Document:

exv4w1

Exhibit
4.1

REGISTERED GLOBAL DEBT SECURITY

THIS DEBT SECURITY IS A GLOBAL DEBT SECURITY WITHIN THE MEANING OF THE FISCAL AGENCY AGREEMENT
(AS DEFINED IN THE ATTACHED CONDITIONS) AND IS REGISTERED IN THE NAME OF CEDE & CO., AS THE NOMINEE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”). THIS DEBT SECURITY MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A DEBT SECURITY REGISTERED, AND NO TRANSFER OF THIS DEBT SECURITY
IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN DTC OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE CONDITIONS REFERRED TO WITHIN THIS
DEBT SECURITY. THIS DEBT SECURITY REPRESENTS “SECURITIES OF A SERIES” WITHIN THE MEANING OF THE
FISCAL AGENCY AGREEMENT.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, TO THE REPUBLIC OF
HUNGARY 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.

REPUBLIC OF HUNGARY

6.250% NOTES DUE 2020

PAYABLE AS TO PRINCIPAL AND INTEREST IN LAWFUL MONEY OF

THE UNITED STATES OF AMERICA

FULLY REGISTERED NOTES

Certificate No. 1

US$500,000,000

CUSIP No. 445545AD8

COMMON CODE No. 048375995

ISIN No. US445545AD87

REGISTERED HOLDER: Cede & Co., or its registered assigns

PRINCIPAL SUM OF FIVE HUNDRED MILLION DOLLARS

 

 

THE REPUBLIC OF HUNGARY (the “Republic”), for value received, hereby promises to pay to the
registered owner specified above or registered assigns on January 29, 2020, upon presentation and
surrender of this Global Debt Security, the principal sum specified above in lawful money of the
United States of America at the office of Citibank, N.A. in London or The City of New York, New
York, and to pay interest thereon in like money in the manner provided in the Conditions endorsed
hereon from January 29, 2010 or from the most recent interest payment date to which interest has
been paid, or duly provided for, such interest to be payable semi-annually at the rate of 6.250%
per annum on July 29 and on January 29 in each year (each an “Interest Payment Date”) until the
principal of this Global Debt Security shall have been paid, the first of such payments of interest
to become due and payable on July 29, 2010. Notwithstanding anything to the contrary provided
herein, any payment of principal or interest falling due on a day which is not a Business Day (as
defined in the Fiscal Agency Agreement, dated as of January 29, 2010, between the Republic and
Citibank, N.A., as Fiscal Agent and Paying Agent) will be payable on the next succeeding Business
Day and no interest shall accrue for the intervening period, provided however that if that next
succeeding Business Day falls in the next calendar month, such payment of principal or interest
will be payable on the first preceding business day. The interest so payable on any such Interest
Payment Date will be paid to the person in whose name this Global Debt Security is registered at
the close of business on the fifteenth day (whether or not such day is a Business Day) preceding
such Interest Payment Date (each a “Record Date”).

This Global Debt Security is a direct, unconditional, unsecured and general obligation of the
Republic. This Global Debt Security ranks and will rank at least equally in right of payment with
all other unsecured and unsubordinated payment obligations of the Republic outstanding at the date
of issue of this Global Debt Security or issued thereafter, except for such obligations as may be
preferred by mandatory provisions of applicable law. This Global Debt Security will be backed by
the full faith and credit of the Republic. The Republic will give no preference to one obligation
over another on the basis of priority of issue date or currency of payment.

This Global Debt Security is not redeemable prior to maturity at the option of the Republic or of
the registered holders thereof.

This Global Debt Security is subject to the Conditions endorsed on the reverse hereof and shall not
be valid or enforceable for any purpose unless authenticated by the manual signature of the Fiscal
Agent (as defined in the Fiscal Agency Agreement). This Global Debt Security shall be dated the
date of its authentication by the Fiscal Agent.

 

 

IN WITNESS WHEREOF, the Republic has caused this Global Debt Security to be duly executed by the
facsimile signature of Mr. Ferenc Szarvas and a facsimile of the written, printed or stamped name
of the Republic to be hereon imprinted.

On behalf of the Republic of Hungary

	 	 	 	 	 
	 	 	 
	By:  	
 	 
	 	Name:  	Ferenc Szarvas 	 
	 	Title:  Chief Executive Officer of the Government Debt Management Agency Pte Ltd. of the
Republic of Hungary as attorney for the Republic of Hungary represented by its Minister of Finance 
	 

 

 

FISCAL AGENT’S CERTIFICATE

OF AUTHENTICATION

This is a permanent global debt security evidencing

the Securities of a Series referred to in the aforementioned

Fiscal Agency Agreement.

