Brussels Office,] as Operator of the Euroclear System [ Cedel S.A.] By ------------------------------ 67 EX-4.21 8 FIRST SUPP IND DATED 2/3/99 - MOTOROLA & HARRIS FIRST SUPPLEMENTAL INDENTURE BETWEEN MOTOROLA, INC. AND HARRIS TRUST AND SAVINGS BANK, AS TRUSTEE DATED AS OF FEBRUARY 3, 1999 TABLE OF CONTENTS ----------------- ARTICLE I
DEFINITIONS.............................................................................. 3 SECTION 1.1 Definition of Terms.................................................... 3 ARTICLE II GENERAL TERMS AND CONDITIONS OF THE DEBENTURES 6 SECTION 2.1 Designation and Principal Amount; Purchase Price; Payment of Principal; Global Securities................................................... 6 SECTION 2.2 Maturity............................................................... 6 SECTION 2.3 Form and Payment....................................................... 7 SECTION 2.4 Global Debenture....................................................... 8 SECTION 2.5 Interest............................................................... 9 SECTION 2.6 Authorized Denominations............................................... 11 SECTION 2.7 Redemption............................................................. 11 SECTION 2.8 Defeasance............................................................. 11 SECTION 2.9 No Sinking Fund........................................................ 11 SECTION 2.10 Depository............................................................. 11 ARTICLE III REDEMPTION OF THE DEBENTURES............................................................. 11 SECTION 3.1 Special Event Redemption............................................... 11 SECTION 3.2 Optional Redemption.................................................... 11 SECTION 3.3 Partial Redemption..................................................... 12 ARTICLE IV EXTENSION OF INTEREST PAYMENT PERIOD..................................................... 12 SECTION 4.1 Extension of Interest Payment Period................................... 12 SECTION 4.2 Notice of Extension.................................................... 13 SECTION 4.3 Limitation of Transactions............................................. 13 ARTICLE V EXPENSES................................................................................. 14 SECTION 5.1 Payment of Expenses.................................................... 14 SECTION 5.2 Payment Upon Resignation or Removal.................................... 15
ARTICLE VI COVENANT TO LIST ON EXCHANGE............................................ 15 SECTION 6.1 Listing on an Exchange................................ 15 ARTICLE VII FORM OF DEBENTURE....................................................... 15 SECTION 7.1 Form of Debenture..................................... 15 ARTICLE VIII ORIGINAL ISSUE OF DEBENTURES............................................ 25 SECTION 8.1 Original Issue of Debentures.......................... 25 SECTION 8.2 Reports by the Trustee................................ 25 ARTICLE IX COVENANTS............................................................... 25 SECTION 9.1 Covenants as to Trust................................. 25 ARTICLE X DEFAULT................................................................. 26 SECTION 10.2 Limitations on Waivers and Consents................... 26 SECTION 10.3 Acknowledgment of Rights.............................. 27 ARTICLE XI MISCELLANEOUS........................................................... 27 SECTION 11.1 Ratification of Indenture............................. 27 SECTION 11.2 Trustee Not Responsible for Recitals.................. 27 SECTION 11.3 Governing Law......................................... 27 SECTION 11.4 Separability.......................................... 28 SECTION 11.5 Counterparts.......................................... 28 SECTION 11.6 Effect of Headings.................................... 28
FIRST SUPPLEMENTAL INDENTURE FIRST SUPPLEMENTAL INDENTURE dated as of February 3, 1999 (the "First Supplemental Indenture") between Motorola, Inc., a Delaware corporation (the "Issuer"), and Harris Trust and Savings Bank, as trustee (the "Trustee") under the Indenture dated as of February 3, 1999 between the Issuer and the Trustee (the "Base Indenture" and, as supplemented by this First Supplemental Indenture, the "Indenture"). WHEREAS, the Issuer executed and delivered the Indenture to the Trustee to provide for the future issuance of the Issuer's unsecured subordinated debentures, notes or other evidence of indebtedness (the "Securities") to be issued from time to time in one or more series as might be determined by the Issuer under the Indenture, in an unlimited aggregate principal amount which may be authenticated and delivered as provided in the Indenture; WHEREAS, pursuant to the terms of the Indenture, the Issuer desires to provide for the establishment of a new series of its Securities to be known as its 6.68% Deferrable Interest Junior Subordinated Debentures due 2039 (the "Debentures"), the form and substance of such Debentures and the terms, provisions and conditions thereof to be set forth as provided in the Indenture and this First Supplemental Indenture; WHEREAS, Motorola Capital Trust I, a Delaware statutory business trust (the "Trust"), is offering to the public up to $500 million aggregate liquidation amount of its 6.68% Trust Originated Preferred Securities (the "Preferred Securities"), representing preferred undivided beneficial interests in the assets of the Trust and proposes to invest the proceeds from such offering, together with the proceeds of the issuance and sale by the Trust to the Issuer of up to $15,463,925 aggregate liquidation amount of its 6.68% Trust Originated Common Securities (the"Common Securities"), in up to $515,463,925 aggregate principal amount of the Debentures; WHEREAS, the Issuer has requested that the Trustee execute and deliver this First Supplemental Indenture; and WHEREAS, all requirements necessary to make this First Supplemental Indenture a valid instrument in accordance with its terms and to make the Debentures, when executed by the Issuer and authenticated and delivered by the Trustee as provided in the Indenture, the valid obligations of the Issuer have been performed, and the execution and delivery of this First Supplemental Indenture has been duly authorized in all respects. NOW, THEREFORE, in consideration of the purchase and acceptance of the Debentures by the Holders thereof, and for the purpose of setting forth, as provided in the Indenture, the form and substance of the Debentures and the terms, provisions and conditions thereof, the Issuer covenants and agrees with the Trustee as follows: 1 ARTICLE I DEFINITIONS SECTION 1.1 DEFINITION OF TERMS. Unless the context otherwise requires: ------------------- (a) a term defined in the Indenture (including as set forth in the first paragraph of Section 1.1 of the Indenture) has the same meaning when used in this First Supplemental Indenture unless otherwise defined herein; (b) a term defined anywhere in this First Supplemental Indenture has the same meaning throughout; (c) the singular includes the plural and vice versa; (d) a reference to a Section or Article is to a Section or Article of this First Supplemental Indenture unless otherwise specified herein; (e) headings are for convenience of reference only and do not affect interpretation; (f) the following terms have the meanings given to them in the Declaration (as defined herein) or in the terms of the Trust Securities (as defined herein) as established in accordance with the