Document:

Form of Note for the Company's 8.0% Equity Linked Securities

 Exhibit 4.01 
  
 THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO A NOMINEE
OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO CITIGROUP GLOBAL MARKETS HOLDINGS INC. OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS 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. 
  

			
	No. R-1	 	                                       
     INITIAL PRINCIPAL AMOUNT
	CUSIP 173078 88 2	 	                                       
     REPRESENTED $65,200,000
	ISIN: US1730788825	 	                                       
     representing 6,520,000 ELKS
	 	 	                                       
     ($10 per ELKS)

  
 CITIGROUP GLOBAL
MARKETS HOLDINGS INC. 
  
 8.0% Equity Linked Securities (ELKS®) based upon the common stock of 
 Texas Instruments Incorporated due February 6, 2006 
  
 Citigroup Global Markets Holdings Inc., a New York corporation (hereinafter referred to as the “Company”, which term includes any
successor corporation under the Indenture herein referred to), for value received and on condition that this Note is not redeemed by the Company prior to February 6, 2006 (the “Stated Maturity Date”), hereby promises to pay to CEDE
& CO., or its registered assigns, the Maturity Payment (as defined below), on the Stated Maturity Date. This Note will pay semi-annual coupon payments, is not subject to any sinking fund, is not subject to redemption at the option of the Holder
thereof prior to the Stated Maturity Date, and is not subject to the defeasance provisions of the Indenture. 
  
 Payment of the Maturity Payment with respect to this Note shall be made upon presentation and surrender of this Note at the corporate trust office of the
Trustee in the Borough of Manhattan, The City and State of New York, in such coin or currency of the United States as at the time of payment is legal tender for payment of public and private debts or, if applicable, in the common stock of Texas
Instruments Incorporated (“Texas Instruments”). 
  
 This Note is one of the series of 8.0% Equity Linked Securities based upon the common stock of Texas Instruments due February 6, 2006 (the “ELKS”). 

 COUPON 
  
 A coupon of $0.4111 per ELKS will be paid in cash on August 8, 2005 and a coupon of $0.3956 per ELKS will be paid in cash on February 6, 2006. The August
8, 2005 coupon will be composed of $0.1593 of interest and a partial payment of an option premium in the amount of $0.2518. The February 6, 2006 coupon will be composed of $0.1533 of interest and a partial payment of an option premium in the amount
of $0.2423. Coupon payments will be payable to the persons in whose names the ELKS are registered at the close of business on the fifth Business Day preceding each Coupon Payment Date. If a Coupon Payment Date falls on a day that is not a Business
Day, the coupon payment to be made on such Coupon Payment Date will be made on the next succeeding Business Day with the same force and effect as if made on such Coupon Payment Date, and no additional interest will accrue as a result of such delayed
payment. 
  
 “Business Day” means any day that is not a
Saturday, a Sunday or a day on which securities exchanges or banking institutions or trust companies in the City of New York are authorized or obligated by law or executive order to close. 
  
 The interest portion of the coupon will represent interest accruing at a rate
of 3.10% per annum from February 3, 2005 or from the most recent Coupon Payment Date to which the interest portion of the coupon has been paid or provided for until maturity. The interest portion of the coupon will be computed on the basis of a
360-day year of twelve 30-day months. 
  
 PAYMENT AT MATURITY 
  
 On the Stated Maturity Date, Holders of the ELKS will receive for each ELKS
the Maturity Payment described below. 
  
 DETERMINATION OF THE MATURITY PAYMENT

  
 The Maturity Payment for each ELKS will equal either:

  

	 	•	 	a number of shares of Texas Instruments common stock equal to the Exchange Ratio, if the Trading Price of Texas Instruments common stock on any Trading Day after January 31, 2005 up
to and including the third Trading Day before the Stated Maturity Date (whether intra-day or at the close of trading on any day) is less than or equal to $17.41 (approximately 75% of the Initial Share Price), or 

  

	 	•	 	$10 in cash. 

