Document:

exv10w1

 

Exhibit 10.1

GENERAL RELEASE AND SEPARATION AGREEMENT

The promises and agreements contained in this General Release and Separation Agreement
(“Agreement”) are made in consideration of each other and with the intent to settle and compromise
any and all potential disputes between the below-mentioned parties.

     Neenah Enterprises, Inc. successor to ACP Holding Company and parent of Neenah
Foundry Company (hereinafter referred to as “Neenah”) and Joseph Varkoly (hereinafter
referred to as ''Employee”) enter into this General Release and Separation Agreement
(hereinafter referred to as the, or this, “Agreement”), contracting and agreeing as follows:

	 	1.	 	Employee’s employment with Neenah was terminated as of December 14, 2007 (the
“Termination Date”).
	 
	 	2.	 	Employee acknowledges that on December 17, 2007, he was given this
Agreement and was afforded twenty-one (21) days to consider same.
	 
	 	3.	 	Employee was, and hereby is, advised to consult a lawyer before signing this
Agreement and did in fact have the opportunity to obtain advice from counsel.
	 
	 	4.	 	Employee may accept this Agreement only by signing, dating and delivering the
Agreement to Neenah (in the manner set forth in Section 16) on or before Neenah’s
normal close of business on January 8, 2008. Time is of the essence with regard to
this Section 4.
	 
	 	5.	 	Employee may revoke this Agreement at any time within seven (7) days after
signing and delivering it to Neenah by notifying Neenah in writing (in the manner set
forth in Section 16) of Employee’s decision to revoke. Time is of the essence with
regard to this Section 5.
	 
	 	6.	 	The effective date of this Agreement (“Effective Date”) shall be the
8th day after Employee signs and delivers the Agreement in accordance with
Section 4 above,

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	 	 	 	unless Employee revokes the Agreement in accordance with Section 5 above. If
Employee revokes this Agreement in accordance with Section 5 above, this
Agreement will not become operative and will not be binding on Employee or
Neenah.
	 
	 	7.	 	Neenah agrees to provide Employee the following severance benefits outlined
herein to which the Employee would not otherwise be entitled. Employee acknowledges and
agrees that these severance benefits constitute adequate legal consideration for the
promises and representations made by him in this Agreement, and are in lieu of any benefits
payable under any severance plan or employment agreement now in existence or adopted prior
to the Termination Date:

	 	a.	 	Neenah will pay Employee the gross sum of $217,296, over a period of
approximately 52 weeks (the “Severance Period”), less applicable withholdings and
deductions required by law, or otherwise agreed to by the parties. Notwithstanding the
denomination of the Severance Period in weeks, payments will be made in bimonthly
installments by check, or direct deposit, at the Employee’s last monthly rate of pay.
Such payment shall not commence until the 1st normal payroll date
following the Effective Date, which the parties agree is January 31, 2008 and shall
continue on or about the regular pay days thereafter until paid in full, which the
parties agree is January 15, 2009 (and may contain pro rata payment for any partial
month). The amount of severance pay shall not be reduced by any amounts paid to
Employee from the Termination Date until the commencement of the

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	 	 	 	severance payments as set forth above or as a result of any income or compensation received by
Employee from any other source. In the event Employee dies before the last payment is made
hereunder, the balance of such payments shall be paid to his spouse or, if he shall have no spouse
at that time, to his estate.
	 
	 	b.	 	Should Employee elect, pursuant to the protections afforded by the Consolidated Omnibus Budget Reconciliation Act (“COBRA), to continue group health care coverage
and/or group dental coverage as is from time to time provided by or through Neenah to all
similarly situated eligible employees, Neenah shall pay the then applicable required COBRA
contribution during the fifty-two week Severance Period. In addition Employee may also continue
to participate in the Execucare supplemental health insurance program that Employee
participated in prior to the Termination Date during the Severance Period and Neenah will pay
the premium for this policy during the Severance Period. Employee may choose to participate in
all or some of the insurance programs described in this paragraph and his waiver of or
ineligibility for participation in one or more of the programs identified shall not preclude
his participation in the other programs. After the Severance Period, the Employee shall pay the
COBRA contribution for the remaining months of COBRA eligibility on any programs in which he
elects to continue to be a participant, or until Employee terminates such coverage, whichever
shall occur first.

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	 	c.	 	Employee shall be given free and clear title to and ownership of the vehicle assigned to him by Neenah which is identified as follows (the “Vehicle”):

2007 Buick Lucerne
 License plate 958
GHS
 VIN 1G4HD57257U183616

	 	 	 	Neenah will sell the Vehicle to Employee at a price of $1.00; the intention of
the parties is that the transfer will be made without any state or federal
income tax liability to Employee and that any such liability will be funded by
Neenah. Until such time as Neenah is able to terminate the existing lease and
delivery free and clear title of the Vehicle to Employee, Neenah shall
continue to make all lease and other payments customarily made by Neenah
prior to the Termination Date, except for the cost of fuel.
	 
	 	d.	 	To assist Employee in obtaining employment, Neenah shall make available
and bear the cost of outplacement services to be provided by an outplacement
firm chosen by Neenah. Said services will be provided for a period of up to
three months, or until Employee finds employment, whichever occurs sooner.
However, the Employee shall have the option to elect to receive a cash
payment of $15,000 in lieu of participation in the outplacement service which
the Company would otherwise arrange. If the Employee wishes to elect the
cash payment in lieu of the outplacement service then he must do so in writing
within sixty (60) days following the Effective Date of this Agreement.
Notice to elect the cash payment shall be made to the individual identified
herein as a representative of the Company to receive such notices.