	 	 	 	 	 
	 	 	 
	By:  	
 	 
	 	Name: 	Citibank, N.A. 	 
	 	Title: 	Fiscal Agent 	 
	 

Dated: January 29, 2010

 

 

THE CONDITIONS WITHIN REFERRED TO

	1	 	This Global Debt Security is one of the permanent global securities evidencing a duly
authorized issue of US$2,000,000,000 aggregate principal amount of 6.250% Notes due January
29, 2020 of the Republic (herein called the “Debt Securities”) as executed by the authorized
signatory of the Republic, Mr. Ferenc Szarvas (the “Republic Authorized Signatory”). The Debt
Securities are issued under the Fiscal Agency Agreement dated as of January 29, 2010 (as the
same may be amended, supplemented or otherwise modified from time to time, the “Fiscal Agency
Agreement”) between the Republic, and Citibank, N.A., as fiscal agent and paying agent (the
“Fiscal Agent”, “Agent” or “Registrar”), to which Fiscal Agency Agreement reference is hereby
made for a statement of the respective rights, duties, limitations of rights, obligations and
immunities thereunder of the Republic, the Agent and the holders of the Debt Securities.
Notices to the Fiscal Agent can be sent to Citibank, N.A., Attention: Citigroup Centre,
21st Floor, Canada Wharf, London E14 5LB. The Debt Securities are issuable as fully
registered Debt Securities without coupons in minimum denominations of US$1,000 and integral
multiples of US$1,000 in lawful money of the United States of America. This Debt Security is
one of the series designated on the face hereof, initially limited to the aggregate price
amount of US$2,000,000,000.
	 
	 	 	The Republic may from time to time, without the consent of the holders of the Debt
Securities, create and issue further debt securities having the same terms and conditions as
the Debt Securities even if further Debt Securities have original issue discount for U.S.
federal income tax purposes and even if doing so may adversely affect the value of the
original Debt Securities. Any additional Debt Securities, together with the Debt Securities,
will constitute a single series of Debt Securities under the Fiscal Agency Agreement.
	 
	2	 	All payments made in respect of this Global Debt Security, including payments of
principal and interest, to a holder that is not a resident of the Republic, shall be made by
the Republic without withholding or deduction for or on account of any present or future
taxes, duties, levies or other governmental charges of whatever nature, imposed or levied by
the Republic or by any political subdivision or taxing authority within the Republic
(“Taxes”). In the event the Republic is required by law to deduct or withhold any such Taxes
from payments, the Republic will pay such additional amounts as may be necessary so that the
net amount received is equal to the amount provided for in this Global Debt Security to be
paid in the absence of such deduction or withholding. A holder will not be paid any additional
amounts however, if the Tax is:

	 	(i)	 	a Tax that would not have been imposed but for the holder’s present or former
connection (or a connection of the holder’s fiduciary, shareholder or other related
party) with the Republic, including the holder being or having been a citizen or
resident of the Republic or being or having been engaged in a trade or business or
present in the Republic or having, or having had, a permanent establishment in the
Republic;
	 
	 	(ii)	 	imposed on a payment to an individual and is required to be made pursuant to the
European Council Directive 2003/48/EC on taxation of savings income in the form on
interest payments or any other Directive implementing the conclusions of the EU Council
of Finance Ministers meeting of November 26 and 27, 2000 or any law implementing or
complying with, or introduced in order to conform to, such Directive;
	 
	 	(iii)	 	imposed because the holder presents a Debt Security for payment more than thirty
(30) days after the date on which the payment became due and payable;
	 
	 	(iv)	 	an estate, inheritance, gift, sales, transfer or personal property tax,
assessment or governmental charge;

 

 

	 	(v)	 	a tax, assessment or other governmental charge which is payable other than by
withholding;
	 
	 	(vi)	 	a Tax that would not have been imposed but for the failure to comply with
certification, information or other reporting requirements concerning the holder’s
nationality, residence or identity (or the nationality, residence or identity of the
beneficial owner of this Global Debt Security), if such holder’s compliance is required
by the laws of the Republic or of any political subdivision or taxing authority of the
Republic to avoid or reduce such tax;
	 
	 	(vii)	 	required to be withheld by any paying agent from a payment on this Global Debt
Security if such payment can be made without such withholding by another paying agent;
or
	 
	 	(viii)	 	are imposed as a result of any combination of the items listed above.