  
 In lieu of any fractional share of Texas Instruments common stock otherwise payable in respect of any ELKS, at the Stated Maturity Date, the Holder of this Note will receive an amount in cash equal to the value of
such fractional share. The number of full shares of Texas Instruments common stock, and any cash in lieu of a fractional share, to be delivered at the Stated Maturity Date to the Holder of this Note will be calculated based on the aggregate number
of ELKS held by such Holder. 
  

 2 

 The “Initial Share Price” equals $23.21, the price per share of Texas Instruments common stock
at the market close on January 31, 2005. 
  
 The “Exchange
Ratio” equals 0.43085. 
  
 A “Market Disruption
Event” means the occurrence or existence of any suspension of or limitation imposed on trading (by reason of movements in price exceeding limits permitted by any exchange or market or otherwise) of, or the unavailability, through a recognized
system of public dissemination of transaction information, of accurate price, volume or related information in respect of, (1) the shares of Texas Instruments common stock (or any other security for which a Trading Price or Closing Price must be
determined) on any exchange or market, or (2) any options contracts or futures contracts relating to the shares of Texas Instruments common stock (or other security), or any options on such futures contracts, on any exchange or market if, in each
case, in the determination of the calculation agent, any such suspension, limitation or unavailability is material. 
  
 A “Trading Day” means a day, as determined by the calculation agent, on which trading is generally conducted (or was scheduled to have been
generally conducted, but for the occurrence of a Market Disruption Event) on the New York Stock Exchange, the American Stock Exchange, the Nasdaq National Market, the Chicago Mercantile Exchange and the Chicago Board Options Exchange, and in the
over-the-counter market for equity securities in the United States. 
  
 The “Trading Price” of Texas Instruments common stock on any date of determination will be (1) if the common stock is listed on a national securities exchange on that date of determination, any reported sale price, regular way, of
the principal trading session on that date on the principal U.S. exchange on which the common stock is listed or admitted to trading, (2) if the common stock is not listed on a national securities exchange on that date of determination, or if the
reported sale price on such exchange is not obtainable (even if the common stock is listed or admitted to trading on such exchange), and the common stock is quoted on the Nasdaq National Market, any reported sale price of the principal trading
session on that date as reported on the Nasdaq, and (3) if the common stock is not quoted on the Nasdaq on that date of determination, or if the reported sale price on the Nasdaq is not obtainable (even if the common stock is quoted on the Nasdaq),
any reported sale price of the principal trading session on the over-the-counter market on that date as reported on the OTC Bulletin Board, the National Quotation Bureau or a similar organization. The determination of the Trading Price by the
calculation agent in the event of a Market Disruption Event may be deferred by the calculation agent for up to five consecutive Trading Days on which a Market Disruption Event is occurring, but not past the Trading Day prior to the Stated Maturity
Date. If no reported sale price of the principal trading session is available pursuant to clauses (1), (2) or (3) above or if there is a Market Disruption Event, the Trading Price on any date of determination, unless deferred by the calculation
agent as described in the preceding sentence, will be the arithmetic mean, as determined by the calculation agent, of the bid prices of the common stock obtained from as many dealers in such stock (which may include Citigroup Global Markets Inc. or
any of our other subsidiaries or affiliates), but not exceeding three such dealers, as will make such bid prices available to the calculation agent. A security “quoted on the Nasdaq National Market” will include a security included for
listing or quotation in any successor to such system and the term “OTC Bulletin Board” will include any successor to such service. 
  
  

 3 

 DILUTION ADJUSTMENTS 
  
 If Texas Instruments, after the closing date of the offering of the ELKS, 
  
 (1) pays a stock dividend or makes a distribution with respect to its common
stock in shares of the stock, 
  
 (2) subdivides or splits the
outstanding shares of its common stock into a greater number of shares, 
  
 (3) combines the outstanding shares of the common stock into a smaller number of shares, or 
  
 (4) issues by reclassification of shares of its common stock any shares of other common stock of Texas Instruments, 
  
 then, in each of these cases, the Exchange Ratio will be multiplied by a dilution adjustment
equal to a fraction, the numerator of which will be the number of shares of common stock outstanding immediately after the event, plus, in the case of a reclassification referred to in (4) above, the number of shares of other common stock of Texas
Instruments, and the denominator of which will be the number of shares of common stock outstanding immediately before the event. The Initial Share Price will also be adjusted in that case in the manner described below. 
  