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	 	 	 	Additionally, any such payment received as a result of this election shall be subject
to normal withholding taxes.
	 
	 	e.	 	Effective on the date specified in Section 1 above, Employee was no longer an
employee of Neenah, and ceased to accrue benefits under any pension, profit
sharing or other Neenah employee welfare benefit plan except as expressly set
forth in this Agreement.
	 
	 	f.	 	Employee hereby acknowledges and agrees that, except for this Agreement, a
dispute exists between Employee and Neenah regarding Employee’s eligibility for any termination benefits from Neenah.

	 	8.	 	As used in this Agreement, the term “Neenah” means, individually and collectively, Neenah,
each subsidiary, parent company or affiliate of Neenah, and their respective employee welfare
benefit plans, severance plans, employee pension benefit plans, successors and assigns
(including all present and former shareholders, directors, officers, fiduciaries, agents,
representatives and employees of those companies and other entities).
	 
	 	9.	 	Subject to Employee’s rights to revoke stated in Section 5 above, by signing this
Agreement, Employee immediately gives up and releases Neenah from, and with
respect to, any and all rights and claims that Employee may have against Neenah,
whether or not Employee presently is aware of such rights or claims except for
any rights and benefits provided by this Agreement, In addition, and without
limiting the foregoing:

	 	a.	 	Employee on behalf of himself, his agents, spouse, representatives,
assignees, attorneys, heirs, executors and administrators, fully releases Neenah and
Neenah’s past and present successors, assigns, parents, divisions, subsidiaries,
affiliates, officers, directors, shareholders, employees, agents and

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	 	 	 	representatives from any and all liability, claims, demands, actions, causes of action,
suits, grievances, debts, sums of moneys, controversies, agreements, premises, damages,
back and front pay, costs, expenses, attorneys fees, and remedies of any type, which
Employee now has or hereafter may have as of the Effective Date of this Agreement, by
reason of any matter, cause, act or omission arising out of or in connection with
Employee’s employment or the termination of his employment with Neenah, including, without
limiting the generality of the foregoing, any claims, demands or actions arising under the
Age Discrimination in Employment Act of 1967, the Older Worker’s Benefit Protection Act,
the Employee Retirement Income Security Act of 1974, Title VII Of the Civil Rights Act of
1964, the Civil Rights Act of 1991, the Civil Rights Act of 1866, the Rehabilitation Act of
1973, the Americans Disabilities Act of 1990, and any other federal, state or local
statute, ordinance or common law of any state regarding employment, discrimination in
employment, or the termination of any employment. Nothing herein, however, shall be deemed
a waiver of any vested rights or entitlements Employee may have under any retirement plans
administered by Neenah or with respect to any stock in Neenah held in the name of Employee,
either individually or jointly with another. Notwithstanding the foregoing, Employee is not
waiving any right that cannot, as a matter of law, be voluntarily waived, including the
right to file a claim, or participate in the adjudication of claim of discrimination filed
with any state or federal administrative agency, though Employee expressly waives any right
to recover any monetary damages as a result of any claim being filed with any state or
federal administrative agency.
	 	b.	 	 

	 	10.	 	Employee agrees never to apply for employment with or otherwise seek to be
hired, re-hired, employed, re-employed or reinstated by Neenah and waives any
reinstatement or future employment with Neenah.
	 
	 	11.	 	 

	 	a.	 	Employee acknowledges that as a consequence of his employment by Neenah,
proprietary and confidential information relating to the business of Neenah
may be or have been disclosed to or developed or acquired by Employee
which is not generally known to the trade or the general public and which is of
considerable value to Neenah. Such information includes, without limitation,
information about trade secrets, inventions, patents, licenses, research

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	 	 	 	projects, costs, profits, markets, sales, customer lists, proprietary computer programs,
proprietary records, and proprietary software; plans for future development, and any other
information not available to the trade or the general public, including information obtained
from or developed in conjunction with a third party that is subject to a confidentiality or
similar agreement between Neenah and such third party. Employee shall not use such information,
as denoted above, for his own benefit, or for the benefit of any other employer or for any
other purpose whatsoever other than the performance of his remaining work for Neenah, if any,
and Employee shall maintain all such information in confidence and shall not disclose any
thereof to any person other than employees of Neenah authorized to receive such information for
a period of two (2) years from the Termination Date. This obligation is in addition to any
similar obligations of Employee pursuant to any other agreement between Neenah and Employee
including those obligations relating to confidentiality outlined in the Employment Agreement
and Restricted Stock Grant between Employee and Neenah Foundry Company and ACP Holding Company
dated October 8, 2003 (the “Employment Agreement”).
	 
	 	b.	 	Nothing herein, however, shall preclude Employee from describing his
general duties with Neenah in future job interviews.
	 
	 	c.	 	Employee shall, as soon as practical after the Termination Date, return all
property to Neenah in his possession including, but not limited to, documents,
printed matter, data and data carriers, records, notes, drafts and all copies,

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	 	 	 	blueprints and carbon copies of such documents, samples, advertising and office
materials, company credit cards, , company mobile phones, and company laptops. Employee
may retain records for his compensation and benefits related to his employment with
Neenah.

