Document:

Exhibit

    

    

TORCHMARK CORPORATION, as Issuer
and
REGIONS BANK, as Trustee
______________________
4.550% Senior Notes due 2028
______________________

FIRST SUPPLEMENTAL INDENTURE
Dated as of September 27, 2018

    

FIRST SUPPLEMENTAL INDENTURE
THIS FIRST SUPPLEMENTAL INDENTURE (this “First Supplemental Indenture”), dated as of September 27, 2018, is between Torchmark Corporation, a Delaware corporation (the “Company”), and Regions Bank, as trustee (the “Trustee”). All capitalized terms used but not otherwise defined herein shall have the meaning set forth in the Base Indenture (as defined below).

RECITALS OF THE COMPANY
WHEREAS, the Company and the Trustee executed and delivered an Indenture, dated as of September 24, 2018 (the “Base Indenture” and, as amended and supplemented by this First Supplemental Indenture, the “Indenture”), to provide for the issuance by the Company from time to time of the Company’s senior debt securities evidencing its unsecured and unsubordinated indebtedness (the “Securities”), to be issued in one or more series as provided in the Indenture.
WHEREAS, the Company has duly authorized the execution and delivery, and desires and has requested the Trustee to join it in the execution and delivery, of this First Supplemental Indenture in order to establish and provide for the issuance by the Company of a series of Securities designated as its 4.550% Senior Notes due 2028 (the “Notes”), on the terms set forth herein;
WHEREAS, Sections 901(5) and 901(7) of the Base Indenture provide that without the consent of Holders of the Securities of any series issued under the Indenture, the Company, when authorized by or pursuant to a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental to the Base Indenture for such purpose.
WHEREAS, the Company desires to establish the form and terms of the Notes and to modify, alter, supplement and change certain provisions of the Base Indenture for the benefit of the Holders of the Notes (except as may be provided in a future supplemental indenture to the Indenture applicable to the Notes (a “Future Supplemental Indenture”)).
WHEREAS, the Company has duly authorized the execution and delivery of this First Supplemental Indenture to provide for the issuance of the Notes and amendment of certain provisions of the Base Indenture as herein provided and all acts and things necessary to make this First Supplemental Indenture a valid, binding, and legal obligation of the Company and to constitute a valid agreement of the Company, in accordance with its terms, have been done and performed.
NOW, THEREFORE, for and in consideration of the premises and the purchase of the Notes by the Holders thereof, it is mutually agreed, for the equal and proportionate benefit of all Holders of the Notes, as follows:

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ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101 Certain Defined Terms. Except as may be provided in a Future Supplemental Indenture, for the benefit of the Holders of the Notes but no other series of Securities under the Indenture, whether now or hereafter issued and Outstanding, Article I of the Base Indenture shall be amended by adding the following defined terms to Section 101 in appropriate alphabetical sequence, as follows:
“Comparable Treasury Issue” means the United States Treasury security selected by a Reference Treasury Dealer as having an actual or interpolated maturity comparable to the remaining term of the Notes called for redemption, that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of Notes called for redemption, assuming for this purpose that the Notes being redeemed matured on the Par Call Date.
“Comparable Treasury Price” means, with respect to any Redemption Date, the average, as determined by the Company, of the Reference Treasury Dealer Quotations for that Redemption Date.
“Lien” means, with respect to any property of any person, any mortgage or deed of trust, pledge, hypothecation, assignment, deposit arrangement, security interest, lien, charge, encumbrance, preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever on or with respect to such property (including any capital lease obligation, conditional sale or other title retention agreement having substantially the same economic effect as any of the foregoing or any sale and leaseback transaction).
“Permitted Lien” means:

		
	(1)
	Liens securing indebtedness owed by a Significant Subsidiary to another Significant Subsidiary or to the Company;

		
	(2)
	pledges or deposits under workers’ compensation or other similar laws and judgment Liens thereunder that are not currently dischargeable;

		
	(3)
	good faith deposits in connection with leases to which the Company or any Significant Subsidiary is a party;

		
	(4)
	deposits to secure the Company’s public or statutory obligations;

		
	(5)
	deposits in connection with obtaining or maintaining self-insurance or obtaining the benefits of any law, regulation or arrangement pertaining to unemployment insurance, old age pensions, social security or similar matters;

		
	(6)
	deposits in litigation or other proceedings;

		
	(7)
	Liens created by or resulting from any judgments or awards against the Company or any of its Significant Subsidiaries with respect to which the Company is in good faith prosecuting an appeal or other review proceedings, or Liens incurred by the Company or any of its 

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Significant Subsidiaries of for the purpose of obtaining a stay or discharge in the course of any litigation to which the Company a party; or
		
	(8)
	Liens for taxes or assessments, governmental charges or levies not yet due or delinquent, or which can be paid thereafter without penalty, or which are being contested in good faith by appropriate proceedings.

“Primary Treasury Dealer” means a nationally recognized investment banking firm that is a primary U.S. Government securities dealer in the United States.
“Prospectus Supplement” means the final prospectus supplement dated as of September 25, 2018 to the accompanying base prospectus dated as of September 24, 2018, each contained in the Company’s Registration Statement on Form S-3 (File No. 333-227501) filed with the Securities and Exchange Commission on September 24, 2018, relating to the offering of the Notes.
“Reference Treasury Dealer” means Merrill Lynch, Pierce, Fenner & Smith Incorporated, Wells Fargo Securities, LLC and one other Primary Treasury Dealer specified by the Company from time to time, and each of their respective successors; provided, however, that if any of the foregoing shall cease to be a Primary Treasury Dealer, the Company shall substitute therefor another nationally recognized investment banking firm that is a Primary Treasury Dealer.
“Reference Treasury Dealer Quotation” means, on any Redemption Date, the average, as determined by the Company, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Company by each Reference Treasury Dealer at 3:30 p.m., New York City time, on the third business day preceding that Redemption Date.
“Remaining Scheduled Payments” means the remaining scheduled payments of principal of and interest on the Notes called for redemption that would be due after the related Redemption Date but for that redemption, assuming for this purpose that the Notes being redeemed matured on the Par Call Date (excluding any portion of such payments of interest accrued and unpaid to, but excluding, the Redemption Date); provided, however, that if such Redemption Date is not an interest payment date with respect to the Notes called for redemption, the amount of the next succeeding scheduled interest payment on such Notes will be reduced by the amount of interest accrued to such Redemption Date.
“Treasury Rate” means, with respect to any Redemption Date, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for that Redemption Date.