 If Texas Instruments, after the closing date, issues, or declares a record
date in respect of an issuance of, rights or warrants to all holders of its common stock entitling them to subscribe for or purchase shares of its common stock at a price per share less than the Then-Current Market Price of the common stock, other
than rights to purchase common stock pursuant to a plan for the reinvestment of dividends or interest, then, in each case, the Exchange Ratio will be multiplied by a dilution adjustment equal to a fraction, the numerator of which will be the number
of shares of common stock outstanding immediately before the adjustment is effected, plus the number of additional shares of common stock offered for subscription or purchase pursuant to the rights or warrants, and the denominator of which will be
the number of shares of common stock outstanding immediately before the adjustment is effected by reason of the issuance of the rights or warrants, plus the number of additional shares of common stock which the aggregate offering price of the total
number of shares of common stock offered for subscription or purchase pursuant to the rights or warrants would purchase at the Then-Current Market Price of the common stock, which will be determined by multiplying the total number of shares so
offered for subscription or purchase by the exercise price of the rights or warrants and dividing the product obtained by the Then-Current Market Price. To the extent that, after the expiration of the rights or warrants, the shares of common stock
offered thereby have not been delivered, the Exchange Ratio will be further adjusted to equal the Exchange Ratio which would have been in effect had the adjustment for the issuance of the rights or warrants been made upon the basis of delivery of
only the number of shares of common stock actually delivered. The Initial Share Price will also be adjusted in that case in the manner described below. 
  

 4 

 If Texas Instruments, after the closing date, declares or pays a dividend or makes a distribution to all
holders of the common stock of any class of its capital stock, the capital stock of one or more of its subsidiaries, evidences of its indebtedness or other non-cash assets, excluding any dividends or distributions referred to in the above paragraph,
or issues to all holders of its common stock rights or warrants to subscribe for or purchase any of its or one or more of its subsidiaries’ securities, other than rights or warrants referred to in the above paragraph, then, in each of these
cases, the Exchange Ratio will be multiplied by a dilution adjustment equal to a fraction, the numerator of which will be the Then-Current Market Price of one share of the common stock, and the denominator of which will be the Then-Current Market
Price of one share of the common stock, less the fair market value (as determined by a nationally recognized independent investment banking firm retained for this purpose by the Company, whose determination will be final) as of the time the
adjustment is effected of the portion of the capital stock, assets, evidences of indebtedness, rights or warrants so distributed or issued applicable to one share of common stock. The Initial Share Price will also be adjusted in that case in the
manner described below. If any capital stock declared or paid as a dividend or otherwise distributed or issued to all holders of Texas Instruments common stock consists, in whole or in part, of marketable securities, then the fair market value of
such marketable securities will be determined by the calculation agent by reference to the price per share of such capital stock on the principal market on which it is traded as of the time the adjustment is effected. The fair market value of any
other distribution or issuance referred to in this paragraph will be determined by a nationally recognized independent investment banking firm retained for this purpose by Citigroup Global Markets Holdings, whose determination will be final.

  
 Notwithstanding the foregoing, in the event that, with respect
to any dividend or distribution to which the above paragraph would otherwise apply, the denominator in the fraction referred to in the above formula is less than $1.00 or is a negative number, then the Company may, at its option, elect to have the
adjustment provided by the above paragraph not be made and in lieu of this adjustment, the Trading Price of Texas Instruments common stock on any Trading Day thereafter up to and including the third Trading Day before the Stated Maturity Date will
be deemed to be equal to the fair market value of the capital stock, evidences of indebtedness, assets, rights or warrants (determined, as of the date this dividend or distribution is made, by a nationally recognized independent investment banking
firm retained for this purpose by the Company, whose determination will be final) so distributed or issued applicable to one share of Texas Instruments common stock and, if the Trading Price of Texas Instruments common stock on any Trading Day
thereafter, up to and including the third Trading Day before the Stated Maturity Date, is less than or equal to approximately 75% of the Initial Share Price, each holder of the ELKS will have the right to receive at maturity cash in an amount per
ELKS equal to the Exchange Ratio multiplied by such fair market value. 
  