	 	12.	 	This Agreement does not constitute an admission by Neenah of any liability to
Employee, and Employee understands and agrees that Neenah denies any such
liability to Employee.
	 
	 	13.	 	(a) This Agreement constitutes the entire agreement between Neenah and
Employee relating to the subject matter thereof except that Employee
acknowledges and agrees that he has continuing obligations outlined in Articles
III and IV of the Employment relating to confidentiality and non-competition,
which are incorporated herein by reference. Specifically, the Employee
acknowledges that he is subject to the obligations outlined Articles III and IV of
the Employment Agreement. The Employee acknowledges that, except as
expressly set forth in this paragraph, nothing in this Agreement modifies any
obligation he may have under Article III or Article IV of the Employment
Agreement that relate to confidentiality and covenants against competition. The
covenants against competition shall continue to remain in effect for a period of
one (1) year from the Termination Date, Specifically, the Employee agrees that
the covenants against competition remain in effect until December 14, 2008. The
confidentiality provisions, however shall be limited to a modified term of two (2)
years pursuant to agreement of the parties outlined in 11(a) herein.

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	 	 	 	(b) The Employee and Neenah have, during the course of negotiations which led to the execution of
this Agreement, discussed the possibility that the obligations outlined in the aforementioned
Employment Agreement that relate to the covenants against competition and that are specifically
found in Article IV of the Employment Agreement could possibly be considered void under Wisconsin
law. However, based upon additional considerations which arc outlined in this Agreement, the
Employee agrees that he will not challenge or object in any manner to the enforceability of the
aforementioned covenants against competition under Wisconsin law or elsewhere. The Employee further
agrees that even if a legal challenge to the provisions of the aforementioned covenants against
competition were initiated by a third party, that the Employee would, regardless of the outcome of
said challenge, continue to be bound by the terms and conditions of the covenant against
competition as if they were fully enforceable and thus the Employee would not engage in any
prohibited competition regardless of the outcome of any such challenge by a third party.
Specifically, the Employee agrees that he will not challenge or otherwise object to the
enforceability of these covenants against competition under Wisconsin law or any other law and that
he will abide by the terms and conditions outlined therein. Nothing in this Agreement shall
prohibit Employee from defending any claim (whether asserted as a claim, counterclaim or
cross-claim) asserted against him that his conduct is in violation of Article IV of the Employment
Agreement.
	 
	 	14.	 	(a) Neenah and Employee intend for every provision of this Agreement to be fully
enforceable. But, if a court with jurisdiction over this Agreement determines that

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	 	 	 	all or part of any provision of this Agreement is unenforceable for any reason, Neenah and
Employee intend for each remaining provision and part to be fully enforceable as though the
unenforceable provision or part had not been included in this Agreement.
	 
	 	 	 	(b) The parties agree that the remedy at law for any breach of the foregoing covenants
shall be adequate and that the Company shall be entitled to injunctive relief. Such
injunctive relief shall not be exclusive, but shall be in addition to any other rights or
remedies the Company may have hereunder or at law for such breach.
	 
	 	15.	 	Employee acknowledges that he has read this entire Agreement, that he fully understands
its meaning and effect, and that he has voluntarily signed this Agreement.
	 
	 	16.	 	Notices or other deliveries required or permitted to be given or made under this Agreement by
Employee to Neenah shall, except to the extent otherwise required by law, be deemed given or
made if delivered by hand or by express mail or overnight courier service to GILL & GILL, 128
North Durkee Street, Appleton, WI 54911, Attention Gregory B. Gill, Sr.
	 
	 	17.	 	Employee and Neenah each agree that if any action is commenced by any party alleging breach
of this Agreement, the non-prevailing party shall be liable to the prevailing party for any
and all available legal and equitable relief, as well as reasonable attorneys’ fees and costs
associated with pursuing or defending such legal action.

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	 	18.	 	(a) Employee specifically agrees and promises that he will not directly or
indirectly disparage Neenah or any of Neenah’s officers, directors, employees,
attorneys or representatives, or any of Neenah’s products or services in any
manner, at any time, to any person or entity. “Disparage” is defined as but not
limited to any utterance whatsoever either verbal, in writing, by gesture or any
behavior of any kind that might tend to or actually harm or injure Neenah,
whether intended or not.
	 