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ARTICLE II
TERMS OF THE NOTES
Section 201 Terms of the Notes. The following terms relating to the Notes are hereby established pursuant to the terms and conditions set forth in the Prospectus Supplement:

(a)The Notes are hereby created and designated a series of Securities under the Base Indenture. The title of the Notes shall be “4.550% Senior Notes due 2028” and shall bear a CUSIP number of 891027AS3 and an ISIN number of US891027AS33.

(b)The aggregate principal amount of Notes that may be initially authenticated and delivered under the Indenture shall be $550,000,000 (except, in each case, for Notes authenticated and delivered upon registration or transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections 304, 305, 306, 906, 1107 or 1305 of the Base Indenture). Under a Board Resolution, Officers’ Certificate pursuant to Board Resolutions or a supplemental indenture, the Company may from time to time, without the consent of the Holders of Notes, issue additional Notes (in any such case “Additional Notes”) having the same ranking and the same interest rate, maturity and other terms as the Notes; provided that no such Additional Notes may be issued unless fungible with the existing Notes for U.S. federal income tax purposes. Any Additional Notes and the existing Notes will constitute a single series under the Indenture and all references to the relevant Notes herein shall include the Additional Notes unless the context otherwise requires.

(c)The Stated Maturity for the Notes shall be September 15, 2028, unless earlier redeemed or repurchased in accordance with the provisions of this First Supplemental Indenture. The Notes shall be payable and may be presented for payment, purchase, redemption, registration of transfer and exchange at the office of the Company maintained for such purpose, which shall initially be the Corporate Trust Office of the Trustee.

(d)The rate at which the Notes shall bear interest shall be 4.550% per annum. The date from which interest shall accrue on the Notes shall be September 27, 2018, or the most recent Interest Payment Date to which interest has been paid or provided for; the Interest Payment Dates for the Notes shall be March 15 and September 15 of each year, commencing March 15, 2019 (if an Interest Payment Date falls on a day that is not a Business Day, then the applicable interest payment will be made on the next succeeding Business Day and no additional interest will accrue as a result of such delayed payment); the initial interest period will be the period from and including September 27, 2018, to, but excluding, the initial Interest Payment Date, and the subsequent interest periods will be the periods from and including an Interest Payment Date to, but excluding, the next Interest Payment Date or the Stated Maturity, as the case may be; the interest so payable, and punctually paid or duly provided for, on any Interest Payment Date, will be paid to the Person in whose name the Note (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be March 1 or September 1 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Payment of principal of (and premium and Make-Whole Amounts, if any, on) and any such interest or Additional Amounts, if any, on the Notes will be made at the Corporate Trust Office of the Trustee in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register; provided, further, however, that so long as the Notes are registered to Cede & Co., such payment will be made by wire transfer in accordance with the procedures 

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established by The Depository Trust Company (“DTC”). Interest on the Notes will be computed on the basis of a 360-day year of twelve 30-day months.

(e)The Notes shall be initially issuable in global form (each such Note, a “Global Note”). The Global Notes and the Trustee’s certificate of authentication thereon shall be substantially in the form of Exhibit A to this First Supplemental Indenture with respect to the Notes. Each Global Note shall represent the outstanding Notes as shall be specified therein and each shall provide that it shall represent the aggregate amount of outstanding Notes from time to time endorsed thereon and that the aggregate amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the amount of outstanding Notes represented thereby shall be made by the Trustee or the Security Registrar, in accordance with Sections 203 and 305 of the Base Indenture.

(f)The depositary for such Global Notes (the “Depositary”) shall be DTC, New York, New York. The Security Registrar with respect to the Global Notes shall be the Trustee.

(g)The Notes shall be defeasible pursuant to Section 1402 or Section 1403 of the Base Indenture. Covenant defeasance contained in Section 1403 of the Base Indenture shall apply to the covenants contained in Sections 1006 and 1007 of the Indenture, as such covenants are amended pursuant to Article III of this First Supplemental Indenture.

(h)The Notes shall be redeemable pursuant to Section 1101 of the Base Indenture pursuant to the following terms:

(i)The Notes will be redeemable in whole or in part at any time and from time to time, at the option of the Company, prior to June 15, 2028 (three months prior to the Stated Maturity of the Notes) (the “Par Call Date”), at a Redemption Price equal to the greater of:

(1)100% of the principal amount of the Notes to be redeemed; and

(2)the sum of the present values of the Remaining Scheduled Payments on such Notes to be redeemed that would be due if such Notes matured on the Par Call Date, discounted to the date of redemption, on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months), at a rate equal to the sum of the Treasury Rate plus 25 basis points,
plus, in each case, accrued and unpaid interest on the principal amount of the Notes being redeemed to, but excluding, the Redemption Date.

(ii)    At any time and from time to time on or after the Par Call Date for the Notes, the Notes will be redeemable at the Company’s option, in whole or in part, at a Redemption Price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest on the principal amount being redeemed to, but excluding, the Redemption Date.

(iii)    Notice of redemption shall be given in writing and mailed, first-class postage prepaid or by overnight courier guaranteeing next-day delivery, or, in the case of Global Notes, sent electronically in accordance with the procedures of DTC, to the Trustee, the Paying Agent and each Holder of the Notes to be redeemed, not less than thirty (30) nor more than sixty (60) days 

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prior to the Redemption Date, at the Holder’s address appearing in the Security Register. All notices of redemption shall contain the information set forth in Section 1104 of the Base Indenture.

(iv)Any exercise of the Company’s option to redeem the Notes will be done in compliance with the Indenture.