Declaration: (i) Affiliate; (ii) Business Day; (iii) Debenture Issuer; (iv) Delaware Trustee; (v) Distribution; (vi) Investment Company Event; (vii) Preferred Securities; (viii) Preferred Security Certificate; (ix) Pro Rata; (x) Property Trustee; 2 (xi) Regular Trustees; (xii) Securities; (xiii) Preferred Securities Guarantee; (xiv) Special Event; (xv) Sponsor; (xvi) Tax Event; and (xvii) Underwriting Agreement; (g) The following terms have the meanings given to them in this Section 1.1(g): "Additional Interest" shall have the meaning set forth in Section 2.5(c). "Compounded Interest" shall have the meaning set forth in Section 4.1. "Coupon Rate" shall have the meaning set forth in Section 2.5(a). "Declaration" means the Amended and Restated Declaration of Trust of Motorola Capital Trust I, a Delaware statutory business trust, dated as of February 3, 1999. "Deferred Interest" shall have the meaning set forth in Section 4.1. "Dissolution Event" means that as a result of an election by the Issuer, the Trust is to be dissolved in accordance with the Declaration, and the Debentures held by the Property Trustee are to be distributed to the holders of the Trust Securities Pro Rata in accordance with the Declaration. "Extended Interest Payment Period" shall have the meaning set forth in Section 4.1. "Extension Conditions" means the following: (i) the Issuer is not in bankruptcy or otherwise insolvent; (ii) the Issuer is not in default on any Debentures issued to the Trust or to any trustee of the Trust in connection with the issuance of Trust Securities by the Trust; (iii) the Issuer has made timely payments on the Debentures for the immediately preceding six quarters without deferrals; 3 (iv) the Trust is not in arrears on payments of Distributions on the Trust Securities; (v) the Debentures or the Preferred Securities are rated investment grade by any one of Standard & Poor's Corporation, Moody's Investors Service, Inc., Fitch Investor Service, LP, Duff & Phelps Credit Rating Company or any other nationally recognized statistical rating organization; and (vi) the final maturity of such Debentures is no later than the forty-ninth anniversary of the issuance of the Preferred Securities. "Global Debenture" shall have the meaning set forth in Section 2.4(a)(i). "Interest Deduction Date" shall have the meaning set forth in Section 2.2(b). "Interest Payment Date" shall have the meaning set forth in Section 2.5(a). "Maturity Date" shall have the meaning set forth in Section 2.2(a). "Non Book-Entry Preferred Securities" shall have the meaning set forth in Section 2.4(a)(ii). "Optional Redemption Price" shall have the meaning set forth in Section 3.2. "Preceding Maturity Date" shall have the meaning set forth in Section 2.2(c). "Redemption Price" shall have the meaning set forth in Section 3.1. "Scheduled Maturity Date" means March 31, 2039. "Trust Securities" shall mean the Preferred Securities and the Common Securities. ARTTICLE II GENERAL TERMS AND CONDITIONS OF THE DEBENTURES ---------------------------------------------- SECTION 2.1 DESIGNATION AND PRINCIPAL AMOUNT; PURCHASE PRICE; PAYMENT OF ------------------------------------------------------------ PRINCIPAL; GLOBAL SECURITIES. - ---------------------------- (a) There is hereby authorized a series of Securities designated the "6.68% Deferrable Interest Junior Subordinated Debentures due 2039," limited in aggregate principal amount to $515,463,925 (not including Debentures authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Debentures pursuant to Sections 3.4, 3.5, 3.6, 9.6 or 11.7 of the Indenture), which amount shall be as set forth in 4 a Company Order for the authentication and delivery of Debentures pursuant to Section 3.3 of the Indenture. (b) The Debentures shall be issued for a purchase price equal to 100% of the principal amount of such Debentures. (c) The principal of the Debentures shall be due and payable in full on the Maturity Date. (d) The Debentures shall initially be issued in fully registered non- book entry certificated form in the aggregate principal amount specified in paragraph (a) above. SECTION 2.2 MATURITY. -------- (a) The "Maturity Date" means the date on which the Debentures mature and on which the principal shall be due and payable together with all accrued and unpaid interest thereon (including Compounded Interest, if any), which date shall be the Scheduled Maturity Date unless the Maturity Date has been changed pursuant to Section 2.2(c) or (d), in which case the Maturity Date shall be the Maturity Date most recently established in accordance with Section 2.2(c) or (d). (b) The "Interest Deduction Date" shall mean the date which is six months earlier than the ending date of the maximum term (beginning on the date of issue of the Debentures and including any extensions thereof), as determined under any federal statute applicable by its terms to the Debentures which is enacted at any time after the issuance of the Debentures (including, but not limited to, at any time after an extension of the Maturity Date), of a debt instrument for which interest is deductible for federal income tax purposes. (c) If the Issuer has elected to dissolve the Trust and cause the Debentures to be distributed to the holders of the Trust Securities in liquidation of the Trust in accordance with Section 8.1(a)(v) of the Declaration, then the Issuer may elect to shorten the Maturity Date to a date not earlier than February 3, 2004, or extend the Maturity Date to a date which is not later than the earlier of (i) March 31, 2048, or (ii) the Interest Deduction Date, and such election shall be made, and such change in the Maturity Date shall be effective, on such date as notice thereof has been given in accordance with Section 2.2(e) so long as, in the case of an extension of the Maturity Date, the Issuer meets the Extension Conditions on such date; provided that (i) any such extension of the Maturity Date shall cease to be in effect (and the Maturity Date shall be the Maturity Date in effect prior to such extension (the "Preceding Maturity Date")) unless the Extension Conditions also are met on the Preceding Maturity Date, and (ii) in no event shall an extended Maturity Date be later than the Interest Deduction Date even if the Maturity Date has previously been extended to a date beyond the Interest Deduction Date. (d) The Issuer may at any time on or before the date which is 90 days before the Maturity Date, elect to extend the Maturity Date for one or more periods, but in no event to 5 a date later than the earlier of (i) March 31, 2048, or (ii) the Interest Deduction Date, and such election shall be made, and such extension of the Maturity Date shall be effective, on such date as notice thereof has been given in accordance with Section 2.2(e) so long as the Issuer meets the Extension Conditions on such date; provided that (i) any such extension of the Maturity Date shall cease to be in effect (and the Maturity Date shall be the Preceding Maturity Date) unless the Extension Conditions also are met on the Preceding Maturity Date, and (ii) in no event shall an extended Maturity Date be later than the Interest Deduction Date even if the Maturity Date has previously been extended to a date beyond the Interest Deduction Date. (e) If the Issuer desires to change the Maturity Date pursuant to Section 2.2(c) or (d), the Issuer shall give notice to Holders of the Debentures, the Property Trustee, the Trust and the Trustee of the new Maturity Date. (f) The terms of this Section 2.2 shall govern the maturity and any extensions thereof of the Debentures, notwithstanding anything