	 	 	 	(b) The Company’s records will reflect that the Employee resigned for personal reasons. The
written resignation of the Employee, attached hereto and marked Exhibit A, shall be
incorporated into the Employee’s record. The Company agrees that in the event future
prospective employers or any other entities or individuals contact the Company concerning
the Employee, that the Company shall not make representations inconsistent with the letter
of resignation attached hereto and marked Exhibit A. Furthermore, any officer authorized to
provide a reference regarding Employee shall not make any representations, statement or
utterance whatsoever either verbally, electronically, in writing, by gesture or by any
behavior of any kind that might tend to or actually be inconsistent with the statements
outlined in the reference letter which the Company is providing to the Employee, which is
attached hereto and marked Exhibit B.
	 
	 	19.	 	The Employee agrees to cooperate with the Company in order to facilitate a
smooth transition of responsibilities which has occurred as a result of this separation. Specifically, the Employee agrees to be reasonably available via

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	 	 	 	telephone or e-mail to answer questions the Company may have regarding matters that
were under his care and control during his period of employment.
	 
	 	20.	 	The terms of this Agreement are binding upon and shall be for the benefit of
Employee and Neenah, as well as their respective heirs, executors, administrators,
successors and assigns.
	 
	 	21.	 	Employee understands that the release contained in Section 9 hereof is a
general release, and represents that he has been advised to seek counsel on the legal and
practical effect of a general release, and recognizes that he is executing and
delivering this release, intending thereby to be legally bound by the terms and
provisions thereof, of his own free will, without promises or threats or the
exertion of duress. He also acknowledges that he has had adequate time to review
it, have it explained to him, and understands its provisions.

     IN WITNESS WHEREOF, a duly authorized representative of Neenah Enterprises, Inc. and Joseph
Varkoly have signed this Agreement as of the dates set forth below.

	 	 	 	 	 
	 	Neenah Enterprises, Inc.	 
	 
	Dated: 1/10/08, 2008 	By:  	/s/ Gregory B. Gill, Sr.
 	 
	 	 	Gregory B. Gill, Sr. 	 
	 	 	Attorneys for Neenah Enterprises, Inc. 	 
	 

THE UNDERSIGNED FURTHER STATES THAT HE HAS CAREFULLY READ THE FOREGOING SETTLEMENT AGREEMENT AND
KNOWS THE CONTENTS THEREOF AND SIGNS THE SAME AS HIS OWN FREE ACT. THIS SETTLEMENT AGREEMENT
INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

	 	 	 	 	 
	 	 	 
	Date: January 8, 2008 	/s/ Joseph Varkoly
 	 
	 	Joseph Varkoly 	 
	 	 	 

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FOR COMPANY USE ONLY

The foregoing General Release and Separation Agreement, signed and dated by Employee was
received by me on behalf of Neenah Enterprises, Inc. this 8th day of
January, 2008.

	 	 	 	 	 
	 	 	 
	 	/s/ Gregory B. Gill, Sr.
 	 
	 	Gregory B. Gill, Sr. 	 
	 	 	 

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EXHIBIT A

December 14, 2007

I have been with Neenah Foundry Company since March 2000, and have worked diligently to be a
leader, to support and further the best interests of the Company, and build my career.

I believe it is best for me to continue my career development with another Corporation. I
respectfully submit this letter of resignation from Neenah Foundry Company and wish Company much
success in the future.

Sincerely,

	 	 	 	 	 
	 	 	 
	/s/ Joseph S. Varkoly
 	 	 
	Joseph S. Varkoly  	 	 
	8006 Nichole Heights

Neenah, WI 54956 	 	 

 

 

EXHIBIT B

January 3, 2008

Joseph S. Varkoly worked for Neenah Foundry Company from March 2000 through December 2007,
serving as our Corporate Vice President of Business Development and Corporate Vice President
of Industrial Product Sales.

Joe completed a number of critical assignments during his tenure. He led the divestiture of two of
our non-core businesses, and he played a leading role in successfully
ceasing operations of Cast
Alloys, Inc.

He participated as a member of the management team that managed ACP Holding Company through a very
difficult restructuring, positioning the Company to survive through a business transition.

In his sales role, Joe led our industrial sales force, building new accounts and
solidifying our position with existing customers. He aggressively managed the surcharge process
enhancing the profitability of our industrial business.

Joe Varkoly is an aggressive, bright, competent business executive. I know that the decision to
resign from the Company was difficult for Joe and I wish him well in
his next assignment.

Sincerely,

	 	 	 	 	 
	Mr. Robert E. Ostendorf

President, Chief Executive Officer 

Neenah Enterprises, Inc.

2121 Brooks Street 

Neenah, WI 54956exv4w1

 

Exhibit 4.1

FORM OF GLOBAL NOTE

Unless and until this Security is exchanged in whole or in part for Securities in definitive form,
this Security may not be transferred except as a whole by The Depository Trust Company, a New York
corporation (“DTC” or the “Depositary”), to a nominee of DTC or by a nominee of DTC to DTC or
another nominee of DTC or by DTC or any nominee to a successor Depositary or a nominee of any
successor Depositary. Unless this certificate is presented by an authorized representative of DTC
to the Issuer or its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as
is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede &
Co., has an interest herein.

