Document:

Exhibit 10.30

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT
(the “Agreement”) is made and entered
into by and between Datalink Corporation, a Minnesota corporation (the “Company”), and Paul F. Lidsky (the “Executive”) effective as of the
20th day of July, 2009.

 

R E C I T A L S :

 

WHEREAS, the Company is
a leading provider of data storage products and solutions;  and

 

WHEREAS,
the Company and the Executive desire to set forth in this Agreement the terms
under which Executive will serve as President and Chief Executive Officer of
the Company;

 

NOW, THEREFORE,
the parties hereto agree as follows:

 

1.             Employment and Duties.  The Company hereby agrees to employ the
Executive, and the Executive hereby accepts the Company’s offer to serve, as
President and Chief Executive Officer of the Company.  As such, the Executive shall have
responsibilities, duties and authority reasonably accorded to and expected of
such an officer of the Company and will report to the Company’s Board of
Directors (the “Board”) and its committees.  Except for an interim period ending not later
than August 20, 2009 (during which period the Executive will expeditiously
arrange termination of employment with his current employer), the Executive
agrees to devote the Executive’s full business time, attention and efforts to
promote and further the business of the Company.  The Executive will faithfully adhere to,
execute and fulfill all policies established by the Board and its committees.

 

Except for the interim period described above,
the Executive will not, during the Term of Executive’s employment hereunder, be
engaged in any other business activity pursued for gain, profit or other
pecuniary advantage if such activity interferes with the Executive’s duties and
responsibilities hereunder.  The
foregoing limitations will not be construed to prohibit the Executive from
making personal investments in such form or manner as will neither require the
Executive’s services in the operation or affairs of the companies or
enterprises in which such investments are made nor violate the terms of Section 4
hereof.

 

The Executive will continue as a member of the
Board after the date of this Agreement.  
However, unless a majority of the Board otherwise determines, in the
event of (and effective coincident with) any termination of the Executive’s
employment with the Company for any reason at any time, the Executive’s service
as a member of the Board will automatically terminate.  The Executive hereby resigns as a member of
the Board’s audit and compensation committees.

 

 

2.             Compensation.  For all services rendered by the Executive on
and after the date hereof, the Company will compensate the Executive as
follows:

 

(a)           Base Salary.  Commencing on the date hereof, the base
salary payable to the Executive (the “Base Salary”)
shall be $325,000 per year, payable on a regular basis in accordance with the
Company’s standard payroll procedures but not less than semi-monthly.  Such base salary will be subject to review
and adjustment from time to time by the Company’s Compensation Committee (the “Compensation Committee”).

 

(b)           Bonuses.  During the Term, the Executive is entitled to
an annual cash bonus (the “Annual Bonus”)
based on attainment of particular financial and business milestones (the “Performance Milestones”).  The amount of the Annual Bonus, the relevant
Performance Milestones for each year and the payment arrangements will be set
from time to time by the Compensation Committee.  Unless the Compensation Committee otherwise
determines, 75% of the Annual Bonus will relate to achievement of financial
milestones and 25% will relate to business milestones.  The Compensation Committee will have complete
discretion to determine the Executive’s level of achievement toward the
Performance Milestones.  Unless the
Compensation Committee otherwise determines, the percentage of the Executive’s
Base Salary payable as an Annual Bonus for achievement of 100% of both the
financial and business Performance Milestones (the “Target
Bonus”) will be 80%.  To
the extent that the Compensation Committee determines that the Executive has
achieved less or greater than 100% of the relevant Performance Milestones, and
unless the Compensation Committee otherwise determines, the percentage of the
Target Bonus payable will be as follows:

 

	
  Attainment

  	
   

  	
  Payout

  	
   

  
	
  80%

  	
   

  	
  20

  	
  %

  
	
  85%

  	
   

  	
  40

  	
  %

  
	
  90%

  	
   

  	
  60

  	
  %

  
	
  95%

  	
   

  	
  80

  	
  %

  
	
  100%

  	
   

  	
  100

  	
  %

  
	
  101 — 150%

  	
   

  	
  Linear

  	
   

  
	
  Capped at 150%

  	
   

  	
   

  	
   

  

 

For 2009 only, the Executive’s Annual Bonus will
be $130,000, conditioned on the Executive’s continuous employment with the
Company through December 31, 2009. 
This Annual Bonus amount is payable not later than March 15, 2010.

 

(c)           Executive Perquisites, Benefits and Other
Compensation.  Commencing
on the date hereof, the Executive shall be entitled to receive additional
benefits and compensation from the Company in such form and to such extent as
provided to other senior executive officers from time to time.  Initially, these additional items are
specified below:

 

 

(i)            A
car allowance and reimbursement for use of a corporate cell phone, all in accordance
with Company policy for similarly situated executive officers.

 

(ii)           Reimbursement
for all business travel and other out-of-pocket expenses reasonably incurred by
the Executive in the performance of the Executive’s services pursuant to this
Agreement.  All reimbursable expenses
shall be appropriately documented in reasonable detail by the Executive upon
submission of any request for reimbursement, and in a format and manner
consistent with the Company’s expense reporting policy.

 

3.             Grant of Stock Options.  In
further consideration of this Agreement, the Company hereby awards to the
Executive the option to purchase a total of 450,000 shares of common stock, par
value $.001 per share, of the Company (the “Common Stock”), subject to the
adjustment and the conditions and restrictions set forth below (the “Stock
Option”).  The Stock
Option is granted pursuant to the Company’s 2009 Incentive Compensation Plan
but is not intended to qualify as an incentive option under Section 422 of
the Internal Revenue Code, as amended. 
The Executive may exercise the Stock Option, in whole or in part, at a
purchase price (the “Exercise Price”)
of $3.50 per share (the closing price of the Company’s Common Stock on the
Nasdaq Stock Market on the date of this Agreement), subject to adjustment as
provided below and in compliance with Section 5(f) below, at any time
within ten (10) years from the date of this Agreement (subject to the
limitations below), but only to the extent that the Executive is vested in the
Stock Option.

 

(a)           Vesting.  The Executive will vest
in 25% of the Stock Option on the first, second, third and fourth anniversaries
hereof;  provided, that the Executive
must be employed with the Company continuously to each such vesting date in
order to vest in the portion of the Stock Option on such date.  However, subject to Section 5(f) below,
all of the Stock Option will vest sooner upon a Change of Control event (as
defined below) that occurs during the Term hereof, but only if (i) the
Executive has been employed with the Company continuously from the date hereof
to the date of the Change of Control, (ii) the Change of Control Price (as
defined below) exceeds $3.50 (the closing price of the Company’s Common Stock
on the Nasdaq Stock Market on the date of this Agreement), (iii) the
Compensation Committee as constituted before such Change of Control event
determines in its sole discretion, and expressly authorizes, the acceleration
and vesting of the Executive’s Stock Option and (iv) such acceleration and
vesting will not cause the Stock Option to be subject to the adverse
consequences described in Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”).  Any portion of the Stock Option that does not
vest prior to the Executive’s termination of employment for any reason at any
time will lapse and automatically be canceled. 
Further, any vested portion of the Stock Option not exercised by the
Executive within ninety (90) days after any termination of employment for any
reason at any time (12 months, if Executive dies during the Term hereof and the
Stock Option is being exercised by the Executive’s estate) will lapse and
automatically be canceled.

 

(b)           Change of Control.  A “Change of Control”
means the happening of any of the following events:

 

 

(i)            An
acquisition of outstanding or newly issued Company securities that results in
any individual, entity or group within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1933, as amended (a “Person,” with such Act being the “Exchange Act”) having beneficial
ownership within the meaning of Rule 13d-3 under the Exchange Act (“Beneficial Ownership”) of more than
50% (other than any Person who, as of the date hereof, already has Beneficial
Ownership of at least 20%) of either (x) the then outstanding shares of
the Company’s Common Stock (the “Outstanding Company
Common Stock”) or (y) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company
Voting Securities”);  or

 

(ii)           A change in the composition of the Board in connection with a tender or exchange offer, a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company or the acquisition of assets of another corporation (a “Corporate Transaction”) or a direct purchase of securities from the Company such that (A) the individuals who, as of the date hereof, constitute the members of the Board (the “Incumbent Board,” it being intended that the Executive is not considered a member of the Incumbent Board at the date hereof) cease to constitute at least a majority of the Board or (B) a majority of the individuals who, as of the date hereof, constitute the Incumbent Board resign or are removed from the Board;  provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents;  or
 

(iii)          The
approval by the shareholders of the Company of a Corporate Transaction or, if
consummation of such Corporate Transaction is subject, at the time of such
approval by shareholders, to the consent of any government or governmental
agency, the obtaining of such consent (either explicitly or implicitly by consummation); 
excluding, however, such a Corporate Transaction pursuant to which (A) all
or substantially all of the Beneficial Owners of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to such
Corporate Transaction will Beneficially Own, directly or indirectly, more than
50% of the outstanding shares of common stock, or more than 50% of the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, of the company resulting from such
Corporate Transaction (including, without limitation, a corporation which as a
result of such transaction owns the Company or all or substantially all of the
Company’s assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to
such Corporate Transaction, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (B) no Person
(other than the Company, any employee benefit

 

 

plan
(or related trust) sponsored or maintained by the Company or any corporation
controlled by the Company or such corporation resulting from such Corporate
Transaction) will Beneficially Own, directly or indirectly, 20% or more of,
respectively, the outstanding shares of common stock of the corporation
resulting from such Corporate Transaction or the combined voting power of the
outstanding voting securities of such corporation entitled to vote generally in
the election of directors except to the extent that such ownership existed with
respect to the Company prior to the Corporate Transaction and (C) individuals
who were members of the Incumbent Board will constitute at least a majority of
the board of directors of the corporation resulting from such Corporate
Transaction;  or

 

(iv)          The
approval by the shareholders of the Company of a complete liquidation or
dissolution of the Company.

 

Despite all of the foregoing, no Change in
Control is deemed to have occurred with respect to the Executive if the
Executive is part of a purchasing group which consummates the Change in Control
transaction.  The Executive is deemed “part
of a purchasing group” for purposes of the preceding sentence if the Executive
is an equity participant in the purchasing company or group except for (i) passive
ownership of less than three percent (3%) of the stock of the purchasing
company or (ii) ownership of an equity participation in the purchasing
company or group which is otherwise not significant, as determined prior to the
Change in Control by a majority of the Incumbent Board.

 

(c)           Change of
Control Price.  “Change of Control Price” means the higher
of (i) the highest reported closing price of a share of Common Stock in
any transaction reported on the Nasdaq Stock Market during the 30-day period
prior to and including the date of a Change of Control or (ii) if the
Change of Control is the result of a tender or exchange offer, a Corporate
Transaction or a direct purchase of securities from the Company, the highest
price per share of Common Stock paid in such tender or exchange offer,
Corporate Transaction or direct purchase of securities.

 

If the Change of Control is the result of a direct purchase of
securities from the Company for a consideration consisting in whole or in part
other than cash, then:

 

(i)            insofar as the
purchase consideration consists of securities and the value of such securities
is not determinable by reference to a separate agreement, (A) if the
securities are then traded on a national securities exchange or the Nasdaq
Stock Market (or a similar national quotation system), then the value shall be
computed based on the average of the closing prices of the securities on such
exchange or system over the thirty (30)-day period ending on the date of
receipt by the Company, (B) if the securities are actively traded
over-the-counter, then the value shall be computed based on the average of the
closing bid prices over the thirty (30) day ending on the date of receipt by
the Company and (C) if there is no active public market, then the value
shall be computed based on the fair market value thereof on the date of receipt
by the Company, as determined in good faith by the Board and

 

 

(ii)           insofar as the
purchase consideration consists of property other than cash and securities,
then the value shall be computed at the fair market value thereof at the time
of such issuance, as determined in good faith by the Board.

 

(d)           Adjustments to
Number of Shares and Exercise Price.  In the event that the Compensation Committee
determines that any dividend or other distribution (whether in the form of
cash, shares or other securities or property), stock split or combination,
forward or reverse merger, reorganization, subdivision, consolidation or
reduction of capital, recapitalization, consolidation, scheme of arrangement,
split-up, spin-off or combination involving the Company or repurchase or
exchange of shares, issuance of warrants or other rights to purchase shares or
other securities of the Company, or other similar corporate transaction or
event affects the Stock Option or the shares of Common Stock underlying it such
that an adjustment is determined by the Compensation Committee to be
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Stock Option, then
the Compensation Committee shall, in such manner as it may deem equitable,
adjust any or all of (i) the number and type of shares (or other
securities or property) subject to the Stock Option or (ii) the Exercise
Price with respect to the Stock Option; 
provided that the number of shares subject to the Stock Option shall
always be a whole number. 
Notwithstanding the foregoing, any adjustments made pursuant to this Section 3(d) shall
be made in such a manner as to ensure that after such adjustment, the Stock
Option continues not to be deferred compensation subject to Code Section 409A
(or if the Stock Option is already subject to Code Section 409A, so as not
to give rise to liability under Code Section 409A).

 

(e)           Non-Alienation of Benefits.  Other
than pursuant to a qualified domestic relations order or by the Executive’s
will upon his death, no right or benefit under this Section 3 shall be
subject to transfer, anticipation, alienation, sale, assignment, pledge,
encumbrance or charge, whether voluntary, involuntary or by operation of law,
and any attempt to transfer, anticipate, alienate, sell, assign, pledge,
encumber or charge the same shall be void.

 

(f)            Subscription Representations;  Transfer Restrictions.  The Executive understands that the Stock
Option constitutes, and any shares of Common Stock acquired upon exercise
thereof will constitute, “restricted securities” within the meaning of the
Securities Act of 1933, as amended (the “Securities Act”).  Accordingly, even if the Executive is fully
vested in the Stock Option, the Executive may never be able to resell the
underlying shares for a profit, or at all. 
In any event, the Executive will be able to resell or otherwise transfer
the underlying Common Stock only if the sale or other transfer is registered
under the Securities Act and applicable state securities laws or there is an
available exemption from this registration. 
The Executive confirms that the Executive can bear the loss of the
Executive’s entire investment in the Company.

 

(g)           Lock-Up
Agreement.  The Executive
agrees that, in the event of each future public offering of the Company’s
equity securities (an “Offering”),
the Executive will agree to such restrictions on the resale of any shares of
the Company’s Common Stock (including the Stock Option and any shares acquired
upon exercise thereof) then beneficially owned by 

 

 

Executive as requested by the managing underwriter or underwriters of
the Offering;  provided, however, that
such restrictions run no longer than the period of resale restriction imposed
by such underwriters on the Company’s other executive officers and
directors.  The Executive agrees not to
sell or otherwise transfer (including upon death) any of the shares of Common
Stock (including shares acquired upon exercise of the Stock Option)
beneficially owned by the Executive, unless the purchaser or recipient agrees
in writing to be bound by the foregoing lock-up agreement.

 

(h)           Stock Certificate Restrictions.  The Executive acknowledges that the Company
will place a restrictive legend on any certificate representing shares of
Common Stock acquired upon exercise of the Stock Option, and a “stop transfer
order” with any transfer agent of the Company’s securities, barring the sale or
other transfer of such shares except in compliance with this Agreement and
without registration under the Securities Act or an exemption therefrom, and
noting the existence of the lock-up agreement above.

 

(i)            Future Grants of Equity Securities.  Future grants of restricted stock, stock
options or other equity securities, if any, will be governed by the terms of
the grant agreement to which the future grant relates, and not by this
Agreement.

 

4.             Non-Competition and Non-Solicitation.

 

(a)           Basic Terms.  In consideration of this Agreement (including
the Stock Option grant hereunder), the Executive will not, during the period of
the Executive’s employment with the Company and for a period of one (1) year
immediately following the termination of the Executive’s employment under this
Agreement, for any reason whatsoever, directly or indirectly, for the Executive
or on behalf of or in conjunction with any other person, firm, entity, company,
business, partnership, corporation, limited liability company or limited
liability partnership of whatever nature:

 

(i)            engage,
as an officer, director, shareholder, owner, partner, joint venturer or in
a  managerial capacity, whether as an
employee, independent contractor, consultant or advisor or as a sales
representative or executive, in any business that, at the date of the Executive’s
termination of employment, manufactures, markets and/or sells hardware and/or
software products and/or services in competition with the Company in the United
States;

 

(ii)           recruit,
solicit, hire or induce, or attempt to recruit, hire or induce, any employee or
employees to terminate employment or otherwise cease his, her or their
relationship with the Company;

 

(iii)          solicit,
divert or take away, or attempt to solicit, divert or to take away, the
hardware and/or software products and/or services business or patronage of any
of the Company’s actual or prospective clients, customers or accounts
contracted, solicited or served by the Company during Executive’s
employment;  or

 

 

(iv)          call
upon or solicit any prospective acquisition candidate or individual or groups
of employees of other organizations, which, to the Executive’s actual knowledge
after due inquiry, the Company has called upon or for which the Company has
made an acquisition or hiring analysis, for the purpose of acquiring such
entity or its assets or hiring such individuals.

 

Notwithstanding
the above, the Executive may acquire as a passive investment not more than
three percent (3%) of the capital stock of a competing business, whose stock is
traded on a national securities exchange or over-the-counter.

 

(b)           Equitable Relief.  Because of the difficulty of measuring
economic losses to the Company as a result of a breach of the foregoing
covenants, and because of the immediate and irreparable damage that could be
caused to the Company for which it would have no other adequate remedy, the
Executive agrees that the foregoing covenants may be enforced by the Company in
the event of breach by the Executive by injunctions and restraining orders.

 

(c)           Severability and/or Reformation.  The covenants in this Section 4 are
severable and separate, and the unenforceability of any specific covenant shall
not affect the provisions of any other covenant.  Moreover, in the event any court of competent
jurisdiction determines that the scope, time or territorial restrictions set
forth are unreasonable, then it is the intention of the parties that such
restrictions be enforced to the fullest extent which the court deems
reasonable, and the Agreement shall be reformed in accordance therewith.

 

(d)           Independently Enforceable.  All of the covenants in this Section 4
shall be construed as an agreement independent of any other provision in this
Agreement, and the existence of any claim or cause of action of the Executive
against the Company, whether predicated on this Agreement or otherwise, shall
not constitute a defense to the enforcement by the Company of such
covenants.  It is specifically agreed
that the period of one (1) year following termination of employment stated
at the beginning of this Section 4, during which the agreements and
covenants of the Executive made in this Section 4 shall be effective,
shall be computed by excluding from such computation any time during which the
Executive is in violation of any provision of this Section 4.

 

5.                                       Term; 
Termination;  Rights on
Termination.

 

The term of Executive’s employment under this
Agreement (the “Term”) begins on the date
hereof and continues through the earlier to occur of (i) the second anniversary
of the date hereof or (ii) the first day of the month next following the
Executive’s 65th birthday (the “Normal Retirement Date”);  provided, however, that on the second
anniversary of the date hereof, and on each successive second anniversary thereafter
(such date and each second anniversary thereof shall be hereinafter referred to
as the “Renewal Date”), the Term
will automatically extend so as to terminate on the earlier of (x) two
years from such Renewal Date or (y) the Executive’s Normal Retirement
Date, unless at least 90 days prior to the Renewal Date, the Company gives
written notice to the Executive that the Company is not extending the 

 

 

Term. 
Despite the Term, this Agreement and the Executive’s employment may be
terminated in any one of the following ways:

 

(a)           Termination Upon Death.  The Executive’s death will immediately
terminate this Agreement.  The Company
will pay the Executive’s estate any of Executive’s accrued Base Salary and any
earned, but unpaid, Annual Bonus (at the time otherwise payable under this
Agreement) through the date of termination and reimbursement of expenses.  The Executive’s estate will forfeit any
portion of the Stock Option not vested in the Executive as of the date of the
Executive’s death.

 

(b)           Termination on Account of Disability.  If, as a result of incapacity due to physical
or mental illness or injury, as reasonably determined by the Executive’s
physician, the Executive is absent from the Executive’s full-time duties
hereunder for ninety (90) days, then thirty (30) days after receiving written
notice (which notice may occur before or after the end of such 90-day period,
but which will not be effective earlier than the last day of such 90-day
period), the Company may terminate the Executive’s employment hereunder;  provided that the Executive is unable to
resume the Executive’s full-time duties at the conclusion of such notice
period.  The Company will pay the
Executive any of the Executive’s accrued Base Salary and any earned, but
unpaid, Annual Bonus (at the time otherwise payable under this Agreement)
through the date of termination and reimbursement of expenses.  The Executive will forfeit any portion of the
Stock Option not vested as of the date of termination.  For a period of 18 months following the date
of termination, the Company will make available to the Executive and the
Executive’s eligible family members, at the Executive’s sole expense, health
insurance continuation coverage pursuant to Section 4980B of the Code,
Sections 601-608 of the Employee Retirement Income Security Act of 1974, as
amended, and under any other applicable law, to the extent required by such
laws (“COBRA Coverage”).

 

(c)           Termination by the Company for Cause.  The Company may terminate this Agreement at
any time for Cause upon written notice to the Executive.  For purposes of this Agreement, “Cause” is (i) the Executive’s
willful, material and irreparable breach of this Agreement;  (ii) the Executive’s gross negligence in
the performance or intentional nonperformance (continuing for thirty (30) days
after receipt of written notice of need to cure) of any of the Executive’s
material duties and responsibilities under this Agreement;  (iii) the Executive’s willful
dishonesty, fraud or misconduct with respect to the business or affairs of the
Company;  or (iv) the Executive’s
conviction of a felony crime.  Upon any
termination for Cause, the Executive will receive no severance compensation
other than base salary accrued through the date of termination and
reimbursement of expenses.  The Executive
will forfeit any portion of the Stock Option not vested as of the date of
termination.  For a period of 18 months
following the date of termination, the Company will make COBRA Coverage
available to the Executive and the Executive’s eligible family members, at the
Executive’s sole expense.

 

(d)           Termination by the Company Without Cause or by the
Executive for Good Reason. 
At any time, either the Executive or the Company may terminate this
Agreement and the Executive’s employment, effective thirty (30) days after
written notice is provided to the 

 

 

other.  If
the Company terminates the Executive’s employment without Cause or if the
Executive resigns employment for Good Reason (as defined below), the Executive
will receive from the Company, subject to Section 5(f) below, (i) any
Base Salary accrued through the date of termination and reimbursement of
expenses, (ii) any earned, but unpaid, Annual Bonus (at the time otherwise
payable under this Agreement) through the date of termination and (iii) a
single, lump sum payment equal to 1.5 times the Executive’s annual Base
Salary.  The Executive will forfeit any
portion of the Stock Option not vested as of the date of termination.  For a period of 18 months following the date
of termination, the Company will make COBRA Coverage available to the Executive
and the Executive’s eligible family members. 
Subject to Section 5(f) below, the Company will directly pay,
or will reimburse the Executive for, the 18 months of premiums for the COBRA
Coverage.  However, if the Executive
becomes re-employed with another employer and is eligible to receive any health
insurance benefits under another employer’s plans, the Company’s obligations to
pay or reimburse for medical and dental insurance benefits under this Section 5(d) shall
terminate.