in the Base Indenture to the contrary. The Debentures shall not include the optional extension rights set forth in Section 3.8 of the Base Indenture. SECTION 2.3 FORM AND PAYMENT. Except as provided in Section 2.4, the ---------------- Debentures shall be issued as Registered Securities in fully registered certificated form without interest coupons. The place where principal of and interest (including the Compounded Interest, if any) on the Debentures will be payable, the Debentures may be surrendered for registration of transfer or exchange, and where notices and demands to or upon the Issuer in respect of the Debentures and the Indenture may be served shall be the Corporate Trust Office of the Trustee, provided, however, that payment of interest may be made at the option of the Issuer by wire transfer to an account maintained by a Holder (upon appropriate instructions from such Holder) or by check mailed to the Holder at such address as shall appear in the Register. Notwithstanding the foregoing, so long as the Holder of any Debentures is the Property Trustee, the payment of the principal of and interest (including Compounded Interest, if any) on such Debentures held by the Property Trustee will be made by wire transfer of immediately available funds at such place and to such account as may be designated by the Property Trustee. Payment of principal of the Debentures will only be made upon surrender of the Debentures to the Trustee. The Debentures will be denominated in Dollars and payment of principal and interest on the Debentures shall be made in Dollars. SECTION 2.4 GLOBAL DEBENTURE. ---------------- (a) In connection with a distribution of the Debentures to the holders of the Trust Securities pursuant to the Declaration: (i) The Debentures in certificated form may be presented to the Trustee by the Property Trustee in exchange for a global Debenture in an aggregate principal amount equal to the aggregate principal amount of all Outstanding Debentures of such series (a "Global Debenture"), to be registered in the name of the Depository, or its nominee, and delivered by the Trustee to the 6 Depository for crediting to the accounts of its participants pursuant to the instructions of the Regular Trustees. The Issuer upon any such presentation shall execute a Global Debenture in such aggregate principal amount and deliver the same to the Trustee for authentication and delivery in accordance with the Indenture and this First Supplemental Indenture. Payments on the Debentures issued as a Global Debenture will be made to the Depository. (ii) If any Preferred Securities are held in non book-entry certificated form, the Debentures in certificated form may be presented to the Trustee by the Property Trustee and any Preferred Security Certificate which represents Preferred Securities other than Preferred Securities held by the Depository or its nominee ("Non Book-Entry Preferred Securities") will be deemed to represent beneficial interests in Debentures presented to the Trustee by the Property Trustee having an aggregate principal amount equal to the aggregate liquidation amount of the Non Book-Entry Preferred Securities until such Preferred Security Certificates are presented to the Registrar for transfer or reissuance at which time such Preferred Security Certificates will be canceled and a Debenture, registered in the name of the holder of the Preferred Security Certificate or the transferee of the holder of such Preferred Security Certificate, as the case may be, with an aggregate principal amount equal to the aggregate liquidation amount of the Preferred Security Certificate canceled, will be executed by the Issuer and delivered to the Trustee for authentication and delivery in accordance with the Indenture and this First Supplemental Indenture. On issue of such Debentures, Debentures with an equivalent aggregate principal amount that were presented by the Property Trustee to the Trustee will be deemed to have been canceled. (b) Unless and until it is exchanged for Debentures in registered certificated form, a Global Debenture may be transferred, in whole but not in part, only by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository or by the Depository or any such nominee to a successor Depository selected or approved by the Issuer or a nominee of such successor Depository. (c) If at any time the Depository for the Debentures notifies the Issuer that it is unwilling or unable to continue as Depository for the Debentures or if at any time the Depository for the Debentures shall no longer be registered or in good standing as a clearing agency under the Securities Exchange Act of 1934, as amended, or other applicable statute or regulation, at a time at which the Depository is required to be so registered to act as Depository for the Debentures, and a successor Depository for such series is not appointed by the Issuer within 90 days after the Issuer receives such notice or becomes aware of such condition, as the case may be, the Issuer will execute, and, subject to Article 3 of the Indenture, the Trustee, upon written notice from the Issuer, will authenticate and deliver the Debentures in definitive registered form without coupons, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Global Debenture in exchange for such Global Debenture. In addition, the Issuer, in its sole discretion, may at any 7 time determine that the Debentures shall no longer be represented by a Global Debenture. In such event the Issuer will execute, and subject to Article 3 of the Indenture, the Trustee, upon receipt of an Officers' Certificate evidencing such determination by the Issuer, will authenticate and deliver the Debentures in definitive registered form without coupons, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Global Debenture in exchange for such Global Debenture. Upon the exchange of the Global Debenture for such Debentures in definitive registered form without coupons, in authorized denominations, the Global Debenture shall be canceled by the Trustee. Such Debentures in definitive registered form issued in exchange for the Global Debenture shall be registered in such names and in such authorized denominations as the Depository, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee in writing. The Trustee shall deliver such registered certificated Debentures in definitive form in exchange for the Global Debenture to the Depository for delivery to the Persons in whose names such Debentures are so registered. SECTION 2.5 INTEREST. -------- (a) The Debentures will bear interest at the fixed rate of 6.68% per annum (the "Coupon Rate") from the original date of issuance or from the most recent Interest Payment Date to which interest has been paid or duly provided for until the principal thereof becomes due and payable, and on any overdue principal and (to the extent that payment of such interest is enforceable under applicable law) on any overdue installment of interest at the Coupon Rate, compounded quarterly, payable (subject to the provisions of Article IV) quarterly in arrears on March 31, June 30, September 30 and December 31 of each year (each, an "Interest Payment Date"), commencing on March 31, 1999. Interest on the Debentures (except defaulted interest) shall be paid to the Persons in whose name the Debentures are registered, at the close of business on the regular Record Date for such interest installment (including Debentures that are canceled after the Record Date and before the Interest Payment Date), which, with respect to any Debentures of which the Property Trustee is the Holder or with respect to a Global