EMERSON ELECTRIC CO.

% Note Due

			
	Principal Amount
	 	No.
	$
	 	CUSIP      

EMERSON ELECTRIC CO., a Missouri corporation (the “Issuer”), for value received, hereby promises to
pay to Cede & Co. or registered assigns, at the agency of the Issuer in The City of New York, New
York, the principal sum of          DOLLARS on     , in immediately available
funds in such coin or currency of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts, and to pay interest, semiannually on
and     of each year (each, an “Interest Payment Date”), commencing      
        , on said principal sum at said office or agency, in like coin or currency, at the rate
per annum specified in the title of this Note, from the most recent Interest Payment Date to which
interest has been paid or, if no interest has been paid, from     , until payment of
said principal sum has been made or duly provided for; provided, that payment of interest may be
made at the option of the Issuer by check mailed to the address of the person entitled thereto as
such address shall appear on the Security register. Each payment of interest in respect of an
Interest Payment Date shall include interest accrued through the day prior to such Interest Payment
Date. The interest so payable on any Interest Payment Date will, subject to certain exceptions
provided in the Indenture referred to on the reverse hereof, be paid to the person in whose name
this Note is registered at the close of business on the      or     , as the case
may be, next preceding such Interest Payment Date.

Reference is made to the further provisions of this Note set forth on the reverse hereof. Such
further provisions shall for all purposes have the same effect as though fully set forth at this
place.

This Note shall not be valid or become obligatory for any purpose until the certificate of
authentication hereon shall have been signed by the Trustee under the Indenture referred to on the
reverse hereof.

 

 

IN WITNESS WHEREOF, Emerson Electric Co. has caused this instrument to be signed by facsimile by
its duly authorized officers and has caused a facsimile of its corporate seal to be affixed
hereunto or imprinted hereon.

	 	 	 	 	 
	 	EMERSON ELECTRIC CO.

	 
	 
	[SEAL]	 	 
	 
	 	By:  	
 	 
	 	 	Title:       Senior Executive Vice President and 	 
	 	 	          Chief Financial Officer 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Title:       Vice President and Treasurer 	 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Securities described in the within-mentioned Indenture.

	 	 	 	 	 
	Dated:                   	THE BANK OF NEW YORK TRUST

COMPANY, N.A., as Trustee

(successor to The Bank of New York)

 	 
	 	By:  	
 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 

 

 

EMERSON ELECTRIC CO.

% Note Due

     This Note is one of a duly authorized issue of unsecured debentures, notes or other evidence
of indebtedness of the Issuer (hereinafter called the “Securities”) of the series hereinafter
specified, all issued or to be issued under and pursuant to an indenture dated as of December 10,
1998 (herein called the “Indenture”), duly executed and delivered by the Issuer to The Bank of New
York Trust Company, N.A., as Trustee (successor to The Bank of New York) (herein called the
“Trustee”), to which Indenture and all indentures supplemental thereto reference is hereby made for
a description of the rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Issuer and the holders of the Securities. The Securities may be issued in one
or more series, which different series may be issued in various aggregate principal amounts, may
mature at different times, may bear interest (if any) at different rates, may be subject to
different redemption provisions (if any), may be subject to different sinking, purchase or
analogous funds (if any) and may otherwise vary as in the Indenture provided. This Note is one of
a series designated as the      % Notes due            of the Issuer, limited in aggregate principal
amount to $ (herein called the “Notes”).

     The Notes will be redeemable, in whole or from time to time in part, at the Issuer’s option
on any date (a “Redemption Date”), at a redemption price equal to the greater of (1) 100 percent of
the principal amount of the Notes to be redeemed and (2) the sum of the present values of the
remaining scheduled payments of principal and interest thereon (exclusive of interest accrued to
that Redemption Date) discounted to that Redemption Date on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Treasury Rate (as defined below) plus            basis
points, plus, in either case, accrued and unpaid interest on the principal amount being redeemed to
that Redemption Date; provided that installments of interest on the Notes which are due and payable
on an Interest Payment Date falling on or prior to the relevant Redemption Date shall be payable to
the holders of those Notes, registered as such at the close of business on the relevant record date
according to their terms and the provisions of the Indenture.

     “Treasury Rate” means, with respect to any Redemption Date of the Notes, (1) the yield, under
the heading which represents the average for the immediately preceding week, appearing in the most
recently published statistical release designated “H.15(519)” or any successor publication which is
published weekly by the Board of Governors of the Federal Reserve System and which establishes
yields on actively traded United States Treasury securities adjusted to constant maturity under the
caption “Treasury Constant Maturities,” for the maturity corresponding to the Comparable Treasury
Issue (as defined below) (if no maturity is within three months before or after the maturity date,
yields for the two published maturities most closely corresponding to the Comparable Treasury Issue
shall be determined and the Treasury Rate shall be interpolated or extrapolated from those yields
on a straight line basis, rounding to the nearest month) or (2) if that release (or any successor
release) is not published during the week preceding the calculation date or does not contain those
yields, the rate per annum equal to the semi-annual equivalent yield to maturity for the Comparable
Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price (as defined below) for
that Redemption Date. The Treasury Rate shall be calculated on the third Business Day preceding
the Redemption Date.