(v)If the Company elects to redeem only a portion of the Notes, the Trustee shall select the Notes to be redeemed pro rata, by lot, or determine such other method for selecting the particular Notes to be redeemed which the Trustee deems to be fair and appropriate, in each case in accordance with the procedures of DTC to the extent applicable; provided further, that the unredeemed portion of the principal amount of any Note shall be in a denomination of not less than $2,000.

(vi)Once notice of redemption is sent, any Notes called for redemption will become due and payable on the Redemption Date and at the applicable Redemption Price, plus, in each case, accrued and unpaid interest thereon to, but excluding, the Redemption Date, subject to any conditions precedent specified in such notice.

(vii)Unless the Company defaults in payment of the Redemption Price and accrued interest, interest will cease to accrue on the Notes called for redemption hereunder on and after the Redemption Date.

(i)The Notes shall not be subject to any sinking fund pursuant to Section 1201 of the Base Indenture.

(j)The Notes shall be issuable in minimum denominations of $2,000.00 and integral multiples of $1,000.00 in excess thereof.

(k)Holders of the Notes will not have the option to have the Notes repaid prior to the Stated Maturity.

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ARTICLE III 
COVENANTS
Section 301 Except as may be provided in a Future Supplemental Indenture, for the benefit of the Holders of the Notes but no other series of Securities under the Indenture, whether now or hereafter issued and Outstanding, Article X of the Base Indenture shall be amended by adding the following new Sections 1006 and 1007 thereto, each as set forth below:

“Section 1006. Limitations on Liens.

As long as any of the Notes are outstanding, the Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed money secured by a Lien, other than a Permitted Lien, on any Voting Securities of any of its Significant Subsidiaries that is owned directly or indirectly by the Company or any of its Subsidiaries, in each case whether owned at the date of the initial issuance of the Notes or thereafter acquired, or any interest therein or any income or profits therefrom, unless the Notes and, if the Company so elects, any other indebtedness of the Company ranking at least on an equal basis with the Notes, will be secured equally and ratably with, or prior to, such other indebtedness secured by such Lien until such time as such indebtedness is no longer secured by such Lien.”
“Section 1007. Limitations on Sales of Capital Stock of Significant Subsidiaries.
As long as any of the Notes are outstanding, the Company will not, and will not permit any of its Subsidiaries to sell, assign, transfer or otherwise dispose of and will not permit any of its Significant Subsidiaries to issue, directly or indirectly, any shares of Capital Stock of any Significant Subsidiary, unless:

(1) the entire Capital Stock of such Significant Subsidiary is disposed of in a single transaction or series of related transactions for consideration consisting of cash or property, which, in the good faith opinion of the Board of Directors, is at least equal to the fair market value of such Capital Stock;

(2) such issuance, sale, assignment, transfer or other disposition is to the Company or one or more of the Company’s other Significant Subsidiaries; or

(3) such issuance, sale, assignment, transfer or other disposition is required to comply with an order of a court or regulatory authority of competent jurisdiction, other than an order issued at the Company’s request or the request of any Significant Subsidiary.”

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ARTICLE IV
MISCELLANEOUS
Section 401 This First Supplemental Indenture and the Notes 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. This First Supplemental Indenture is subject to the provisions of the Trust Indenture Act that are required to be part of the Indenture and shall, to the extent applicable, be governed by such provisions.
Section 402 In case any provision in this First Supplemental Indenture or in the Notes 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 403 This First Supplemental Indenture may be executed in counterparts, each of which will be an original, but such counterparts will together constitute but one and the same First Supplemental Indenture. The exchange of copies of this First Supplemental Indenture and pages by facsimile, .pdf transmission, email or other electronic means shall constitute effective execution and delivery of this First Supplemental Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile, .pdf transmission, email or other electronic means shall be deemed to be their original signatures for all purposes.
Section 404 The Base Indenture, as supplemented and amended by this First Supplemental Indenture, is in all respects ratified and confirmed, and the Base Indenture and this First Supplemental Indenture shall be read, taken and construed as one and the same instrument with respect to the Notes. All provisions included in this First Supplemental Indenture supersede any conflicting provisions included in the Base Indenture with respect to the Notes, unless not permitted by law. The Trustee accepts the trusts created by the Base Indenture, as supplemented by this First Supplemental Indenture, and agrees to perform the same upon the terms and conditions of the Base Indenture, as supplemented by this First Supplemental Indenture.
Section 405 The provisions of this First Supplemental Indenture shall become effective as of the date hereof.
Section 406 Notwithstanding anything else to the contrary herein, the terms and provisions of this First Supplemental Indenture shall apply only to the Notes (and any Additional Notes) and shall not apply to any other series of Securities under the Indenture and this First Supplemental Indenture shall not and does not otherwise affect, modify, alter, supplement or change the terms and provisions of any other series of Securities under the Indenture, whether now or hereafter issued and Outstanding. For the purposes of the applicability of Section 901(13) to the Notes and this First Supplemental Indenture, the reference to the “final prospectus supplement” in Section 901(13) shall be deemed to be to the Prospectus Supplement.

Section 407 The recitals contained herein and in the Notes (including any Additional Notes) shall be taken as the statements of the Company, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this First Supplemental Indenture, the Notes or any Additional Notes, except that the Trustee represents that it is duly authorized to execute and deliver this First Supplemental Indenture, authenticate the Notes and any Additional Notes and perform its obligations hereunder. The Trustee shall not be accountable for the use or application by the Company of the Notes or any Additional Notes or the proceeds thereof.