	 	 	Furthermore, no additional amounts shall be paid with respect to any Debt Security to a
holder who is a fiduciary or partnership or other than the sole beneficial owner of such
payment to the extent that the settlor with respect to such fiduciary, partner or beneficial
owner, as the case may be, would not have been entitled to payment of such additional amounts
if they held this Global Debt Security themselves.

	3	 	As long as any Debt Security remains outstanding, the Republic will not allow any
Security Interest to be established on any of the Republic’s or the National Bank of Hungary’s
assets or revenues, present or future, in order to secure (i) any Public External Indebtedness
of the Republic having an original maturity of at least one year; or (ii) any Public External
Indebtedness of the National Bank of Hungary having an original maturity of at least one year
and incurred on or prior to December 31, 1998, unless the debt securities are secured equally
and rateably to this external indebtedness.
	 
	 	 	For these purposes:
	 
	 	 	“External Indebtedness” means any obligation in respect of existing or future Indebtedness
denominated or payable, or at the option of the holder thereof payable, in a currency other
than the lawful currency of the Republic of Hungary. If at any time the lawful currency of
the Republic of Hungary becomes the Euro, then External Indebtedness shall also include
Indebtedness expressed in or payable or optionally payable in Euro, if (i) such Indebtedness
was issued after the date on which the Euro became the lawful currency of the Republic of
Hungary, and (ii) more than 50% of the aggregate principal amount of such Indebtedness was
initially placed outside the Republic of Hungary.
	 
	 	 	“Public External Indebtedness” means External Indebtedness which: (i) is in the form of, or
represented by, bonds, notes or other similar securities; and (ii) is, or may be, quoted,
listed or ordinarily purchased and sold on any stock exchange, automated trading system or
over-the-counter or other securities market.
	 
	 	 	“Indebtedness” means any indebtedness of any Person (whether incurred as principal or surety)
for money borrowed.
	 
	 	 	“Person” means any individual, company, corporation, firm, partnership, joint venture,
association, organization, state or agency of a state or other entity, whether or not having
separate legal personality.

 

 

	 	 	“Security Interest” means any lien, pledge hypothecation, mortgage, security interest, charge
or other encumbrance or arrangement which has a similar legal and economic effect, and,
without limitation, anything analogous to any of the foregoing under the laws of any
jurisdiction.
	 
	4	 	An “Event of Default” means any of the following:

	 	(i)	 	the Republic fails to pay the principal of or interest on any of the Debt
Securities for more than 30 days after payment is due; or
	 
	 	(ii)	 	the Republic does not perform any of its other covenants under any of the Debt
Securities for more than 60 days after the holder of the Debt Security has given written
notice of the breach to the Republic at the Fiscal Agent’s corporate trust office.

	 	 	An “Event of Acceleration” means any of the following:

	 	(i)	 	any action, condition or any other thing which at any time is required to be
taken, fulfilled or done in order: (A) to enable the Republic lawfully to enter into,
exercise its rights and perform and comply with its obligations under and in respect of
the Debt Securities, (B) to ensure that those obligations are legal, valid, binding and
enforceable and (C) subject to their official translation into the Hungarian language,
to make the Debt Securities admissible in evidence in the courts of the Republic of
Hungary, is not taken, fulfilled or done within 30 days of receipt by the Republic of
written notice thereof; or
	 
	 	(ii)	 	it becomes illegal for the Republic to perform any of its obligations under the
Debt Securities or if these obligations become invalid and not remedied by the Republic
within 30 days’ written notice thereof.

	 	 	If an Event of Default or an Event of Acceleration occurs, all of the Debt Securities may, by
written notice addressed and delivered by the holders of at least 25% of the aggregate
principal amount of the outstanding Debt Securities to the Republic at the office of the
Fiscal Agent, be declared to be immediately due and payable, unless prior to such date the
Republic shall have remedied the Event of Default or Event of Acceleration for all the Debt
Securities.
	 
	 	 	If the Fiscal Agent receives notice in writing from holders of at least 50% in aggregate
principal amount of the outstanding Debt Securities and/or a resolution is passed at a
meeting of the holders of the Debt Securities, duly convened and held in accordance with the
Fiscal Agency Agreement, to the effect that the Event(s) of Default and/or Event(s) of
Acceleration giving rise to a declaration of acceleration made pursuant to the conditions
above is or are cured or is or are waived by them following any such declaration and that
such holders request the Fiscal Agent to rescind the relevant declaration, the Fiscal Agent
shall, by notice in writing to the Republic and the holders, rescind the relevant declaration
whereupon it shall be rescinded and shall have no further effect.
	 