 

 

     “Comparable Treasury Issue” means the United States Treasury security selected by the
Independent Investment Banker (as defined below) as having a maturity comparable to the remaining
term of the Notes to be redeemed that would be utilized, at the time of selection and in accordance
with customary financial practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the Notes.

     “Independent Investment Banker” means            or, if that firm is
unwilling or unable to select the Comparable Treasury Issue, an independent investment banking
institution of national standing appointed by the Trustee after consultation with the Issuer.

     “Comparable Treasury Price” means with respect to any Redemption Date for the Notes (1) the
average of five Reference Treasury Dealer Quotations for that Redemption Date, after excluding the
highest and lowest such Reference Treasury Dealer Quotations (as defined below), or (2) if the
Trustee obtains fewer than five such Reference Treasury Dealer Quotations, the average of all such
quotations

     “Reference Treasury Dealer” means (1) and its successors,
provided, however, that if the foregoing shall cease to be a primary U.S. Government securities
dealer in New York City (a “Primary Treasury Dealer”), the Issuer shall substitute therefor another
Primary Treasury Dealer, and (2) any other Primary Treasury Dealers selected by the Issuer.

     “Reference Treasury Dealer Quotation” means with respect to each Reference Treasury Dealer (as
defined above) and any Redemption Date, the average, as determined by the Trustee, of the bid and
asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Trustee by that Reference Treasury Dealer at 5:00 p.m.,
New York City time, on the third Business Day preceding that Redemption Date.

     Notice of any redemption by the Issuer will be mailed at least 30 days but not more than 60
days before any Redemption Date to each holder of the Notes to be redeemed. If less than all the
Notes are to be redeemed at the Issuer’s option the Trustee shall select, in such manner as it
shall deem fair and appropriate, the Notes to be redeemed in whole or in part.

     If a Change of Control Triggering Event occurs, unless the Issuer has exercised its option to
redeem the Notes as described above, the Issuer will be required to make an offer (the “Change of
Control Offer”) to each holder of the Notes to repurchase all or any part (equal to $2,000 or an
integral multiple of $1,000 in excess thereof) of that holder’s Notes on the terms set forth
herein. In the Change of Control Offer, the Issuer will be required to offer payment in cash equal
to 101% of the aggregate principal amount of Notes repurchased, plus accrued and unpaid interest,
if any, on the Notes repurchased to the date of repurchase (the “Change of Control Payment”).
Within 30 days following any Change of Control Triggering Event or, at the Issuer’s option, prior
to the date of the consummation of any Change of Control, but after public announcement of the
transaction that constitutes or may constitute the Change of Control the Issuer will be required to
mail a notice to holders of Notes, with a copy to the Trustee, describing the transaction or
transactions that constitute or may constitute the Change of Control Triggering Event and offering
to repurchase the Notes on the date specified in the notice, which date will be no earlier than 30
days and no later than 60 days from the date such notice is mailed (the

 

 

“Change of Control Payment Date”) pursuant to the procedures described in such notice and in
conformity with the Indenture.

     The notice shall, if mailed prior to the date of the consummation of the Change of Control,
state that the offer to purchase is conditioned on the Change of Control Triggering Event occurring
on or prior to the payment date specified in the notice.

     On the Change of Control Payment Date, the Issuer will be required, to the extent lawful: (a)
accept for payment all Notes or portions of Notes properly tendered pursuant to the Change of
Control Offer; (b) deposit with the paying agent an amount equal to the Change of Control Payment
in respect of all Notes or portions of Notes properly tendered; and (c) deliver or cause to be
delivered to the Trustee the Notes properly accepted together with an Officers’ Certificate stating
the aggregate principal amount of Notes or portions of Notes being repurchased.

     The paying agent will promptly mail or electronically deliver to each holder of Notes properly
tendered the purchase price for the Notes, and the Trustee will promptly authenticate and mail (or
cause to be transferred by book-entry) to each holder a new Note equal in principal amount to any
unpurchased portion of any Notes surrendered; provided that each new Note will be in a principal
amount of U.S. $1,000 or an integral multiple of U.S. $1,000 in excess thereof.

     The Issuer will not be required to make the Change of Control Offer upon a Change of Control
Triggering Event if a third party makes such an offer in the manner, at the times and otherwise in
compliance with the requirements for an offer made by the Issuer and such third party purchases all
Notes properly tendered and not withdrawn under its offer. In addition, the Issuer will not
repurchase any Notes if there has occurred and is continuing on the Change of Control Payment Date
an Event of Default under the Indenture, other than a default in the payment of the Change of
Control Payment upon a Change of Control Triggering Event.

     The Issuer must comply with the requirements of Rule 14e-1 under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), and any other securities laws and regulations thereunder
to the extent those laws and regulations are applicable in connection with the repurchase of the
Notes as a result of a Change of Control Triggering Event. To the extent that the provisions of any
securities laws or regulations conflict with the Change of Control Triggering Event provisions of
the Notes, the Issuer will comply with those securities laws and regulations and will not be deemed
to have breached its obligations under the Indenture or the Change of Control Offer provisions of
the Notes by virtue of any such conflicts.