Debenture, shall be the close of business on the Business Day next preceding that Interest Payment Date. Notwithstanding the foregoing sentence, if the Preferred Securities are no longer in book-entry only form or if, pursuant to the Indenture and this First Supplemental Indenture the Debentures are distributed to the holders of the Trust Securities and are not represented by a Global Debenture, the Issuer may select a regular Record Date for such interest installment which shall conform to the rules of any securities exchange, interdealer quotation system or other organization on which the Debentures are listed and which shall be more than ten Business Days but less than 60 Business Days before the applicable Interest Payment Date. Notwithstanding the foregoing, any interest that is payable at maturity shall be payable to the Person to whom principal payable at maturity shall be payable. (b) The amount of interest payable for any period will be computed on the basis of a 360-day year of twelve 30-day months, and for any period shorter than a full quarter on the basis of the actual number of days elapsed in such 90-day quarter. In the event that any date on which interest is payable on the Debentures is not a Business Day, then payment of 8 the interest payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay), except that, notwithstanding any provision of the Indenture to the contrary, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date. (c) If, at any time while the Property Trustee is the Holder of any Debentures, the Trust or the Property Trustee is required to pay any taxes, duties, assessment or governmental charges of whatever nature (other than withholding taxes) imposed by the United States, or any other taxing authority, then, in any case, the Company will pay as additional interest ("Additional Interest") on the Debentures held by the Property Trustee, such additional amounts as shall be required so that the net amounts received and retained by the Trust and the Property Trustee after paying such taxes, duties, assessments or other governmental charges will be equal to the amounts the Trust and the Property Trustee would have received had no such taxes, duties, assessments or other government charges been imposed. SECTION 2.6 AUTHORIZED DENOMINATIONS. The Debentures shall be issuable in ------------------------ denominations of $25 and integral multiples of $25 in excess thereof. SECTION 2.7 REDEMPTION. The Debentures are not subject to conversion at ---------- the option of the Holder. The Debentures are not subject to redemption at the option of the Holder and are subject to redemption at the option of the Issuer or otherwise as provided in Article III hereof. SECTION 2.8 DEFEASANCE. The Debentures shall be subject to the provisions ---------- of Articles 4 and 15 of the Indenture concerning the satisfaction and discharge of the Issuer's indebtedness and obligations under the Indenture and the termination of certain covenants of the Issuer under the Indenture. SECTION 2.9 NO SINKING FUND. The Debentures shall not be entitled to the --------------- benefit of any sinking fund or analogous provision. SECTION 2.10 DEPOSITORY. The Depository Trust Company (or its nominee) ---------- shall act as the initial Depository for any Global Debenture which may be issued pursuant to this First Supplemental Indenture. ARTICLE III REDEMPTION OF THE DEBENTURES ---------------------------- SECTION 3.1 Special Event Redemption. If a Special Event has occurred and ------------------------ is continuing then, notwithstanding Section 3.2 hereof but subject to the provisions of Article XI of the Indenture, the Issuer shall have the right, upon not less than 30 days' nor more than 60 days' notice to the Holders of the Debentures, to redeem the Debentures, in whole or in part, for cash within 90 9 days following the occurrence of such Special Event at a redemption price equal to 100% of the principal amount to be redeemed plus any accrued and unpaid interest thereon (including Compounded Interest, if any) to the date of such redemption (the "Redemption Price"). The Redemption Price shall be paid prior to 12:00 noon, New York time, on the date of such redemption or at such earlier time as the Issuer determines and specifies in the notice of redemption, provided the Issuer shall deposit with the Trustee an amount sufficient to pay the Redemption Price at least one hour prior to the time such Redemption Price is to be paid. SECTION 3.2 OPTIONAL REDEMPTION. Subject to the provisions of Section 3.3 ------------------- hereof and Article 11 of the Indenture, the Issuer shall have the right to redeem the Debentures, in whole or in part, at any time or from time to time, on or after February 3, 2004, at a redemption price equal to 100% of the principal amount to be redeemed plus any accrued and unpaid interest thereon, (including Compounded Interest, if any), to the date of such redemption (the "Optional Redemption Price"). Any redemption pursuant to this paragraph will be made upon not less than 30 days nor more than 60 days notice to the Holder of the Debentures, at the Optional Redemption Price. The Optional Redemption Price shall be paid prior to 12:00 noon, New York time, on the date of such redemption or at such earlier time as the Issuer determines and specifies in the notice of redemption, provided that the Issuer shall deposit with the Trustee an amount sufficient to pay the Optional Redemption Price at least one hour prior to the time such Optional Redemption Price is to be paid. SECTION 3.3 PARTIAL REDEMPTION. ------------------ (a) If a partial redemption of the Debentures would result in the delisting of the Preferred Securities issued by the Trust from any national securities exchange, interdealer quotation system or other organization on which the Preferred Securities are then listed, the Issuer shall not be permitted to effect such partial redemption and may only redeem the Debentures in whole. (b) The Issuer may not redeem fewer than all of the Outstanding Debentures unless all accrued and unpaid interest on the Debentures has been paid as of the Interest Payment Date next preceding the Redemption Date. (c) If the Debentures are only partially redeemed pursuant to Section 3.2, the Debentures will be redeemed pro rata or by lot or by any other method utilized by the Trustee; provided that, if at the time of redemption the Debentures are registered as a Global Debenture, the Depository shall determine, in accordance with its procedures, the principal amount of such Debentures credited to each of its participant accounts to be redeemed. 