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IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed as of the date first above written.
TORCHMARK CORPORATION
By:    /s/ Frank M. Svoboda
Name: Frank M. Svoboda 
Title: EVP and CFO
REGIONS BANK
By:    /s/ Deloris Lynch
Name: Deloris Lynch
Title: Assistant Vice President
[Signature page to First Supplemental Indenture]

Exhibit A
Form of Global Note
THIS SECURITY IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN THE DEPOSITORY TRUST COMPANY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND SUCH CERTIFICATE ISSUED IN EXCHANGE FOR THIS CERTIFICATE IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

Torchmark Corporation
No. [l]                                    
U.S.$ [l]
CUSIP No. 891027AS3
 ISIN No. US891027AS33

4.550% Senior Notes due 2028
Torchmark Corporation, a corporation duly organized and existing under the laws of Delaware (herein called the “Company,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of [l] U.S. DOLLARS (U.S.$ [l]) on September 15, 2028, and to pay interest thereon from September 27, 2018, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually in arrears on March 15 and September 15 in each year, commencing March 15, 2019, at the rate of 4.550% per annum, until the principal hereof is paid or made available for payment.
The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security is registered at the close of business on the Regular Record Date for such interest, which shall be March 1 or September 1 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture. This Security may be issued as part of a series.
Payment of the principal of (and premium and Make-Whole Amounts, if any, on) and any such interest and Additional Amounts, if any, on this Security will be made at the Corporate Trust Office of the Trustee in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register; provided, further, however, that so long as this Security is registered to Cede & Co., such payment will be made by wire transfer in accordance with the procedures established by The Depository Trust Company.
Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. 
Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

A-1

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.
Dated:
TORCHMARK CORPORATION 

By:________________________
Name: 
Title:

[Signature Page to Global Note]

A-2

TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.
Dated:
REGIONS BANK, as Trustee
                        
By: ___________________    
Authorized Signatory

[Trustee’s Certificate of Authentication]

A-3

(REVERSE OF NOTE)

TORCHMARK CORPORATION 

4.550% Senior Notes due 2028
This Security is one of a duly authorized issue of debt securities of the Company (herein called the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of September 24, 2018 (herein called the “Base Indenture,” which term shall have the meaning assigned to it in such instrument), between the Company and Regions Bank, as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Base Indenture), and reference is hereby made to the Base 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 Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered, as supplemented by the First Supplemental Indenture relating to the Securities, dated as of September 27, 2018, by and between the Company and the Trustee (herein called the “First Supplemental Indenture” the First Supplemental Indenture and the Base Indenture collectively are herein called the “Indenture”). In the event of any conflict between the Base Indenture and the First Supplemental Indenture, the First Supplemental Indenture shall govern and control. In the event of a conflict between the Indenture and this Security, the Indenture shall govern and control.

1.Defined Terms. All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

2.Aggregate Principal Amount; Additional Securities. This Security is one of the series designated on the face hereof, which series is initially limited in aggregate principal amount to $550,000,000. Under a Board Resolution, Officers’ Certificate pursuant to Board Resolutions or a supplemental indenture, the Company may from time to time, without the consent of the Holders of Securities, issue additional Securities of this series (in any such case “Additional Securities”) having the same ranking and the same interest rate, maturity and other terms as the Securities. Any Additional Securities and the existing Securities will constitute a single series under the Indenture and all references to the relevant Securities herein shall include the Additional Securities unless the context otherwise requires. The aggregate amount of outstanding Securities represented hereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions.

3.Optional Redemption. The Securities shall be redeemable at the option of the Company in accordance with Section 201(h) of the First Supplemental Indenture.

4.No Sinking Fund. The Securities are not entitled to the benefit of any sinking fund.

5.Indenture; Copies. The terms of this Security include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (“TIA”) as in effect on the date the Indenture is qualified. This Security is subject to all such terms, and Holders are referred to the Indenture and TIA for a statement of such terms. This Security is a senior, unsecured, unsubordinated obligation of the Company and constitutes a Security in the series designated on the face hereof as the “4.550% Senior Notes due 2028.” The Company will furnish to any Holder upon written request and without charge a copy of the Base Indenture and the First 

A-4

Supplemental Indenture. Requests may be made to: Torchmark Corporation, 3700 South Stonebridge Dr., McKinney, TX 75070, attention of General Counsel.

6.Amendment. 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 Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in aggregate principal amount of the Securities at the time Outstanding of each series to be affected. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security 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 Security.

7.Limitations on Suits. As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless:

		
	(i)
	such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities of this series;

		
	(ii)
	the Holders of not less than 25% in aggregate principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee hereunder;

		
	(iii)
	such Holder or Holders have offered to the Trustee indemnity satisfactory to it against the costs, expenses and liabilities to be incurred in compliance with such request;

		
	(iv)
	the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and

		
	(v)
	no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in aggregate principal amount of the Securities of this series at the time Outstanding.

The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or any premium, Make-Whole Amount, Additional Amount or interest hereon on or after the respective due dates expressed herein.

8.Obligations Absolute. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium, Make-Whole Amount, Additional Amount and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed.

9.Registration and Transfer. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and any premium, Make-Whole Amount, Additional Amount and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of 

A-5

transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities 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. No service charge shall be made for any such registration of transfer or exchange, but the Company or Trustee may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

10.Denominations. The Securities of this series are issuable only in registered form without coupons in minimum denominations of $2,000.00 and any integral multiples of $1,000.00 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.

11.Persons Deemed Owners. Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

12.Defeasance. The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Security or certain restrictive covenants and Events of Default with respect to this Security, in each case upon compliance with certain conditions set forth in the Indenture.

13.Event of Default. Subject to the provisions of the Indenture, if an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of, or accrued and unpaid interest, premium, if any, the Make-Whole Amount, if any, and any Additional Amounts, on the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.

14.Governing Law. The Indenture and this Security 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.

A-6Exhibit 4.1

 

THIRD SUPPLEMENTAL INDENTURE

 

Dated as of September 27, 2018

 

to

 

INDENTURE

 

Dated as of March 11, 2011

 

Between

 

BEST BUY CO., INC.,

 

as Issuer

 

and

 

U.S. Bank National Association,

 

as Trustee

 

 

4.450% Notes due 2028

 

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 1.   DEFINITIONS
    	
 
    	
2
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 1.1.
    	
 
    	
Definition of Terms
    	
 
    	
2
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 2.   TERMS AND CONDITIONS OF NOTES
    	
 
    	
2
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 2.1.
    	
 
    	
Designation and Principal Amount
    	
 
    	
2
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 2.2.
    	
 
    	
Maturity
    	
 
    	
2
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 2.3.
    	
 
    	
Further Issues
    	
 
    	
2
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 2.4.
    	
 
    	
Payment
    	
 
    	
2
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 2.5.
    	
 
    	
Global Securities
    	
 
    	
3
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 2.6.
    	