 If Texas Instruments, after the closing date, declares a record date in respect of a distribution of cash, other than any Permitted Dividends described below, any cash distributed in consideration of fractional shares of common stock and
any cash distributed in a Reorganization Event referred to below, by dividend or otherwise, to all holders of its common stock, or makes 
  

 5 

 an Excess Purchase Payment, then the Exchange Ratio will be multiplied by a dilution adjustment equal to a fraction, the
numerator of which will be the Then-Current Market Price of the common stock, and the denominator of which will be the Then-Current Market Price of the common stock on the record date less the amount of the distribution applicable to one share of
common stock which would not be a Permitted Dividend, or, in the case of an Excess Purchase Payment, less the aggregate amount of the Excess Purchase Payment for which adjustment is being made at the time divided by the number of shares of common
stock outstanding on the record date. The Initial Share Price will also be adjusted in that case in the manner described below. 
  
 For the purposes of these adjustments: 
  
 A “Permitted Dividend” is any cash dividend in respect of Texas Instruments common stock, other than a cash dividend that exceeds the
immediately preceding cash dividend, and then only to the extent that the per share amount of this dividend results in an annualized dividend yield on the common stock in excess of 10%. 
  
 An “Excess Purchase Payment” is the excess, if any, of (x) the cash and the value (as determined by a nationally
recognized independent investment banking firm retained for this purpose by the Company, whose determination will be final) of all other consideration paid by Texas Instruments with respect to one share of common stock acquired in a tender offer or
exchange offer by Texas Instruments, over (y) the Then-Current Market Price of the common stock. 
  
 Notwithstanding the foregoing, in the event that, with respect to any dividend, distribution or Excess Purchase Payment to which the sixth paragraph in
this section would otherwise apply, the denominator in the fraction referred to in the formula in that paragraph is less than $1.00 or is a negative number, then the Company may, at its option, elect to have the adjustment provided by the sixth
paragraph in this section not be made and in lieu of this adjustment, the Trading Price of Texas Instruments common stock on any Trading Day thereafter up to and including the third Trading Day before the Stated Maturity Date will be deemed to be
equal to the sum of the amount of cash and the fair market value of other consideration (determined, as of the date this dividend or distribution is made, by a nationally recognized independent investment banking firm retained for this purpose by
the Company, whose determination will be final) so distributed or applied to the acquisition of the common stock in the tender offer or exchange offer applicable to one share of Texas Instruments common stock and, if the Trading Price of Texas
Instruments common stock on any Trading Day thereafter, up to and including the third Trading Day before the Stated Maturity Date, is less than or equal to $17.41 (approximately 75% of the Initial Share Price), each holder of the ELKS will have the
right to receive at maturity cash in an amount per ELKS equal to the Exchange Ratio multiplied by such sum. 
  
 If any adjustment is made to the Exchange Ratio as set forth above, an adjustment will also be made to the Initial Share Price. The required adjustment
will be made by dividing the Initial Share Price by the relevant dilution adjustment. 
  

 6 

 Each dilution adjustment will be effected as follows: 
  

	 	•	 	in the case of any dividend, distribution or issuance, at the opening of business on the Business Day next following the record date for determination of holders of Texas
Instruments common stock entitled to receive this dividend, distribution or issuance or, if the announcement of this dividend, distribution, or issuance is after this record date, at the time this dividend, distribution or issuance was announced by
Texas Instruments, 

  

	 	•	 	in the case of any subdivision, split, combination or reclassification, on the effective date of the transaction, 

  

	 	•	 	in the case of any Excess Purchase Payment for which Texas Instruments announces, at or prior to the time it commences the relevant share repurchase, the repurchase price per share
for shares proposed to be repurchased, on the date of the announcement, and 

  

	 	•	 	in the case of any other Excess Purchase Payment, on the date that the holders of the repurchased shares become entitled to payment in respect thereof. 