 

For purposes of this Agreement, each of the
following is a “Good Reason” for the
Executive to terminate employment with the Company:  (i) the Company’s imposition of material
and adverse changes, without the Executive’s consent, in the Executive’s
principal duties (including upon a Change of Control);  (ii) the Company’s move (including upon
a Change of Control) of its principal executive offices more than 50 miles from
its current location without the Executive’s consent;  and (iii) the reduction by the Company
(including upon a Change of Control) in the Executive’s Base Salary without the
Executive’s consent by more than the weighted average percentage reduction made
contemporaneously by the Company of the base salaries all other executive
officers.  Despite the foregoing, if
within the 30-day period after receiving the Executive’s notice of intent to
terminate employment on account of Good Reason, the Company corrects the
deficiency giving rise to such notice, the resignation by the Executive will
not constitute a termination for Good Reason (without a new event giving rise
therefor).

 

(e)           Termination in Connection with a Change of Control.  Notwithstanding the other provisions of this Section 5,
if during the Term of this Agreement, (x) the Company terminates the
Executive’s employment in anticipation of, in connection with, at the time of
or within ninety (90) days after a Change of Control or (y) the Executive
resigns employment with the Company for Good Reason arising in anticipation of,
in connection with, at the time of or within ninety (90) days after a Change of
Control, the Executive will receive from the Company, subject to Section 5(f) below,
(i) any Base Salary accrued through the date of termination and
reimbursement of expenses, (ii) any earned, but unpaid, Annual Bonus (at
the time otherwise payable under this Agreement) through the date of
termination and (iii) a single, lump sum payment equal to 1.5 times the
Executive’s annual Base Salary.  The
Executive will vest in his Stock Option to the extent provided for by Section 3(a) above.  For a period of 18 months following the date
of termination, the Company will make COBRA Coverage available to the Executive
and the Executive’s eligible family members. 
Subject to Section 5(f) below, the Company will directly pay,
or will reimburse the Executive for, the 18 months of premiums for the COBRA
Coverage.  However, if the Executive
becomes re-employed with another employer and is eligible to receive any health
insurance benefits under another employer’s plans, the 

 

 

Company’s obligations to pay or reimburse for
medical and dental insurance benefits under this Section 5(e) shall
terminate.

 

(f)            Prerequisites to Severance Benefits;  Timing of Cash Payments.  The Company’s obligations to make cash
payments under Section 5, and the exercisability of the Stock Option after
any termination of the Executive’s employment at any time for any reason, are
subject to the following:

 

(i)            the
Executive must execute and deliver to the Company a release in the form
attached as Exhibit A (the “Release”) and must not revoke
it and

 

(ii)           the
Executive must continuously comply with the provisions of this Agreement
(including the non-competition and non-solicitation provisions of Section 4
above).

 

The Company will pay the lump sum cash severance
amounts under Section 5(d) or 5(e) above on the first day of the
month following the Executive’s date of termination (or, if later, five
business days after expiration of any period for revocation under the Release).

 

6.                                       Tax Withholdings.  The Company may withhold from any amounts
payable under this Agreement such federal, state, local or foreign taxes as
shall be required to be withheld pursuant to any applicable law or regulation.  The Executive may satisfy withholding
obligations relating to the vesting of Restricted Stock by instructing the
Company to retain and cancel a number of shares of Common Stock having a Market
Price on the date of termination (or as of the immediately preceding business day
if the date of termination is not a business day) equal to the withholding tax
obligation amount.  The term “Market Price” with respect to
shares of Common Stock means the closing price on the Nasdaq Stock Market or,
if none, the average of the last reported closing bid and asked prices on any
other national or regional securities exchange or as quoted in the National
Association of Securities Dealers, Inc.’s Automated Quotations System (“Nasdaq”),
or if not listed on a national or regional securities exchange or quoted in
Nasdaq, the closing price as reported by bigcharts.com (or if this service is
discontinued, such other reporting service acceptable to the Company), or if no
quotations in such Common Stock are available, the fair market value of the shares
as determined in good faith by the Board.

 

7.                                       Reduction to Avoid Excise Tax.  If any payment or
distribution to or for the benefit of the Executive (whether paid or payable or
distributed or distributable) pursuant to the terms of this Agreement or otherwise
(a “Payment”)
would constitute a “parachute payment” within the meaning of Section 280G
of the Code, the Payment shall be reduced to the extent necessary so that no
portion of the Payment is subject to the excise tax imposed by Section 4999
of the Code, together with any interest or penalties imposed with respect to
such excise tax, but only if, by reason of such reduction, the net after-tax
benefit to the Executive shall equal or exceed the net after-tax benefit to the
Executive if no reduction was made.  Subject to the next paragraph, the
Company shall afford the Executive an opportunity to select a reduction of cash
or non-cash items, or a combination of both, to reduce the excess Payment.

 

 

All determinations required to be made under this Section 7,
including whether a reduction of any Payment is required and the assumptions to
be utilized in arriving at such determination, shall be made by the Company’s
independent registered public accountants serving immediately prior to the
Change in Control, or such other nationally recognized accounting firm as may
be agreed by the Company and the Executive (the “Accounting Firm”); 
provided, that the Accounting Firm’s determination shall be made based upon “substantial
authority” within the meaning of Section 6662 of the Code.  Any
determination by the Accounting Firm hereunder shall be binding upon the
Company and the Executive.

 

8.                                       Return of Company Property.  All records, designs, tradenames and
trademarks, service names and service marks, patents, business plans, financial
statements, manuals, memoranda, customer and other lists and other property
delivered to or compiled by the Executive by or on behalf of the Company, or
its representatives, vendors or customers which pertain to the business of the
Company are and will remain the property of the Company, and be subject at all
times to its discretion and control. 
Likewise, all correspondence, reports, records, charts, advertising and
marketing materials and other similar data pertaining to the business,
activities or future plans of the Company which is collected by or in the
possession of the Executive shall be delivered promptly to the Company without
request by it upon termination of the Executive’s employment.  Further, upon any termination of employment,
the Executive shall return any Company computer (without deleting or tampering
with information thereon) and any other physical property of the Company.

 

9.                                       Inventions.  The Executive will disclose promptly to the
Company any and all significant conceptions and ideas for inventions,
improvements and valuable discoveries, whether patentable or not, which are
conceived or made by the Executive, solely or jointly with another, during the
period of employment, and which are directly related to the business or
activities of the Company and which the Executive conceives as a result of the
Executive’s employment by the Company. 
The Executive hereby assigns and agrees to assign all of the Executive’s
interests therein to the Company or its nominee.  Whenever requested to do so by the Company,
the Executive will execute any and all applications, assignments or other
instruments that the Company shall deem necessary to apply for and obtain
letters patent of the United States or any foreign country or to otherwise
protect the Company’s interest therein. 
Nothing in this Agreement shall apply to an invention for which no
equipment, supplies, facility or trade secret information of the Company was
used and which was developed entirely on the Executive’s own time and (i) which
does not relate (a) directly to the business of the Company or (b) to
the Company’s actual or demonstrably anticipated research or development or (ii) which
does not result from any work performed by the Executive for the Company.

 

10.                                 Confidentiality. 
In consideration of this Agreement, the Executive agrees to not at any time use
or, other than as required by court order, disclose, or permit use or
disclosure of, any of the Company’s confidential information or trade
secrets.  This includes all knowledge and information that Executive
acquires during employment with the Company which relates to the business,
developments, activities, products and services or financial affairs of the
Company or any individual or firm that is engaged in or has done business with
the Company.  This also 

 

 

includes any information or compilation of
information that derives independent economic value from not being generally
known or readily ascertainable by proper means by other persons and which
relates to any aspect of the Company’s business, including, but not limited
to:  trade secrets within the meaning of the Minnesota Trade Secrets Act,
customer lists, customer information, costs and selling prices, payment and
credit information, customer profiles and analysis, prospect tracking
recording, financial information, budget and financial plans, costing, pricing,
billing information, tax data, sales and marketing information, business
strategies and plans, technical information including software, research, product/product
development information, personnel information such as salaries, phone numbers,
titles, benefits, bonuses, employment histories, shareholder information and
stock data and any discoveries, inventions, ideas, methods, products,
equipment, developments, improvements or programs which the Company holds
confidential and has not publicly disclosed.  Despite the above, the
Executive is not obliged to maintain the confidentiality of information that is
or becomes public other than as a result of acts by or through the Executive or
that the Executive independently obtains from a third party having no duty of
confidentiality to the Company.

 

11.                                 Indemnification;  Directors’ and Officers’ Insurance.  The Executive shall have the benefit of
indemnification to the fullest extent permitted by applicable law, which
indemnification shall continue after the termination of this Agreement for such
period as may be necessary to continue to indemnify Executive for acts or
omissions during the Term hereof to the fullest extent permitted by applicable
law.

 

12.                                 Code Section 409A.  To the extent applicable and notwithstanding
any other provision of this Agreement, this Agreement and the Stock Option and
other payments and benefits hereunder shall be administered, operated and
interpreted in accordance with Code Section 409A and Department of
Treasury regulations and other interpretive guidance issued thereunder,
including without limitation any such regulations or other guidance that may be
issued after the date of this Agreement; 
provided, however, in the event that the Compensation Committee
determines that any amounts payable hereunder may be taxable to the Executive
under Code Section 409A and related Department of Treasury guidance prior
to the payment and/or delivery to the Executive of such amount, the Company may
(a) adopt such amendments to this Agreement and the related Stock Option
or other payments and benefits hereunder, and appropriate policies and
procedures, including amendments and policies with retroactive effect, that the
Compensation Committee determines necessary or appropriate to preserve the
intended tax treatment of the benefits provided by this Agreement and/or (b) take
such other actions as the Compensation Committee determines necessary or
appropriate to comply with or exempt this Agreement and the Stock Option and
other payments and benefits hereunder from the requirements of Code Section 409A
and related Department of Treasury guidance, including such Department of
Treasury guidance and other interpretive materials as may be issued after the
date of this Agreement.  The Company
makes no guarantees to the Executive regarding the tax treatment of this
Agreement and, notwithstanding the above provisions and any agreement or
understanding to the contrary, if any stock, payments or other amounts due to
the Executive (or his beneficiaries, as applicable) results in, or causes in
any manner, the application of an accelerated or additional tax, fine or
penalty under Code Section 409A or otherwise to be imposed, then the
Executive (or his beneficiaries, as 

 

 

applicable) shall be solely liable for the
payment of, and the Company shall have no obligation or liability to pay or
reimburse (either directly or otherwise) the Executive (or his beneficiaries,
as applicable) for, any such additional taxes, fines or penalties.

 

13.                                 Complete Agreement.  This Agreement supersedes any other
agreements or understandings, written or oral, between the Company and the
Executive, and the Executive has no oral representations, understandings or
agreements with the Company or any of its officers, directors, employees or
representatives covering the same subject matter as this Agreement.  This document is the final, complete and
exclusive statement and expression of the agreement between the Company and the
Executive and of all the terms of this Agreement, and it cannot be varied,
contradicted or supplemented by evidence of any prior or contemporaneous oral
or written agreements.  This document may
not be later modified except by a written instrument signed by a duly
authorized officer of the Company and the Executive, and no term of this
Agreement may be waived except by a written instrument signed by the party
waiving the benefit of such term.

 

14.                                 Notice.  Whenever any notice is required hereunder, it
shall be given in writing addressed as follows:

 

	
  To the Company:

  	
  Datalink Corporation

  
	
   

  	
  8170 Upland Circle

  
	
   

  	
  Chanhassen, Minnesota 55317

  
	
   

  	
  Attention: Greg R. Meland, Chairman

  
	
   

  	
   

  
	
  To the Executive:

  	
  Paul F. Lidsky

  
	
   

  	
  18715 — 24th Avenue North

  
	
   

  	
  Plymouth, Minnesota 55447

  

 

Notice is given and effective three (3) days
after the deposit in the U.S. mail of a writing addressed as above and sent
first class mail, certified, return receipt requested, or when actually
received.  Either party may change the
address for notice by notifying the other party of such change in accordance
with this Section 14.

 

15.                                 Arbitration.  Except as to matters of injunctive or
equitable relief (over which the parties agree that the federal and state
courts located in Minneapolis, Minnesota will have exclusive jurisdiction and
are deemed to be of proper venue and convenience to the parties), any
unresolved dispute or controversy arising under or in connection with this
Agreement will be settled exclusively by arbitration, conducted before a panel
of three (3) arbitrators in Minneapolis, Minnesota, in accordance with the
rules of the American Arbitration Association then in effect.  The arbitrators will not have the authority
to add to, detract from or modify any provision hereof nor to award punitive
damages to any injured party.  A decision
by a majority of the arbitration panel will be final and binding.  Judgment may be entered on the arbitrators’
award in any court having jurisdiction. 
The direct expense of any arbitration proceedings,

 

 

including, but not limited to, the
administrative fees and the arbitrators’ fees and expenses, will be borne by
the Company.

 

16.                                 Binding  Effect; 
Governing Law.  This Agreement will inure to the benefit of
the successors or assigns of the Company. 
This Agreement shall be governed by and construed in accordance with the
laws of the State of Minnesota, exclusive of its conflicts of laws rules.

 

IN WITNESS WHEREOF,
the undersigned have hereunto affixed their signatures.

 

	
  DATALINK CORPORATION

  	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By

  	
  /s/ Greg R. Meland

  	
   

  	
  By

  	
  /s/ Paul F. Lidsky

  
	
   

  	
  Greg R. Meland, Chairman

  	
   

  	
  Paul F. Lidsky

  
	
   

  	
   

  	
   

  	
   

  
	
  Date

  	
  7/20/2009

  	
   

  	
  Date

  	
  7/20/2009

  

 

 

Exhibit A

Release of Claims

 

I release Datalink Corporation and its officers, directors, employees
and agents from any claim, cause of action, damages or expenses, including
attorneys’ fees, arising out of the relationship between the parties through
the signing of this Release.  This is intended to be a complete release of
claims by me, whether the claims are known or unknown, matured or unmatured or
fixed or contingent.  Therefore, by this release I GIVE UP
ANY RIGHT TO MAKE A CLAIM, BRING A LAWSUIT, FILE AN ADMINISTRATIVE CHARGE OF
DISCRIMINATION OR OTHERWISE SEEK MONEY DAMAGES OR COURT ORDERS AS A RESULT OF
MY EMPLOYMENT BY DATALINK, OR OF MY SEPARATION FROM EMPLOYMENT WITH DATALINK. 
I acknowledge and intend that this Release cover claims of wrongful
termination, defamation, intentional infliction of emotional distress, any
claims under the Federal Age Discrimination in Employment Act, Title VII of the
Civil Rights Act of 1964, the Americans With Disabilities Act, the Minnesota
Human Rights Act and Minnesota Statute Section 181.81 (which prohibits age
discrimination) and any other state or federal statutes prohibiting
discrimination in employment.  This Release also binds my heirs,
administrators, representatives, executors, successors and assigns.  I
have been advised by my legal counsel of the effect of this Release. 
Despite the above, this Release does not apply to claims against Datalink for
breaching its obligations under an Employment Agreement dated July 20,
2009.

 

NOTICE TO THE UNDERSIGNED:

 

THIS IS A RELEASE OF LEGAL RIGHTS YOU MAY HAVE.  YOU SHOULD
CONSULT WITH AN ATTORNEY REGARDING THIS RELEASE AND OTHER ASPECTS OF THIS
LETTER BEFORE YOU SIGN IT.

 

YOU HAVE 21 DAYS TO CONSIDER WHETHER OR NOT TO SIGN THIS RELEASE,
STARTING FROM THE DATE YOU FIRST RECEIVE A COPY OF IT.  YOU MAY SIGN
THIS RELEASE AT ANY TIME DURING THE 21-DAY PERIOD.

 

YOUR EMPLOYMENT BY DATALINK HAS TERMINATED.  YOUR ACCEPTANCE OR
FAILURE TO ACCEPT THIS RELEASE DOES NOT AFFECT YOUR TERMINATION.  IF YOU
DO NOT ACCEPT THIS RELEASE, OR IF YOU REVOKE YOUR ACCEPTANCE OF IT, DATALINK
WILL NOT PROVIDE YOU THE SEVERANCE PAY AND OTHER BENEFITS DESCRIBED IN YOUR
EMPLOYMENT AGREEMENT.

 

AFTER YOU ACCEPT THIS RELEASE BY SIGNING IT, YOU MAY REVOKE YOUR
ACCEPTANCE FOR A PERIOD OF 15 DAYS AFTER THE DATE YOU SIGN.  THIS RELEASE
IS NOT EFFECTIVE UNTIL THIS 15-DAY REVOCATION PERIOD EXPIRES.

 

IF YOU WISH TO REVOKE YOUR ACCEPTANCE OF THIS RELEASE, YOU MUST NOTIFY
DATALINK IN WRITING WITHIN THE 15-DAY REVOCATION PERIOD.  YOU MUST DELIVER
YOUR NOTICE TO DATALINK IN PERSON OR BY CERTIFIED MAIL,

 

 

RETURN RECEIPT REQUESTED, ADDRESSED TO:  Greg R. Meland, Chairman,
Datalink Corporation, 8170 Upland Circle, Chanhassen, Minnesota 
55317.  IF YOU FAIL TO PROPERLY DELIVER OR MAIL YOUR WRITTEN REVOCATION AS
INSTRUCTED, YOUR REVOCATION WILL NOT BE EFFECTIVE.

 

	
  Date this Release is first given by Datalink to the undersigned:

  	
   

  
	
   

  	
   

  
	
  Agreed to and accepted by the undersigned:

  	
   

  
	
   

  	
   

  
	
  Date this Release is signed by the undersigned:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EmployeeExhibit 4.2

 

EXECUTION VERSION

 

JANUS
CAPITAL GROUP INC.

 

as Issuer

 

THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A.

 

as Trustee

 

 

Second Supplemental Indenture

 

Dated as of July 21, 2009

 

to Senior Debt Indenture Dated as

of

 

November 6, 2001

 

 

3.25% Convertible Senior Notes
due 2014

 

 

TABLE OF CONTENTS

 

 

 

	
   

  	
   

  	
  PAGE

  
	
  ARTICLE 1

  
	
  DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

  
	
   

  	
   

  	
   

  
	
  SECTION
  1.01.

  	
  Scope
  of Supplemental Indenture

  	
  2

  
	
  SECTION
  1.02.

  	
  Definitions

  	
  2

  
	
  SECTION
  1.03.

  	
  References
  to Interest

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  
	
  THE SECURITIES

  
	
   

  	
   

  	
   

  
	
  SECTION
  2.01.

  	
  Title
  and Terms; Payments

  	
  10

  
	
  SECTION
  2.02.

  	
  Book-Entry
  Provisions for Global Notes

  	
  11

  
	
  SECTION
  2.03.

  	
  Reporting
  Requirement

  	
  12

  
	
  SECTION
  2.04.

  	
  Repurchase
  and Cancellation

  	
  12

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3

  
	
  FUNDAMENTAL CHANGES AND PURCHASES THEREUPON

  
	
   

  	
   

  	
   

  
	
  SECTION
  3.01.

  	
  Purchase
  at Option of Holders Upon a Fundamental Change

  	
  12

  
	
  SECTION
  3.02.

  	
  Effect
  of Fundamental Change Purchase Notice

  	
  15

  
	
  SECTION
  3.03.

  	
  Withdrawal
  of Fundamental Change Purchase Notice

  	
  15

  
	
  SECTION
  3.04.

  	
  Deposit
  of Fundamental Change Purchase Price

  	
  15

  
	
  SECTION
  3.05.

  	
  Notes
  Purchased in Whole or in Part

  	
  16

  
	
  SECTION
  3.06.

  	
  Covenant
  to Comply With Applicable Laws Upon Purchase of Notes

  	
  16

  
	
  SECTION
  3.07.

  	
  Repayment
  to the Company

  	
  16

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4

  
	
  CONVERSION

  
	
   

  	
   

  	
   

  
	
  SECTION
  4.01.

  	
  Right
  to Convert

  	
  16

  
	
  SECTION
  4.02.

  	
  Conversion
  Procedures

  	
  19

  
	
  SECTION
  4.03.

  	
  Settlement
  Upon Conversion

  	
  20

  
	
  SECTION
  4.04.

  	
  Adjustment
  of Conversion Rate

  	
  23

  
	
  SECTION
  4.05.

  	
  Certain
  Other Adjustments

  	
  31

  
	
  SECTION
  4.06.

  	
  Adjustment
  to Shares Delivered Upon Conversion Upon a Make-Whole Fundamental Change

  	
  31

  
	
  SECTION
  4.07.

  	
  Effect
  of Recapitalization, Reclassification, Consolidation, Merger or Sale

  	
  33

  
	
  SECTION
  4.08.

  	
  Taxes
  on Shares Issued

  	
  35

  
	
  SECTION
  4.09.

  	
  Reservation
  of Shares; Shares to be Fully Paid; Compliance With Governmental
  Requirements; Listing of Common Stock

  	
  36

  
	
  SECTION
  4.10.

  	
  Responsibility
  of Trustee

  	
  36

  

 

 

 

	
  SECTION
  4.11.

  	
  Notice
  to Holders Prior to Certain Actions

  	
  36

  
	
  SECTION
  4.12.

  	
  Stockholder
  Rights Plan

  	
  37

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5

  
	
  REMEDIES

  
	
   

  	
   

  	
   

  
	
  SECTION
  5.01.

  	
  Events
  of Default

  	
  37

  
	
  SECTION
  5.02.

  	
  Additional
  Interest

  	
  38

  
	
  SECTION
  5.03.

  	
  Waiver;
  Unconditional Right of Holders to Receive Amounts Due Upon Conversion

  	
  38

  
	
  SECTION
  5.04.

  	
  Notice
  of Defaults

  	
  39

  
	
  SECTION
  5.05.

  	
  Overdue
  Payments

  	
  39

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6

  
	
  SATISFACTION AND DISCHARGE

  
	
   

  	
   

  	
   

  
	
  SECTION
  6.01.

  	
  Satisfaction
  and Discharge of the Supplemental Indenture

  	
  39

  
	
  SECTION
  6.02.

  	
  Deposited
  Monies to Be Held in Trust by Trustee

  	
  40

  
	
  SECTION
  6.03.

  	
  Paying
  Agent to Repay Monies Held

  	
  40

  
	
  SECTION
  6.04.

  	
  Return
  of Unclaimed Monies

  	
  40

  
	
  SECTION 6.05.

  	
  Reinstatement

  	
  41

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7

  
	
  SUPPLEMENTAL INDENTURES

  
	
   

  	
   

  	
   

  
	
  SECTION 7.01.

  	
  Supplemental
  Indentures Without Consent of Holders

  	
  41

  
	
  SECTION
  7.02.

  	
  Supplemental
  Indentures With Consent of Holders

  	
  42

  
	
  SECTION
  7.03.

  	
  Notice
  of Amendment or Supplement

  	
  42

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8

  
	
  SUCCESSOR COMPANY

  
	
   

  	
   

  	
   

  
	
  SECTION
  8.01.

  	
  Consolidation,
  Merger and Sale of Assets

  	
  42

  
	
  SECTION
  8.02.

  	
  Successor
  Person Substituted

  	
  43

  
	
  SECTION
  8.03.

  	
  Opinion
  of Counsel to Be Given to Trustee

  	
  43

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9

  
	
  MISCELLANEOUS

  
	
   

  	
   

  	
   

  
	
  SECTION
  9.01.