 
    	
Interest
    	
 
    	
3
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 2.7.
    	
 
    	
Authorized Denominations
    	
 
    	
3
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 2.8.
    	
 
    	
Redemption; Purchase and Sinking Fund
    	
 
    	
3
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 2.9.
    	
 
    	
Ranking
    	
 
    	
3
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 2.10.
    	
 
    	
Appointments
    	
 
    	
3
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 2.11.
    	
 
    	
Defeasance
    	
 
    	
3
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 2.12.
    	
 
    	
Guarantees
    	
 
    	
3
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 3.   FORM OF NOTES
    	
 
    	
3
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 3.1.
    	
 
    	
Form of Notes
    	
 
    	
3
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 4.   ORIGINAL ISSUE OF NOTES
    	
 
    	
4
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 4.1.
    	
 
    	
Original Issue of Notes
    	
 
    	
4
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 5.   AMENDMENTS
    	
 
    	
4
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 5.1.
    	
 
    	
Event of Default
    	
 
    	
4
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 5.2.
    	
 
    	
Definition of Indebtedness
    	
 
    	
4
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 6.   MISCELLANEOUS
    	
 
    	
4
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 6.1.
    	
 
    	
Ratification of Indenture
    	
 
    	
4
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 6.2.
    	
 
    	
Trustee Not Responsible for Recitals
    	
 
    	
4
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 6.3.
    	
 
    	
Governing Law
    	
 
    	
4
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 6.4.
    	
 
    	
Separability
    	
 
    	
4
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 6.5.
    	
 
    	
Counterparts
    	
 
    	
5
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
EXHIBIT A –   Form of Notes
    	
 
    	
A-1
    

 

 

THIRD SUPPLEMENTAL INDENTURE, dated as of September 27, 2018 (this “Supplemental Indenture”), between BEST BUY CO., INC., a corporation duly organized and existing under the laws of the State of Minnesota (the “Company”), and U.S. Bank National Association, a national banking association duly organized and existing under the laws of the United States, as successor Trustee (the “Trustee”).

 

RECITALS OF THE COMPANY

 

WHEREAS, the Company executed and delivered to Wells Fargo Bank, N.A., as initial trustee the Indenture, dated as of March 11, 2011 (the “Indenture”), to provide for the issuance of the Company’s debt securities (the “Securities”), to be issued in one or more series;

 

WHEREAS, pursuant to the terms of the Indenture, the Company desires to provide for the establishment of a new series of its Securities under the Indenture to be known as its “4.450% Notes due 2028” (the “Notes”), the form and substance and the terms, provisions and conditions thereof to be set forth as provided in the Indenture and this Supplemental Indenture;

 

WHEREAS, the financing committee of the Finance & Investment Policy Committee of the Board of Directors of the Company by duly adopted resolutions has authorized the proper officers of the Company to, among other things, determine the terms of the Securities to be issued under the Indenture and execute any and all appropriate documents necessary or appropriate to effect each such issuance;

 

WHEREAS, this Supplemental Indenture is being entered into pursuant to the provisions of Section 901(8) of the Indenture;

 

WHEREAS, the Company has requested that the Trustee execute and deliver this Supplemental Indenture; and

 

WHEREAS, all things necessary to make this Supplemental Indenture a valid agreement of the Company, in accordance with its terms, and to make the Notes, when executed and delivered by the Company and authenticated by the Trustee, the valid obligations of the Company, have been performed, and the execution and delivery of this Supplemental Indenture has been duly authorized in all respects.

 

NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:

 

For and in consideration of the premises and the purchase of the Notes by the Holders thereof, and for the purpose of setting forth, as provided in the Indenture, the forms and terms of the Notes, the Company covenants and agrees with the Trustee, as follows:

 

 

ARTICLE 1.

 

DEFINITIONS

 

Section 1.1.                                 Definition of Terms.  Unless the context otherwise requires:

 

(a)                                 each term defined in the Indenture has the same meaning when used in this Supplemental Indenture;

 

(b)                                 the singular includes the plural, and vice versa; and

 

(c)                                  headings are for convenience of reference only and do not affect interpretation.

 

ARTICLE 2.

 

TERMS AND CONDITIONS OF NOTES

 

Section 2.1.                                 Designation and Principal Amount.  There is hereby authorized and established a series of Securities under the Indenture, designated as the “4.450% Notes due 2028,” which is initially limited in aggregate principal amount to $500,000,000 (except upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant to Section 304, 305, 306, 906 or 1107 of the Indenture and except for any Notes which, pursuant to Section 303 of the Indenture, are deemed never to have been authenticated and delivered).

 

Section 2.2.                                 Maturity.  The Stated Maturity of principal of the Notes shall be October 1, 2028.

 

Section 2.3.                                 Further Issues.  The Company may at any time and from time to time, without the consent of the Holders of the Notes, issue additional Notes; provided that any such additional Notes shall be fungible for U.S. federal income tax purposes with the Notes issued hereunder.  Any such additional Notes shall have the same ranking, interest rate, maturity date and other terms as the Notes.  Any such additional Notes, together with the Notes herein provided for, shall constitute a single series of Securities under the Indenture.

 

Section 2.4.                                 Payment.  Principal of and interest on the Notes shall be payable in U.S. dollars in immediately available funds at the office or agency of the Company maintained for such purpose, which shall initially be at the Corporate Trust Office of the Trustee; provided, however, that payment of interest may be made at the option of the Company through the Paying Agent by check mailed to the Holder at such address as shall appear in the Security Register at the close of business on the Record Date for such Holder or by wire transfer to an account appropriately designated by the Holder to the Company and the Trustee; and provided, further, that the Company through the Paying Agent shall pay principal of and interest on the Notes in the form of Global Securities registered in the name of Cede & Co. (or such other nominee requested by The Depository Trust Company (“DTC”) or such other Depositary as any Officer of the Company may from time to time designate, or its respective nominee, by wire transfer in immediately available funds to such Depositary or its nominee, as the case may be, as the registered holder of such Notes in the form of Global Securities.