  
 All dilution adjustments will be rounded upward or downward to the nearest
1/10,000th or, if there is not a nearest 1/10,000th, to the next lower 1/10,000th. No adjustment in the Exchange Ratio will be required unless the adjustment would require an increase or decrease of at least one percent therein, provided, however,
that any adjustments which by reason of this sentence are not required to be made will be carried forward (on a percentage basis) and taken into account in any subsequent adjustment. If any announcement or declaration of a record date in respect of
a dividend, distribution, issuance or repurchase requiring an adjustment as described herein is subsequently canceled by Texas Instruments, or this dividend, distribution, issuance or repurchase fails to receive requisite approvals or fails to occur
for any other reason, then, upon the cancellation, failure of approval or failure to occur, the Exchange Ratio and the Initial Share Price will be further adjusted to the Exchange Ratio and the Initial Share Price which would then have been in
effect had adjustment for the event not been made. If a Reorganization Event described below occurs after the occurrence of one or more events requiring an adjustment as described herein, the dilution adjustments previously applied to the Exchange
Ratio will not be rescinded but will be applied to the Reorganization Event as provided for below. 
  
 The “Then-Current Market Price” of the common stock, for the purpose of applying any dilution adjustment, means the average Closing Price per
share of common stock for the ten Trading Days immediately before this adjustment is effected or, in the case of an adjustment effected at the opening of business on the Business Day next following a record date, immediately before the earlier of
the date the adjustment is effected and the related Ex-Date. For purposes of determining the Then-Current Market Price, the determination of the Closing Price by the calculation agent in the event of a Market Disruption Event, as described in the
definition of Closing Price, may be deferred by the calculation agent for up to five consecutive Trading Days on which a Market Disruption Event is occurring, but not past the Trading Day prior to the Stated Maturity Date. 
  

 7 

 The “Closing Price” of Texas Instruments common stock (or any other security for which a
Closing Price must be determined) on any date of determination will be (1) if the common stock is listed on a national securities exchange on that date of determination, the closing sale price or, if no closing sale price is reported, the last
reported sale price on that date on the principal U.S. exchange on which the common stock is listed or admitted to trading, (2) if the common stock is not listed on a national securities exchange on that date of determination, or if the closing sale
price or last reported sale price is not obtainable (even if the common stock is listed or admitted to trading on such exchange), and the common stock is quoted on the Nasdaq National Market, the closing sale price or, if no closing sale price is
reported, the last reported sale price on that date as reported on the Nasdaq, and (3) if the common stock is not quoted on the Nasdaq on that date of determination or, if the closing sale price or last reported sale price is not obtainable (even if
the common stock is quoted on the Nasdaq), the last quoted bid price for the common stock in the over-the-counter market on that date as reported by the OTC Bulletin Board, the National Quotation Bureau or a similar organization. The determination
of the Closing Price by the calculation agent in the event of a Market Disruption Event may be deferred by the calculation agent for up to five consecutive Trading Days on which a Market Disruption Event is occurring, but not past the Trading Day
prior to the Stated Maturity Date. If no closing sale price or last reported sale price is available pursuant to clauses (1), (2) or (3) above or if there is a Market Disruption Event, the Closing Price on any date of determination, unless deferred
by the calculation agent as described in the preceding sentence, will be the arithmetic mean, as determined by the calculation agent, of the bid prices of the common stock obtained from as many dealers in such stock (which may include Citigroup
Global Markets Inc. or any of our other subsidiaries or affiliates), but not exceeding three such dealers, as will make such bid prices available to the calculation agent. A security “quoted on the Nasdaq National Market” will include a
security included for listing or quotation in any successor to such system and the term “OTC Bulletin Board” will include any successor to such service. If, during any period of ten Trading Days used to calculate the Then-Current Market
Price, there occurs any event requiring an adjustment to be effected as described herein, then the Closing Price for each Trading Day in such period of ten Trading Days occurring prior to the day on which such adjustment is effected will be adjusted
by being divided by the relevant dilution adjustment. 
  