	 	 	The Republic is not obliged to provide investors with periodic evidence that there are no
Events of Default and/or Events of Acceleration. Please also note that the Fiscal Agency
Agreement does not provide for the holders to be notified of the existence of an Event of
Default or an Event of Acceleration or for any right to examine the Debt Securities register.
	 
	5	 	The Fiscal Agency Agreement contains provisions for convening meetings of holders of
the Debt Securities to consider matters relating to the Debt Securities, including, without
limitation, the modification of any provision of the terms of the Debt Securities. Any such
modification may be made if, having been approved in writing by the Republic, it is sanctioned
by an Extraordinary Resolution. Such a meeting may be convened by the Republic and shall be
convened by the Fiscal Agent upon the request in writing of holders holding not less than 10%
of the aggregate principal amount of the outstanding Debt Securities. The quorum at any
meeting of holders

 

 

convened to vote on an Extraordinary Resolution will be two or more persons holding or
representing not less than 50% of the aggregate principal amount of the outstanding Debt
Securities or, at any adjourned meeting of holders, two or more persons being or representing
holders, whatever the aggregate principal amount of the outstanding Debt Securities held or
represented; provided, however, that any proposals relating to a Reserved Matter may only be
sanctioned by an Extraordinary Resolution passed at a meeting of holders at which two or more
persons holding or representing not less than 75% of the aggregate principal amount of the
outstanding Debt Securities or, at any adjourned meeting, 25% of the aggregate principal
amount of the outstanding Debt Securities form a quorum. Any Extraordinary Resolution duly
passed at any such meeting shall be binding on all the holders of the Debt Securities,
whether present or not.

If a resolution is brought in writing, such a resolution in writing may be contained in one
document or several documents in the same form, each signed by or on behalf of one or more
holders.

	 	 	 	For these purposes:
	 
	 	 	 	“Extraordinary Resolution” means:

	 	(i)	 	in relation to any Reserved Matter:
	 
	 	 	 	(x) a resolution passed at a meeting of holders duly convened and held in accordance
with the Fiscal Agency Agreement by a majority consisting of not less than 75% of the
aggregate principal amount of all outstanding Debt Securities; or
	 
	 	 	 	(y) a resolution in writing signed by or on behalf of holders of not less than 75% of
the aggregate principal amount of all outstanding Debt Securities; and

	 	(ii)	 	in relation to any other matter:
	 
	 	 	 	(x) a resolution passed at a meeting of holders duly convened and held in accordance
with the Fiscal Agency Agreement by a majority consisting of not less than 66.67% of
the aggregate principal amount of the outstanding Debt Securities which are
represented at that meeting; or
	 
	 	 	 	(y) a resolution in writing signed by or on behalf of holders of not less than 66.67%
of the aggregate principal amount of all outstanding Debt Securities.
	 
	 	 	 	“Reserved Matter” means any proposal to:

	 	(i)	 	change any date, or the method for determining the date, fixed for payment of
principal or interest in respect of the Debt Securities, to reduce the amount of
principal or interest payable on any date in respect of the Debt Securities or to alter
the method of calculating the amount of any payment in respect of the Debt Securities on
redemption or maturity or the date for any such payment;
	 
	 	(ii)	 	effect the exchange or substitution of the Debt Securities for, or the conversion
of the Debt Securities into, shares, bonds or other obligations or securities of the
Republic or any other person or body corporate formed or to be formed;
	 
	 	(iii)	 	reduce or cancel the principal amount of the Debt Securities;
	 
	 	(iv)	 	vary the currency or place of payment in which any payment in respect of the Debt
Securities is to be made;
	 
	 	(v)	 	amend the status of the Debt Securities;

 

 

	 	(vi)	 	amend the obligation of the Republic to pay additional amounts under Condition 2;
	 
	 	(vii)	 	amend the Events of Default or the Events of Acceleration set out in Condition
4;
	 
	 	(viii)	 	amend the law governing the Debt Securities, the courts to the jurisdiction to which
the Republic has submitted in the Debt Securities, the Republic’s obligation to maintain
an agent for service of process in the United States or the Republic’s waiver of
immunity, in respect of actions or proceedings brought by any holder of the Debt
Securities set out in Conditions 6 and 7;
	 
	 	(ix)	 	modify the provisions contained in Schedule I to the Fiscal Agency Agreement
concerning the quorum required at any meeting of holders of the Debt Securities or any
adjournment thereof or concerning the majority required to pass an Extraordinary
Resolution or the percentage of votes required for the taking of any action;
	 
	 	(x)	 	change the definition of “Extraordinary Resolution” or “outstanding” in these
conditions of the Debt Securities and/or in the Fiscal Agency Agreement;
	 
	 	(xi)	 	instruct any holder of the Debt Securities or committee appointed on behalf of
all holders of the Debt Securities pursuant to the Fiscal Agency Agreement to withdraw,
settle or compromise any proceeding or claim being asserted pursuant to Condition 4;
	 
	 	(xii)	 	confer upon any committee appointed pursuant to the Fiscal Agency Agreement any
powers or discretions which the holder of the Debt Securities could themselves exercise
by Extraordinary Resolution; or
	 
	 	(xiii)	 	amend this definition.