 

2

 

Section 2.5.                                 Global Securities.  Upon the original issuance, the Notes will be represented by Global Securities registered in the name of Cede & Co., the nominee of DTC.  The Company will deposit the Global Securities with DTC or its custodian and register the Global Securities in the name of Cede & Co.

 

Section 2.6.                                 Interest.  The Notes shall bear interest (computed on the basis of a 360-day year consisting of twelve 30-day months) from September 27, 2018 at the rate of 4.450% per annum, payable semi-annually in arrears.  Interest payable on each Interest Payment Date shall include interest accrued from September 27, 2018, or from the most recent Interest Payment Date to which interest has been paid or duly provided for.  The Interest Payment Dates on which such interest shall be payable are April 1 and October 1, commencing on April 1, 2019; and the Record Date for the interest payable on any Interest Payment Date is the close of business on March 15 or September 15, as the case may be, next preceding the relevant Interest Payment Date.

 

Section 2.7.                                 Authorized Denominations.  The Notes shall be issuable in denominations of $2,000 and integral multiples of $1,000 in excess thereof.

 

Section 2.8.                                 Redemption; Purchase and Sinking Fund.  The Notes shall not be redeemable at the option of the Company or the Holders except as set forth in Paragraph 3 of the Notes.  The Company shall be required to purchase the Notes in accordance with the provisions of Paragraph 2 of the Notes.  The Notes shall not be entitled to the benefit of any sinking fund.

 

Section 2.9.                                 Ranking.  The Notes shall be senior unsecured debt securities of the Company, ranking equally with the Company’s other unsecured and unsubordinated Indebtedness.

 

Section 2.10.                          Appointments.  The Trustee shall be the initial Security Registrar and initial Paying Agent for the Notes.

 

Section 2.11.                          Defeasance.  The Company may elect, at its option at any time, pursuant to Section 1301 of the Indenture, to have Section 1302 or Section 1303 in the Indenture, or both, apply to the Notes, or any principal amount thereof.

 

Section 2.12.                          Guarantees.  The Notes shall not be guaranteed by any Person.

 

ARTICLE 3.

 

FORM OF NOTES

 

Section 3.1.                                 Form of Notes.  The Notes and the Trustee’s certificate of authentication thereon shall to be substantially in the form set forth in Exhibit A hereto.

 

3

 

ARTICLE 4.

 

ORIGINAL ISSUE OF NOTES

 

Section 4.1.                                 Original Issue of Notes.  The Notes may, upon execution of this Supplemental Indenture, be executed by the Company and delivered to the Trustee for authentication, and the Trustee shall, upon Company Order, authenticate and deliver such Notes as in such Company Order provided.

 

ARTICLE 5.

 

AMENDMENTS

 

Section 5.1.                                 Event of Default.  For purposes of this series of Notes, Section 501(5)(A) and (B) of the Indenture are amended to replace “$150 million” with “$250 million.”

 

Section 5.2                                    Definition of Indebtedness.  For purposes of this series of Notes, the definition of “Indebtedness” in Section 101 of the Indenture is amended to replace “February 26, 2011” with “August 4, 2018.”

 

ARTICLE 6.

 

MISCELLANEOUS

 

Section 6.1.                                 Ratification of Indenture.  The Indenture, as supplemented by this Supplemental Indenture, is in all respects ratified and confirmed, and this Supplemental Indenture shall be deemed part of the Indenture in the manner and to the extent herein and therein provided; provided, however, that the provisions of this Supplemental Indenture shall apply solely with respect to the Notes and not to any other series of Securities issued under the Indenture.

 

Section 6.2.                                 Trustee Not Responsible for Recitals.  The recitals herein contained are made by the Company and not by the Trustee, and the Trustee assumes no responsibility for the correctness thereof.  The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture.

 

Section 6.3.                                 Governing Law.  This Supplemental Indenture and the Notes shall be governed by, and construed in accordance with, the law of the State of New York.

 

Section 6.4.                                 Separability.  In case any one or more of the provisions contained in the Indenture, this Supplemental Indenture or the Notes shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of the Indenture, this Supplemental Indenture or the Notes, but the Indenture, this Supplemental Indenture and the Notes shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein.

 

4

 

Section 6.5.                                 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.

 

[Signature page follows]

 

5

 

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

 

	
 
    	
BEST BUY CO., INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Christopher Samson
    
	
 
    	
 
    	
Name: Chris Samson
    
	
 
    	
 
    	
Title: Vice President, Treasurer
    

 

 

	
 
    	
U.S. BANK NATIONAL ASSOCIATION,
    
	
 
    	
    as Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Donald T. Hurrelbrink
    
	
 
    	
 
    	
Name: Donald T. Hurrelbrink
    
	
 
    	
 
    	
Title: Vice President
    

 

 

EXHIBIT A

 

[FORM OF NOTE]

 

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

 

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

 

THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS NOTE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A NOTE REGISTERED, AND NO TRANSFER OF THIS NOTE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

BEST BUY CO., INC.

 

4.450% Notes due 2028

 

CUSIP No.: 08652BAA7

ISIN: US08652BAA70

 

	
No. A-1
    	
$500,000,000
    

 

BEST BUY CO., INC., a corporation duly incorporated under the laws of the State of Minnesota (the “Company,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of $500,000,000 (FIVE HUNDRED MILLION DOLLARS), as revised by the Schedule of Increases and Decreases attached hereto, on October 1, 2028, and to

 

A-1

 

pay interest thereon from September 27, 2018 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on April 1 and October 1 of each year, commencing on April 1, 2019, at the rate of 4.450% per annum, until the principal hereof is paid or made available for payment; provided that any principal and premium, and any such installment of interest, which is overdue shall bear interest at the rate of 4.450% per annum (to the extent permitted by applicable law), from the dates such amounts are due until they are paid or made available for payment, and such interest shall be payable on demand. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid 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, which shall be the March 15 or September 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on a “Special Record Date” for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of the Notes not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture.

 

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

 

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.

 

A-2

 

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.