 The
“Ex-Date” relating to any dividend, distribution or issuance is the first date on which the shares of the common stock trade in the regular way on their principal market without the right to receive this dividend, distribution or issuance.

  
 In the event of any of the following “Reorganization
Events”: 
  

	 	•	 	any consolidation or merger of Texas Instruments, or any surviving entity or subsequent surviving entity of Texas Instruments, with or into another entity, other than a merger or
consolidation in which Texas Instruments is the continuing corporation and in which the common stock outstanding immediately before the merger or consolidation is not exchanged for cash, securities or other property of Texas Instruments or another
issuer, 

  

	 	•	 	any sale, transfer, lease or conveyance to another corporation of the property of Texas Instruments or any successor as an entirety or substantially as an entirety,

  

 8 

	 	•	 	any statutory exchange of securities of Texas Instruments or any successor of Texas Instruments with another issuer, other than in connection with a merger or acquisition, or

  

	 	•	 	any liquidation, dissolution or winding up of Texas Instruments or any successor of Texas Instruments, 

  
 the Trading Price of Texas Instruments common stock on any Trading Day thereafter up to and including the third Trading Day before the
Stated Maturity Date will be deemed to be equal to the Transaction Value. 
  
 The “Transaction Value” will be the sum of: 
  
 (1) for any cash received in a Reorganization Event, the amount of cash received per share of common stock, 
  
 (2) for any property other than cash or Marketable Securities received in a Reorganization Event, an amount equal to the market value on the date the
Reorganization Event is consummated of that property received per share of common stock, as determined by a nationally recognized independent investment banking firm retained for this purpose by the Company, whose determination will be final, and

  
 (3) for any Marketable Securities received in a Reorganization
Event, an amount equal to the Closing Price per share of these Marketable Securities on the applicable Trading Day multiplied by the number of these Marketable Securities received for each share of common stock. 
  
 “Marketable Securities” are any perpetual equity securities or debt
securities with a stated maturity after the maturity date, in each case that are listed on a U.S. national securities exchange or reported by the Nasdaq National Market. The number of shares of any equity securities constituting Marketable
Securities included in the calculation of Transaction Value pursuant to clause (3) above will be adjusted if any event occurs with respect to the Marketable Securities or the issuer of the Marketable Securities between the time of the Reorganization
Event and maturity that would have required an adjustment as described above, had it occurred with respect to Texas Instruments common stock or Texas Instruments. Adjustment for these subsequent events will be as nearly equivalent as practicable to
the adjustments described above. 
  
 If Texas Instruments common
stock has been subject to a Reorganization Event and the Trading Price of Texas Instruments common stock on any Trading Day thereafter, up to and including the third Trading Day before the Stated Maturity Date, is less than or equal to $17.41
(approximately 75% of the Initial Share Price), then each holder of the ELKS will have the right to receive per $10 principal amount of ELKS (i) cash in an amount equal to the Exchange Ratio multiplied by the sum of clauses (1) and (2) in the
definition of “Transaction Value” above and (ii) the number of Marketable Securities received for each share of stock in the Reorganization Event multiplied by the Exchange Ratio. 
  

 9 

 GENERAL 
  
 This Note is one of a duly authorized issue of Debt Securities of the Company, issued and to be issued in one or more series under a Senior Debt
Indenture, dated as of October 27, 1993, as supplemented by a First Supplemental Indenture, dated as of November 28, 1997, a Second Supplemental Indenture, dated as of July 1, 1999, and as further supplemented from time to time (the
“Indenture”), between the Company and The Bank of New York, as trustee (the “Trustee”, which term includes any successor trustee under the Indenture), to which Indenture reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the ELKS, and the terms upon which the ELKS are, and are to be, authenticated and delivered. 
  