10 ARTICLE IV EXTENSION OF INTEREST PAYMENT PERIOD ------------------------------------ SECTION 4.1 EXTENSION OF INTEREST PAYMENT PERIOD. The Issuer shall have ------------------------------------ the right, at any time and from time to time during the term of the Debentures, to defer payments of interest on the Debentures by extending the interest payment period of the Debentures for a period not exceeding 20 consecutive quarters (the "Extended Interest Payment Period"), during which Extended Interest Payment Period no interest shall be due and payable; provided that no Extended Interest Payment Period may extend beyond the Maturity Date. To the extent permitted by applicable law, interest, the payment of which has been deferred because of the extension of the interest payment period pursuant to this Section 4.1, will bear interest thereon at the Coupon Rate compounded quarterly for each quarter of the Extended Interest Payment Period ("Compounded Interest"). At the end of the Extended Interest Payment Period, the Issuer shall pay all interest accrued and unpaid on the Debentures, including any Compounded Interest (all such interest the "Deferred Interest") that shall be payable to the Holders of the Debentures in whose names the Subordinated Debentures are registered in the Register as of the Record Date relating to the Interest Payment Date that corresponds to the end of such Extended Interest Payment Period. Before the termination of any Extended Interest Payment Period, the Issuer may further extend such period, provided that such period together with all such previous and further extensions thereof shall not exceed 20 consecutive quarters or extend beyond the Maturity Date. Upon the termination of any Extended Interest Payment Period and upon the payment of all Deferred Interest then due, the Issuer may commence a new Extended Interest Payment Period, subject to the foregoing requirements. No interest shall be due and payable during an Extended Interest Payment Period, except at the end thereof, but the Issuer may prepay at any time all or any portion of the Deferred Interest accrued during an Extended Interest Payment Period. SECTION 4.2 NOTICE OF EXTENSION. ------------------- (a) If the Property Trustee is the only registered Holder of the Debentures at the time the Issuer selects an Extended Interest Payment Period, the Issuer shall give written notice to the Trustee, the Regular Trustees and the Property Trustee of its selection of such Extended Interest Payment Period one Business Day before the earlier of (i) the next succeeding date on which Distributions on the Trust Securities are payable, or (ii) the date the Regular Trustees, on behalf of the Trust, are required to give notice of the record date, or the date such Distributions are payable, to holders of the Preferred Securities (or any national securities exchange or self-regulatory organization on which the Preferred Securities are listed). (b) If the Property Trustee is not the only Holder of the Debentures at the time the Issuer selects an Extended Interest Payment Period, the Issuer shall give the Trustee, the Property Trustee and the Holders of the Debentures written notice of its selection of such Extended Interest Payment Period 10 Business Days before the earlier of (i) the next succeeding Interest Payment Date, or (ii) the date the Issuer is required to give notice of the 11 record or payment date of such interest payment to the New York Stock Exchange or other applicable self-regulatory organization or to Holders of the Debentures. (c) The quarter in which any notice is given pursuant to paragraphs (a) or (b) of this Section 4.2 shall be counted as one of the 20 quarters permitted in the maximum Extended Interest Payment Period permitted under Section 4.1. SECTION 4.3 LIMITATION OF TRANSACTIONS. If the Issuer shall exercise its -------------------------- right to defer payment of interest as provided in Section 4.1, then, prior to the payment of all accrued interest on outstanding Debentures, the Issuer shall not (a) declare or pay dividends on, make a distribution with respect to, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock, (b) make any payment of interest, principal or premium, if any, on, or repay, repurchase or redeem, any debt securities issued by the Issuer that rank equal with or junior to the Debentures or (c) make guarantee payments with respect to the foregoing (other than pursuant to the Preferred Securities Guarantee); provided, however, that the restriction in clause (a) shall not apply to (i) purchases or acquisitions of the Issuer's capital stock in connection with the satisfaction of its obligations under any employee benefit plans, stock option plans, employee stock purchase plans or direct reinvestment plans as may be in effect from time to time or the satisfaction of its obligations pursuant to any contract or security outstanding on the date of such event requiring the Issuer to purchase its capital stock (other than a contractual obligation ranking equal with or junior to the Debentures), (ii) reclassifications of the Issuer's capital stock or the exchange or conversion of one class or series of the Issuer's capital stock, provided that such reclassification, exchange or conversion does not result in a change in the priority vis-a-vis the Preferred Securities of any class or series of capital stock that is being so reclassified or that is the subject of such exchange or conversion, (iii) purchases of fractional interests in shares of the Issuer's capital stock pursuant to the conversion or exchange provisions of such capital stock or the security bring converted or exchanged, (iv) stock dividends paid by the Issuer where the dividend stock is the same stock as that on which the dividend is being paid or (v) redemptions or purchases of any rights pursuant to purchase rights contained in any rights agreement as shall be in effect from time to time, which purchase rights are substantially similar to those contained in the Issuer's Rights Agreement dated November 5, 1998. ARTICLE V EXPENSES -------- SECTION 5.1 PAYMENT OF EXPENSES. In connection with the offering, sale and ------------------- issuance of the Debentures to the Property Trustee in connection with the sale of the Trust Securities by the Trust and during the existence of the Trust, the Issuer, in its capacity as borrower with respect to the Debentures, shall: (a) pay all costs and expenses relating to the offering, sale and issuance of the Debentures, including commissions to the underwriters payable pursuant to the Underwriting 12 Agreement and compensation of the Trustee under the Indenture in accordance with the provisions of Section 6.7 of the Indenture; (b) pay other debts and obligations of the Trust (other than with respect to the Trust Securities) and all costs and expenses of the Trust (including, but not limited to, costs and expenses relating to the organization, maintenance and dissolution of the Trust, the offering, sale and issuance of the Trust Securities (including commissions to the underwriters payable pursuant to the Underwriting Agreement), the retention of the Regular Trustees, reimbursement of the Regular Trustees as provided in the Declaration, the fees and expenses of the Property Trustee and the Delaware Trustee, the trustee under the Preferred Securities Guarantee, the costs and expenses relating to the operation of the Trust, including without limitation, costs and expenses of accountants, attorneys, statistical or bookkeeping services, expenses for printing and engraving and computing or accounting equipment, paying agent(s), registrar(s), transfer agent(s), duplicating, travel and telephone and other telecommunications expenses and costs and expenses incurred in connection with the acquisition, financing and disposition of Trust assets, and the fees and expenses related to the enforcement by the Property Trustee of the rights of the holders of the Preferred Securities) and all other amounts payable by the Issuer pursuant to the Declaration; (c) be primarily liable for any indemnification obligations arising with respect to the Declaration; and (d) pay any and all taxes, duties, assessments or governmental charges of whatever nature (other than withholding taxes) imposed on the Trust or its assets and all liabilities, costs and expenses of the Trust with respect to such taxes, duties, assessments or governmental charges. SECTION 5.2 PAYMENT UPON RESIGNATION OR REMOVAL. Upon termination of this ----------------------------------- First Supplemental Indenture or the Indenture or the removal or