  	
  Governing
  Law

  	
  44

  
	
  SECTION
  9.02.

  	
  Legal
  Holidays

  	
  44

  
	
  SECTION
  9.03.

  	
  No
  Security Interest Created

  	
  44

  
	
  SECTION
  9.04.

  	
  Trust
  Indenture Act

  	
  44

  
	
  SECTION
  9.05.

  	
  Benefits
  of Supplemental Indenture

  	
  44

  
	
  SECTION
  9.06.

  	
  Calculations

  	
  44

  
	
  SECTION
  9.07.

  	
  Effect
  of Headings and Table of Contents

  	
  44

  
	
  SECTION
  9.08.

  	
  Execution
  in Counterparts

  	
  44

  
	
  SECTION
  9.09.

  	
  Separability
  Clause

  	
  45

  

 

 

 

	
  SECTION
  9.10.

  	
  Ratification
  of Original Indenture

  	
  45

  
	
  SECTION
  9.11.

  	
  The
  Trustee

  	
  45

  
	
  SECTION
  9.12.

  	
  Applicability
  of First Supplemental Indenture

  	
  45

  
	
   

  	
   

  	
   

  
	
  EXHIBIT

  
	
   

  	
   

  	
   

  
	
  Exhibit
  A

  	
  Form
  of Note

  	
  A-1

  

 

 

 

SECOND SUPPLEMENTAL
INDENTURE (this “Supplemental Indenture”), dated as
of July 21, 2009, between Janus Capital Group Inc., a Delaware
corporation, and The Bank of New York Mellon Trust Company, N.A, (the “Trustee”) as trustee under the Senior Debt Indenture dated
as of November 6, 2001, between the Company (formerly known as Stilwell
Financial Inc.) and the Trustee (as amended or supplemented from time to time
in accordance with the terms thereof, the “Original
Indenture”).

 

RECITALS
OF THE COMPANY

 

WHEREAS, the Company
executed and delivered the Original Indenture to the Trustee to provide, among
other things, for the issuance, from time to time, of the Company’s unsecured
Securities, in an unlimited aggregate principal amount, in one or more series
to be established by the Company under, and authenticated and delivered as
provided in, the Original Indenture;

 

WHEREAS, Section 901(6) of
the Original Indenture provides for the Company and the Trustee to enter into
an indenture supplemental to the Original Indenture to establish the form and
terms of Securities of any series as contemplated by Sections 201 and 301 of
the Original Indenture;

 

WHEREAS, the Board of
Directors has duly adopted resolutions authorizing the Company to execute and
deliver this Supplemental Indenture;

 

WHEREAS, pursuant to the
terms of the Original Indenture, the Company desires to establish a new series
of its Securities to be known as its “3.25% Convertible Senior Notes due 2014”
(the “Notes”), the form and
substance of such Notes and the terms, provisions and conditions thereof to be
set forth as provided in the Original Indenture and this Supplemental
Indenture;

 

WHEREAS, the Form of
Note, the certificate of authentication to be borne by each Note and the Form of
Notice of Conversion, Form of Fundamental Change Purchase Notice and Form of
Assignment and Transfer contemplated under the terms of the Notes are to be
substantially in the forms hereinafter provided; and

 

WHEREAS, the Company has
requested that the Trustee execute and deliver this Supplemental Indenture, and
all requirements necessary to make (i) this Supplemental Indenture a valid
instrument in accordance with its terms, and (ii) the Notes, when executed
by the Company and authenticated and delivered by the Trustee, the valid
obligations of the Company have been performed, and the execution and delivery
of this Supplemental Indenture have been duly authorized in all respects.

 

NOW, THEREFORE, THIS
SUPPLEMENTAL INDENTURE WITNESSETH, for and in consideration of the premises and
the purchases of the Notes by the Holders thereof, it is mutually agreed, for
the benefit of the Company and the equal and proportionate benefit of all
Holders of the Notes, as follows:

 

 

 

ARTICLE 1

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

 

SECTION 1.01.              Scope of
Supplemental Indenture.  The
changes, modifications and supplements to the Original Indenture effected by
this Supplemental Indenture shall be applicable only with respect to, and shall
only govern the terms of, the Notes, which may be issued from time to time, and
shall not apply to any other Securities that may be issued under the Original
Indenture unless a supplemental indenture with respect to such other Securities
specifically incorporates such changes, modifications and supplements.  The provisions of this Supplemental Indenture
shall supersede any corresponding provisions in the Original Indenture.

 

SECTION 1.02.              Definitions.  For all purposes of the Indenture, except as
otherwise expressly provided or unless the context otherwise requires:

 

(i)            the terms defined in this Article 1
shall have the meanings assigned to them in this Article 1 and include the
plural as well as the singular;

 

(ii)           all words, terms and phrases defined
in the Original Indenture (but not otherwise defined herein) shall have the
same meanings as in the Original Indenture;

 

(iii)          all other terms used herein that are
defined in the Trust Indenture Act, either directly or by reference therein, shall
have the meanings assigned to them in the Trust Indenture Act;

 

(iv)          all accounting terms not otherwise
defined herein shall 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 at the date of this instrument;
and

 

(v)           the words “herein,” “hereof” and “hereunder”
and other words of similar import refer to this Supplemental Indenture as a
whole and not to any particular Article, Section or other subdivision.

 

“Additional Interest” has the meaning specified in Section 5.02.

 

“Additional Notes” has the meaning specified in Section 2.01.

 

“Additional Shares” has the meaning specified in Section 4.06(a).

 

“Agent Members” has the meaning specified in Section 2.02.

 

“Bid Solicitation Agent” means the Company or such other Person
(including the Trustee) as may be appointed, from time to time, by the Company
to solicit bids for the Trading Price of the Notes in accordance with Section 4.01(b)(ii).  The Company shall initially act as the Bid
Solicitation Agent.

 

2

 

“Business Day” means, solely for purposes of this Supplemental
Indenture, any day other than a Saturday, a Sunday or a day on which the
Federal Reserve Bank of New York is authorized or required by law or executive
order to close or to be closed.

 

“Cash
Settlement” has the meaning specified in Section 4.03(a).

 

“Cash
Settlement Averaging Period” with respect to any Note means the 25
consecutive Trading Day period beginning on, and including, the third Trading
Day immediately following the related Conversion Date; provided
that with respect to any Conversion Date occurring during the period beginning
on, and including, June 2, 2014, and ending at the close of business on
the Business Day immediately prior to the Stated Maturity, the “Cash Settlement Averaging Period” means the 25 consecutive
Trading Days beginning on, and including, the 27th Scheduled Trading Day prior
to the Stated Maturity.

 

“Clause A Distribution” has the meaning specified in Section 4.04(c).

 

“Clause B Distribution” has the meaning specified in Section 4.04(c).

 

“Clause C Distribution” has the meaning specified in Section 4.04(c).

 

“close of business” means 5:00 p.m. (New York City time).

 

“Combination
Settlement” has the meaning specified in Section 4.03(a).

 

“Common Equity”
of any Person means Capital Stock of such Person that is generally entitled (a) to
vote in the election of directors of such Person or (b) if such Person is
not a corporation, to vote or otherwise participate in the selection of the
governing body, partners, managers or others that will control the management
or policies of such Person.

 

“Common Stock”
means the common stock of the Company, par value $.01 per share, at the date of
this Supplemental Indenture, or such other Reference Property into which the
Company’s common stock is changed pursuant to Section 4.07.

 

“Conversion Agent” means the Trustee or such other office or
agency designated by the Company where Notes may be presented for
conversion.  The Trustee shall initially
be the Conversion Agent.

 

“Conversion Date” has the meaning specified in Section 4.02(b).

 

“Conversion Notice” has the meaning specified in Section 4.02(b)(i).

 

“Conversion
Obligation” has the meaning specified in Section 4.01(a).

 

“Conversion Price” means, in respect of each Note, as of any
date, $1,000, divided by the
Conversion Rate as of such date.

 

“Conversion Rate” means, initially, 71.3012 shares of Common
Stock per $1,000 principal amount of Notes, subject to adjustment as set forth
herein.

 

3

 

“Custodian” means the Trustee, as custodian with respect to the
Notes (so long as the Notes constitute Global Notes), or any successor entity.

 

“Daily Conversion Value”
means, for each of the 25 consecutive Trading Days during the applicable Cash
Settlement Averaging Period, one-twenty-fifth (1/25th) of the product of (a) the
applicable Conversion Rate and (b) the Daily VWAP of the Common Stock on
such Trading Day.

 

“Daily Measurement Value”
means the Specified Dollar Amount (if any), divided by 25.

 

“Daily Settlement Amount,”
for each of the 25 consecutive Trading Days during the Cash Settlement
Averaging Period, shall consist of:

 

(a)           cash equal to the lesser of (i) the
Daily Measurement Value and (ii) the Daily Conversion Value; and

 

(b)           if the Daily Conversion Value exceeds
the Daily Measurement Value, a number of shares of Common Stock equal to (i) the
difference between the Daily Conversion Value and the Daily Measurement Value, divided by (ii) the Daily VWAP for such Trading Day.

 

“Daily VWAP”
means, for each of the 25 consecutive Trading Days during the applicable Cash
Settlement Averaging Period, the per share volume-weighted average price as
displayed under the heading “Bloomberg VWAP” on Bloomberg page “JNS.N
<equity> AQR” (or its equivalent successor if such page is not
available) in respect of the period from scheduled open of trading until the
scheduled close of trading of the primary trading session on such Trading Day
(or if such volume-weighted average price is unavailable, the market value of
one share of the Common Stock on such Trading Day determined, using a
volume-weighted average method, by a nationally recognized independent
investment banking firm retained for this purpose by the Company). The “Daily VWAP” shall be determined without regard to after
hours trading or any other trading outside of the regular trading session
trading hours.

 

“Defaulted
Amounts” has the meaning specified in Section 5.05.

 

“Depositary” or “Depository”
shall initially be The Depository Trust Company until a successor Depositary
shall have become such pursuant to the applicable provisions of the Indenture,
and thereafter “Depositary” shall
mean such successor Depositary.

 

“Distributed Property” has the meaning specified in Section 4.04(c).

 

“Effective Date” has the meaning specified in Section 4.06(c).

 

“Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.

 

4

 

“Ex-Dividend
Date” means the first date on which shares of the Common Stock trade
on the applicable exchange or in the applicable market, regular way, without
the right to receive the issuance, dividend or distribution in question.

 

“First
Supplemental Indenture” has the meaning specified in Section 9.12.

 

“Form of Assignment
and Transfer” shall mean the “Form of Assignment and Transfer”
attached as Attachment 3 to the Form of Note attached hereto as Exhibit A.

 

“Form of Fundamental
Change Purchase Notice” shall mean the “Form of Fundamental
Change Purchase Notice” attached as Attachment 2 to the Form of Note
attached hereto as Exhibit A.

 

“Form of Notice of
Conversion” shall mean the “Form of Notice of Conversion”
attached as Attachment 1 to the Form of Note attached hereto as Exhibit A.

 

“Fundamental Change” shall be deemed to have occurred at the
time after the Notes are originally issued if any of the following occurs:

 

(a)           a “person” or “group” within the
meaning of Section 13(d) of the Exchange Act, other than the Company,
its Subsidiaries and its and their employee benefit plans, has become the
direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the
Exchange Act, of the Company’s Common Equity representing more than 50% of the
voting power of the Company’s Common Equity;

 

(b)           consummation of (i) any
recapitalization, reclassification or change of the Common Stock (other than
changes resulting from a subdivision or combination) as a result of which the
Common Stock would be converted into, or exchanged for, stock, other
securities, other property or assets or (ii) any share exchange,
consolidation or merger of the Company pursuant to which the Common Stock will
be converted into cash, securities or other property or any sale, lease or
other transfer in one transaction or a series of transactions of all or
substantially all of the consolidated assets of the Company and its
Subsidiaries, taken as a whole, to any Person other than one of the Company’s
Subsidiaries; provided, however,
that a transaction where the holders of all classes of the Company’s Common
Equity immediately prior to such transaction that is a share exchange,
consolidation or merger own, directly or indirectly, more than 50% of all
classes of Common Equity of the continuing or surviving corporation or
transferee or the parent thereof immediately after such event shall not be a
Fundamental Change;

 

(c)           the Company’s stockholders approve
any plan or proposal for the liquidation or dissolution of the Company; or

 

(d)           the Common Stock (or other common
stock underlying the Notes) ceases to be listed or quoted on any of The New
York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global
Market (or any of their respective successors).

 

Notwithstanding the foregoing, a Fundamental
Change as a result of clause (a), (b) or (d) shall not be deemed to
have occurred in connection with any transaction or transactions described in

 

5

 

clause (a) or (b) pursuant to which
at least 90% of the consideration received or to be received by the common
stockholders of the Company, excluding cash payments for fractional shares, in
connection with such transaction or transactions consists of shares of Publicly
Traded Securities and as a result of this transaction or transactions the Notes
become convertible into such consideration, excluding cash payments for
fractional shares (subject to the provisions set forth under Section 4.03).

 

“Fundamental Change Company Notice” has the meaning specified
in Section 3.01(b).

 

“Fundamental Change Purchase Date” has the meaning specified in
Section 3.01(a).

 

“Fundamental Change Purchase Notice” has the meaning specified
in Section 3.01(a)(i).

 

“Fundamental Change Purchase Price” has the meaning specified
in Section 3.01(a).

 

“Global Note” means any Note that is a Registered Security in
global form.

 

“Indenture” means the Original Indenture, as originally
executed and as supplemented from time to time by one or more indentures
supplemental thereto, including this Supplemental Indenture, entered into
pursuant to the applicable provisions of the Indenture, 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 the Original
Indenture, this Supplemental Indenture and any other such supplemental
indenture, respectively, subject to Section 9.12.

 

“Initial Dividend Threshold” has the meaning specified in Section 4.04(d).

 

“Initial Notes” has the meaning specified in Section 2.01.

 

“Interest Payment Date” means, with respect to the payment of
interest on the Notes, each January 15 and July 15 of each year.

 

“Last
Reported Sale Price” of the Common Stock on any date means the
closing sale price per share (or if no closing sale price is reported, the
average of the bid and ask prices or, if more than one in either case, the
average of the average bid and the average ask prices) on that date as reported
in composite transactions for the principal U.S. securities exchange on which
the Common Stock is traded.  If the
Common Stock is not listed for trading on a U.S. national or regional
securities exchange on the relevant date, the “Last
Reported Sale Price” shall be the last quoted bid price for the
Common Stock in the over-the-counter market on the relevant date as reported by
Pink OTC Markets Inc. or a similar organization.  If the Common Stock is not so quoted, the “Last Reported Sale Price” shall be the average of the
mid-point of the last bid and ask prices for the Common Stock on the relevant
date from each of at least three nationally recognized independent investment
banking firms selected by the Company for this purpose.

 

“Make-Whole Fundamental Change” means any transaction or event
that constitutes a Fundamental Change as defined in clause (a), (b) or (d) of
such definition (and determined after giving effect to any exceptions or
exclusions to such definition, including without limitation the

 

6

 

first
full paragraph immediately following clause (d) of the definition thereof,
but without regard to the proviso
in clause (b) of the definition thereof).

 

“Market Disruption Event” means (i) for purposes of
determining amounts due upon conversion pursuant to Section 4.03, (x) a
failure by the primary United States national or regional securities exchange
or market on which the Common Stock is listed or admitted to trading to open
for trading during its regular trading session or (y) the occurrence or
existence prior to 1:00 p.m., New York City time, on any Scheduled Trading
Day for the Common Stock for more than a one half-hour period in the aggregate
during regular trading hours of any suspension or limitation imposed on trading
(by reason of movements in price exceeding limits permitted by the relevant
stock exchange or otherwise) in the Common Stock or in any options, contracts
or future contracts relating to the Common Stock and (ii) for all other
purposes, if the Common Stock is listed for trading on The New York Stock
Exchange or listed on another U.S. national or regional securities exchange,
the occurrence or existence during the one-half hour period ending on the
scheduled close of trading on any Trading Day of any material suspension or
limitation imposed on trading (by reason of movements in price exceeding limits
permitted by the stock exchange or otherwise) in the Common Stock or in any
options, contracts or future contracts relating to the Common Stock.

 

“Measurement Period” has the meaning specified in Section 4.01(b)(ii).

 

“Merger
Common Stock” has the meaning specified in Section 4.07(c)(i).

 

“Merger Event”
has the meaning specified in Section 4.07(a).

 

“Merger
Valuation Percentage” has the meaning specified in Section 4.07(d)(i).

 

“Merger
Valuation Period” has the meaning specified in Section 4.07(d)(ii).

 

“Note” or “Notes”
has the meaning specified in the fourth paragraph of the recitals of this
Supplemental Indenture, and shall include any Additional Notes issued pursuant
to Section 2.01.

 

“open of business” means 9:00 a.m. (New York City time).

 

“Original Indenture” has the meaning specified in the first
paragraph of this Supplemental Indenture.

 

“Paying Agent” has the meaning set forth in the Original
Indenture, which shall initially be the Trustee, and shall be the Person
authorized by the Company to pay the principal amount of, interest on, or
Fundamental Change Purchase Price of, any Notes on behalf of the Company.

 

“Physical Notes” means certificated Notes that are not in
global form and are Registered Securities issued in denominations of $1,000
principal amount and multiples thereof.

 

“Physical
Settlement” has the meaning specified in Section 4.03(a).

 

“Place of Payment” means, for purposes of the Notes, New York,
New York.

 

7

 

“Publicly Traded Securities” means, in respect of a transaction
or transactions described in clause (a) or (b) of the definition of
Fundamental Change, shares of common stock that are listed or quoted on any of
The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ
Global Market (or any or their respective successors) or will be so listed or
quoted when issued or exchanged in connection with such transaction or
transactions.

 

“Record Date” has the meaning specified in Section 4.04(h).

 

“Regular Record Date” means, with respect to the payment of
interest on the Notes, the January 1 (whether or not a Business Day)
immediately preceding an Interest Payment Date on January 15 and the July 1
(whether or not a Business Day) immediately preceding an Interest Payment Date
on July 15.

 

“Reference Property” has the meaning specified in Section 4.07(a).

 

“Scheduled Trading Day” means a day that is scheduled to be a
Trading Day on the principal United States national securities exchange or
market on which the Common Stock is listed or admitted for trading.  If the Common Stock is not so listed or
admitted for trading, “Scheduled Trading Day”
means a Business Day.

 

“Settlement Amount” has the meaning specified in Section 4.03(a)(iv).

 

“Settlement Method”
means, with respect to any conversion of Notes, Physical Settlement, Cash
Settlement or Combination Settlement, as elected (or deemed to have been
elected) by the Company.

 

“Settlement Notice”
has the meaning specified in Section 4.03(a)(iii).

 

“Specified Dollar Amount”
means the amount of cash per $1,000 principal amount of converted Note
specified in the Settlement Notice related to such converted Note.

 

“Spin-Off” has the meaning specified in Section 4.04(c).

 

“Stated Maturity” means, with respect to any Note and the
payment of the principal amount thereof, July 15, 2014.

 

“Stock Price”
has the meaning specified in Section 4.06(c).

 

“Subsidiary”
means, with respect to any Person, any corporation, association, partnership or
other business entity of which more than 50% of the total voting power of
shares of Capital Stock or other interests (including partnership interests)
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers, general partners or trustees thereof is at the
time owned or controlled, directly or indirectly, by (i) such Person; (ii) such
Person and one or more Subsidiaries of such Person; or (iii) one or more
Subsidiaries of such Person.

 

“Successor
Company” has the meaning specified in Section 8.01(a).

 

8

 

“Supplemental
Indenture” has the meaning specified in the first paragraph hereof.

 

“Trading Day”
means a day on which (i) trading in the Common Stock generally occurs on
The New York Stock Exchange or, if the Common Stock is not then listed on The
New York Stock Exchange, on the principal other United States national or
regional securities exchange on which the Common Stock is then listed or, if
the Common Stock is not then listed on a United States national or regional
securities exchange, on the principal other market on which the Common Stock is
then traded and (ii) there is no Market Disruption Event (as defined in
clause (ii) of the definition thereof); provided
that if the Common Stock (or other security for which a closing sale price must
be determined) is not so listed or traded, “Trading Day”
means a Business Day; and provided, further, that for purposes of determining amounts due upon
conversion pursuant to Section 4.03 only, “Trading Day”
means a day on which (x) there is no Market Disruption Event (as defined
in clause (i) of the definition thereof) and (y) trading in the
Common Stock generally occurs on The New York Stock Exchange or, if the Common
Stock is not then listed on The New York Stock Exchange, on the principal other
United States national or regional securities exchange on which the Common
Stock is then listed or, if the Common Stock is not then listed on a United
States national or regional securities exchange, on the principal other market
on which the Common Stock is then traded, except that if the Common Stock (or
other security for which a Daily VWAP must be determined) is not so listed or
traded, “Trading Day” means a Business Day.

 

“Trading Price” of the Notes on any date of determination means
the average of the secondary market bid quotations obtained by the Bid
Solicitation Agent for $5 million principal amount of the Notes at
approximately 3:30 p.m., New York City time, on such determination date from
three independent nationally recognized securities dealers selected by the
Company; provided that if three
bids cannot reasonably be obtained by the Bid Solicitation Agent but two such
bids are obtained, then the average of the two bids shall be used, and if only
one such bid can reasonably be obtained by the Bid Solicitation Agent, that one
bid shall be used.  If the Bid
Solicitation Agent cannot reasonably obtain at least one bid for $5 million
principal amount of the Notes from a nationally recognized securities dealer,
then the Trading Price per $1,000 principal amount of Notes shall be deemed to
be less than 98% of the product of the Last Reported Sale Price of the Common
Stock and the applicable Conversion Rate.

 

“Trading Price Condition” has the meaning specified in Section 4.01(b)(ii).

 

“Trigger Event” has the meaning specified in Section 4.04(c).

 

“Trustee”
has the meaning set forth in the first paragraph of this Supplemental
Indenture.

 

“Underwriters” means J.P. Morgan Securities Inc., Goldman, Sachs &
Co. and Merrill Lynch, Pierce, Fenner & Smith Incorporated.

 

“unit of
Reference Property” has the meaning specified in Section 4.07(a)

 

“U.S.” means the United States of America.

 

“Valuation Period” has the meaning specified in Section 4.04(c).

 

9

 

SECTION 1.03.              References
to Interest.  Any reference to
interest on, or in respect of, any Note in the Indenture shall be deemed to
include Additional Interest if, in such context, Additional Interest is, was or
would be payable pursuant to Section 5.02. Any express mention of the
payment of Additional Interest in any provision hereof shall not be construed
as excluding Additional Interest in those provisions hereof where such express
mention is not made.

 

ARTICLE 2

THE SECURITIES

 

SECTION 2.01.              Title and
Terms; Payments.  There is
hereby established a series of Securities designated the “3.25% Convertible
Senior Notes due 2014” initially limited in aggregate principal amount to
$170,000,000, which amount shall be as set forth in a Company Order for the
authentication and delivery of Notes pursuant to Section 303 of the
Original Indenture.