The holders of the Debt Securities may, by a resolution passed at a meeting of holders duly
convened and held in accordance with the Fiscal Agency Agreement by a majority of at least
50% in aggregate principal amount of the Debt Securities then outstanding, or by notice in
writing to the Fiscal Agent signed by or on behalf of the holders of at least 50% in
aggregate principal amount of the Debt Securities then outstanding, appoint any persons as a
committee to represent the interests of the holders if any of the following events shall have
occurred:

	 	(i)	 	an Event of Default or an Event of Acceleration;
	 
	 	(ii)	 	any event or circumstance which would, with the giving of notice, lapse of time,
the issuing of a certificate and/or fulfillment of any other requirement provided for in
Condition 4 become an Event of Default or an Event of Acceleration; or
	 
	 	(iii)	 	any public announcement by the Republic, to the effect that the Republic is
seeking or intends to seek a restructuring of the Debt Securities (whether by amendment,
exchange offer or otherwise).

Such committee in its discretion may, among other things, (i) engage legal advisers and
financial advisers to assist it in representing the interests of the holders of the Debt
Securities, (ii) adopt such rules as it considers appropriate regarding its proceedings and
(iii) enter into discussions with the Republic and/or other creditors of the Republic. The
Republic shall pay any reasonably incurred fees and expenses of any such committee
(including, without limitation, the fees and expenses of the committee’s legal advisers and
financial advisers, if any) within 30 days of the delivery to the Republic of a reasonably
detailed invoice and supporting documentation.

For the purposes of (i) ascertaining the right to attend and vote at any meeting of the
holders of the Debt Securities and (ii) Conditions 4 and 5, those Debt Securities (if any)
which are for the time being held by any person (including but not limited to the Republic)
for the benefit of the

 

 

Republic or by any public body owned or controlled, directly or indirectly, by the Republic
shall (unless and until ceasing to be so held) be deemed not to remain outstanding.

	6	 	As more fully set forth in the Fiscal Agency Agreement, the Republic has appointed the
Consulate General of Hungary, 223 East 52nd Street, New York, New York 10022, as its
authorized agent upon which process may be served in any action arising out of or based on the
Debt Securities which may be instituted in any Federal or State court in New York, New York by
the holder of any Debt Security, and the Republic hereby expressly accepts the jurisdiction of
any such court in respect of any such action. Such appointment shall be irrevocable so long as
any of the Debt Securities remain outstanding, unless and until a successor shall have been
appointed by the Republic as its authorized agent for such purpose and such successor
authorized agent shall have accepted such appointment. Notwithstanding the foregoing, any
action arising out of or based on the Debt Securities may be instituted by the holder of any
Debt Security in any competent court in the Republic of Hungary. The Republic hereby waives
irrevocably, to the fullest extent permitted by law, any immunity from jurisdiction to which
it might otherwise be entitled in any such action which may be instituted by the holder of any
Debt Security in Federal or State court in New York, New York or in any competent court in the
Republic of Hungary. This waiver is intended to be effective upon execution of this Global
Debt Security without further act by the Republic before any such court, and introduction of
this Global Debt Security into evidence shall be final and conclusive evidence of such waiver.
Such waiver constitutes only a limited and specific waiver for the purposes of the Debt
Securities and under no circumstances shall it be interpreted as a general waiver by the
Republic or a waiver with respect to proceedings unrelated to the Debt Securities. Neither
such appointment nor such waiver shall be interpreted to include the waiver of any immunity
with respect to: (i) actions brought against the Republic under U.S. State or Federal
securities laws; (ii) present or future “premises of the mission” as defined in the Vienna
Convention on Diplomatic Relations signed in 1961; (iii) “Consular premises” as defined in the
Vienna Convention on Consular Relations signed in 1963; (iv) any other property or assets used
solely or mainly for official state purposes in the Republic or elsewhere; or (v) military
property or military assets or property or assets of the Republic related thereto.
	 
	7	 	This Global Debt Security shall be governed by and construed in accordance with the
laws of the State of New York, without regard to the conflicts of law principles of such
State, except with respect to its authorization and execution by the Republic, which shall be
governed by the laws of the Republic of Hungary.
	 