resignation of the Trustee pursuant to Section 6.10 of the Indenture, the Issuer shall pay to the Trustee all amounts due to the Trustee in accordance with Section 6.7 of the Indenture. Upon termination of the Declaration or the removal or resignation of the Delaware Trustee or the Property Trustee, as the case may be, pursuant to Section 5.7 of the Declaration, the Issuer shall pay to the Delaware Trustee or the Property Trustee, as the case may be, all amounts due to such trustee accrued to the date of such termination, removal or resignation. ARTICLE VI COVENANT TO LIST ON EXCHANGE ---------------------------- SECTION 6.1 LISTING ON AN EXCHANGE. If the Debentures are to be ---------------------- distributed to the holders of the Preferred Securities as described in Section 2.4(a), the Issuer will, if the Debentures are not already so listed, use its best efforts to list such Subordinated Debentures on The New York 13 Stock Exchange, Inc. or on such other exchange or other organization as the Preferred Securities are then listed. ARTICLE VII FORM OF DEBENTURE ----------------- SECTION 7.1 FORM OF DEBENTURE. The Debentures and the Trustee's ----------------- Certificate of Authentication to be endorsed thereon are to be substantially in the following forms: This Debenture is one of a duly authorized series of Debentures (herein sometimes referred to as the "Debentures") of Motorola, Inc., a Delaware corporation (the "Company," which term includes any successor corporation under the Indenture hereinafter referred to), specified in and all issued or to be issued in one or more series under and pursuant to an Indenture dated as of February 3, 1999 (as originally executed or as it may from time to time be supplemented or amended by one or more supplemental indentures, including the First Supplemental Indenture dated as of February 3, 1999, the "Indenture"), duly executed and delivered between the Company and Harris Trust and Savings Bank, as Trustee (in such capacity, the "Trustee"), to which a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders of the Debentures, and to all of which provisions the Holder of this Debenture by acceptance hereof, assents and agrees. By the terms of the Indenture, the Debentures are issuable in series that may vary as to amount, date of maturity, rate of interest and in other respects as provided in the Indenture. This series of Debentures is limited in aggregate principal amount as specified in said Indenture. Defined terms used but not otherwise defined in this Debenture have the meanings set forth in the Indenture. (IF THE DEBENTURE IS TO BE A GLOBAL INDENTURE, INSERT - This Debenture is in Global form within the meaning of the Indenture hereinafter referred to and is registered in the name of a Depository or a nominee of a Depository. Unless and until it is exchanged in whole or in part for securities in certificated form in the limited circumstances described in the indenture, this security may not be transferred except as a whole by the depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository or by the Depository or any such nominee to a successor Depository or a nominee of such successor Depository. Unless this Debenture is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), to the issuer or its agent for registration of transfer, exchange or payment, and any Debenture issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of DTC (and any payment hereon is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.) -14- MOTOROLA, INC. 6.68% DEFERRABLE INTEREST JUNIOR SUBORDINATED DEBENTURE No. 1 DUE MARCH 31, 2039 REGISTERED $515,463,925 The Company, for value received, hereby promises to pay to Harris Trust and Savings Bank, as Property Trustee under that certain Amended and Restated Declaration of Trust, dated as of February 3, 1999, among the Trustees of Motorola Capital Trust I named therein, the Company and the holders from time to time of undivided beneficial interests in the assets of Motorola Capital Trust I, or registered assigns, the principal sum of Five Hundred Fifteen Million Four Hundred Sixty Three Thousand Nine Hundred Twenty Five Dollars ($515,463,925) on March 31, 2039 (or on such date that is no earlier than February 3, 2004 or such date that is no later than the earlier of: (i) March 31, 2048 or (ii) the Interest Deduction Date, if the Company elects to shorten or extend the Maturity Date as further described herein), and to pay interest on said principal sum from the date of issuance, or from the most recent interest payment date (each such date, an "Interest Payment Date") to which interest has been paid or duly provided for, quarterly (subject to deferral as set forth herein) in arrears on March 31, June 30, September 30 and December 31 of each year commencing March 31,1999, at the rate of 6.68% per annum until the principal hereof shall have become due and payable, and on any overdue principal and (without duplication and to the extent that payment of such interest is enforceable under applicable law) on any overdue installment of interest at the same rate per annum compounded quarterly. The amount of interest payable on any Interest Payment Date shall be computed on the basis of a 360-day year of twelve 30-day months, and for any period shorter than a full quarter on the basis of the actual number of days elapsed in such 90-day quarter. The principal of and the interest on this Debenture shall become due and payable, in the manner, with the effect and subject to the conditions and limitations provided in the Indenture. The indebtedness evidenced by this Debenture is, to the extent provided in the Indenture, subordinate and junior in right of payment to the prior payment in full of all Senior Debt, and this Debenture is issued subject to the provisions of the Indenture with respect thereto. Each Holder of this Debenture, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on his or her behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination so provided and (c) appoints the Trustee his or her attorney-in- fact for any and all such purposes. Each Holder hereof, by his or her acceptance hereof, hereby waives all notice of the acceptance of the subordination provisions contained herein and in the Indenture by each holder of Senior Debt, whether now outstanding or hereafter incurred, and waives reliance by each such holder upon said provisions. No reference herein to the Indenture and no provision of this Debenture or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Debenture at the time and place and at the rate and in the money herein prescribed. All terms used in this Debenture that are defined in the Indenture shall have the meanings assigned to them in the Indenture. -15- The provisions of this Debenture are continued on the reverse side hereof and such continued provisions shall for all purposes have the same effect as though fully set forth at this place. * * * * * * * * * -16- IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. Dated: February 3, 1999. MOTOROLA, INC. - ------------------------ -------------- By: /s/ ------------------------------------ Name: Title: -17- CERTIFICATE OF AUTHENTICATION This is one of the Debentures referred to in the within-mentioned Indenture. HARRIS TRUST AND SAVINGS BANK, as Trustee By: /s/ ----------------------------------- Authorized Signatory -18- Except as provided in the next paragraph with respect to the occurrence of a Special Event, the Debentures may not be redeemed by the Company prior to February 3, 2004. The Company shall have the right to redeem this Debenture, in whole or in part at