 

The principal amount of
Notes then Outstanding shall be payable at the Stated Maturity.  Interest on the Notes shall accrue at a rate
of 3.25% per annum, from July 21, 2009 or from the most recent date on
which interest has been paid or duly provided for, until the principal thereof
is paid or made available for payment. 
Interest shall be payable on each Interest Payment Date, beginning on January 15,
2010, to the Person in whose name a Note is registered on the Security Register
at the close of business on the Regular Record Date immediately preceding the
applicable Interest Payment Date.

 

The Company may, without the
consent of the Holders of the Notes, hereafter issue additional notes (“Additional Notes”) under the Indenture with
the same terms and with the same CUSIP numbers as the Notes issued on the date
of this Supplemental Indenture (the “Initial
Notes”) in an unlimited aggregate principal amount; provided that such Additional Notes must
be part of the same issue as the Initial Notes for federal income tax
purposes.  Any such Additional Notes
shall constitute a single series together with the Initial Notes for all purposes
hereunder, including, without limitation, for purposes of any waivers,
supplements or amendments to the Indenture requiring the approval of Holders of
the Notes and any offers to purchase the Notes.

 

The Form of Note shall
be substantially as set forth in Exhibit A and the Form of Notice of
Conversion, the Form of Fundamental Change Purchase Notice and the Form of
Assignment and Transfer shall be substantially as set forth in Attachments 1, 2
and 3, respectively, to Exhibit A, each of which is incorporated into and
shall be deemed a part of this Supplemental Indenture, and in each case with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by the 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 as may, consistently herewith, be determined to be necessary or
appropriate by the Officers of the Company executing such Notes, as evidenced
by their execution of the Notes.

 

The Company shall pay the
principal of and interest on any Global Note in immediately available funds to
the Depositary or its nominee, as the case may be, as the registered Holder of
such Global Note.  The Company shall pay
the principal of and interest on any Physical Notes at

 

10

 

the
office or agency designated by the Company for that purpose, unless a Holder
timely requests to have such amounts paid by wire transfer in accordance with
the final three sentences of this paragraph, in which case the Company shall
instead pay such principal of and interest on any Physical Notes by wire
transfer in accordance with the transfer instructions provided in such
request.  The Company has initially
designated the Trustee as its Paying Agent and Security Registrar in respect of
the Notes and its agency in New York, New York as a place where Notes may be
presented for payment or for registration of transfer.  The Company may, however, change the Paying
Agent or Security Registrar for the Notes without prior notice to the Holders
thereof, and the Company may act as Paying Agent or Security Registrar for the
Notes.  Payments on any Physical Notes
having a principal amount of at least $10,000,000 shall be payable, if the
Holder of such Physical Notes so requests in accordance with the two
immediately succeeding sentences, by wire transfer of immediately available
funds to an account specified by the Holder at a bank in New York City, New
York. To request payment by wire transfer, the Holder must give appropriate
transfer instructions to the Trustee or other Paying Agent (if not the Trustee)
at least 15 Business Days before the requested wire payment is due and, in the
case of any interest payments, the instructions must be given by the Person who
is shown on the Trustee’s records as the Holder of the Physical Note on the
applicable Regular Record Date. All applications for payment by wire transfer
shall remain in effect unless and until new instructions are given in the
manner described in the immediately preceding sentence.

 

SECTION 2.02.              Book-Entry
Provisions for Global Notes.  (a) The
Notes initially shall be issued in the form of one or more Global Notes without
interest coupons (i) registered in the name of Cede & Co., as
nominee of the Depositary and (ii) delivered to the Trustee as custodian
for the Depositary.

 

Members of, or participants
in, the Depositary (“Agent Members”)
shall have no rights under this Supplemental Indenture or the Original
Indenture with respect to any Global Note held on their behalf by the
Depositary, or the Trustee as its custodian, or under the Global Note, and Cede &
Co., or such other Person designated by the Depositary as its nominee, may be
treated by the Company, the Trustee and any agent of the Company or the Trustee
as the absolute owner of the Global Note for all purposes whatsoever.  Notwithstanding the foregoing, 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 the Depositary or impair, as between the Depositary
and its Agent Members, the operation of customary practices governing the exercise
of the rights of any Holder.

 

(b)           Transfers of Global Notes shall be
limited to transfers in whole, but not in part, to the Depositary, its
successors or their respective nominees. 
Notwithstanding anything to the contrary in Section 305 of the
Original Indenture, interests of beneficial owners in a Global Note may be
transferred or exchanged, in whole or in part, for Physical Notes, only if: (i) the
Depositary notifies the Company at any time that the Depositary is unwilling or
unable to continue as Depositary for the Global Notes and a successor
Depositary is not appointed within 60 days; (ii) the Depositary ceases to
be registered as a clearing agency under the Exchange Act and a successor
Depositary is not appointed within 60 days; or (iii) an Event of Default
with respect to the Notes has occurred and is continuing and such beneficial
owner requests that its Notes be issued as Physical Notes, in each case in
accordance with the rules and procedures of

 

11

 

the Depositary.  Other than as set forth in this Section 2.02(b),
the Notes shall remain in global form as Global Notes.

 

(c)           In connection with any transfer or
exchange of a portion of the beneficial interest in the Global Note to
beneficial owners pursuant to Section 305 of the Original Indenture, as
modified by this Section 2.02, the Security Registrar shall (if one or
more Physical Notes are to be issued) reflect on its books and records the date
and a decrease in the principal amount of the Global Note in an amount equal to
the principal amount of the beneficial interest in the Global Note to be
transferred, and the Company shall execute, and the Trustee shall authenticate
and deliver, one or more Physical Notes of like tenor and amount in accordance
with Section 305 of the Original Indenture, as modified by this Section 2.02.

 

(d)           In connection with the transfer of
the entire Global Note to beneficial owners pursuant to Section 305 of the
Original Indenture, as modified by this Section 2.02, the Global Note
shall be deemed to be surrendered to the Trustee for cancellation, and the
Company shall execute, and the Trustee shall authenticate and deliver, to each
beneficial owner identified by the Depositary in exchange for its beneficial
interest in the Global Note, an equal aggregate principal amount of Physical
Notes of authorized denominations and the same tenor.

 

(e)           The Holder of Global Notes may grant
proxies and otherwise authorize any Person, including Agent Members and Persons
that may hold interests through Agent Members, to take any action that a Holder
is entitled to take under this Supplemental Indenture, Original Indenture or
the Notes.

 

SECTION 2.03.              Reporting
Requirement.  For purposes of Section 703
of the Original Indenture, documents filed by the Company with the Commission
via the Commission’s EDGAR system shall be deemed to be filed with the Trustee
as of the time such documents are filed via the Commission’s EDGAR system.

 

SECTION 2.04.              Repurchase
and Cancellation.   To the extent permitted by law, the Company
may repurchase Notes in open-market purchases or negotiated transactions
without giving prior notice to Holders. 
The Company shall surrender any Notes repurchased by the Company to the
Trustee for cancellation in accordance with Section 310 of the Original
Indenture and any such Notes repurchased by the Company shall be deemed to be
no longer Outstanding.  Any Notes
surrendered for cancellation by the Company shall not be reissued or resold.

 

ARTICLE 3

FUNDAMENTAL CHANGES AND PURCHASES THEREUPON

 

SECTION 3.01.              Purchase at
Option of Holders Upon a Fundamental Change.  (a) If a Fundamental Change occurs at
any time prior to the Stated Maturity, then each Holder of Notes shall have the
right, at such Holder’s option, to require the Company to purchase for cash any
or all of such Holder’s Notes, or any portion of the principal amount thereof,
that is equal to $1,000 or an integral multiple of $1,000, on a date (the “Fundamental Change Purchase Date”) specified by the Company
that is not less than 20 calendar days or more than 35 calendar days following
the date of the Fundamental Change Company Notice, at a purchase price equal to

 

12

 

100% of the principal amount thereof, plus accrued and unpaid interest
thereon, if any, to, but excluding, the Fundamental Change Purchase Date (the “Fundamental Change Purchase Price”), unless the Fundamental
Change Purchase Date is after a Regular Record Date and on or prior to the
Interest Payment Date to which such Regular Record Date relates, in which case
the Company shall instead pay the full amount of accrued and unpaid interest on
the Interest Payment Date to the Holders of record as of the preceding Regular
Record Date, and the Fundamental Change Purchase Price shall be equal to 100%
of the principal amount of the Notes to be purchased pursuant to this Article 3.

 

Purchases of Notes under
this Section 3.01 shall be made, at the option of the Holder thereof,
upon:

 

(i)            delivery to the Paying Agent by a
Holder of a duly completed notice (the “Fundamental Change
Purchase Notice”) in the form set forth in Attachment 2 to the Form of
Note attached hereto as Exhibit A, if the Notes are Physical Notes, or in
compliance with the Depositary’s procedures for tendering interests in Global
Notes, if the Notes are not Physical Notes, in each case on or before the close
of business on the Business Day immediately preceding the Fundamental Change
Purchase Date (the “Fundamental Change
Expiration Time”); and

 

(ii)           delivery of the Notes, in the case of
Physical Notes, to the Paying Agent appointed by the Company (together with all
necessary endorsements for transfer), or book-entry transfer of the Notes, in
compliance with the procedures of the Depositary, such delivery or transfer
being a condition to receipt by the Holder of the Fundamental Change Purchase
Price therefor.

 

The Fundamental Change
Purchase Notice in respect of any Notes to be purchased shall state:

 

(i)            if such Notes are Physical Notes,
the certificate numbers of such Notes;

 

(ii)           the portion of the principal amount
of such Notes, which must be $1,000 or an integral multiple thereof; and

 

(iii)          that such Notes are to be purchased by
the Company pursuant to the applicable provisions of the Notes and this Supplemental
Indenture;

 

provided,  however,
that if such Notes are Global Notes, the Fundamental Change Purchase Notice
must also comply with appropriate procedures of the Depositary.

 

Notwithstanding anything
herein to the contrary, any Holder delivering to the Paying Agent the
Fundamental Change Purchase Notice contemplated by this Section 3.01 shall
have the right to withdraw, in whole or in part, such Fundamental Change
Purchase Notice at any time prior to the close of business on the Business Day
immediately preceding the Fundamental Change Purchase Date by delivery of a
written notice of withdrawal to the Paying Agent in accordance with Section 3.03.

 

13

 

The Paying Agent shall
promptly notify the Company of the receipt by it of any Fundamental Change
Purchase Notice or written notice of withdrawal thereof.

 

(b)           On or before the 20th calendar day
after the occurrence of a Fundamental Change, the Company shall provide to all
Holders of the Notes, the Trustee and the Paying Agent (in the case of any
Paying Agent other than the Trustee) a notice (the “Fundamental Change Company Notice”) of the occurrence of such
Fundamental Change and of the purchase right at the option of the Holders
arising as a result thereof.  Such notice
shall be sent by first class mail or, in the case of any Global Notes, in
accordance with the procedures of the Depositary for providing notices.  Simultaneously with providing such Fundamental
Change Company Notice, the Company shall publish a notice containing the
information included therein in a newspaper of general circulation in The City
of New York or publish such information on the Company’s website or through
such other public medium as the Company may use at such time.

 

Each Fundamental Change
Company Notice shall specify:

 

(i)            the events causing a Fundamental
Change;

 

(ii)           the date of the Fundamental Change;

 

(iii)          the last date on which a Holder of
Notes may exercise the purchase right pursuant to this Article 3;

 

(iv)          the Fundamental Change Purchase Price;

 

(v)           the Fundamental Change Purchase Date;

 

(vi)          the name and address of the Paying
Agent and the Conversion Agent, if applicable;

 

(vii)         if applicable, the applicable Conversion
Rate and any adjustments to the applicable Conversion Rate;

 

(viii)        if applicable, that the Notes with
respect to which a Fundamental Change Purchase Notice has been delivered by a
Holder may be converted only if the Holder withdraws the Fundamental Change
Purchase Notice in accordance with this Supplemental Indenture; and

 

(ix)           the procedures that Holders must
follow to require the Company to purchase their Notes.

 

No failure of the Company to
give the foregoing notices and no defect therein shall limit the purchase
rights of the Holders of Notes or affect the validity of the proceedings for
the purchase of the Notes pursuant to this Section 3.01.

 

(c)           Notwithstanding the foregoing, there
shall be no purchase of any Notes pursuant to this Section 3.01 if the
principal amount of the Notes has been accelerated, and such acceleration has
not been rescinded, on or prior to the Fundamental Change Purchase Date 

 

14

 

(except in the case of an
acceleration resulting from a Default by the Company in the payment of the
Fundamental Change Purchase Price with respect to such Notes).  The Paying Agent will promptly return to the
respective Holders thereof any Physical Notes held by it during the
acceleration of the Notes (except in the case of an acceleration resulting from
a Default by the Company in the payment of the Fundamental Change Purchase
Price with respect to such Notes) and shall deem to be cancelled any
instructions for book-entry transfer of the Notes in compliance with the
procedures of the Depositary, in which case, upon such return or cancellation,
as the case may be, the Fundamental Change Purchase Notice with respect thereto
shall be deemed to have been withdrawn.

 

SECTION 3.02.              Effect of
Fundamental Change Purchase Notice. 
Upon receipt by the Paying Agent of a Fundamental Change Purchase Notice
specified in Section 3.01, the Holder of the Note in respect of which such
Fundamental Change Purchase Notice was given shall (unless such Fundamental
Change Purchase Notice is withdrawn in accordance with Section 3.03)
thereafter be entitled to receive solely the Fundamental Change Purchase Price
in cash with respect to such Note.  Such
Fundamental Change Purchase Price shall be paid to such Holder, subject to
receipt of funds by the Paying Agent, on the later of (x) the Fundamental
Change Purchase Date with respect to such Note (provided the conditions in Section 3.01
have been satisfied) and (y) the time of delivery or book-entry transfer
of such Note to the Paying Agent by the Holder thereof in the manner required
by Section 3.01.

 

SECTION 3.03.              Withdrawal
of Fundamental Change Purchase Notice.  A Fundamental Change Purchase Notice may be
withdrawn (in whole or in part) by means of a written notice of withdrawal
delivered to the Paying Agent in accordance with the Fundamental Change Company
Notice at any time prior to the close of business on the Business Day
immediately preceding the Fundamental Change Purchase Date, specifying:

 

(i)            the principal amount of the Notes
with respect to which such notice of withdrawal is being submitted;

 

(ii)           if Physical Notes have been issued,
the certificate numbers of the withdrawn Notes; and

 

(iii)          the principal amount, if any, of such
Notes that remains subject to the original Fundamental Change Purchase Notice,
which portion must be in principal amounts of $1,000 or an integral multiple of
$1,000;

 

provided,  however,
that if Physical Notes have not been issued, the notice must comply with
appropriate procedures of the Depositary.

 

The Paying Agent will
promptly return to the respective Holders thereof any Physical Notes with
respect to which a Fundamental Change Purchase Notice has been withdrawn in
compliance with the provisions of this Section 3.03.

 

SECTION 3.04.              Deposit of
Fundamental Change Purchase Price. 
Prior to 11:00 a.m. (local time in The City of New York) on the
Fundamental Change Purchase Date, the Company shall deposit with the Paying
Agent (or, if the Company or a Subsidiary or an Affiliate of either of them is
acting as the Paying Agent, shall segregate and hold in trust as provided
herein) an 

 

15

 

amount of money (in immediately available funds if deposited on such
Business Day) sufficient to pay the Fundamental Change Purchase Price of all
the Notes or portions thereof that are to be purchased as of the Fundamental
Change Purchase Date.  If the Paying
Agent holds cash sufficient to pay the Fundamental Change Purchase Price of the
Notes for which a Fundamental Change Purchase Notice has been tendered and not
withdrawn in accordance with this Supplemental Indenture on the Fundamental
Change Purchase Date, then as of such Fundamental Change Purchase Date, (a) such
Notes will cease to be Outstanding and interest will cease to accrue thereon
(whether or not book-entry transfer of such Notes is made or such Notes have
been delivered to the Paying Agent) and (b) all other rights of the
Holders in respect thereof will terminate (other than the right to receive the
Fundamental Change Purchase Price upon delivery or book-entry transfer of such
Notes).

 

SECTION 3.05.              Notes
Purchased in Whole or in Part. 
Any Note that is to be purchased, whether in whole or in part, shall be
surrendered at the office of the Paying Agent (with, if the Company or the
Trustee so requires in the case of Physical Notes, 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 such Holder’s attorney duly
authorized in writing) and the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Note, without service charge, a
new Note or Notes, of any authorized denomination as requested by such Holder
in aggregate principal amount equal to, and in exchange for, the portion of the
principal amount of the Note so surrendered that is not purchased.

 

SECTION 3.06.              Covenant to
Comply With Applicable Laws Upon Purchase of Notes.  In connection with any offer to purchase
Notes under Section 3.01, the Company shall, in each case if required, (i) comply
with Rule 13e-4, Rule 14e-1 and any other tender offer rules under
the Exchange Act that may then be applicable, (ii) file a Schedule TO or
any other required schedule under the Exchange Act and (iii) otherwise
comply with all federal and state securities laws, in each case, so as to
permit the rights and obligations under Section 3.01 to be exercised in
the time and in the manner specified in Section 3.01.

 

SECTION 3.07.              Repayment to
the Company.  To the extent
that the aggregate amount of cash deposited by the Company pursuant to Section 3.04
exceeds the aggregate Fundamental Change Purchase Price of the Notes or
portions thereof that the Company is obligated to purchase as of the
Fundamental Change Purchase Date, then, following the Fundamental Change
Purchase Date, the Paying Agent shall promptly return any such excess to the
Company.

 

ARTICLE 4

CONVERSION

 

SECTION 4.01.              Right
to Convert.

 

(a)           Subject to and upon compliance with
the provisions of this Article 4, each Holder of Notes shall have the
right, at such Holder’s option, to convert the principal amount of any such
Notes, or any portion of such principal amount equal to $1,000 or an integral
multiple thereof, at the Conversion Rate then in effect (subject to the
settlement provisions set forth in Section 4.03, the “Conversion
Obligation”) (x) prior to the close of business on the Business
Day immediately preceding April 15, 2014, only upon satisfaction of one or
more of the 

 

16

 

conditions described in Section 4.01(b) and
(y) on or after April 15, 2014, at any time prior to the close of
business on the Business Day immediately preceding the Stated Maturity
irrespective of the conditions described in Section 4.01(b).

 

(b)           (i) The Notes may be surrendered
for conversion during any calendar quarter commencing after September 30,
2009 (and only during such calendar quarter), if the Last Reported Sale Price
of the Common Stock for at least 20 Trading Days (whether or not consecutive)
during the period of 30 consecutive Trading Days ending on the last Trading Day
of the immediately preceding calendar quarter is greater than or equal to 130%
of the applicable Conversion Price on each applicable Trading Day.  The Conversion Agent, on behalf of the
Company, shall determine at the beginning of each calendar quarter commencing
after September 30, 2009 whether the Notes may be surrendered for
conversion in accordance with this clause (i) and shall notify the Company
and the Trustee (in the case of a Conversion Agent other than the Trustee) if
the Notes become convertible in accordance with this clause (i).

 

(ii)           The Notes may be surrendered for
conversion during the five Business Day period after any five consecutive
Trading Day period (the “Measurement Period”)
in which the Trading Price per $1,000 principal amount of Notes, as determined
following a request by a Holder of the Notes in accordance with the procedures
set forth in this clause (ii), for each Trading Day of such Measurement Period
was less than 98% of the product of the Last Reported Sale Price of the Common
Stock on such Trading Day and the applicable Conversion Rate (the “Trading Price Condition”). 
The Trading Prices shall be determined by the Bid Solicitation Agent
pursuant to this clause (ii) and the definition of Trading Price set forth
in Section 1.02.  The Company shall
provide written notice to the Bid Solicitation Agent (if other than the
Company) of the three independent nationally recognized securities dealers
selected by the Company in accordance with the definition of Trading Price,
along with appropriate contact information for each.  The Bid Solicitation Agent (if other than the
Company) shall have no obligation to determine the Trading Price of the Notes
in accordance with this clause (ii) unless requested by the Company, and
the Company shall have no obligation to make such request unless a Holder
provides the Company with reasonable evidence that the Trading Price per $1,000
principal amount of the Notes would be less than 98% of the product of the Last
Reported Sale Price of the Common Stock and the applicable Conversion Rate, at
which time the Company shall instruct the Bid Solicitation Agent to determine
(or, if the Company is then acting as Bid Solicitation Agent, the Company shall
determine) the Trading Price of the Notes beginning on the next Trading Day
following the receipt of such evidence and on each successive Trading Day until
the Trading Price per $1,000 principal amount of Notes is greater than or equal
to 98% of the product of the Last Reported Sale Price of the Common Stock and
the applicable Conversion Rate.  If the
Company does not so instruct the Bid Solicitation Agent to obtain (or, if the
Company is then acting as Bid Solicitation Agent, the Company does not obtain)
bids when required, then the Trading Price per $1,000 principal amount of Notes
shall be deemed to be less than 98% of the product of the Last Reported Sale
Price of the Common Stock and the applicable Conversion Rate on each day the
Company fails to do so.  If the Trading
Price Condition has been met, the Company shall so notify the Holders, the
Trustee and the Conversion Agent (if other than the Trustee).  If, at any 

 

17

 

time after the Trading Price condition set forth above
has been met, the Trading Price per $1,000 principal amount of Notes is greater
than or equal to 98% of the product of the Last Reported Sale Price of the
Common Stock on such Trading Day and the applicable Conversion Rate, the
Company shall so notify the Holders of the Notes, the Trustee and the
Conversion Agent.

 

(iii)          If the Company elects to:

 

(A)          issue to all or substantially all
holders of its Common Stock rights, options or warrants entitling them, for a
period of not more than 45 calendar days after the announcement date of such
issuance to subscribe for or purchase shares of its Common Stock, at a price
per share less than the average of the Last Reported Sale Prices of the Common
Stock for the 10 consecutive Trading Day period ending on the Trading Day
immediately preceding the date of announcement of such issuance; or

 

(B)           distribute to all or substantially
all holders of its Common Stock the Company’s assets, debt securities or rights
to purchase securities of the Company, which distribution has a per share
value, as reasonably determined by the Board of Directors, exceeding 10% of the
Last Reported Sale Price of the Common Stock on the Trading Day preceding the
date of announcement for such distribution,

 

then, in each case, the Company shall notify the Holders of the Notes
at least 35 Scheduled Trading Days prior to the Ex-Dividend Date for such
issuance or distribution.  Once the
Company has given such notice, Holders may surrender Notes for conversion at
any time until the earlier of (x) the close of business on the Business
Day immediately preceding such Ex-Dividend Date and (y) the Company’s
announcement that such issuance or distribution will not take place, even if the
Notes are not otherwise convertible at such time.

 

(iv)          If a transaction or event that
constitutes a Fundamental Change or a Make-Whole Fundamental Change occurs,
regardless of whether a Holder has the right to require the Company to purchase
the Notes pursuant to Article 3, or if the Company is a party to a
consolidation, merger, binding share exchange, sale, conveyance, transfer or
lease of all or substantially all of its assets, pursuant to which the Common
Stock would be converted into cash, securities or other assets, the Notes may
be surrendered for conversion at any time from or after the date which is 35
Scheduled Trading Days prior to the anticipated effective date of the
transaction (or, if later, the Business Day after the Company gives notice of
such transaction) until 35 Trading Days after the actual effective date of such
transaction or, if such transaction also constitutes a Fundamental Change,
until the related Fundamental Change Purchase Date.  The Company shall notify Holders and the Trustee
(i) as promptly as practicable following the date the Company publicly
announces such transaction but in no event less than 35 Scheduled Trading Days
prior to the anticipated effective date of such transaction or (ii) if the
Company does not have knowledge of such transaction at least 35 Scheduled
Trading Days prior to the anticipated effective date of such transaction, 

 

18

 

within one Business Day of the date upon which the
Company receives notice, or otherwise becomes aware, of such transaction but in
no event later than the actual effective date of such transaction.