	8	 	Except as set forth in this Condition 8, the Debt Securities are issuable only as fully
registered global securities, without coupons, each registered in the name of DTC, a nominee
thereof or a successor to DTC or a nominee thereof, and

	 	(i)	 	no Global Debt Security may be transferred, except in whole and not in part, and
only to DTC, one or more nominees of DTC or one or more respective successors of DTC and
its nominees; and
	 
	 	(ii)	 	no Global Debt Security may be exchanged for any Debt Security other than another
Global Debt Security.

Notwithstanding any other provisions of the Fiscal Agency Agreement or this Global Debt
Security, a Global Debt Security may be transferred to, or exchanged for registered Debt
Securities registered in the name of, a person other than DTC, a nominee of DTC or a
successor of DTC or its nominee if:

 

 

	 	(i)	 	DTC or each of Euroclear and Clearstream (a) notifies the Republic that it is
unwilling or unable to continue as depository for such Global Debt Security or (b)
ceases to be a clearing agency registered under the Securities Exchange Act of 1934 at a
time when it is required to be, and in either such case (a) or (b) a successor
depository is not appointed by the Republic within 90 days after receiving such notice
from Euroclear, Clearstrea or DTC or on becoming aware that DTC is no longer so
registered;
	 
	 	(ii)	 	the Republic, in its sole discretion, instructs the Fiscal Agent in writing that
a Global Debt Security shall be so transferable and exchangeable; or
	 
	 	(iii)	 	there shall have occurred and be continuing an Event of Default and/or Event of
Acceleration with respect to the Debt Securities evidenced by this Global Debt Security.

Registered Debt Securities issued in exchange for this Global Debt Security will be
registered in such names, and issued in such denominations (of $1,000 and integral multiples
thereof), as an authorized representative of DTC shall request.

	9	 	The Republic will maintain for the Debt Securities (i) a Paying Agent and Registrar in
the City of London, England or The City and State of New York, and (ii) if the Debt Securities
are issued in definitive form, a transfer agent and paying agent in The City and State of New
York. The Republic will cause the Registrar to maintain a register in which shall be entered
the names and addresses of the holders of the Debt Securities of this issue and the
particulars of the Debt Securities held by them respectively and in which, subject to
Condition 8 above, transfers of the Debt Securities shall be registered. Such Paying Agent and
Registrar in England shall be Citibank, N.A., unless and until the Republic appoints a
different Paying Agent or Registrar (if applicable) in the same city. The Republic will
appoint a transfer agent and paying agent as or when required in The City and State of New
York. The holders of the Debt Securities may serve notices and demands with respect to the
Debt Securities at the office of any Paying Agent and Registrar maintained pursuant to this
Condition. In addition, all notices of the Republic will be published in a daily newspaper of
general circulation in London for so long as the Debt Securities are listed on the London
Stock Exchange and the rules of the London Stock Exchange so require. Any such notice shall be
deemed to have been given on the date of such publication or, if published more than once on
different dates, on the first date on which publication is made.
	 
	10	 	Subject to Condition 8 above, this Global Debt Security is transferable upon
presentation for such purpose at the office of the Registrar referred to in Condition 9,
accompanied by a written instrument of transfer in form approved by the Republic executed by
the registered holder hereof or by his duly authorized attorney, whereupon this Global Debt
Security will be canceled and one or more Debt Securities of this issue for an equal aggregate
principal amount will be delivered to the transferee.
	 
	11	 	Subject to Condition 8 above, Debt Securities of this issue upon presentation for such
purpose at the office of the Registrar referred to in Condition 9, accompanied by a written
instrument of transfer in form approved by the Republic executed by the registered holder or
by his duly authorized attorney, may be exchanged for an equal aggregate principal amount of
other fully registered Debt Securities of this issue in other authorized denominations.
	 
	12	 	Subject to Condition 8 above, the Republic will make transfers and exchanges of Debt
Securities of this issue as aforesaid upon compliance by the holders of the Debt Securities
with such reasonable regulations as may be prescribed by the Republic, and the Republic shall
not be entitled to make any charge in respect to transfers and exchanges of Debt Securities of
this

 

 

issue, other than in respect of transfer taxes, if any. Each Debt Security issued upon any
such transfer or exchange shall be dated the date of its authentication by the Fiscal Agent.