 In case an Event of Default with respect to the ELKS shall have occurred and
be continuing, the principal of the ELKS may be declared due and payable in the manner and with the effect provided in the Indenture. In such case, the amount declared due and payable upon any acceleration permitted by the Indenture will be
determined by the calculation agent and will be equal to, with respect to this Note, the Maturity Payment calculated as though the Stated Maturity Date of this Note were the date of early repayment. In case of default at Maturity of this Note, this
Note shall bear interest, payable upon demand of the beneficial owners of this Note in accordance with the terms of the ELKS, from and after Maturity through the date when payment of such amount has been made or duly provided for, at the rate of
3.75% per annum on the unpaid amount (or the cash equivalent of such unpaid amount) due. 
  
 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 Debt Securities of each
series to be affected under the Indenture at any time by the Company and a majority in aggregate principal amount of the Debt Securities at the time Outstanding of each series affected thereby. The Indenture also contains provisions permitting the
Holders of specified percentages in aggregate principal amount of the Debt Securities of any series at the time Outstanding, on behalf of the Holders of all Debt Securities of such series, to waive compliance by the Company with certain provisions
of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note. 
  
 The Holder of this Note may not enforce such Holder’s rights pursuant to the Indenture or the Notes except as provided
in the Indenture. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company to pay the Maturity Payment with respect to this Note, and to pay any interest on any
overdue amount thereof at the time, place and rate, and in the coin or currency, herein prescribed. 
  
 All terms used in this Note which are defined in the Indenture but not in this Note shall have the meanings assigned to them in the Indenture. 

 

 10 

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

 11 

 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.

  

			
	 CITIGROUP GLOBAL MARKETS HOLDINGS INC.

		
	 By:
	  	 /s/ Scott Freidenrich

	 Name:
	  	 Scott Freidenrich

	 Title:
	  	 Executive Vice President and Treasurer

  
 Corporate Seal 
 Attest: 
  

			
	 By:
	  	 /s/ Douglas C. Turnbull

	 Name:
	  	 Douglas C. Turnbull

	 Title:
	  	 Assistant Secretary

	
	 Dated February 3, 2005

	
	 CERTIFICATE OF AUTHENTICATION
 This is one of the Notes referred to in the within-mentioned Indenture.

	
	 The Bank of New York,

	 as Trustee

		
	 By:
	  	 /s/ Stacey Poindextor

	 	  	 Authorized Signatory

  

 12Form of Grant Letter

			
	 

 

	 	 ARMSTRONG WORLD INDUSTRIES, INC.
 2500 COLUMBIA AVE., P.O. BOX 3001
 LANCASTER, PA 17604
  
 717.397.0611         www.armstrong.com

  
 Exhibit 10.1

  
 PERSONAL & CONFIDENTIAL 
  
 <NAME> 
 <TITLE> 
  
 Dear <FIRSTNAME>:

  
 Subject: 2005 Cash Retention Payment 
  
 As Armstrong World Industries prepares to emerge from its Chapter 11 bankruptcy
reorganization, we recognize the importance of retaining those key employees who are vital to the company’s current and future success. Recently, the U.S. Bankruptcy Court approved a 2005 cash retention payment program that will apply to a
limited number of key employees for this purpose. 
  
 I am very pleased to offer
you participation in this special retention program with a cash retention payment of <AMOUNT> which represents <PERCENT> of your current annualized base salary. This payment will be made to you on or about December 29, 2005 as long as
you continue your employment with Armstrong until this scheduled payment date. If Armstrong World Industries emerges from Chapter 11 reorganization prior to December 29, 2005, you will remain eligible for the full cash retention payment at
year end contingent on your continued employment. If your employment is terminated for any reason, voluntarily or involuntarily, prior to December 29, 2005, you will be ineligible for the retention payment. 
  
 This retention payment will not be counted for purposes of benefit determination under the
company’s employee benefit plans (pension, savings, life insurance). 
  
 It
is important that you keep the details of this cash retention payment confidential. You should not assume that your manager or associates are participants in this program. Eligibility was not determined solely by grade level. 
  
 On behalf of the Office of the Chairman, we congratulate you on your participation in this
special retention program. We are confident that you will continue to make significant contributions to Armstrong’s success and provide the leadership necessary to achieve our future goals. 
  
 If you have any questions regarding this information, please contact me or Scott Webster.

  
 Sincerely, 
  
 Armstrong World Industries, Inc.

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