 

SECTION 4.02.              Conversion
Procedures.  (a)  Each
Note shall be convertible at the office of the Conversion Agent and, if
applicable, in accordance with the procedures of the Depositary.

 

(b)           In order to exercise the conversion
privilege with respect to a beneficial interest in a Global Note, the Holder
must complete the appropriate instruction form for conversion pursuant to the
Depositary’s book-entry conversion program, furnish appropriate endorsements
and transfer documents if required by the Company or the Conversion Agent, and
pay the funds, if any, required by Section 4.03(d) and any taxes or
duties if required pursuant to Section 4.08, and the Conversion Agent must
be informed of the conversion in accordance with the customary practice of the
Depositary.  In order to exercise the
conversion privilege with respect to any Physical Notes, the Holder of any such
Notes to be converted, in whole or in part, shall:

 

(i)            complete and manually sign a
conversion notice in the form set forth in the Form of Notice of
Conversion (the “Conversion Notice”)
or a facsimile of the Conversion Notice;

 

(ii)           deliver the Conversion Notice, which
is irrevocable, and the Note to the Conversion Agent;

 

(iii)          if required, furnish appropriate
endorsements and transfer documents,

 

(iv)          if required, make any payment required
under Section 4.03(d); and

 

(v)           if required, pay all transfer or
similar taxes as set forth in Section 4.08.

 

The date on which the Holder
satisfies all of the applicable requirements set forth above shall be the “Conversion Date” with respect to such Notes
surrendered for conversion.  The
Conversion Agent will, as promptly as possible, and in any event within one
Business Day of the receipt thereof, provide the Company with notice of any
conversion by a Holder of the Notes.

 

(c)           Each Conversion Notice shall state
the name or names (with address or addresses) in which any certificate or
certificates for shares of Common Stock which shall be issuable on such
conversion shall be issued.  All such
Notes surrendered for conversion shall, unless the shares of Common Stock
issuable on conversion are to be issued in the same name as the registration of
such Notes, be duly endorsed by, or be accompanied by instruments of transfer
in form satisfactory to the Company duly executed by, the Holder or its duly
authorized attorney.

 

(d)           In case any Notes of a denomination
greater than $1,000 shall be surrendered for partial conversion, the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
the Notes so surrendered, without charge, new Notes in authorized denominations
in an aggregate principal amount equal to the unconverted portion of the
surrendered Notes.

 

19

 

Each conversion shall be
deemed to have been effected as to any such Notes (or portion thereof)
surrendered for conversion on the relevant Conversion Date; provided, however,
that the Person in whose name the certificate for any shares of Common Stock
delivered upon conversion is registered shall be treated as a stockholder of
record as of the close of business on the relevant Conversion Date (if the
Company elects to satisfy the related Conversion Obligation by Physical
Settlement) or the last Trading Day of the related Cash Settlement Averaging
Period (if the Company elects to satisfy the related Conversion Obligation by
Combination Settlement), as the case may be. 
Upon the Conversion Date of Notes surrendered for conversion, such
Person shall no longer be a Holder with respect to such Notes.

 

(e)           Upon the conversion of a beneficial
interest in Global Notes, the Conversion Agent shall make a notation on such
Global Notes as to the reduction in the principal amount represented
thereby.  The Company shall notify the
Trustee in writing of any conversions of Notes effected through any Conversion
Agent other than the Trustee.

 

(f)            Notwithstanding the foregoing, a
Note in respect of which a Holder has delivered a Fundamental Change Purchase
Notice exercising such Holder’s option to require the Company to purchase such
Note may be converted only if such Fundamental Change Purchase Notice is
withdrawn in accordance with Article 3 prior to the close of business on
the Business Day prior to the relevant Fundamental Change Purchase Date.

 

SECTION 4.03.              Settlement
Upon Conversion.  (a) Subject
to this Section 4.03 and Section 4.06(b), upon conversion of any
Note, the Company shall pay or deliver, as the case may be, to converting
Holders, in respect of each $1,000 principal amount of Notes being converted,
either cash (“Cash Settlement”), shares of
Common Stock, together with cash, if applicable, in lieu of any fractional
share of Common Stock in accordance with clause (e) of this Section 4.03
(“Physical Settlement”) or a combination
of cash and shares of Common Stock, together with cash, if applicable, in lieu
of any fractional share of Common Stock in accordance with clause (e) of
this Section 4.03 (“Combination Settlement”),
at its election, as set forth in this Section 4.03.

 

(i)            All conversions occurring on or
after April 15, 2014 shall be settled using the same Settlement Method.

 

(ii)           Prior to April 15, 2014, the
Company shall use the same Settlement Method for all conversions occurring on
any given Conversion Date.  Except for
any conversion with a Conversion Date that occurs on or after April 15,
2014, the Company shall not have any obligation to use the same Settlement
Method with respect to conversions with Conversion Dates that occur on
different Trading Days.

 

(iii)          If, in respect of any Conversion Date
(or the period beginning on, but excluding, April 15, 2014 and ending on,
and including, the Business Day immediately preceding the Stated Maturity, as
the case may be), the Company elects to deliver a notice (a “Settlement Notice”) of the relevant Settlement Method in
respect of such Conversion Date (or such period, as the case may be), the
Company, through the Trustee, shall deliver such Settlement Notice to
converting Holders no later than the second Trading Day immediately following
the relevant Conversion Date (or, in the case of any conversions occurring on
or after April 15, 2014, no later than April 15, 2014).  

 

20

 

If the Company does not elect a Settlement Method
prior to the deadline set forth in the immediately preceding sentence, the
Company shall no longer have the right to elect Cash Settlement or Physical
Settlement and the Company shall be deemed to have elected Combination
Settlement in respect of its Conversion Obligation, and the Specified Dollar
Amount shall be equal to $1,000.  Such
Settlement Notice shall specify the relevant Settlement Method and in the case
of an election of Combination Settlement, the relevant Settlement Notice shall
indicate the Specified Dollar Amount. If the Company delivers a Settlement
Notice electing Combination Settlement in respect of its Conversion Obligation
but does not indicate a Specified Dollar Amount in such Settlement Notice, the
Specified Dollar Amount shall be deemed to be equal to $1,000.

 

(iv)          The cash, shares of Common Stock or
combination of cash and shares of Common Stock in respect of any conversion of
Notes (the “Settlement Amount”) shall be
computed as follows:

 

(A)          if the Company elects to satisfy its
Conversion Obligation in respect of such conversion by Physical Settlement, the
Company shall deliver to the converting Holder a number of shares of Common
Stock equal to the product of (1) the aggregate principal amount of Notes
to be converted, divided by
$1,000, and (2) the
applicable Conversion Rate;

 

(B)           if the Company elects to satisfy its
Conversion Obligation in respect of such conversion by Cash Settlement, the
Company shall pay to the converting Holder in respect of each $1,000 principal
amount of Notes being converted cash in an amount equal to the sum of the Daily
Conversion Values for each of the 25 consecutive Trading Days during the
related Cash Settlement Averaging Period; and

 

(C)           if the Company elects to satisfy its
Conversion Obligation in respect of such conversion by Combination Settlement
(or is deemed to have so elected), the Company shall pay and deliver, as the
case may be, in respect of each $1,000 principal amount of Notes being
converted, an amount of cash and shares of Common Stock equal to the sum of the
Daily Settlement Amounts for each of the 25 consecutive Trading Days during the
related Cash Settlement Averaging Period.

 

(v)           The Company shall pay or deliver, as
the case may be, the consideration due in respect of its Conversion Obligation
no later than the third Business Day immediately following the relevant
Conversion Date, if the Company elects to satisfy its Conversion Obligation in
respect of such conversion by Physical Settlement, and no later than the third
Business Day immediately following the last Trading Day of the Cash Settlement
Averaging Period, in the case of an election to satisfy its Conversion
Obligation in respect of such conversion by any other Settlement Method.

 

(b)           The Daily Settlement Amounts (if
applicable) and the Daily Conversion Values (if applicable) shall be determined
by the Company promptly following the last day of the Cash 

 

21

 

Settlement Averaging
Period.  Promptly after such
determination of the Daily Settlement Amounts or the Daily Conversion Values,
as the case may be, and the amount of cash deliverable in lieu of any
fractional share, the Company shall notify the Trustee and the Conversion Agent
(if other than the Trustee) of the Daily Settlement Amounts or the Daily
Conversion Values, as the case may be, and the amount of cash deliverable in
lieu of fractional shares of Common Stock. 
The Trustee and the Conversion Agents (if other than the Trustee) shall
have no responsibility for any such determination.

 

(c)           Subject to Section 4.03(d), upon
conversion, Holders shall not receive any separate cash payment for accrued and
unpaid interest, if any.

 

(d)           Upon the conversion of any Notes, the
Holder of such Notes shall not be entitled to receive any separate cash payment
for accrued and unpaid interest, if any, except to the extent specified
below.  The Company’s delivery to the
Holder of cash, shares of Common Stock, or a combination of cash and shares of
Common Stock, together with any cash payment for any fractional share of Common
Stock, if applicable, into which a Note is convertible shall be deemed to
satisfy in full the Company’s obligation to pay the principal amount of the
Notes so converted and accrued and unpaid interest, if any, to, but not
including, the Conversion Date.  As a
result, accrued and unpaid interest, if any, to, but not including, the
Conversion Date shall be deemed to be paid in full rather than cancelled,
extinguished or forfeited.  Upon a
conversion of Notes into a combination of cash and shares of Common Stock,
accrued and unpaid interest shall be deemed to be paid first out of any cash
paid upon such conversion. 
Notwithstanding the foregoing, if Notes are converted after the close of
business on any Regular Record Date and prior to the open of business on the
immediately following Interest Payment Date, Holders of such Notes at the close
of business on such Regular Record Date shall receive the interest payable on
such Notes on the corresponding Interest Payment Date notwithstanding the
conversion.  Notes surrendered for
conversion during the period from the close of business on any Regular Record
Date to the open of business on the immediately following Interest Payment Date
must be accompanied by funds equal to the amount of interest payable on the
Notes so converted; provided that
no such payment need be made (i) for conversions following the Regular
Record Date immediately preceding the Stated Maturity, (ii) if the Company
has specified a Fundamental Change Purchase Date that is after a Regular Record
Date and on or prior to the Business Day immediately following the
corresponding Interest Payment Date, or (iii) to the extent of any
Defaulted Interest, if any Defaulted Interest exists at the time of conversion
with respect to such Note.

 

(e)           The Company shall not issue any
fractional share of Common Stock upon conversion of the Notes and shall instead
pay cash in lieu of any fractional share of Common Stock issuable upon
conversion based on the Daily VWAP of the Common Stock on the relevant
Conversion Date (in the case of Physical Settlement) or based on the Daily VWAP
on the last Trading Day of the relevant Cash Settlement Averaging Date (in the
case of Combination Settlement).  For
each Note surrendered for conversion, if the Company has elected Combination
Settlement, the full number of shares that shall be issued upon conversion
thereof shall be computed on the basis of the aggregate Daily Settlement
Amounts for the applicable Cash Settlement Averaging Period and any fractional
share remaining after such computation shall be paid in cash.  In addition, if more than one Note shall be
surrendered for conversion at one time by the same Holder, the number of full
shares that shall be issued upon conversion thereof shall 

 

22

 

be computed on the basis
of the aggregate principal amount of the Notes (or specified portions thereof)
so surrendered.

 

SECTION 4.04.              Adjustment
of Conversion Rate.  The
Conversion Rate shall be adjusted from time to time by the Company if any of
the following events occurs, except that the Company shall not make any
adjustment to the Conversion Rate if Holders of the Notes participate (other
than in the case of a share split or share combination), at the same time and
upon the same terms as holders of the Common Stock and solely as a result of
holding the Notes, in any of the transactions described in this Section 4.04,
without having to convert their Notes, as if such Holders held a number of
shares of Common Stock equal to the Conversion Rate in effect for such Notes
immediately prior to the Ex-Dividend Date for such event, multiplied
by the principal amount (expressed in thousands) of Notes held by
such Holder.

 

(a)           If the Company exclusively issues
shares of its Common Stock as a dividend or distribution on shares of its
Common Stock, or if the Company effects a share split or share combination, the
Conversion Rate shall be adjusted based on the following formula:

 

	
  CR1

  	
  =

  	
  CR0

  	
  x

  	
  
  OS1

  

  
	
  OS0

  

 

where,

 

	
  CR0

  	
  =

  	
  the Conversion Rate in
  effect immediately prior to the open of business on the Ex-Dividend Date of
  such dividend or distribution, or immediately prior to the open of business on
  the effective date of such share split or share combination, as applicable;

  
	
   

  	
   

  	
   

  
	
  CR1

  	
  =

  	
  the Conversion Rate in
  effect immediately after the open of business on such Ex-Dividend Date or
  such effective date;

  
	
   

  	
   

  	
   

  
	
  OS0

  	
  =

  	
  the number of shares of
  Common Stock outstanding immediately prior to the open of business on such
  Ex-Dividend Date or such effective date; and

  
	
   

  	
   

  	
   

  
	
  OS1

  	
  =

  	
  the number of shares of
  Common Stock outstanding immediately after giving effect to such dividend,
  distribution, share split or share combination.

  

 

Any adjustment made under
this Section 4.04(a) shall become effective immediately after the
open of business on the Ex-Dividend Date for such dividend or distribution, or
immediately after the open of business on the effective date for such share
split or share combination.  If any
dividend or distribution of the type described in this Section 4.04(a) is
declared but not so paid or made, or any share split or combination of the type
described in this Section 4.04(a) is announced but the outstanding
shares of Common Stock are not split or combined, as the case may be, the
Conversion Rate shall be immediately readjusted, effective as of the date the
Board of Directors determines not to pay such dividend or distribution, or not
to split or combine the outstanding shares of Common Stock, as the case may be,
to the Conversion Rate that would then be in effect if such dividend,
distribution, share split or share combination had not been declared or
announced.

 

23

(b)           If the Company issues to all or
substantially all holders of its Common Stock any rights, options or warrants
entitling them for a period of not more than 45 calendar days after the
announcement date of such issuance to subscribe for or purchase shares of the
Common Stock, at a price per share less than the average of the Last Reported
Sale Prices of the Common Stock for the 10 consecutive Trading Day period
ending on the Trading Day immediately preceding the date of announcement of
such issuance, the Conversion Rate shall be increased based on the following
formula:

 

	
  CR1

  	
  =

  	
  CR0

  	
  x

  	
  
  OS0 + X

  

  
	
  OS0 + Y

  

 

where,

 

	
  CR0

  	
  =

  	
  the Conversion Rate in
  effect immediately prior to the open of business on the Ex-Dividend Date for
  such issuance;

  
	
   

  	
   

  	
   

  
	
  CR1

  	
  =

  	
  the Conversion Rate in
  effect immediately after the open of business on such Ex-Dividend Date;

  
	
   

  	
   

  	
   

  
	
  OS0

  	
  =

  	
  the number of shares of
  Common Stock outstanding immediately prior to the open of business on such
  Ex-Dividend Date;

  
	
   

  	
   

  	
   

  
	
  X

  	
  =

  	
  the total number of shares
  of Common Stock issuable pursuant to such rights, options or warrants; and

  
	
   

  	
   

  	
   

  
	
  Y

  	
  =

  	
  the number of shares of
  Common Stock equal to the aggregate price payable to exercise such rights,
  options or warrants divided by
  the average of the Last Reported Sale Prices of the Common Stock over the 10
  consecutive Trading Day period ending on the Trading Day immediately
  preceding the date of announcement of the issuance of such rights, options or
  warrants.

  

 

Any increase made under this
Section 4.04(b) shall be made successively whenever any such rights,
options or warrants are issued and shall become effective immediately after the
open of business on the Ex-Dividend Date for such issuance.  To the extent that shares of the Common Stock
are not delivered after the expiration of such rights, options or warrants, the
Conversion Rate shall be decreased to the Conversion Rate that would then be in
effect had the increase with respect to the issuance of such rights, options or
warrants been made on the basis of delivery of only the number of shares of
Common Stock actually delivered.  If such
rights, options or warrants are not so issued, the Conversion Rate shall be
decreased to the Conversion Rate that would then be in effect if such Ex-Dividend
Date for such issuance had not occurred.

 

For
purposes of this Section 4.04(b), in determining whether any rights,
options or warrants entitle the holders to subscribe for or purchase shares of
the Common Stock at less than such average of the Last Reported Sale Prices of
the Common Stock for the 10 consecutive Trading Day period ending on the
Trading Day immediately preceding the date of announcement for such issuance,
and in determining the aggregate offering price of such shares of the Common
Stock, there shall be taken into account any consideration received by the
Company for such 

 

24

 

rights, options or warrants
and any amount payable on exercise or conversion thereof, the value of such
consideration, if other than cash, to be determined by the Board of Directors.

 

(c)           If the Company distributes shares of
its Capital Stock, evidences of its indebtedness, other assets or property of
its or rights, options or warrants to acquire its Capital Stock or other
securities, to all or substantially all holders of the Common Stock, excluding

 

(i)            dividends, distributions, rights,
options or warrants as to which an adjustment was effected pursuant to Section 4.04(a) or
Section 4.04(b);

 

(ii)           dividends or distributions paid
exclusively in cash; and

 

(iii)          Spin-Offs as to which the provisions
set forth below in this Section 4.04(c) shall apply;

 

(any of such shares of Capital Stock, evidences of
indebtedness, other assets or property or rights, options or warrants to
acquire Capital Stock or other securities of the Company, the “Distributed Property”), then the Conversion Rate shall be
increased based on the following formula:

 

	
  CR1

  	
  =

  	
  CR0

  	
  x

  	
  
  SP0

  

  
	
  SP0 - FMV

  

 

where,

 

	
  CR0

  	
  =

  	
  the Conversion Rate in
  effect immediately prior to the open of business on the Ex-Dividend Date for
  such distribution;

  
	
   

  	
   

  	
   

  
	
  CR1

  	
  =

  	
  the Conversion Rate in
  effect immediately after the open of business on such Ex-Dividend Date;

  
	
   

  	
   

  	
   

  
	
  SP0

  	
  =

  	
  the average of the Last
  Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day
  period ending on the Trading Day immediately preceding the Ex-Dividend Date
  for such distribution; and

  
	
   

  	
   

  	
   

  
	
  FMV

  	
  =

  	
  the fair market value (as
  determined by the Board of Directors) of the Distributed Property distributed
  with respect to each outstanding share of the Common Stock on the Ex-Dividend
  Date for such distribution.

  

 

If the Board of Directors
determines the “FMV” (as defined above) of any distribution for purposes of
this Section 4.04(c) by reference to the actual or when-issued
trading market for any securities, it shall in doing so consider the prices in
such market over the same period used in computing the Last Reported Sale
Prices of the Common Stock over the 10 consecutive Trading Day period ending on
the Trading Day immediately preceding the Ex-Dividend Date for such
distribution.  Notwithstanding the
foregoing, if “FMV” (as defined above) is equal to or greater than “SP0” (as defined above), in
lieu of the foregoing increase, each Holder of Notes shall receive, in respect
of each $1,000 principal amount thereof, at the same time and upon the same
terms as holders of the Common Stock receive the Distributed Property, the
amount and kind of the Distributed Property that such Holder would have
received as if such Holder owned a 

 

25

 

number of shares of Common
Stock equal to the Conversion Rate in effect on the Ex-Dividend Date for the
distribution.

 

Any increase made under the
above portion of Section 4.04(c) shall become effective immediately
after the open of business on the Ex-Dividend Date for such distribution.  If such distribution is not so paid or made,
the Conversion Rate shall be decreased to the Conversion Rate that would then
be in effect if such distribution had not been declared.

 

With respect to an adjustment pursuant to this Section 4.04(c) where there has been a payment of a
dividend or other distribution on the Common Stock of shares of Capital Stock
of any class or series, or similar equity interest, of or relating to a
Subsidiary or other business unit of the Company (a “Spin-Off”), the Conversion Rate shall be increased based on
the following formula:

 

	
  CR1

  	
  =

  	
  CR0

  	
  x

  	
  
  FMV0 + MP0

  

  
	
  MP0

  

 

where,

 

	
  CR0

  	
  =

  	
  the Conversion Rate in
  effect immediately prior to the end of the Valuation Period;

  
	
   

  	
   

  	
   

  
	
  CR1

  	
  =

  	
  the Conversion Rate in
  effect immediately after the end of the Valuation Period;

  
	
   

  	
   

  	
   

  
	
  FMV0

  	
  =

  	
  the average of the Last
  Reported Sale Prices of the Capital Stock or similar equity interest
  distributed to holders of Common Stock applicable to one share of Common
  Stock (determined for purposes of the definition of Last Reported Sale Price
  as if such Capital Stock or similar equity interest were the Common Stock)
  over the first 10 consecutive Trading Day period after, and including, the
  Ex-Dividend Date of the Spin-Off (the “Valuation
  Period”); and

  
	
   

  	
   

  	
   

  
	
  MP0

  	
  =

  	
  the average of the Last
  Reported Sale Prices of Common Stock over the Valuation Period.

  

 

The adjustment to the
Conversion Rate under the preceding paragraph shall occur on the last day of
the Valuation Period; provided that
in respect of any conversion during the Valuation Period references in the
portion of this Section 4.04(c) related to Spin-Offs to 10 Trading
Days shall be deemed replaced with such lesser number of Trading Days as have
elapsed between the Ex-Dividend Date of such Spin-Off and the Conversion Date
in determining the applicable Conversion Rate.

 

For the purposes of this Section 4.04(c) (and
subject in all respects to Section 4.12), rights, options or warrants
distributed by the Company to all holders of its Common Stock entitling them to
subscribe for or purchase shares of the Company’s Capital Stock (either
initially or under certain circumstances), which rights, options or warrants,
until the occurrence of a 

 

26

 

specified
event or events (a “Trigger Event”):  (1) are deemed to be transferred with
such shares of Common Stock; (2) are not exercisable; and (3) are
also issued in respect of future issuances of Common Stock, shall be deemed not to have been
distributed for purposes of this Section 4.04(c), (and no adjustment to the Conversion
Rate under this Section 4.04(c) will be required) until the occurrence of the earliest
Trigger Event, whereupon such rights, options or warrants shall be deemed to
have been distributed and an appropriate adjustment (if any is required) to the
Conversion Rate shall be made under this Section 4.04(c). 
If any such right, option or warrant, including any such existing
rights, options or warrants distributed prior to the date of this Supplemental
Indenture, are subject to events, upon the occurrence of which such rights,
options or warrants become exercisable to purchase different securities,
evidences of indebtedness or other assets, then the date of the occurrence of
any and each such event shall be deemed to be the date of distribution and
Ex-Dividend Date of such deemed distribution (in which case the original
rights, options or warrants shall be deemed to terminate and expire on such
date without exercise by any of the holders). 
In addition, in the event of any distribution or deemed distribution of
rights, options or warrants, or any Trigger Event or other event (of the type
described in the preceding sentence) with respect thereto that was counted for
purposes of calculating a distribution amount for which an adjustment to the
Conversion Rate under this Section 4.04(c) was made, (1) in the case of any
such rights, options or warrants which shall all have been redeemed or
purchased without exercise by any Holders thereof, upon such final redemption
or repurchase (x) the Conversion Rate shall be readjusted as if such
rights, options or warrants had not been issued and (y) the Conversion
Rate shall then again be readjusted to give effect to such distribution, deemed
distribution or Trigger Event, as the case may be, as though it were a cash
distribution, equal to the per share redemption or purchase price received by
holders of Common Stock with respect to such rights, options or warrants
(assuming each such holder had retained such rights, options or warrants), made
to all holders of Common Stock as of the date of such redemption or purchase,
and (2) in the case of such rights, options or warrants which shall have
expired or been terminated without exercise by any holders thereof, the
Conversion Rate shall be readjusted as if such rights and warrants had not been
issued.