	13	 	Interest on the Debt Securities of this issue shall be computed on the basis of a
360-day year of twelve 30-day months. Unless other arrangements are made, payments of interest
on this Global Debt Security will be made by check drawn on a bank or trust company in The
City and State of New York payable to the order of the registered holder, or, in the case of
joint holders, to the order of all such joint holders or to such person as the joint holders
may request in writing, provided that payment of principal will be made only upon prior
presentation and surrender of this Global Debt Security at the office of a Paying Agent of the
Republic referred to in Condition 9. Such check shall be mailed to the address of the
registered holder as such address shall appear on the register maintained by the Registrar
pursuant to Condition 9 hereof, or, in the case of joint holders, to such registered address
of that joint holder who is first named in the register as one of such joint holders or to
such address specified in the aforementioned request of such joint holders. The registered
holder hereof or his legal personal representatives will be regarded as exclusively entitled
to the principal moneys hereby secured, and in the case of joint registered holders of this
Global Debt Security the said principal monies shall be deemed to be owing to them on joint
account. Any holder of Debt Securities, the aggregate principal amount of which equals or
exceeds U.S. $1,000,000, may, by written notice to the Paying Agent no later than the Record
Date therefor, elect to receive the interest payment in respect of such Debt Securities by
wire transfer in same-day funds to a bank account maintained by such holder in the United
States.
	 
	14	 	Claims for payment of the principal amount of this Debt Security shall become void 10
years after such principal amount became due and payable. Claims for payment of interest on
this Debt Security shall become void five years after relevant interest payment date on which
the interest became due and payable.
	 
	15	 	In case any Debt Security shall at any time become mutilated or destroyed or stolen or
lost, and such Debt Security, or evidence of the loss, theft or destruction thereof (together
with the indemnity hereinafter referred to and such other documents or proof as may be
required in the premises) shall be delivered to the Registrar referred to in Condition 9
above, a new Debt Security of like tenor and date will be issued by the Republic in exchange
for the Debt Security so mutilated, or in lieu of the Debt Security so destroyed or stolen or
lost, but, in the case of any destroyed or stolen or lost Debt Security, only upon receipt of
evidence satisfactory to the Republic that such Debt Security was destroyed or stolen or lost,
and, upon receipt also of indemnity satisfactory to the Republic. Mutilated Debt Securities
must be surrendered before replacement therefore will be issued. Application for replacement
may be made only by the registered holder thereof and shall be made at the office of the
Fiscal Agent specified in Condition 1. All expenses and reasonable charges associated with
procuring such indemnity and with the preparation, authentication and delivery of a new Debt
Security shall be borne by the owner of the Debt Security mutilated, destroyed, stolen or
lost.

ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this instrument,
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)                       (Minor)
	 
	TEN ENT-as tenants by the entireties

	 	Under Uniform Gifts to Minors Act                     
	 
	 

	 	                                                                  (State)

 

 

JT TEN-as joint tenants with right of survivorship and not as tenants in common.

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

TRANSFERS

For Value Received the undersigned hereby sells, assigns and transfers unto

 

 
 

 
 

name and address including zip code and social security number or other identifying number of
assignee the within Debt Security, hereby irrevocably constituting and appointing

 

 
 

 
 

Attorney to transfer the Debt Security on the register kept at the office of the Registrar of the
Republic for such purpose in the Borough of Manhattan, The City of New York and State of New York,
United States of America or London, with full power of substitution

dated this                      day of                     ,                      .

	 	 	 	 
	By:
	 	 	 
	 

	 	 	 
	 

	 	Signature	 

NOTICE: The signature to this assignment must correspond with the name as written upon the face of
the within Debt Security in every particular without alteration or enlargement or any change
whatsoever and must be guaranteed by a commercial bank or trust company having its principal office
or correspondent in The City of New York or by a member of the New York Stock Exchange.exv10w3

Exhibit 10.3

HUTCHINSON TECHNOLOGY INCORPORATED

NON-EMPLOYEE DIRECTORS EQUITY PLAN

1. Purpose. The purpose of this Hutchinson Technology Incorporated Non-Employee Directors Equity
Plan (the “Plan”) is to provide non-employee members of the Board of Directors (the
“Board”) of Hutchinson Technology Incorporated (the “Company”) with an opportunity
to increase their ownership of Company common stock by allowing each participating director to
voluntarily elect to receive all or a portion of the annual cash retainers (Board, committee and
committee chair retainers) (collectively, the “Retainer”) payable to him or her for service
as a member of the Board in the form of shares of the Company’s common stock (the “Stock”).

2. Eligibility. Directors of the Company who are not also officers or other employees of the
Company or its subsidiaries are eligible to participate in this Plan (each, a “Director”).