 

Dated:  September 27, 2018

 

	
 
    	
BEST   BUY CO., INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   Chris Samson
    
	
 
    	
 
    	
Title:   Vice President, Treasurer
    

 

A-3

 

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

 

	
 
    	
U.S.   BANK NATIONAL ASSOCIATION,
    
	
 
    	
as Trustee
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Donald   T. Hurrelbrink
    

 

Dated:  September 27, 2018

 

A-4

 

[REVERSE OF NOTE]

 

1.                                      This Note is one of a duly authorized issue of Securities of the Company (the “Notes”), issued and to be issued in one or more series under the Indenture, dated as of March 11, 2011, and a supplemental indenture relating to the Notes dated as of September 27, 2018 (together, the “Indenture”), between the Company and U.S. Bank National Association, as Trustee (the “Trustee,” which term includes any successor trustee under the Indenture), 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. This Note is one of the series designated on the face hereof, such series initially limited in aggregate principal amount to $500,000,000; provided that the Company may at any time and from time to time, without the consent of any Holder, issue additional Notes of this series.

 

All terms which are used but not defined in this Note and which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

2.                                      If a Change of Control Triggering Event occurs, unless the Company has exercised its option to redeem the Notes pursuant to Paragraph 3 hereof, the Company shall make an offer (the “Change of Control Offer”) to each Holder of Notes to purchase all or any part (equal to $2,000 or any integral multiple of $1,000 in excess thereof) of such Holder’s Notes on the terms set forth herein.

 

In such Change of Control Offer, the Company shall offer payment in cash (the “Change of Control Payment”) equal to 101% of the aggregate principal amount of the Notes to be purchased, plus accrued and unpaid interest, if any, on the Notes up to, but not including, the date of purchase.

 

Within 30 days following any Change of Control Triggering Event or, at the Company’s option, prior to any Change of Control, but after public announcement of the transaction that constitutes or may constitute the Change of Control, the Company shall send notice of such Change of Control Offer by first-class mail, with a copy to the Trustee, to each Holder of Notes describing the transaction that constitutes or may constitute the Change of Control Triggering Event and offering to purchase the Notes on the date specified in the notice, which date shall be no earlier than 30 days and no later than 60 days from the date such notice is delivered or, if the notice is delivered prior to the Change of Control, no earlier than 30 days and no later than 60 days from the date on which the Change of Control Triggering Event occurs (the “Change of Control Payment Date”).  The notice shall, if delivered prior to the date of consummation of the Change of Control, state that the offer to purchase is conditioned on the Change of Control Triggering Event occurring on or prior to the Change of Control Payment Date.

 

On the Change of Control Payment Date, the Company shall, to the extent lawful:

 

(a)                                 accept for payment all Notes or portions of Notes properly tendered pursuant to the Change of Control Offer;

 

(b)                                 deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of Notes or portions of Notes properly tendered; and

 

A-5

 

(c)                                  deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Officer’s Certificate stating the aggregate Principal Amount of Notes or portions of Notes being repurchased.

 

The Company shall publicly announce the results of the Change of Control Offer on, or as soon as possible after, the date of purchase.

 

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

 

The Company shall comply in all material respects with the requirements of Rule 14e-1 under the Exchange Act, and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the purchase of the Notes as a result of a Change of Control Triggering Event.  To the extent that the provisions of any such securities laws or regulations conflict with these Change of Control Offer provisions, the Company shall comply with those securities laws and regulations and shall not be deemed to have breached its obligations under the Change of Control Offer provisions by virtue of any such conflict.

 

For purposes of this Paragraph 2, the following terms shall have the following specified meanings:

 

“Change of Control” means the occurrence of any of the following:

 

(1)                                 the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any person (other than the Company or a Subsidiary) becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the Company’s outstanding Voting Stock or other Voting Stock into which the Company’s Voting Stock is reclassified, consolidated, exchanged or changed, measured by voting power rather than number of securities; provided, however, that a person shall not be deemed beneficial owner of, or to own beneficially any securities, (A) tendered pursuant to a tender or exchange offer made by or on behalf of such person or any of such person’s affiliates until such tendered securities are accepted for purchase or exchange thereunder or (B) if such beneficial ownership (i) arises solely as a result of a revocable proxy delivered in response to a proxy or consent solicitation made pursuant to the applicable rules and regulations under the Exchange Act and (ii) is not also then reportable on Schedule 13D (or any successor schedule) under the Exchange Act;

 

(2)                                 the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the Company’s assets and the assets of the Subsidiaries, taken as a

 

A-6

 

whole, to one or more persons (other than to the Company or a Subsidiary); provided, however, that none of the circumstances in this clause (2) shall be a Change of Control if the persons that beneficially own the Company’s Voting Stock immediately prior to the transaction own, directly or indirectly, shares with a majority of the total voting power of all of the outstanding Voting Stock of the surviving or transferee person immediately after the transaction;

 

(3)                                 the Company consolidates with, or merges with or into, any person or any such person consolidates with, or merges with or into, the Company, in either case, pursuant to a transaction in which any of the Company’s outstanding Voting Stock or the Voting Stock of such other person is converted into or exchanged for cash, securities or other property, other than pursuant to a transaction in which shares of the Company’s Voting Stock outstanding immediately prior to the transaction constitute, or are converted into or exchanged for, a majority of the Voting Stock of the surviving person immediately after giving effect to such transaction; or

 

(4)                                 the adoption of a plan relating to the Company’s liquidation or dissolution.

 

Notwithstanding the foregoing, a transaction shall not be deemed to involve a Change of Control if (a) the Company becomes a direct or indirect wholly-owned subsidiary of a holding company (i.e., a parent company) and (b)(1) the direct or indirect holders of the Voting Stock of such holding company immediately following that transaction are substantially the same as the holders of the Company’s Voting Stock immediately prior to that transaction or (2) immediately following that transaction no person (other than a holding company satisfying the requirements of this sentence) is the beneficial owner, directly or indirectly, of more than 50% of the Voting Stock of such holding company; provided that any series of related transactions shall be treated as a single transaction.  The term “person,” as used in this definition, has the meaning given thereto in Section 13(d)(3) of the Exchange Act.

 

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

 

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

 

“Moody’s” means Moody’s Investors Service, Inc., or any successor thereto.