 

For purposes of this Section 4.04(c) and
subsections (a) and (b) of this Section 4.04, any dividend or
distribution to which this Section 4.04(c) applies which also
includes one or both of:

 

(A)                              a dividend or distribution
of shares of Common Stock to which Section 4.04(a) applies (the “Clause A Distribution”);

 

(B)                                a dividend or distribution of rights,
options or warrants to which Section 4.04(b) applies (the “Clause B Distribution”),

 

then (1) such dividend
or distribution, other than the Clause A Distribution and the Clause B
Distribution, shall be deemed to be a dividend or distribution to which this Section 4.04(c) applies
(the “Clause C Distribution”) and
any Conversion Rate adjustment required by this Section 4.04(c) with
respect thereto shall then be made, and (2) the Clause A Distribution and
Clause B Distribution shall be deemed to immediately follow the Clause C
Distribution and any Conversion Rate adjustment required by Section 4.04(a) and
Section 4.04(b) with respect
thereto shall then be made, except that, if determined by the Company, (I) the
“Ex-Dividend Date” of the Clause A 

 

27

 

Distribution and the Clause
B Distribution shall be deemed to be the Ex-Dividend Date of the Clause C
Distribution and (II) any shares of Common Stock included in the Clause A Distribution or Clause B Distribution
shall be deemed not to be “outstanding immediately prior to the open of
business on such Ex-Dividend Date or such effective date” within the meaning of
Section 4.04(a) or “outstanding immediately prior to the open of
business on such Ex-Dividend Date” within the meaning of Section 4.04(b).

 

(d)           If any cash dividend or distribution
is made to all or substantially all holders of the Common Stock, other than a
regular, annual cash dividend that does not exceed $0.04 per share (the “Initial Dividend Threshold”), the Conversion Rate shall be
adjusted based on the following formula:

 

	
  CR1

  	
  =

  	
  CR0

  	
  x

  	
  
  SP0 — T

  

  
	
  SP0 — C

  

 

where,

 

	
  CR0

  	
  =

  	
  the Conversion Rate in
  effect immediately prior to the open of business on the Ex-Dividend Date for
  such dividend or distribution;

  
	
  CR1

  	
  =

  	
  the Conversion Rate in
  effect immediately after the open of business on the Ex-Dividend Date for
  such dividend or distribution;

  
	
  SP0

  	
  =

  	
  the Last Reported Sale
  Price of the Common Stock on the Trading Day immediately preceding the
  Ex-Dividend Date for such dividend or distribution; 

  
	
  T

  	
  =

  	
  the Initial Dividend
  Threshold; provided that if the dividend
  or distribution is not a regular annual cash dividend, the Initial Dividend
  Threshold shall be deemed to be zero; and

  
	
  C

  	
  =

  	
  the amount in cash per
  share that the Company distributes to holders of the Common Stock.

  

 

The Initial Dividend
Threshold shall be adjusted in a manner inversely proportional to adjustments
to the Conversion Rate; provided
that no adjustment shall be made to the Initial Dividend Threshold for any
adjustment made to the Conversion Rate pursuant to this Section 4.04(d).

 

Any increase pursuant to
this Section 4.04(d) shall become effective immediately after the
open of business on the Ex-Dividend Date for such dividend or distribution.
Notwithstanding the foregoing, if “C” (as defined above) is equal to or greater
than “SP0” (as defined
above), in lieu of the foregoing increase, each Holder shall receive, for each
$1,000 principal amount of Notes, at the same time and upon the same terms as
holders of shares of the Common Stock, the amount of cash that such Holder
would have received as if such Holder owned a number of shares of Common Stock
equal to the Conversion Rate on the Ex-Dividend Date for such cash dividend or
distribution.

 

28

 

If such dividend or
distribution is not so paid or made, the Conversion Rate shall be decreased to
the Conversion Rate that would then be in effect if such dividend or
distribution had not been declared.

 

(e)           If the Company or any of its
Subsidiaries make a payment in respect of a tender offer or exchange offer for
the Common Stock, to the extent that the cash and value of any other
consideration included in the payment per share of the Common Stock exceeds the
Last Reported Sale Price of the Common Stock on the Trading Day next succeeding
the last date on which tenders or exchanges may be made pursuant to such tender
or exchange offer, the Conversion Rate shall be increased based on the
following formula:

 

	
  CR1

  	
  =

  	
  CR0

  	
  x

  	
  
  AC + (SP1 x OS1)

  

  
	
  OS0 x SP1

  

 

where,

 

	
  CR0

  	
  =

  	
  the Conversion Rate in
  effect immediately prior to the close of business on the 10th Trading Day
  immediately following, and including, the Trading Day next succeeding the
  date such tender or exchange offer expires;

  
	
   

  	
   

  	
   

  
	
  CR1

  	
  =

  	
  the Conversion Rate in effect
  immediately after the close of business on the 10th Trading Day immediately
  following, and including, the Trading Day next succeeding the date such
  tender or exchange offer expires;

  
	
   

  	
   

  	
   

  
	
  AC

  	
  =

  	
  the aggregate value of all
  cash and any other consideration (as determined by the Board of Directors)
  paid or payable for shares purchased in such tender offer or exchange offer;

  
	
   

  	
   

  	
   

  
	
  OS0

  	
  =

  	
  the number of shares of
  Common Stock outstanding immediately prior to the date such tender or
  exchange offer expires (prior to giving effect to the purchase of all shares
  accepted for purchase or exchange in such tender offer or exchange offer);

  
	
   

  	
   

  	
   

  
	
  OS1

  	
  =

  	
  the number of shares of
  Common Stock outstanding immediately after the date such tender or exchange
  offer expires (after giving effect to the purchase of all shares accepted for
  purchase or exchange in such tender or exchange offer); and

  
	
   

  	
   

  	
   

  
	
  SP1

  	
  =

  	
  the average of the Last
  Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day
  period commencing on the Trading Day next succeeding the date such tender or
  exchange offer expires.

  

 

The adjustment to the
Conversion Rate under this Section 4.04(e) shall occur at the close
of business on the 10th Trading Day immediately following, and including, the
Trading Day next succeeding the date such tender or exchange offer expires; provided that in respect of any conversion within 10 Trading
Days immediately following, and including, the expiration date of any tender or
exchange offer, references in this Section 4.04(e) with respect to 10
Trading Days shall be deemed replaced with such lesser number of Trading Days
as have elapsed between the 

 

29

 

expiration date of such
tender or exchange offer and the Conversion Date in determining the applicable
Conversion Rate.

 

(f)            The Company from time to time may
increase the Conversion Rate by any amount for a period of at least 20 Business
Days and the Board of Directors shall have made a determination that such
increase would be in the best interests of the Company, which determination
shall be conclusive.  Whenever the
Conversion Rate is increased pursuant to this Section 4.04(f), the Company
shall mail to Holders of record of the Notes a notice of the increase at least
10 days prior to the date the increased Conversion Rate takes effect, and such
notice shall state the increased Conversion Rate and the period during which it
will be in effect.

 

(g)           The Company may (but shall not be
required to) increase the Conversion Rate, in addition to any adjustments
pursuant to Section 4.04(a), 4.04(b), 4.04(c), 4.04(d), 4.04(e) or
4.04(f), if the Board of Directors considers such increase to be advisable to
avoid or diminish any income tax to holders of Common Stock or rights to
purchase shares of Common Stock in connection with a dividend or distribution
of shares (or rights to acquire shares) or similar event.

 

(h)           Notwithstanding this Section 4.04
or any other provision of this Indenture or the Notes, if a Conversion Rate
adjustment becomes effective on any Ex-Dividend Date, and a Holder that has
converted its Notes on or after such Ex-Dividend Date and on or prior to the
related Record Date would be treated as the record holder of the Common Shares
as of the related Conversion Date as described under Section 4.02(d) based
on an adjusted Conversion Rate for such Ex-Dividend Date, then, notwithstanding
the Conversion Rate adjustment provisions in this Section 4.04, the
Conversion Rate adjustment relating to such Ex-Dividend Date will not be made
for such converting Holder. Instead, such Holder will be treated as if such
Holder were the record owner of shares on an un-adjusted basis and participate
in the related dividend, distribution or other event giving rise to such
adjustment.  The term “Record Date” shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of Common Stock
(or other security) have the right to receive any cash, securities or other
property or in which the Common Stock (or other applicable security) is
exchanged for or converted into any combination of cash, securities or other
property, the date fixed for determination of stockholders entitled to receive
such cash, securities or other property (whether such date is fixed by the Board
of Directors, by statute, by contract or otherwise).

 

(i)            All calculations under this Article 4
shall be made by the Company and shall be made to the nearest cent (including,
in the case of any adjustment to the Conversion Rate, the resulting adjustment
to the Conversion Price) or to the nearest one ten-thousandth of a share.  No adjustment shall be required to be made
for the Company’s issuance of shares of Common Stock or any securities
convertible into or exchangeable for shares of Common Stock or rights to
purchase shares of Common Stock or such convertible or exchangeable securities,
other than as provided in this Section 4.04 and in Section 4.12.

 

(j)            Whenever the Conversion Rate is
adjusted as herein provided, the Company shall promptly file with the Trustee
and any Conversion Agent an Officers’ Certificate setting forth the Conversion
Rate after such adjustment and setting forth a brief statement of the facts
requiring such adjustment.  Unless and
until a Responsible Officer of the Trustee shall have received such Officers’
Certificate, the Trustee shall not be deemed to have knowledge of any 

 

30

 

adjustment of the
Conversion Rate and may assume without inquiry that the last Conversion Rate of
which it has knowledge is still in effect. 
Promptly after delivery of such certificate, the Company shall prepare a
notice of such adjustment of the Conversion Rate setting forth the adjusted
Conversion Rate and the date on which each adjustment becomes effective and
shall mail such notice of such adjustment of the Conversion Rate to each Holder
of the Notes.  Failure to deliver such
notice shall not affect the legality or validity of any such adjustment.

 

(k)           For purposes of this Section 4.04,
the number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Company so long as the Company does not pay
any dividend or make any distribution on shares of Common Stock held in the
treasury of the Company, but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock.

 

(l)            Notwithstanding anything to the
contrary in this Article 4, no adjustment to the Conversion Rate shall be
made:

 

(i)            upon the issuance of any shares of
Common Stock pursuant to any present or future plan providing for the
reinvestment of dividends or interest payable on the Company’s securities and
the investment of additional optional amounts in shares of Common Stock under
any plan;

 

(ii)           upon the issuance of any shares of
Common Stock or options or rights to purchase those shares pursuant to any
present or future employee, director or consultant benefit plan or program of
or assumed by the Company or any of its Subsidiaries;

 

(iii)          upon the issuance of any shares of
Common Stock pursuant to any option, warrant, right or exercisable,
exchangeable or convertible security not described in clause (ii) of this Section 4.04(l) and
outstanding as of the date the Notes were first issued;

 

(iv)          for a change in the par value of the
Common Stock; or

 

(v)           for accrued and unpaid interest on
the Notes, if any.

 

SECTION 4.05.              Certain
Other Adjustments.  Whenever
any provision of the Indenture requires the Company to calculate the Last
Reported Sale Prices, the Daily VWAPs, the Daily Conversion Values or the Daily
Settlement Amounts over a span of multiple days (including any Cash Settlement
Averaging Period), the Company shall make appropriate adjustments to each to
account for any adjustment to the Conversion Rate that becomes effective, or
any event requiring an adjustment to the Conversion Rate where the Ex-Dividend
Date of the event occurs, at any time during the period when the Last Reported
Sale Prices, the Daily VWAPs, the Daily Conversion Values or the Daily
Settlement Amounts are to be calculated.

 

SECTION 4.06.              Adjustment
to Shares Delivered Upon Conversion Upon a Make-Whole Fundamental Change.  (a) If
a Make-Whole Fundamental Change occurs and a Holder elects to convert its Notes
in connection with such Make-Whole Fundamental Change, the Company shall, under
certain circumstances, increase the Conversion Rate for the Notes so 

 

31

 

surrendered for conversion by a number of additional shares of Common
Stock (the “Additional Shares”),
as described below.  A conversion of
Notes shall be deemed for these purposes to be “in connection with” such
Make-Whole Fundamental Change if the relevant Conversion Notice is received by
the Conversion Agent from, and including, the Effective Date of the Make-Whole
Fundamental Change up to, and including, the Business Day immediately prior to
the related Fundamental Change Purchase Date (or, in the case of a Make-Whole
Fundamental Change that would have been a Fundamental Change but for the proviso in clause (b) of the definition thereof, the
35th Trading Day immediately following the Effective Date of such Make-Whole
Fundamental Change).

 

(b)           Upon surrender of Notes for
conversion in connection with a Make-Whole Fundamental Change, the Company
shall, at its option, satisfy the related Conversion Obligation by Physical
Settlement, Cash Settlement or Combination Settlement in accordance with Section 4.03;
provided, however, that if, at the effective time of
a Make-Whole Fundamental Change described in clause (b) of the definition
of Fundamental Change, the Reference Property is comprised entirely of cash,
then, for any conversion of Notes following the Effective Date of such
Make-Whole Fundamental Change, the Conversion Obligation shall be calculated
based solely on the Stock Price for the Make-Whole Fundamental Change and shall
be deemed to be an amount equal to the applicable Conversion Rate (including
any adjustment for Additional Shares) multiplied
by such Stock Price. In such event, the Conversion Obligation
deliverable by the Company shall be determined and paid to Holders in cash on
the third Business Day following the Conversion Date.

 

(c)           The number of Additional Shares, if
any, by which the Conversion Rate will be increased shall be determined by
reference to the table attached as Schedule A hereto, based on the date
on which the Make-Whole Fundamental Change occurs or becomes effective (the “Effective Date”) and the price (the “Stock Price”) paid (or deemed paid) per
share of the Common Stock in the Make-Whole Fundamental Change.  If the holders of the Common Stock receive
only cash in a Make-Whole Fundamental Change described in clause (b) of
the definition of Fundamental Change, the Stock Price shall be the cash amount
paid per share.  Otherwise, the Stock
Price shall be the average of the Last Reported Sale Prices of the Common Stock
over the five Trading Day period ending on, and including, the Trading Day
immediately preceding the Effective Date of the Make-Whole Fundamental
Change.  The Board of Directors shall
make appropriate adjustments to the Stock Price, in its good faith
determination, to account for any adjustment to the Conversion Rate that
becomes effective, or any event requiring an adjustment to the Conversion Rate
where the Ex-Dividend Date of the event occurs, during such five consecutive
Trading Day period.

 

The exact Stock Prices and
Effective Dates may not be set forth in the table in Schedule A, in
which case:

 

(i)            If the Stock Price is between two
Stock Prices in the table or the Effective Date is between two Effective Dates
in the table, the number of Additional Shares shall be determined by a
straight-line interpolation between the number of Additional Shares set forth
for the higher and lower Stock Prices and the earlier and later Effective
Dates, as applicable, based on a 365-day year.

 

32

 

(ii)           If the Stock Price is greater than
$130.00 per share (subject to adjustment in the same manner as the Stock Prices
set forth in the column headings of the table in Schedule A pursuant to
subsection (d) below), the number of Additional Shares that shall be added
to the Conversion Rate shall be determined by assuming that the Stock Price is
instead such price per share.

 

(iii)          If the Stock Price is less than $11.00
per share (subject to adjustments in the same manner as the Stock Prices set
forth in the column headings of the table in Schedule A pursuant to
subsection (d) below), the number of Additional Shares that shall be added
to the Conversion Rate shall be determined by assuming that the Stock Price is
instead such price per share.

 

Notwithstanding the foregoing, in no event shall the
total number of shares of Common Stock issuable upon conversion exceed 90.9090
per $1,000 principal amount of Notes, subject to adjustments in the same manner
as the Conversion Rate as set forth in Section 4.04.

 

(d)           The Stock Prices set forth in the
column headings of the table in Schedule A hereto shall be adjusted as
of any date on which the Conversion Rate of the Notes is otherwise
adjusted.  The adjusted Stock Prices
shall equal the Stock Prices applicable immediately prior to such adjustment, multiplied by a fraction, the numerator of
which is the Conversion Rate immediately prior to such adjustment giving rise
to the Stock Price adjustment and the denominator of which is the Conversion
Rate as so adjusted.  The number of
Additional Shares set forth in such table shall be adjusted in the same manner
and at the same time as the Conversion Rate as set forth in Section 4.04.

 

(e)           The Company shall notify the Holders
of Notes of the Effective Date of any Make-Whole Fundamental Change and issue a
press release announcing such Effective Date no later than five business days
after such Effective Date.

 

SECTION 4.07.              Effect
of Recapitalization, Reclassification, Consolidation, Merger or Sale.

 

(a)           In the case of:

 

(i)            any recapitalization,
reclassification or change of the Common Stock (other than changes resulting
from a subdivision or combination);

 

(ii)           any consolidation, merger or
combination involving the Company;

 

(iii)          any sale, lease or other transfer to a
third party of the consolidated assets of the Company and its Subsidiaries
substantially as an entirety; or

 

(iv)          any statutory share exchange;

 

in each case as a result of which the Common Stock would be converted
into, or exchanged for, stock, other securities, other property or assets
(including cash or any combination thereof) (any such event, a “Merger Event”), then, at and after the effective time of
such Merger Event, the right to convert each $1,000 principal amount of Notes
shall be changed into a right to convert

 

33

 

such principal amount of Notes into the kind and amount of shares of
stock, other securities or other property or assets (including cash or any
combination thereof) that a holder of a number of shares of Common Stock equal
to the Conversation Rate prior to such Merger Event would have owned or been
entitled to receive (the “Reference Property”,
with each “unit of Reference Property”
meaning the type and amount of Reference Property that a holder of one share of
Common Stock is entitled to receive) and, prior to or at the effective time of
such Merger Event, the Company or the successor or purchasing Person, as the
case may be, shall execute with the Trustee a supplemental indenture (which
shall comply with the Trust Indenture Act as in force at the date of execution
of such supplemental indenture) providing for such change in the right to
convert each $1,000 principal amount of Notes; provided,
however, that at and after the effective
time of the Merger Event (i) the Company shall continue to have the right
to determine the form of consideration to be paid and delivered, as the case
may be, upon conversion of the Notes in accordance with Section 4.03 and (ii) (x) any
amount payable in cash upon conversion of the Notes in accordance with Section 4.03
shall continue to be payable in cash, (y) any shares of Common Stock that
the Company would have been required to deliver upon conversion of the Notes in
accordance with Section 4.03 shall instead be deliverable in the amount
and type of Reference Property that a holder of that number of shares of Common
Stock would have been entitled to receive in such Merger Event and (z) the
Daily VWAP shall be calculated based on the value of a unit of Reference Property.

 

If, as a result of the Merger Event, each share of
Common Stock is converted into the right to receive more than a single type of
consideration (determined based in part upon any form of stockholder election),
then (x) the Reference Property into which the Notes will be convertible
will be deemed to be the weighted average of the types and amounts of
consideration received by the holders of Common Stock that affirmatively make
such an election, and (y) the unit of Reference Property for purposes of
the foregoing sentence shall refer to the consideration referred to in clause (x) attributable
to one share of Common Stock.  The
Company shall notify Holders, the Trustee and the Conversion Agent (if other
than the Trustee) of such weighted average as soon as practicable after such
determination is made.

 

The Company shall not become a party to any such
Merger Event unless its terms are consistent with this Section 4.07.  Such supplemental indenture described in the
second immediately preceding paragraph shall provide for adjustments which
shall be as nearly equivalent to the adjustments provided for in this Article 4 in the judgment of the Board of
Directors or the board of directors of the successor Person.  If, in the case of any such Merger Event, the
Reference Property receivable thereupon by a holder of Common Stock includes
shares of stock, securities or other property or assets (including cash or any
combination thereof) of a Person other than the successor or purchasing Person,
as the case may be, in such Merger Event, then such supplemental indenture
shall also be executed by such other Person.

 

(b)           The Company shall cause notice of the
execution of such supplemental indenture to be mailed to each Holder, at the
address of such Holder as it appears on the register of the Notes maintained by
the Registrar, within 20 days after execution thereof.  Failure to deliver such notice shall not
affect the legality or validity of such supplemental indenture.  The above provisions of this Section 4.07
shall similarly apply to successive Merger Events.  If this Section 4.07 applies to any
Merger Event, Section 4.04 shall not apply.

 

34

 

(c)           In connection with any Merger Event,
the Initial Dividend Threshold shall be subject to adjustment as described in
clause (i), clause (ii) or clause (iii) below, as the case may be.

 

(i)            In the case of a Merger Event in
which the Reference Property (determined, as appropriate, pursuant to the
second paragraph of subsection (a) above and excluding any dissenters’
appraisal rights) is composed entirely of shares of common stock (the “Merger Common Stock”), the Initial Dividend Threshold at and
after the effective time of such Merger Event shall be equal to (x) the
Initial Dividend Threshold immediately prior to the effective time of such
Merger Event, divided by (y) the
number of shares of Merger Common Stock that a holder of one share of Common
Stock would receive in such Merger Event (such quotient rounded down to nearest
cent).

 

(ii)           In the case of a Merger Event in
which the Reference Property (determined, as appropriate, pursuant to the
second paragraph of subsection (a) above and excluding any dissenters’
appraisal rights) is composed in part of shares of Merger Common Stock, the Initial
Dividend Threshold at and after the effective time of such Merger Event shall
be equal to (x) the Initial Dividend Threshold immediately prior to the
effective time of such Merger Event, multiplied
by (y) the Merger Valuation Percentage for such Merger Event
(such quotient rounded down to nearest cent).

 

(iii)          For the avoidance of doubt, in the
case of a Merger Event in which the Reference Property (determined, as
appropriate, pursuant to the second paragraph of subsection (a) above and
excluding any dissenters’ appraisal rights) is composed entirely of
consideration other than shares of common stock, the Initial Dividend Threshold
at and after the effective time of such Merger Event shall be equal to zero.