     For purposes of the Change of Control Offer provisions, the following terms are applicable:

     “Change of Control” means the occurrence of any of the following: (1) the consummation of any
transaction (including, without limitation, any merger or consolidation) the result of which is
that any “person” (as that term is used in Section 13(d)(3) of the Exchange Act) (other than the
Issuer or one of its subsidiaries) becomes the beneficial owner (as defined in Rules 13d-3 and
13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the Issuer’s Voting
Stock or other Voting Stock into which the Issuer’s Voting Stock is reclassified, consolidated,
exchanged or changed, measured by voting power rather than number of shares;

 

 

(2) the direct or indirect sale, transfer, conveyance or other disposition (other than by way
of merger or consolidation), in one or more series of related transactions, of all or substantially
all of the Issuer’s assets and the assets of its subsidiaries, taken as a whole, to one or more
“Persons” (as that term is defined in the Indenture) (other than the Issuer or one of its
subsidiaries); or (3) the first day on which a majority of the members of the Issuer’s Board of
Directors are not Continuing Directors. Notwithstanding the foregoing, a transaction will not be
deemed to involve a Change of Control if (1) the Issuer becomes a direct or indirect wholly-owned
subsidiary of a holding company and (2)(A) the direct or indirect holders of the Voting Stock of
such holding company immediately following that transaction are substantially the same as the
holders of the Issuer’s Voting Stock immediately prior to that transaction or (B) immediately
following that transaction no Person (other than a holding company satisfying the requirements of
this sentence) is the beneficial owner, directly or indirectly, of more than 50% of the Voting
Stock of such holding company.

     “Change of Control Triggering Event” means the occurrence of both a Change of Control and a
Rating Event.

     “Continuing Directors” means, as of any date of determination, any member of the Issuer’s
Board of Directors who (1) was a member of such Board of Directors on the date the Notes were
issued or (2) was nominated for election, elected or appointed to such Board of Directors with the
approval of a majority of the Continuing Directors who were members of such Board of Directors at
the time of such nomination, election or appointment (either by a specific vote or by approval of
the Issuer’s proxy statement in which such member was named as a nominee for election as a
director, without objection to such nomination).

     “Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by
Moody’s and BBB- (or the equivalent) by S&P, and the equivalent investment grade credit rating from
any additional rating agency or rating agencies selected by us.

     “Moody’s” means Moody’s Investors Service Inc.

     “Rating Agencies” means (1) each of Moody’s and S&P; and (2) if either of Moody’s or S&P
ceases to rate the Notes or fails to make a rating of the Notes publicly available for reasons
outside of the Issuer’s control, a “nationally recognized statistical rating organization” within
the meaning of Rule 15c3- 1 (c)(2)(vi)(F) under the Exchange Act selected by the Issuer (as
certified by a resolution of the Issuer’s Board of Directors) as a replacement agency for Moody’s
or S&P, or both of them, as the case may be.

     “Rating Event” means the rating on the Notes is lowered by each of the Rating Agencies and the
Notes are rated below an Investment Grade Rating by each of the Rating Agencies on any day within
the 60-day period (which 60-day period will be extended so long as the rating of the Notes is under
publicly announced consideration for a possible downgrade by any of the Rating Agencies) after the
earlier of (1) the occurrence of a Change of Control and (2) public notice of the occurrence of a
Change of Control or the Issuer’s intention to effect a Change of Control; provided, however, that
a Rating Event otherwise arising by virtue of a particular reduction in rating will not be deemed
to have occurred in respect of a particular Change of Control (and thus will not be deemed a Rating
Event for purposes of the definition of Change of

 

 

Control Triggering Event) if the Rating Agencies making the reduction in rating to which this
definition would otherwise apply do not announce or publicly confirm or inform the Trustee in
writing at the Issuer or its request that the reduction was the result, in whole or in part, of any
event or circumstance comprised of or arising as a result of, or in respect of, the applicable
Change of Control (whether or not the applicable Change of Control has occurred at the time of the
Rating Event).

     “S&P” means Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies, Inc.

     “Voting Stock” means, with respect to any specified “person” (as that term is used in Section
13(d)(3) of the Exchange Act) as of any date, the capital stock of such person that is at the time
entitled to vote generally in the election of the board of directors or similar governing body of
such person.

     In case an Event of Default with respect to the Notes shall have occurred and be continuing,
the principal hereof may be declared, and upon such declaration shall become, due and payable, in
the manner, with the effect and subject to the conditions provided in the Indenture.