3. Election to Receive Stock. On forms provided by the Company, each eligible Director may elect
to receive, in lieu of cash, shares of Stock having a Fair Market Value (as defined in Section 6)
equal to the percentage, from 0% to 100%, specified by the eligible Director of the Retainer
payable to such Director during the period between the Company’s next two annual meetings of
shareholders following the deadline for submission of an applicable election form. If no election
is made by an eligible Director, the entire Retainer during such period will be paid in cash. To
be effective for any period between annual Company shareholder meetings, any election to receive
Stock in lieu of cash must be submitted to the Company (Attn: CEO Administrative Assistant) no
later than January 15 immediately prior to the first of the two succeeding annual meetings of
shareholders. Any eligible Director whose initial election to the Board occurs during a period
between annual Company shareholder meetings shall have 30 days following such election to elect to
receive Stock in lieu of cash for Retainer amounts payable after the date of election and prior to
the next annual Company shareholder meeting. Any election made in accordance with this Section 3
may not be modified or withdrawn by the Director.

4. Issuance of Stock. Shares of Stock having a Fair Market Value equal to the portion of the
Retainer to be received in Stock shall be issued to each participating Director on each date a
Retainer amount is scheduled to be paid to eligible Directors during the applicable calendar year
(currently February 15 and August 15 or, if not a business day, the first business day thereafter
on which Stock is traded on the Nasdaq Global Select Market or such other established securities
market as may then be the principal trading market for the Stock). The number of shares of Stock
to be issued on any payment date pursuant to this Plan shall be the amount of Retainer to which the
Director is entitled as of the payment date multiplied by the percentage of such Retainer the
Director has elected to receive in Stock, divided by the Fair Market Value of a share of Stock on
the payment date. Whenever application of this formula would otherwise result in the issuance of a
fractional share, the number of shares to be issued will be rounded down to the nearest whole
share. A Director shall be entitled to receive shares of Stock pursuant to this Plan on any
payment date only if the Director continues to be a non-employee member of the Board as of that
payment date.

5. Shares Subject to Plan. The total number of shares of Stock reserved for issuance under the
Plan shall be 100,000. If the number of outstanding shares of Stock is changed by a stock
dividend, recapitalization, stock split, reverse stock split, subdivision, combination,
reclassification or similar change in the capital structure of the Company without consideration,
then the number of shares reserved for issuance under this Plan will be proportionately adjusted by
the Compensation Committee of the Board (the “Committee”).

6. Fair Market Value. The Fair Market Value of each share of Stock on any date shall be the
closing sale price of one share of Stock on the Nasdaq Global Select Market (or such other
established securities market as may then be the principal trading market for the Stock) on the
relevant date or, if no sales occurred on that date, on the next preceding date on which a sale of
shares of Stock occurred, as reported in the Wall Street Journal (or such other authoritative
source as may be designated by the Committee).

 

 

7. Administration of Plan. This Plan shall be administered by the Committee. Subject to the terms
of the Plan, the Committee shall have the authority to establish and amend rules to administer the
Plan, to interpret the Plan and to make all other determinations necessary or desirable for the
administration of the Plan. The Committee may delegate any non-discretionary administrative
oversight responsibilities under the Plan to any employee or agent of the Company.

8. Amendment to the Plan. The Board may at any time amend, alter, suspend or discontinue this Plan.
No amendment, alteration, suspension or discontinuance shall require shareholder approval unless
such approval would be required by applicable law or stock exchange rules. Notwithstanding any
election made pursuant to the Plan, the Committee shall have the authority to direct the Company to
make any retainer payment in cash instead of Stock if the Committee determines, in its discretion,
that it is advisable to do so.

9. Separation From Service as Director. If a Director participating in the Plan ceases to be a
member of the Board for any reason whatsoever, including death, disability or removal in accordance
with applicable law, he or she will no longer be entitled to receive any Retainer payment in cash
or in shares of Stock pursuant to this Plan following the date of such cessation.

10. Effective Date and Duration of Plan. The Plan shall become effective on the date it is adopted
by the Board, and shall continue in effect until all shares of Stock reserved for issuance under
the Plan have been issued, or until its earlier termination by the Board.

11. Compliance with Law. Notwithstanding any other provision of this Plan, no shares of Stock
shall be issued and delivered under this Plan unless the issuance of such shares complies with all
applicable legal requirements, including compliance with the provisions of applicable federal and
state securities laws.

12. Governing Law. To the extent that federal laws do not otherwise control, this Plan and all
determinations made and actions taken under this Plan shall be governed by the laws of the State of
Minnesota, without regard to the conflicts of law provisions thereof, and construed accordingly.

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