 

(d)           For purposes of subsection (c) of
this Section 4.07, the following terms shall have the following meanings:

 

(i)            The “Merger
Valuation Percentage” for any Merger Event shall be equal to (x) the
arithmetic average of the Last Reported Sale Prices of one share of such Merger
Common Stock over the relevant Merger Valuation Period (determined as if
references to “Common Stock” in the definition of “Last Reported Sale Price”
were references to the “Merger Common Stock” for such Merger Event), divided by (y) the arithmetic average
of the Last Reported Sale Prices of one share of Common Stock over the relevant
Merger Valuation Period.

 

(ii)           The “Merger
Valuation Period” for any Merger Event means the five consecutive
Trading Day period immediately preceding, but excluding, the effective date for
such Merger Event.

 

SECTION 4.08.              Taxes on
Shares Issued.  The Company
shall pay any documentary, stamp or similar issue or transfer tax due on the
issue or delivery of shares of Common Stock on conversion of Notes pursuant
hereto; provided, however,
that if such documentary, stamp or similar issue or transfer tax is due because
the Holder or beneficial owner of such Notes has

 

35

 

requested that shares of Common Stock be issued in a name other than
that of the Holder or beneficial owner of the converted Notes, then such taxes
shall be paid by such Holder or beneficial owner, and the Company shall not be
required to issue or deliver any stock certificate evidencing such shares
unless and until such Holder or beneficial owner shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.

 

SECTION 4.09.              Reservation
of Shares; Shares to be Fully Paid; Compliance With Governmental Requirements;
Listing of Common Stock.  The
Company shall reserve, out of its authorized but unissued shares or shares held
in treasury, sufficient shares of Common Stock to satisfy conversion of the
Notes from time to time as such Notes are presented for conversion (assuming
that, at the time of the computation of such number of shares or securities,
all such Notes would be converted by a single Holder and that Physical
Settlement is applicable).

 

The Company covenants that
all shares of Common Stock that may be issued upon conversion of Notes shall be
newly issued shares or treasury shares, shall be duly authorized, validly
issued, fully paid and non-assessable and shall be free from preemptive rights
and free from any tax, lien or charge (other than those created by the Holder).

 

The Company shall list or
cause to have quoted any shares of Common Stock to be issued upon conversion of
Notes on each national securities exchange or over-the-counter or other
domestic market on which the Common Stock is then listed or quoted.

 

SECTION 4.10.              Responsibility
of Trustee.  The Trustee and any Conversion
Agent shall not at any time be under any duty or responsibility to any Holder
of Notes to determine or calculate the Conversion Rate, to determine whether
any facts exist which may require any adjustment of the Conversion Rate, or to
confirm the accuracy of any such adjustment when made or the appropriateness of
the method employed, or herein or in any supplemental indenture provided to be
employed, in making the same.  The Trustee
and any other Conversion Agent shall not be accountable with respect to the
validity or value (or the kind or amount) of any shares of Common Stock or of
any other securities or property that may at any time be issued or delivered
upon the conversion of any Notes; and the Trustee and the Conversion Agent make
no representations with respect thereto. 
Neither the Trustee nor any Conversion Agent shall be responsible for
any failure of the Company to issue, transfer or deliver any shares of Common
Stock or stock certificates or other securities or property or cash upon the
surrender of any Notes for the purpose of conversion or to comply with any of
the duties, responsibilities or covenants of the Company contained in this Article 4.  The rights, privileges, protections,
immunities and benefits given to the Trustee, including without limitation its
right to be compensated, reimbursed, and indemnified, are extended to, and
shall be enforceable by, the Trustee in each of its capacities hereunder,
including its capacity as Conversion Agent and if it is so
appointed by the Company and accepts such appointment, as Bid Solicitation
Agent.

 

SECTION 4.11.              Notice to
Holders Prior to Certain Actions. 
In case of any:

 

(a)           action by the Company or one of its
Subsidiaries that would require an adjustment in the Conversion Rate pursuant
to Section 4.04 or Section 4.12; or

 

36

 

(b)           Merger Event; or

 

(c)           voluntary or involuntary dissolution,
liquidation or winding up of the Company or any of its Subsidiaries;

 

then, in each case (unless
notice of such event is otherwise required pursuant to another provision of
this Supplemental Indenture), the Company shall cause to be filed with the
Trustee and the Conversion Agent (if other than the Trustee) and to be mailed
to each Holder of Notes at such Holder’s address appearing on in the Security
Register, which the Company shall provide to the Trustee, as promptly as
practicable but in any event at least 10 days prior to the applicable date
hereinafter specified, a notice stating (x) the date on which a record is
to be taken for the purpose of such action by the Company or one of its
Subsidiaries or, if a record is not to be taken, the date as of which the
holders of Common Stock of record are to be determined for the purposes of such
action by the Company or one of its Subsidiaries, or (y) the date on which
such Merger Event, dissolution, liquidation or winding up is expected to become
effective or occur, and the date as of which it is expected that holders of
Common Stock of record shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such Merger Event, dissolution,
liquidation or winding up.  Failure to give
such notice, or any defect therein, shall not affect the legality or validity
of such dividend (or any other distribution), Merger Event, dissolution,
liquidation or winding up.

 

SECTION 4.12.              Stockholder
Rights Plan.  Each share of
Common Stock, if any, issued upon conversion of Notes pursuant to this Article 4 shall
be entitled to receive the appropriate number of rights, if any, and the
certificates representing the Common Stock issued upon such conversion shall
bear such legends, if any, in each case as may be provided by the terms of any
stockholder rights plan adopted by the Company and in effect upon conversion of
such Notes, as the same may be amended from time to time.  Notwithstanding the foregoing, if prior to
any conversion such rights have separated from the shares of Common Stock in
accordance with the provisions of the applicable stockholder rights agreement,
the Conversion Rate shall be adjusted at the time of separation as if the
Company had distributed to all holders of the Common Stock, shares of the
Company’s Capital Stock, evidences of indebtedness, assets, property, rights,
options or warrants as described in Section 4.04(c), subject to
readjustment in the event of the expiration, termination or redemption of such
rights.

 

ARTICLE 5

REMEDIES

 

SECTION 5.01.              Events of
Default.  In addition to the
Events of Default specified in Section 501 of the Original Indenture, each
of the following events shall be an “Event of
Default” wherever used herein with respect to the Notes:

 

(a)           default in the payment of principal
of any Note when due and payable upon purchase in connection with a Fundamental
Change, upon declaration of acceleration or otherwise;

 

37

 

(b)           failure by the Company to comply with
its obligation to convert the Notes in accordance with the Indenture upon
exercise of a Holder’s conversion right in accordance with Article 4,
which failure continues unremedied for five days; and

 

(c)           failure by the Company to provide a
Fundamental Change Company Notice pursuant to Section 3.01(b) or
notice of a specified corporate transaction required by Section 4.01(b)(iii) or
Section 4.01(b)(iv) in accordance with the relevant Section, in each
case when due; and

 

(d)           default by the Company or any of its
Subsidiaries with respect to any mortgage, agreement or other instrument under
which there may be outstanding, or by which there may be secured or evidenced,
any indebtedness for money borrowed in excess of $50 million in the aggregate
of the Company or any such Subsidiary, whether such indebtedness exists on the
date of this Supplemental Indenture or shall hereafter be created (i) resulting
in such indebtedness becoming or being declared due and payable or (ii) constituting
a failure to pay the principal or interest of any such debt when due and
payable at its stated maturity, upon required repurchase, upon declaration or
otherwise.

 

SECTION 5.02.              Additional
Interest.  Notwithstanding any
provisions of the Indenture to the contrary, to the extent the Company elects,
the sole remedy for an Event of Default relating to (i) its failure to
file with the Trustee pursuant to Section 314(a)(1) of the Trust
Indenture Act any documents or reports that it is required to file with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act or (ii) its
failure to comply with its reporting obligations in Section 703 of the
Original Indenture, as modified by Section 2.03, shall after the
occurrence of such an Event of Default consist exclusively of the right to
receive additional interest on the Notes at a rate equal to 0.25% per annum of
the principal amount of the Notes Outstanding (“Additional Interest”) for each day during the 60-day period
beginning on, and including, the occurrence of such an Event of Default during
which such Event of Default is continuing. 
If the Company so elects, such Additional Interest shall be payable in
the same manner and on the same dates as the stated interest payable on the
Notes.  On the 61st day after such Event
of Default occurs (if such Event of Default is not cured or waived prior to
such 61st day), the Notes shall be subject to acceleration as provided in Section 502
of the Original Indenture.  This Section 5.02
shall not affect the rights of Holders of Notes in the event of the occurrence
of any other Event of Default.  In the
event the Company does not timely elect to pay Additional Interest following an
Event of Default in accordance with this Section 5.02, the Notes shall be
subject to acceleration as provided in Section 502 of the Original
Indenture.

 

In order to elect to pay
Additional Interest as the sole remedy during the first 60 days after the
occurrence of an Event of Default described in the immediately preceding
paragraph, the Company must give notice to Holders of the Notes, the Trustee
and the Paying Agent of such election prior to the beginning of such 60-day
period.  Upon the failure to timely give
all Holders, the Trustee and the Paying Agent such notice, the Notes shall be
immediately subject to acceleration as provided in Section 502 of the
Original Indenture.

 

SECTION 5.03.              Waiver;
Unconditional Right of Holders to Receive Amounts Due Upon Conversion.  (a)  In addition to the circumstances set
forth in Section 513 of the Original Indenture and notwithstanding any
provision to the contrary in the Indenture, Holders of the

 

38

 

Notes may not on behalf of the Holders of all Notes waive any past
Default with respect to the Company’s failure to (a) pay or deliver, as
the case may be, the consideration due upon conversion in accordance with Article 4
or (b) pay the Fundamental Change Purchase Price (if applicable) in
accordance with Article 3.

 

(b)           In addition to the circumstances set
forth in Section 508 of the Original Indenture and notwithstanding any
provision to the contrary in the Indenture, the Holder of any Note shall have
the right, which is absolute and unconditional, to receive amounts due upon
conversion in accordance with Article 4 and the Fundamental Change
Purchase Price (if applicable) in accordance with Article 3 and to
institute suit for the enforcement of any such payment or delivery, as the case
may be, and such rights shall not be impaired without the consent of such
Holder.

 

SECTION 5.04.              Notice of
Defaults.   Notwithstanding any provision to the contrary
in the Indenture, (a) the list of exceptions in Section 601 of the
Original Indenture pursuant to which the Trustee may not withhold notice of any
Default under the Indenture shall include the payment of the Fundamental Change
Purchase Price (if applicable) in accordance with Article 3 and the
payment or delivery, as the case may be, of the consideration due upon
conversion of the Notes in accordance with Article 4 and (b) in
addition to any obligations of the Company under Section 601 of the
Original Indenture, the Company shall deliver to the Trustee, within 30 days
after the occurrence thereof, written notice of any events that would
constitute an Event of Default, the status of such events and what action the
Company is taking or proposes to take in respect thereof.

 

SECTION 5.05.              Overdue
Payments. Notwithstanding Section 503 of the Original
Indenture, payments of (a) principal of the Notes, (b) to the extent
lawful, interest on the Notes and (c) the Fundamental Change Purchase
Price (if applicable) in accordance with Article 3 that are not made when
due shall, in each case, accrue interest at the annual rate of the
then-applicable interest rate of the Notes from the required payment date (any
such amounts, “Defaulted Amounts”).  The Company shall pay any such Defaulted
Amounts in accordance with the provisions of Section 307 of the Original
Indenture and, for this purpose, each reference to Defaulted Interest in the
Original Indenture shall be deemed to be a reference to Defaulted Amounts.  In addition, all references in Section 503
of the Original Indenture to “principal” shall, with respect to the Notes, be
deemed to be references to “principal (including the Fundamental Change
Purchase Price, if applicable).”

 

ARTICLE 6

SATISFACTION AND DISCHARGE

 

SECTION 6.01.              Satisfaction
and Discharge of the Supplemental Indenture.  Articles 4 and 14 of the Original Indenture
shall not apply to the Notes.  Instead,
the satisfaction and discharge provisions set forth in this Article 6
shall, with respect to the Notes, supersede in their entirety Articles 4 and 14
of the Original Indenture, and all references in the Original Indenture to
Articles 4 and 14 thereof and satisfaction and discharge provisions therein, as
the case may be, shall, with respect to the Notes, be deemed to be references
to this Article 6 and the satisfaction and discharge provisions set forth
in this Article 6, respectively. 
When (a) the Company shall deliver to the Registrar for
cancellation all Notes theretofore authenticated (other than any Notes

 

39

 

that have been destroyed, lost or stolen and in lieu of or in
substitution for which other Notes shall have been authenticated and delivered)
and not theretofore canceled, or (b) all the Notes not theretofore
canceled or delivered to the Trustee for cancellation shall have become due and
payable (whether at Stated Maturity, on any Fundamental Change Purchase Date,
upon conversion or otherwise) and the Company shall deposit with the Trustee,
in trust, or deliver to the Holders, as applicable, cash or cash and shares of
Common Stock, if any (in the case of any conversion to which Physical
Settlement or Combination Settlement applies), sufficient to pay all amounts
due (and shares of Common Stock deliverable following conversion, if
applicable) on all of such Notes (other than any Notes that shall have been
mutilated, destroyed, lost or stolen and in lieu of or in substitution for
which other Notes shall have been authenticated and delivered) not theretofore
canceled or delivered to the Trustee for cancellation, including principal and
interest due, accompanied, except in the event the Notes are due and payable
solely in cash at the Stated Maturity of the Notes or upon an earlier
Fundamental Change Purchase Date, by a verification report as to the
sufficiency of the deposited amount from an independent certified accountant or
other financial professional reasonably satisfactory to the Trustee (which may
include any of the Underwriters), and if the Company shall also pay or cause to
be paid all other sums payable hereunder by the Company, then this Supplemental
Indenture shall cease to be of further effect (except as to (i) rights
hereunder of Holders of the Notes to receive all amounts owing upon the Notes
and the other rights, duties and obligations of Holders of the Notes, as
beneficiaries hereof with respect to the amounts, if any, so deposited with the
Trustee and (ii) the rights, obligations and immunities of the Trustee
hereunder), and the Trustee, on written demand of the Company accompanied by an
Officers’ Certificate and an Opinion of Counsel as required by Section 102
of the Original Indenture and at the cost and expense of the Company, shall
execute proper instruments acknowledging satisfaction and discharge of this
Supplemental Indenture; the Company, however, hereby agrees to reimburse the
Trustee for any costs or expenses thereafter reasonably and properly incurred
by the Trustee, including the fees and expenses of its counsel, and to compensate
the Trustee for any services thereafter reasonably and properly rendered by the
Trustee in connection with this Supplemental Indenture or the Notes.

 

SECTION 6.02.              Deposited
Monies to Be Held in Trust by Trustee.  Subject to Section 6.04, all monies and
shares of Common Stock, if any, deposited with the Trustee pursuant to Section 6.01
shall be held in trust for the sole benefit of the Holders of the Notes, and
such monies and shares of Common Stock shall be applied by the Trustee to the
payment, either directly or through any Paying Agent (including the Company if
acting as its own Paying Agent), to the Holders of the particular Notes for the
payment, settlement or redemption of which such monies or shares of Common
Stock have been deposited with the Trustee, of all sums or amounts due and to
become due thereon for principal and interest, if any.

 

SECTION 6.03.              Paying Agent
to Repay Monies Held.  Upon
the satisfaction and discharge of this Indenture, all monies and shares of
Common Stock, if any, then held by any Paying Agent (if other than the Trustee)
shall, upon written request of the Company, be repaid to it or paid to the
Trustee, and thereupon such Paying Agent shall be released from all further
liability with respect to such monies and shares of Common Stock.

 

SECTION 6.04.              Return of
Unclaimed Monies.  Subject to
the requirements of applicable law, any monies and shares of Common Stock
deposited with or paid to the Trustee

 

40

 

for payment of the principal of or interest, if any, on the Notes and
not applied but remaining unclaimed by the Holders of the Notes for two years
after the date upon which the principal of or interest, if any, on such Notes,
as the case may be, shall have become due and payable, shall be repaid to the
Company by the Trustee on demand, and all liability of the Trustee shall
thereupon cease with respect to such monies and shares of Common Stock; and the
Holder of any of the Notes shall thereafter look only to the Company for any
payment or delivery that such Holder of the Notes may be entitled to collect
unless an applicable abandoned property law designates another Person.

 

SECTION 6.05.              Reinstatement.  If the Trustee or the Paying Agent is unable
to apply any money or shares of Common Stock in accordance with Section 6.02
by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Company’s
obligations under the Indenture and the Notes shall be revived and reinstated
as though no deposit had occurred pursuant to Section 6.01 until such time
as the Trustee or the Paying Agent is permitted to apply all such money and
shares of Common Stock in accordance with Section 6.02; provided, however, that
if the Company makes any payment of interest on, principal of or payment or
delivery in respect of any Note following the reinstatement of its obligations,
the Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money or shares of Common Stock, if any, held by
the Trustee or Paying Agent.

 

ARTICLE 7

SUPPLEMENTAL INDENTURES

 

SECTION 7.01.              Supplemental
Indentures Without Consent of Holders.  In addition to any permitted amendment or
supplement to the Indenture pursuant to Section 901 of the Original
Indenture, the Company and the Trustee may amend or supplement the Indenture or
the Notes without notice to or the consent of any Holder of the Notes:

 

(a)           to add guarantees with respect to the
Notes or remove any such guarantees;

 

(b)           to secure the Notes;

 

(c)           to make any change that does not
adversely affect the rights of any Holder, including without limitation curing
any omission, ambiguity, manifest error or defect and correcting any
inconsistency in the Indenture;

 

(d)           to add provisions for the issuance of
Additional Notes;

 

(e)           to comply with any requirement of the
Commission in connection with the qualification of the Indenture under the
Trust Indenture Act;.

 

(f)            to comply with their obligations to
execute and deliver a supplemental indenture pursuant to the provisions of Section 4.07;

 

(g)           to provide for uncertificated Notes
in addition to or in place of certificated Notes; provided, however, that the
uncertificated Notes are issued as Registered Securities for purposes of Section 163(f) of
the United States Internal Revenue Code of 1986, as amended, or in a

 

41

 

manner such that the
uncertificated Notes are described in Section 163(f)(2)(B) of the
United States Internal Revenue Code of 1986, as amended; or

 

(h)           to conform this Supplemental
Indenture and the form or terms of the Notes to the “Description of Notes”
section as set forth in the final prospectus supplement related to the offering
and sale of the Notes dated July 15, 2009.

 

Clause (c) of this Section 7.01 shall,
with respect to the Notes, supersede in its entirety Section 901(8) of
the Original Indenture and all references in the Original Indenture to Section 901(8) shall,
with respect to the Notes, be deemed to be references to clause (c) of
this Section 7.01.

 

SECTION 7.02.              Supplemental
Indentures With Consent of Holders. 
In addition to the amendments or supplements to the Indenture pursuant
to Section 902 of the Original Indenture that require the consent of each
Holder of an Outstanding Note affected thereby, no amendment, supplement or
waiver, including a waiver in relation to a past Event of Default, may:

 

(a)           reduce the Fundamental Change
Purchase Price of any Note or amend or modify in any manner adverse to the
Holders of Notes the Company’s obligation to make any such payment, whether
through an amendment or waiver of provisions in the covenants, definitions
related thereto or otherwise; or

 

(b)           change the ranking of the Notes.

 

SECTION 7.03.              Notice of
Amendment or Supplement.   After an amendment or supplement under this Article 7
or Article 9 of the Original Indenture becomes effective, the Company
shall mail to the Holders a notice briefly describing such amendment or
supplement.  However, the failure to give
such notice to all the Holders, or any defect in the notice, shall not impair
or affect the validity of the amendment or supplement.

 

ARTICLE 8

SUCCESSOR COMPANY

 

SECTION 8.01.              Consolidation,
Merger and Sale of Assets.  In
addition to the provisions set forth under Article 8 of the Original
Indenture, the Company shall not consolidate with or merge with or into, or
sell, convey, transfer or lease all or substantially all of its properties and
assets to, another Person, unless:

 

(a)           the resulting, surviving or transferee Person (if not the Company) (the “Successor Company”) is an entity organized and existing under the laws of the U.S., any state thereof or the District of Columbia
and such Successor Company (if not the Company) expressly assumes by
supplemental indenture all of the Company’s obligations under the Notes and the
Indenture;

 

(b)           if as a result of such transaction
the Notes become convertible into common stock or other securities issued by a
third party, such third party fully and unconditionally guarantees all
obligations of the Company or such Successor Company under the Notes and the
Supplemental Indenture; and

 

42

 

(c)           in the case of any sale, conveyance,
transfer or lease that constitutes a Merger Event, or any consolidation or
merger, the resulting, surviving or transferee person (if not the Company) is a
corporation;

 

(d)           immediately after giving effect to
such transaction, no Default or Event of Default has occurred and is continuing
under the Indenture; and

 

(e)           the Company has delivered to the
Trustee the Officers’ Certificate and Opinion of Counsel pursuant to Section 8.03.

 

In the case of a sale, conveyance, transfer or lease
to one or more of the Company’s Subsidiaries of all or substantially all of the
Company’s properties and assets, the Notes will remain convertible into the
Common Stock, subject to the provisions described in Section 4.07.

 

SECTION 8.02.              Successor
Person Substituted.  In case
of any such consolidation, merger, sale, conveyance, transfer or lease in which
the Company is not the surviving corporation and upon the assumption by the Successor Company, by supplemental indenture,
executed and delivered to the Trustee, of the due and punctual payment of the principal
of and interest on all of the Notes, and the due and punctual performance and
observance of all of the covenants and conditions of the Indenture to be
performed or satisfied by the Company, such Successor
Company shall succeed to, and be substituted for, and may exercise every
right and power of, the Company, with the same effect as if it had been named
herein as the party of this first part, and the Company shall be discharged
from its obligations under the Notes and the Indenture, except in the case of a
lease of all or substantially all of the Company’s properties and assets.  Such Successor
Company thereupon may cause to be signed, and may issue either in its
own name or in the name of the Company any or all of the Notes, issuable
hereunder that theretofore shall not have been signed by the Company and
delivered to the Trustee; and, upon the order of such Successor Company instead of the Company and
subject to all the terms, conditions and limitations in the Indenture
prescribed, the Trustee shall authenticate and shall deliver, or cause to be
authenticated and delivered, any Notes that previously shall have been signed
and delivered by the officers of the Company to the Trustee for authentication,
and any Notes that such Successor Company
thereafter shall cause to be signed and delivered to the Trustee for that
purpose.  All the Notes so issued shall
in all respects have the same legal rank and benefit under the Indenture as the
Notes theretofore or thereafter issued in accordance with the terms of this
Indenture as though all of such Notes had been issued at the date of the
execution hereof.  In the event of any
such consolidation, merger, sale, conveyance or transfer, upon compliance with
this Article 8 the Person named as the “Company” in the first paragraph of this Indenture or any successor
that shall thereafter have become such in the manner prescribed in this Article 8
may be dissolved, wound up and liquidated at any time thereafter and such
Person shall be discharged from its liabilities as obligor and maker of the
Notes and from its obligations under this Indenture.

 

SECTION 8.03.              Opinion of
Counsel to Be Given to Trustee.  Prior to execution of any supplemental
indenture pursuant to this Article 8, the Trustee shall receive an
Officers’ Certificate and an Opinion of Counsel in accordance with Section 102
of the Original Indenture as conclusive evidence that any such consolidation,
merger, sale, conveyance, transfer or lease and any such assumption complies
with the provisions of this Article 8.