any time and from time to time on or after February 3, 2004 (an "Optional Redemption"), at a redemption price equal to 100% of the principal amount to be redeemed plus any accrued and unpaid interest thereon (including any Compounded Interest, if any), to the date of such redemption (the "Optional Redemption Price"). Any redemption pursuant to this paragraph will be made upon not less than 30 days nor more than 60 days notice to the Holder(s) of the Debentures at the Optional Redemption Price, in the manner, with the effect and subject to the conditions and limitations provided in the Indenture. If, at any time, a Tax Event or an Investment Company Event (each, as defined in the Indenture, a "Special Event") shall occur and be continuing, the Company shall have the right, upon not less than 30 nor more than 60 days' notice, to redeem the Debentures in whole or in part for cash at the Optional Redemption Price within 90 days following the occurrence of such Special Event, in the manner, with the effect and subject to the conditions and limitations provided in the Indenture. The Company shall have the right at any time during the term of the Debentures from time to time to extend the interest payment period of such Debentures for up to 20 consecutive quarters, in the manner, with the effect and subject to the conditions and limitations provided in the Indenture. The Company will have at any time the right to dissolve the Trust and cause the Debentures to be distributed to the holders of the Trust Securities in liquidation of the Trust, in the manner, with the effect and subject to the conditions and limitations provided in the Indenture. In case an Event of Default, as defined in the Indenture, shall have occurred and be continuing, the principal of all of the Debentures may be declared, and upon such declaration shall become, due and payable, in the manner, with the effect and subject to the conditions and limitations provided in the Indenture. No recourse shall be had for the payment of the principal of or the interest on this Debenture or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture, against any incorporator, stockholder, officer or director, past, present or future, as such, of the Company or of any predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issuance hereof, expressly waived and released. The Company and the Holder agree (i) that for United States federal, state and local tax purposes it is intended that the Debenture constitute indebtedness and (ii) to file all United States federal, state and local tax returns and reports on such basis (unless the Company or the Holder, as the case may be, shall have received an opinion of independent nationally recognized tax counsel -19- to the effect that as a result of a change in law after the date of the issuance of the Debenture the Company or the Holder, as the case may be, is prohibited from filing on such basis). This Debenture shall not be entitled to any benefit under the Indenture hereinafter referred to, be valid or become obligatory for any purpose until the Certificate of Authentication hereon shall have been signed by or on behalf of the Trustee. ARTICLE VIII ORIGINAL ISSUE OF DEBENTURES ---------------------------- SECTION 8.1 ORIGINAL ISSUE OF DEBENTURES. Debentures in the aggregate ---------------------------- principal amount of $515,463,925 may, upon or after execution of this First Supplemental Indenture, be executed by the Issuer and delivered to the Trustee for authentication, and the Trustee shall thereupon authenticate and deliver such Debentures to or upon the written order of the Issuer, signed by its Chairman, its President, or any Vice President and its Treasurer or an Assistant Treasurer or its Secretary or an Assistant Secretary, without any further action by the Issuer. SECTION 8.2 REPORTS BY THE TRUSTEE. Up until and including the Maturity ---------------------- Date, the Trustee shall, in respect of each applicable date, make such reports within such time periods as are required to be made by the Trustee under the Trust Indenture Act and the Indenture. ARTICLE IX COVENANTS SECTION 9.1 COVENANTS AS TO TRUST. In the event Debentures are issued and --------------------- sold to the Property Trustee in connection with the issuance of Trust Securities by the Trust, for so long as the Trust Securities remain outstanding, the Issuer will (i) maintain 100% direct or indirect ownership of the Common Securities of the Trust; provided, however, that any permitted successor of the Issuer under the Indenture may succeed to the Issuer's ownership of the Common Securities; (ii) not voluntarily dissolve, wind-up or terminate the Trust, except in connection with the distribution of Debentures upon a Dissolution Event or otherwise, and in connection with certain mergers, consolidations or amalgamations permitted by the Declaration; (iii) timely perform its duties as sponsor of the Trust; (iv) use its reasonable efforts to cause the Trust (a) to remain a business trust, except in connection with the distribution of Debentures as provided in the Declaration, the redemption of the Trust Securities or in connection with certain mergers, consolidations or amalgamations as permitted by the Declaration, and (b) otherwise continue not to be treated as an association taxable as a corporation or partnership for United States federal -20- income tax purposes; and (v) use its reasonable efforts to cause each holder of Trust Securities to be treated as owning an individual beneficial interest in the Debentures. This covenant is intended solely for the benefit of the Holders of the Debentures issued pursuant to this First Supplemental Indenture and shall not be applicable to the Securities of any other series issued pursuant to the Indenture. ARTICLE X DEFAULT ------- SECTION 10.1 ADDITIONAL EVENT OF DEFAULT. There is hereby established as --------------------------- an additional Event of Default (as contemplated by Section 5.1(7) of the Indenture) the following: In the event the Debentures are issued and sold to the Property Trustee in connection with the issuance of Trust Securities by the Trust, the Trust shall have voluntarily or involuntarily dissolved, wound-up its business or otherwise terminated its existence except in connection with (i) the distribution of the Debentures to holders of Trust Securities in liquidation or redemption of their interests in the Trust, (ii) the redemption of all or part of the outstanding Trust Securities of the Trust or (iii) certain mergers, consolidations or amalgamations of the Trust, each as permitted by the Declaration of the Trust. The foregoing Event of Default is intended solely for the benefit of the Holders of the Debentures issued pursuant to this First Supplemental Indenture and shall not be applicable to any other series of Securities heretofore or hereafter issued pursuant to the Indenture. SECTION10.2 LIMITATIONS ON WAIVERS AND CONSENTS. ----------------------------------- (a) Notwithstanding anything to the contrary contained in Section 5.4 of the Indenture, if the Debentures are held by the Trust or by the Property Trustee, a waiver of a past default or any modification to a waiver of a past default shall not be effective until the holders of a majority in liquidation amount of Trust Securities shall have consented to such waiver or modification; provided, however, that if the consent of the Holder of each Outstanding Debenture is required in connection with such waiver or modification, such waiver or modification shall not be effective until each holder of the Trust Securities shall have consented