 

“Rating Agencies” means each of Moody’s and S&P and, if any of Moody’s or  S&P ceases to rate the Notes or fails to make a rating of the Notes publicly available for reasons outside of the control of the Company, a “nationally recognized statistical rating organization” within the meaning of Section 3(a)(62) of the Exchange Act selected by the Company (as certified by a Board Resolution) as a replacement agency for Moody’s or S&P, or all of them, as the case may be.

 

A-7

 

“Rating Event” means the Notes are rated below an Investment Grade Rating by each of the Rating Agencies on any day during the period commencing on the earlier of the date of the first public notice of the occurrence of a Change of Control or the Company’s intention to effect a Change of Control and ending 60 days following consummation of such Change of Control (which period shall be extended so long as the rating of the Notes is under publicly announced consideration for a possible downgrade by any of the Rating Agencies).

 

“S&P” means S&P Global Ratings, a division of the S&P Global Inc. or any successor thereto.

 

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

 

3.                                      The Notes shall be redeemable before the Par Call Date, at any time or from time to time, in a whole or in part, at the Company’s option, on at least 30 days’ but not more than 60 days’ prior notice delivered to the registered address of each Holder of Notes to be redeemed (the “Redemption Date”), at a redemption price (the “Redemption Price”) equal to the greater of: (i) 100% of the principal amount of the Notes to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of interest and principal on the Notes to be redeemed (exclusive of interest accrued and unpaid to, but not including, the Redemption Date) from the Redemption Date to the Par Call Date, in each case discounted to the Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 50 basis points.

 

At any time on or after the Par Call Date, the Company shall have the right at its option to redeem the Notes, in whole or in part, at any time and from time to time, on at least 30 days’ but not more than 60 days’ notice, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed.

 

The Redemption Price for any Notes redeemed pursuant to this Paragraph 3 shall include accrued and unpaid interest, if any, on the principal amount of such Notes up to, but not including, the Redemption Date.

 

For purposes of this Paragraph 3, the following terms shall have the following specified meanings:

 

“Comparable Treasury Issue” means the United States Treasury security or securities selected by an Independent Investment Banker as having an actual or interpolated maturity comparable to the remaining term of the Notes that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of a comparable maturity to the remaining term of the Notes (assuming, for this purpose, the Notes mature on the Par Call Date).

 

“Comparable Treasury Price” means, with respect to any Redemption Date, (A) the arithmetic average of the Reference Treasury Dealer Quotations for such Redemption

 

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Date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (B) if the Company obtains fewer than four such Reference Treasury Dealer Quotations, the arithmetic average of all such quotations for such Redemption Date.

 

“Independent Investment Banker” means one of the Reference Treasury Dealers appointed by the Company.

 

“Par Call Date” means July 1, 2028.

 

“Reference Treasury Dealer” means Merrill Lynch, Pierce, Fenner & Smith Incorporated, Credit Securities (USA) LLC or U.S. Bancorp Investments, Inc., or their respective affiliates, which are primary U.S. government securities dealers in the United States of America, and their respective successors plus one other primary U.S. government securities dealer in the United States of America designated by the Company; provided, however, that if any of the foregoing shall cease to be a primary U.S. government securities dealer in the United States of America (a “Primary Treasury Dealer”), the Company shall substitute therefor another Primary Treasury Dealer.

 

“Reference Treasury Dealer Quotation” means, with respect to each Reference Treasury Dealer and any Redemption Date, the arithmetic average, as determined by the Company, of the bid and asked prices for the applicable Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Company by such Reference Treasury Dealer at 3:30 p.m. (New York City time) on the third Business Day preceding such Redemption Date.

 

“Treasury Rate” means, with respect to any Redemption Date, the rate per annum equal to the semiannual equivalent yield to maturity or interpolated maturity (on a day count basis) of the applicable Comparable Treasury Issue, assuming a price for such Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the applicable Comparable Treasury Price for such Redemption Date.

 

The provisions of Article XI of the Indenture shall apply to any redemption of the Notes.

 

The Notes are not entitled to the benefit of any sinking fund.

 

4.                                      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 under the Indenture and the Notes at any time by the Company and the Trustee with the consent of the Holders of a majority in aggregate principal amount of the Notes at the time Outstanding. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate 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 the Notes and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holders of Notes shall be conclusive and binding upon such Holders and upon all future Holders of the Notes and of any Notes 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.

 

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5.                                      If an Event of Default with respect to the Notes shall occur and be continuing, the principal of the Notes may be declared, or shall immediately become, due and payable in the manner and with the effect provided in the Indenture.

 

As provided in and subject to the provisions of the Indenture, the Holders of the Notes shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder or hereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Notes, the Holders of not less than 25% in aggregate principal amount of the Notes at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee shall not have received from the Holders of a majority in aggregate principal amount of the Notes at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of the Notes for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein.

 

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 the principal of and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed.

 

6.                                      The Indenture contains provisions for defeasance at any time of the entire indebtedness of the Notes or certain restrictive covenants and Events of Default with respect to such Notes, in each case upon compliance with certain conditions set forth in the Indenture.

 

7.                                      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 any 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 his attorney duly authorized in writing, and thereupon one or more new Notes 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 $2,000 and integral multiples of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, Notes are exchangeable for a like principal amount of Notes 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.

 

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

 

This Note is a Global Security and is subject to the provisions of the Indenture relating to Global Securities, including the limitations in Section 305 thereof on transfers and exchanges of Global Securities.

 

8.                                      This Note and the Indenture shall be governed by, and construed in accordance with, the law of the State of New York.

 

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SCHEDULE OF INCREASES OR DECREASES

 

The following increases or decreases in this Global Security have been made:

 

	
Date of
   Transfer or
   Exchange
    	
 
    	
Amount of decrease
   in Principal
   Amount of this
   Global Security
    	
 
    	
Amount of increase
   in Principal
   Amount of this
   Global Security
    	
 
    	
Principal Amount
   of this Global
   Security following
   such decrease or
   increase
    	
 
    	
Signature of
   authorized
   signatory of Trustee
   or Security
   Registrar
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

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