     The Indenture contains provisions permitting the Issuer and the Trustee, with the consent of
the Holders of not less than a majority in aggregate principal amount of the Securities at the time
Outstanding (as defined in the Indenture) of all series to be affected (voting as one class),
evidenced as in the Indenture provided, to execute supplemental indentures adding any provisions to
or changing in any manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or modifying in any manner the rights of the Holders of the Securities of
each such series; provided, however, that no such supplemental indenture shall (i) extend the final
maturity of any Security, or reduce the principal amount thereof or any premium thereon, or reduce
the rate or extend the time of payment of any interest thereon, or reduce any amount payable on
redemption thereof or reduce the amount of the principal of an Original Issue Discount Security (as
defined in the Indenture) payable upon acceleration thereof or the amount thereof provable in
bankruptcy, or impair or affect the rights of any Holder to institute suit for the payment thereof,
or, if the Securities provide therefor, any right of repayment at the option of the Holder, without
the consent of the Holder of each Security so affected, or (ii) reduce the aforesaid percentage of
Securities, the Holders of which are required to consent to any such supplemental indenture,
without the consent of the Holder of each Security affected. It is also provided in the Indenture
that, with respect to certain defaults or Events of Default regarding the Securities of any series,
prior to any declaration accelerating the maturity of such Securities, the Holders of a majority in
aggregate principal amount Outstanding of the Securities of such series (or, in the case of certain
defaults or Events of Default, all or certain series of the Securities) may on behalf of the
Holders of all the Securities of such series (or all or certain series of the Securities, as the
case may be) waive any such past default or Event of Default and its consequences. The preceding
sentence shall not, however, apply to a default in the payment of the principal of or premium, if
any, or interest on any of the Securities. Any such consent or waiver by the Holder of this Note
(unless revoked as provided in the Indenture) shall be conclusive and binding upon such Holder and
upon all future Holders and owners of this Note

 

 

and any Notes which may be issued in exchange or substitution herefor, irrespective of whether
or not any notation thereof is made upon this Note or such other Notes.

     No reference herein to the Indenture and no provision of this Note or of the Indenture shall
alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the
principal of and any premium and interest on this Note in the manner, at the respective times, at
the rate and in the coin or currency herein prescribed.

     The Notes are issuable only in registered form, without coupons, in denominations of $1,000
and any integral multiple thereof, and in book-entry form. The Notes may be represented by one or
more Global Securities (each, a “Global Note”) deposited with the Depositary and registered in the
name of the nominee of the Depositary, with certain limited exceptions. So long as DTC or any
successor Depositary or its nominee is the registered Holder of a Global Note, DTC, such Depositary
or such nominee, as the case may be, will be considered the sole owner or Holder of the Notes
represented by such Global Note for all purposes under the Indenture and the Notes. Beneficial
interest in the Notes will be evidenced only by, and transfer thereof will be effected only
through, records maintained by DTC and its participants. Except as provided below, an owner of a
beneficial interest in a Global Note will not be entitled to have Notes represented by such Global
Note registered in such owner’s name, will not receive or be entitled to receive physical delivery
of the Notes in certificated form and will not be considered the owner or Holder thereof under the
Indenture.

     No Global Note may be transferred except as a whole by the Depositary to a nominee of the
Depositary. Global Notes are exchangeable for certificated Notes only if (x) the Depositary
notifies the Issuer that it is unwilling or unable to continue as Depositary for such Global Notes
or if at any time the Depositary ceases to be a clearing agency registered under the Securities
Exchange Act of 1934, as amended, and the Issuer fails within 90 days thereafter to appoint a
successor, (y) the Issuer in its sole discretion determines that such Global Notes shall be so
exchangeable or (z) there shall have occurred and be continuing an Event of Default or an event
which with the giving of notice or lapse of time or both would constitute an Event of Default with
respect to the Notes represented by such Global Notes. In such event, the Issuer will issue Notes
in certificated form in exchange for such Global Notes. In any such instance, an owner of a
beneficial interest in the Global Notes will be entitled to physical delivery in certificated form
of Notes equal in principal amount to such beneficial interest and to have such Notes registered in
its name. Notes so issued in certificated form will be issued in denominations of $1,000 or any
integral multiple thereof, and will be issued in registered form only, without coupons.

     The Issuer, the Trustee and any authorized agent of the Issuer or the Trustee may deem and
treat the registered Holder hereof as the absolute owner of this Note (whether or not this Note
shall be overdue and notwithstanding any notation of ownership or other writing hereon), for the
purpose of receiving payment of, or on account of, the principal hereof and premium, if any, and
subject to the provisions on the face hereof, interest hereon, and for all other purposes, and
neither the Issuer nor the Trustee nor any authorized agent of the Issuer or the Trustee shall be
affected by any notice to the contrary.

     No recourse under or upon any obligation, covenant or agreement of the Issuer in the Indenture
or any indenture supplemental thereto or in any Note, or because of the creation of any

 

 

indebtedness represented thereby, shall be had against incorporator, stockholder, officer or
director, as such, of the Issuer or of any successor corporation, either directly or through the
Issuer or any successor corporation, under any rule of law, statute or constitutional provision or
by the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance hereof and as part of the
consideration for the issue hereof.

     The acceptance of this Note shall be deemed to constitute the consent and agreement of the
Holder hereof to all of the terms and provisions of the Indenture. Terms used herein which are
defined in the Indenture shall have the respective meanings assigned thereto in the Indenture.

     THE INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF.

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