to such waiver or modification. (b) Except for any supplemental indenture provided under Section 9.1 of the Indenture and notwithstanding anything to the contrary contained in Section 9.2 of the Indenture, if the Debentures are held by the Trust or by the Property Trustee, a supplemental indenture shall not be effective until the holders of a majority in principal amount of Trust -21- Securities shall have consented to such supplemental indenture; provided, however, that if the consent of the Holder of each Outstanding Debenture is required in connection with a supplemental indenture, such supplemental indenture shall not be effective until each holder of the Trust Securities shall have consented to such supplemental indenture. SECTION 10.3 ACKNOWLEDGMENT OF RIGHTS. ------------------------ The Issuer acknowledges that, with respect to any Debentures held either by the Trust or by the Property Trustee, if the Property Trustee fails to enforce its rights to the fullest extent permitted by law under the Indenture, this First Supplemental Indenture or the Debentures as the Holder of the Debentures held as the assets of the Trust, any record holder of Preferred Securities may institute legal proceedings directly against the Issuer to enforce the Property Trustee's rights under the Indenture, this First Supplemental Indenture or the Debentures without first instituting any legal proceedings against such Property Trustee or any other person or entity. Notwithstanding the foregoing, if an Event of Default under the Declaration has occurred and is continuing and such event is attributable to the failure of the Issuer to pay interest or principal on the Debentures on the date such interest or principal is otherwise payable (or in the case of redemption, on the applicable redemption date), the Issuer acknowledges that a holder of Preferred Securities may institute a proceeding directly against the Issuer for enforcement of payment to the holder of the Preferred Securities of the principal of or interest on the Debentures on or after the respective due date specified in the Debentures, and the amount of payment will be based on the holder's pro rata share of the amount due and owing on all the Preferred Securities. ARTICLE XI MISCELLANEOUS ------------- SECTION 11.1 RATIFICATION OF INDENTURE. The Indenture, as supplemented by ------------------------- this First Supplemental Indenture, is in all respects ratified and confirmed, and this First Supplemental Indenture shall be deemed part of the Indenture in the manner and to the extent herein and therein provided. SECTION 11.2 TRUSTEE NOT RESPONSIBLE FOR RECITALS. The recitals contained ------------------------------------ herein and in the Debentures, except for the Trustee's certificate of authentication, shall be taken as the statements of the Issuer and not of the Trustee, and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representation as to the validity or sufficiency of this First Supplemental Indenture or of the Debentures. SECTION 11.3 GOVERNING LAW. This First Supplemental Indenture and each ------------- Debenture shall be deemed to be a contract made under the laws of the State of New York, and for -22- all purposes shall be construed in accordance with the laws of said State, except as may otherwise be required by mandatory provisions of law. SECTION 11.4 SEPARABILITY. In case any one or more of the provisions ------------ contained in this First Supplemental Indenture or in the Debentures shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this First Supplemental Indenture or of the Debentures, but this First Supplemental Indenture and the Debentures shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein. SECTION 11.5 COUNTERPARTS. This First Supplemental Indenture may be ------------ executed in any number of counterparts each of which shall be an original; but such counterparts shall together constitute but one and the same instrument. SECTION 11.6 EFFECT OF HEADINGS. The Article and Section headings herein ------------------ and the Table of Contents hereto are for convenience only and shall not affect the construction hereof. -23- IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed as of the day and year first above written. MOTOROLA, INC. By:/s/ Garth L. Milne --------------------------------------- Name: Garth L. Milne Title: Senior Vice President and Treasurer HARRIS TRUST AND SAVINGS BANK, as Trustee By:/s/ Carolyn Potter --------------------------------------- Name: Carolyn Potter Title: Assistant Vice President -24- EX-21 9 SUBSIDIARIES OF MOTOROLA Exhibit 21 MOTOROLA, INC. LISTING OF SUBSIDIARIES * Motorola Argentina, S.A. Argentina Motorola Gesellschaft M.B.H. Austria S.A. Motorola N.V. Belgium Motorola de Bolivia S.A. Bolivia Motorola do Brasil LTDA. Brazil Starfish Software, Inc. California Indala Corporation California Motorola Canada Limited Canada Motorola (China) Electronics Ltd. China Motorola de Colombia Limitada Colombia Motorola International Capital Corporation Delaware Motorola International Development Corporation Delaware Motorola Credit Corporation Delaware Motorola Lighting, Inc. Delaware Motorola International Network Ventures Delaware Motorola del Ecuador S.A. Ecuador Motorola Limited England Motorola Semiconducteurs S.A. France Motorola S.A. France Motorola G.m.b.H. Germany Motorola A.E. (Greece) Greece Motorola Finance B.V. Holland Motorola Asia Limited Hong Kong Motorola Semiconductors Hong Kong Limited Hong Kong Motorola Hungary Communications Limited Liability Company Hungary Motorola (India) Limited India Motorola Ireland Limited Ireland TCS Insurance Company of Ireland Limited Ireland Motorola Israel Limited Israel Motorola Semiconductor Israel Limited Israel Motorola Israel Information Systems Limited Israel Motorola S.p.A. Italy Motorola Japan Limited Japan Motorola Korea Limited Korea Motorola Malaysia Sdn. Bhd. Malaysia Motorola Semiconductor Sdn. Bhd. Malaysia Motorola Electronics Sdn. Bhd. Malaysia Motorola de Mexico, S.A. Mexico North African Cellular Investments, Ltd. Morocco Motorola del Paraguay S.A. Paraguay Motorola Portugal Comunicacoes, Lda Portugal Motorola Communications SRL Romania Motorola A.O. Russia Motorola Electronics Pte. Limited Singapore Motorola South Asia Pte Limited Singapore Motorola Asia Treasury Pte. Ltd Singapore Motorola Southern Africa (Proprietary) Ltd. South Africa Motorola Espana S.A. Spain Telcel S.A. Spain Motorola (Suisse) S.A. Switzerland Motorola Electronics Taiwan, Limited Taiwan Motorola (Thailand) Ltd. Thailand Motorola Komunikasyson Ticaret Ve Servis Limited Sirketi Turkey Motorola de los Andes, C.A. Venezuela Motorola Foreign Sales Corporation Virgin Islands * Pursuant to Item 601(b)(21)(ii) of Regulation S-K, the names of particular subsidiaries (which, if considered in the aggregate as a single subsidiary, would not constitute a "significant subsidiary" as of 12/31/98) have been omitted. EX-27 10 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET AS OF 12/31/98 AND THE CONSOLIDATED STATEMENT OF OPERATIONS FOR THE TWELVE MONTHS ENDED 12/31/98 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000,000 YEAR DEC-31-1998 JAN-01-1998 DEC-31-1998 1,453 171 5,277 (220) 3,745 13,531 22,888 (12,839) 28,728 11,440 2,633 0 0 1,804 10,418 28,728 29,398 0 20,886 28,359 2,197 0 216 (1,374) (412) 0 0 0 0 (962) (1.607) (1.607) TOTAL COST INCLUDES: COST OF GOODS SOLD, SELLING & ADMIN EXPENSE, TOTAL EXCH (GAIN)/LOSS. OTHER EXPENSE INCLUDES: DEPRECIATION EXPENSES Prior year EPS-Basic: 1.982 Prior year EPS-Diluted: 1.936
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