 

43

 

ARTICLE 9

MISCELLANEOUS

 

SECTION 9.01.              Governing
Law.  THIS SUPPLEMENTAL
INDENTURE AND EACH OF THE NOTES, AND ANY CLAIM CONTROVERSY OR DISPUTE ARISING
UNDER OR RELATED TO THIS SUPPLEMENTAL INDENTURE AND EACH OF THE NOTES, SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
(WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS).

 

SECTION 9.02.              Legal
Holidays.  All references in Section 112
of the Original Indenture to “Repayment Date” shall, for purposes of the Notes,
be deemed to be references to “Fundamental Change Purchase Date.”

 

SECTION 9.03.              No Security
Interest Created.  Nothing in
this Supplemental Indenture or in the Notes, expressed or implied, shall be construed
to constitute a security interest under the Uniform Commercial Code or similar
legislation, as now or hereafter enacted and in effect, in any jurisdiction.

 

SECTION 9.04.              Trust
Indenture Act.  This
Supplemental Indenture will be subject to, and governed by, the provisions of
the Trust Indenture Act that are required to be part of this Supplemental
Indenture and shall, to the extent applicable, be governed by such provisions.

 

SECTION 9.05.              Benefits of
Supplemental Indenture. 
Nothing in this Supplemental Indenture or in the Notes or coupons,
express or implied, shall give to any Person (including any Security Registrar,
any Paying Agent, any Authenticating Agent, Conversion Agent, any Bid
Solicitation Agent and their successors hereunder), other than the parties
hereto, any benefit or any legal or equitable right, remedy or claim under this
Supplemental Indenture.

 

SECTION 9.06.              Calculations.  Except as otherwise provided in this
Supplemental Indenture, the Company shall be responsible for making all calculations
called for under the Notes.  These
calculations include, but are not limited to, determinations of the Last
Reported Sale Prices of the Common Stock, accrued interest payable on the Notes
and the Conversion Rate.  The Company
shall make all these calculations in good faith and, absent manifest error, the
Company’s calculations shall be final and binding on Holders of Notes.  The Company shall provide a schedule of its
calculations to each of the Trustee and the Conversion Agent (if other than the
Trustee), and each of the Trustee and Conversion Agent (if other than the
Trustee) is entitled to rely conclusively upon the accuracy of the Company’s
calculations without independent verification. 
The Trustee will forward the Company’s calculations to any Holder of
Notes upon the request of that Holder at the sole cost and expense of the
Company.

 

SECTION 9.07.              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 9.08.              Execution in
Counterparts.  This
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.

 

44

 

SECTION 9.09.              Separability
Clause.  In case any provision
in this Supplemental Indenture or in any Note or coupon 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 9.10.              Ratification
of Original Indenture.  The
Original Indenture, as supplemented by this Supplemental Indenture, is in all
respects ratified and confirmed, and this Supplemental Indenture shall be
deemed part of the Original Indenture in the manner and to the extent herein
and therein provided.  For the avoidance
of doubt, each of the Company and each Holder of the Notes, by its acceptance
of such Notes, acknowledges and agrees that all of the rights, privileges,
protections, immunities and benefits afforded to the Trustee under the Original
Indenture are deemed to be incorporated herein, and shall be enforceable by the
Trustee hereunder, as if set forth herein in full.

 

SECTION 9.11.              The
Trustee. The recitals in this Supplemental Indenture are made by the
Company only and not the Trustee, and all of the provisions contained in the
Original Indenture in respect of the rights, privileges, immunities, powers and
duties of the Trustee shall be applicable in respect of the Notes and of this
Supplemental Indenture as fully and with like effect as set forth in full
herein.

 

SECTION 9.12.              Applicability
of First Supplemental Indenture. 
The First Supplemental Indenture (the “First
Supplemental Indenture”) to the Original Indenture, dated as of June 14,
2007, among Janus Capital Group Inc. and The Bank of New York Mellon Trust
Company, N.A. (as successor to The Bank of New York Trust Company, N.A.) shall
not apply to the Notes and the term Indenture as used herein shall not include
the First Supplemental Indenture.

 

[Remainder of the page intentionally left blank]

 

 

45

 

IN WITNESS WHEREOF, the
parties hereto have caused this Supplemental Indenture to be duly executed as
of the day and year first above written.

 

	
   

  	
  JANUS
  CAPITAL GROUP INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Gregory A. Frost

  
	
   

  	
  Name:
  

  	
  Gregory
  A. Frost

  
	
   

  	
  Title:

  	
  Executive Vice President and Chief

  
	
   

  	
   

  	
  Financial Officer

  

 

[Trustee Signature Follows]

 

 

 

 

 

	
   

  	
  THE
  BANK OF NEW YORK MELLON TRUST 

  
	
   

  	
  COMPANY,
  N.A., as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Lawrence M. Kusch

  
	
   

  	
  Name:

  	
  Lawrence
  M. Kusch

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  

 

 

 

SCHEDULE A

 

The following table sets
forth the number of Additional Shares to be received per $1,000 principal
amount of Notes pursuant to Section 4.06 for each Stock Price and
Effective Date set forth below:

 

	
   

  	
   

  	
  Stock Price

  	
   

  
	
  Effective Date

  	
   

  	
  $11.00

  	
   

  	
  $20.00

  	
   

  	
  $30.00

  	
   

  	
  $40.00

  	
   

  	
  $50.00

  	
   

  	
  $60.00

  	
   

  	
  $70.00

  	
   

  	
  $80.00

  	
   

  	
  $90.00

  	
   

  	
  $100.00

  	
   

  	
  $110.00

  	
   

  	
  $120.00

  	
   

  	
  $130.00

  	
   

  
	
  July 21, 2009

  	
   

  	
  19.6078

  	
   

  	
  7.4021

  	
   

  	
  3.4255

  	
   

  	
  1.9522

  	
   

  	
  1.2323

  	
   

  	
  0.8197

  	
   

  	
  0.5591

  	
   

  	
  0.3842

  	
   

  	
  0.2622

  	
   

  	
  0.1753

  	
   

  	
  0.1124

  	
   

  	
  0.0666

  	
   

  	
  0.0336

  	
   

  
	
  July 15, 2010

  	
   

  	
  19.6078

  	
   

  	
  6.8469

  	
   

  	
  2.9713

  	
   

  	
  1.6442

  	
   

  	
  1.0247

  	
   

  	
  0.6772

  	
   

  	
  0.4594

  	
   

  	
  0.3135

  	
   

  	
  0.2118

  	
   

  	
  0.1392

  	
   

  	
  0.0868

  	
   

  	
  0.0488

  	
   

  	
  0.0217

  	
   

  
	
  July 15, 2011

  	
   

  	
  19.6078

  	
   

  	
  5.9273

  	
   

  	
  2.3307

  	
   

  	
  1.2430

  	
   

  	
  0.7680

  	
   

  	
  0.5073

  	
   

  	
  0.3437

  	
   

  	
  0.2332

  	
   

  	
  0.1555

  	
   

  	
  0.0996

  	
   

  	
  0.0591

  	
   

  	
  0.0297

  	
   

  	
  0.0092

  	
   

  
	
  July 15, 2012

  	
   

  	
  19.6078

  	
   

  	
  4.4980

  	
   

  	
  1.4889

  	
   

  	
  0.7669

  	
   

  	
  0.4811

  	
   

  	
  0.3244

  	
   

  	
  0.2229

  	
   

  	
  0.1518

  	
   

  	
  0.1004

  	
   

  	
  0.0627

  	
   

  	
  0.0348

  	
   

  	
  0.0144

  	
   

  	
  0.0012

  	
   

  
	
  July 15, 2013

  	
   

  	
  19.6078

  	
   

  	
  2.1877

  	
   

  	
  0.4797

  	
   

  	
  0.2606

  	
   

  	
  0.1779

  	
   

  	
  0.1265

  	
   

  	
  0.0901

  	
   

  	
  0.0629

  	
   

  	
  0.0417

  	
   

  	
  0.0248

  	
   

  	
  0.0109

  	
   

  	
  0.0002

  	
   

  	
  0.0000

  	
   

  
	
  July 15, 2014

  	
   

  	
  19.6078

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  

 

 

 

EXHIBIT A

 

[FORM OF
FACE OF NOTE]

 

THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY. THIS NOTE IS EXCHANGEABLE FOR NOTES REGISTERED IN THE
NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER
THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED
CIRCUMSTANCES.

 

UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
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 INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

A-1

 

JANUS
CAPITAL GROUP INC.

 

3.25%
Convertible Senior Note due 2014

 

	
  No. [                ]

  	
   

  	
  Initially
  $[              ]

  

 

CUSIP No. 47102X AG0

 

JANUS
CAPITAL GROUP INC., a Delaware corporation (herein called the “Company”, which term includes any successor
Person under the Indenture hereinafter referred to), for value received, hereby
promises to pay CEDE & CO., or registered assigns,
[                  ]
MILLION DOLLARS
($[              ])
(or such lesser principal amount as shall be specified in the “Schedule of
Exchanges of Securities” attached hereto) on July 15, 2014 unless earlier
converted or repurchased, and to pay interest thereon as set forth in the
manner, at the rates and to the Persons set forth in the Indenture.

 

This
Note shall bear interest at a rate of 3.25% per annum from July 21, 2009
or from the most recent date to which interest had been paid or provided to,
but excluding, the next scheduled Interest Payment Date, until the principal
hereof shall be repaid. Interest on this Note will be computed on the basis of
a 360-day year composed of twelve 30-day months. Interest is payable
semi-annually in arrears on each January 15 and July 15, commencing
on January 15, 2010, to the Person in whose name this Note (or one or more
predecessor securities) is registered at the close of business on the Regular
Record Date for such interest. Additional Interest will be payable at the
option of the Company on the terms set forth in Section 5.02 of the
within-mentioned Supplemental Indenture, and any reference to interest on, or
in respect of, any Note therein shall be deemed to include Additional Interest
if, in such context, Additional Interest is, was or would be payable pursuant
to such Section 5.02 and any express mention of the payment of Additional
Interest in any provision therein shall not be construed as excluding
Additional Interest in those provisions thereof where such express mention is
not made.

 

The
Company will pay interest on overdue principal (including the Fundamental
Change Purchase Price, if applicable), and, to the extent lawful, on Defaulted
Interest, in each case at the annual rate of the then-applicable interest rate
from the required payment date. Interest not paid when due and any interest on
principal (including the Fundamental Change Purchase Price, if applicable) or
interest not paid when due shall be paid to Holders by the Company in
accordance with the provisions of Section 307 of the Original Indenture
and, for this purpose, each reference to Defaulted Interest in the Original
Indenture shall be deemed to include such interest payable in respect of
overdue principal (including the Fundamental Change Purchase Price, if
applicable).

 

The
Company shall pay principal of and interest on this Note, so long as such Note
is a Global Note, in immediately available funds to the Depositary or its
nominee, as the case may be, as the registered Holder of such Note. As provided
in and subject to the provisions of the Indenture, the Company shall pay
principal of any Notes (other than Notes that are Global Notes) at the office
or agency designated by the Company for that purpose. The Company has initially
designated the Trustee as its Paying Agent and Security Registrar in respect of
the Notes and its agency in New York, New York as a place where Notes may be
presented for payment or for registration of transfer.

 

A-2

 

Reference
is hereby made to the further provisions of this Note set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as
if set forth at this place.

 

In
the case of any conflict between this Note and the Indenture, the provisions of
the Indenture shall control. This Note, and any claim or controversy or dispute
arising under or related to this Note, shall be governed by and construed in
accordance with the laws of the State of New York (without regard to principles
of conflicts of laws).

 

Unless the certificate of
authentication hereon has been executed by the Trustee referred to on the
reverse hereof by manual signature, this Note shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose.

 

[Remainder of page intentionally left blank]

 

A-3

 

IN
WITNESS WHEREOF, JANUS CAPITAL GROUP INC. has caused this instrument to be
signed manually or by facsimile by one of its duly authorized Officers.

 

Dated:
July 21, 2009

 

	
   

  	
  JANUS CAPITAL GROUP INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

A-4

 

CERTIFICATE
OF AUTHENTICATION

 

This
is one of the Securities of the series referred to in the within-mentioned
Indenture.

 

Dated:
July 21, 2009

 

	
   

  	
   

  THE BANK OF NEW YORK MELLON TRUST

  
	
   

  	
  COMPANY, N.A., as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

A-5

 

[FORM OF
REVERSE OF NOTE]

 

JANUS
CAPITAL GROUP INC.

3.25% Convertible Senior Note due 2014

 

This
Note is one of a duly authorized issue of Securities of the Company (herein
called the “Notes”), issued under
an Indenture dated as of November 6, 2001, as previously amended and
supplemented from time to time in accordance with the terms thereof (herein
called the “Original Indenture”)
and as further supplemented by the Second Supplemental Indenture dated as of July 21,
2009 (herein called the “Supplemental
Indenture” and the Original Indenture, as supplemented by the
Supplemental Indenture, the “Indenture”)
by and between the Company and The Bank of New York Mellon Trust Company, N.A.,
herein called the “Trustee”, and
reference is hereby made to the Indenture for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Notes and of the terms upon which the Notes
are, and are to be, authenticated and delivered. Additional Notes may be issued
in an unlimited aggregate principal amount, subject to certain conditions
specified in the Indenture.

 

This
Note is not subject to redemption at the option of the Company prior to July 15,
2014 and, for the avoidance of doubt, this Note is not subject to the
provisions of Article 11 of the Original Indenture.

 

The
provisions in Articles 4 and 14 of the Original Indenture shall not apply with
respect to the Notes, and Article 6 of the Supplemental Indenture
supersedes the entirety thereof.

 

As
provided in and subject to the provisions of the Indenture, upon the occurrence
of a Fundamental Change, the Holder has the right, at such Holder’s option, to
require the Company to repurchase all of such Holder’s Notes or any portion
thereof (in principal amounts of $1,000 or integral multiples thereof) on the
Fundamental Change Purchase Date at a price equal to the Fundamental Change
Purchase Price.

 

As
provided in and subject to the provisions of the Indenture, the Holder hereof
has the right, at its option (i) during certain periods and upon the
occurrence of certain conditions specified in the Indenture, prior to the close
of business on the Business Day immediately preceding April 15, 2014, and (ii) on
or after April 15, 2014, at any time prior to the close of business on the
Business Day immediately preceding the Stated Maturity, to convert this Note or
a portion thereof that is $1,000 or an integral multiple thereof, into cash,
shares of Common Stock or a combination thereof, at the Company’s election, at
the applicable Conversion Rate specified in the Indenture, as adjusted from
time to time as provided in the Indenture.

 

As
provided in and subject to the provisions of the Indenture, the Company will
make all payments in respect of the Fundamental Change Purchase Price and the
principal amount on the Stated Maturity thereof, as the case may be, to the
holder who surrenders a Note to the Paying Agent to collect such payments in
respect of the Note. The Company will pay cash amounts in money of the United
States that at the time of payment is legal tender for payment of public and
private debts.

 

A-6

 

The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Company and
the rights of the Holders of the Notes to be effected under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of a
majority in principal amount of the Notes at the time Outstanding. The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Notes at the time Outstanding, on behalf
of the Holders of all Notes, to waive compliance by the Company with certain
provisions of the Indenture and certain past Defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Note shall
be conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange herefor or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Note.

 

As
provided in and subject to the provisions of the Indenture, in case an Event of
Default, as defined in the Indenture, shall have occurred and be continuing,
the principal of and interest on all Notes may be declared due and payable, by
either the Trustee or Holders of not less than 25% in aggregate principal
amount of Notes then Outstanding, and upon said declaration shall become due
and payable, in the manner, with the effect and subject to the conditions
provided in the Indenture.

 

No
reference herein to the Indenture and no provision of this Note or of the
Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay or deliver, as the case may be, the
principal of, interest on and the consideration due upon conversion of, this
Note at the time, place and rate, and in the coin and currency, herein
prescribed.

 

As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Note is registrable in the Security Register, upon
surrender of this Note for registration of transfer at the office or agency of
the Company in any place where the principal of and interest on this Note are
payable, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company and the Security Registrar duly executed
by, the Holder hereof or its attorney duly authorized in writing, and thereupon
one or more new Notes of this series and of like tenor, of authorized
denominations and for the same aggregate principal amount, will be issued to
the designated transferee or transferees.

 

The
Notes are issuable only in registered form without coupons in denominations of
$1,000 and any integral multiple thereof. As provided in the Indenture and subject
to certain limitations therein set forth, the Notes are exchangeable for a like
aggregate principal amount of Notes and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.

 

No
service charge shall be made for any such registration of transfer or exchange,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.

 

Prior
to due presentment of this Note for registration of transfer, the Company, the
Trustee and any agent of the Company or Trustee may treat the Person in whose
name the Note

 

A-7

 

is registered as the owner hereof for all purposes, whether or not this
Note be overdue, and neither the Company, the Trustee nor any such agent shall
be affected by notice to the contrary.

 

All defined terms used in
this Note that are defined in the Indenture shall have the meanings assigned to
them in the Indenture.

 

A-8

 

ABBREVIATIONS

 

The following abbreviations, when used in the inscription of the face
of this Note, shall be construed as though they were written out in full
according to applicable laws or regulations:

 

	
  TEN COM - as
  tenants in common

  	
   

  	
  UNIF GIFT MIN ACT

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   Custodian

  
	
   

  	
   

  	
  (Cust)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TEN ENT - as
  tenants by the entireties

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Minor)

  	
   

  	
   

  
	
  JT TEN - as
  joint tenants with right of 

  	
   

  	
   

  	
   

  	
   

  
	
  Survivorship and
  not as tenants in common

  	
   

  	
  Uniform Gifts to Minors Act

  	
   

  	
   (State)

  

 

Additional
abbreviations may also be used though not in the above list.

 

A-9

 

SCHEDULE A

 

SCHEDULES
OF EXCHANGES OF SECURITIES

 

JANUS
CAPITAL GROUP INC.

3.25% Convertible Senior Notes due 2014

 

The
initial principal amount of this Global Note is
[              ]
MILLION DOLLARS
($[            ]). The
following exchanges, purchases or conversions of a part of this Global Note
have been made:

 

	
  Date of

  Exchange

  	
   

  	
  Amount of decrease in

  principal amount of this

  Global Note

  	
   

  	
  Amount of increase in

  principal amount of this

  Global Note

  	
   

  	
  Principal amount of this

  Global Note following such

  decrease or increase

  	
   

  	
  Signature of authorized

  signatory of Trustee or

  Custodian

  	
   

  

 

 

A-10

 

ATTACHMENT 1

 

[FORM OF
NOTICE OF CONVERSION]

 

To:          Janus Capital Group
Inc.

 

The undersigned owner of this Note hereby irrevocably exercises the
option to convert this Note, or a portion hereof (which is $1,000 or
an integral multiple hereof) below designated, into cash, shares of Common
Stock or a combination of cash and shares of Common Stock, at the Company’s
election, in accordance with the terms of the Indenture referred to in this
Note, and directs that cash payable and any shares of Common Stock issuable and
deliverable upon conversion, together with any check in payment for fractional
shares of Common Stock, and any Notes representing any unconverted principal
amount hereof, be paid or issued and delivered, as the case may be, to the
registered Holder hereof unless a different name has been indicated below. Subject
to certain exceptions set forth in the Indenture, if this notice is being
delivered on a date after the close of business on a Regular Record Date and
prior to the open of business on the related Interest Payment Date, this notice
is accompanied by payment of an amount equal to the interest payable on such
Interest Payment Date of the principal of this Note to be converted. If any
shares of Common Stock are to be issued in the name of a Person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
hereto as set forth in Section 4.08 of the Supplemental Indenture. Any
amount required to be paid by the undersigned on account of interest
accompanies this Note.

 

Principal amount to be converted (in an integral multiple of $1,000, if
less than all):

 

	
   

  
	
   

  
	
   

  
	
   

  
	
  Signature(s)

  
	
   

  
	
  Signature(s) must
  be guaranteed  by an institution which is a member of one of the
  following recognized signature Guarantee Programs:

  
	
   

  
	
  (i) The
  Securities Transfer Agent Medallion Program (STAMP); (ii) The New York
  Stock Exchange Medallion Program (MNSP); (iii) The Stock Exchange
  Medallion Program (SEMP) or (iv) another guarantee program acceptable to
  the Trustee.

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  Signature Guarantee

  

 

1

 

Fill in for registration of any shares of Common Stock and Notes if to
be issued otherwise than to the registered Holder.

 

	
   

  
	
   

  
	
  (Name)

  
	
   

  
	
   

  
	
  (Address)

  
	
   

  
	
  Please print
  Name and Address

  (including zip code number)

  
	
   

  
	
  Social Security
  or other Taxpayer

  
	
  Identifying
  Number

  	
   

  

 

2

 

ATTACHMENT 2

 

[FORM OF
FUNDAMENTAL CHANGE PURCHASE NOTICE]

 

To:          Janus Capital Group
Inc.

 

The undersigned registered owner of this Note hereby acknowledges
receipt of a notice from Janus Capital Group Inc. (the “Company”) as to the occurrence of a
Fundamental Change with respect to the Company and specifying the Fundamental
Change Purchase Date and requests and instructs the Company to pay to the
registered holder hereof in accordance with the applicable provisions of this
Note and the Indenture referred to in this Note (1) the entire principal
amount of this Note, or the portion thereof (that is $1,000 principal amount or
an integral multiple thereof) below designated, and (2) if such
Fundamental Change Purchase Date does not fall during the period after a
Regular Record Date and on or prior to the corresponding Interest Payment Date,
accrued and unpaid interest thereon to, but excluding, such Fundamental Change
Purchase Date.

 

In
the case of certificated Notes, the certificate numbers of the Notes to be
repurchased are as set forth below:

 

	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature(s)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Social Security or Other Taxpayer Identification Number

  
	
   

  	
   

  
	
   

  	
  principal amount to be repaid (if less than all):

  
	
   

  	
  $                    ,
  000

  
	
   

  	
   

  
	
   

  	
  NOTICE: The signature on the Fundamental Change
  Purchase Notice must correspond with the name as written upon the face of the
  Note in every particular without alteration or enlargement or any change
  whatever.

  

 

1

 

ATTACHMENT 3

 

[FORM OF
ASSIGNMENT AND TRANSFER]

 

For value received                        hereby sell(s), assign(s) and transfer(s) unto
                                              
(Please insert social security or Taxpayer Identification Number of assignee)
the within Note, and hereby irrevocably constitutes and appoints
                                  
to transfer the said Note on the books of the Company, with full power of
substitution in the premises.

 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature(s)

  
	
   

  	
   

  
	
   

  	
  Signature(s) must be guaranteed by an institution which is a
  member of one of the following recognized signature Guarantee Programs:

  
	
   

  	
   

  
	
   

  	
  (i) The Securities Transfer Agent Medallion Program (STAMP);
  (ii) The New York Stock Exchange Medallion Program (MNSP);
  (iii) The Stock Exchange Medallion Program (SEMP) or (iv) another
  guarantee program acceptable to the Trustee.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature Guarantee

  

 

1

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