Document:

Exhibit 4.1

 

SUPPLEMENTAL INDENTURE NO. 5
  
 Dated as of January 9, 2014

 

4.000% Notes due 2024
 4.900% Notes due 2034

5.100% Notes due 2044

 

SUPPLEMENTAL INDENTURE NO. 5, dated as of January 9, 2014, between FedEx Corporation, a Delaware corporation (the “Company”), the Guarantors referred to in the Indenture below (the “Guarantors”) and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”).

 

RECITALS

 

WHEREAS, the Company, the Guarantors and the Trustee have executed and delivered an Indenture, dated as of August 8, 2006 (as amended or supplemented to date, the “Indenture”), to provide for the issuance by the Company from time to time, and the guarantee by the Guarantors, of the Company’s senior unsecured debt securities;

 

WHEREAS, the Company, the Guarantors and the Trustee have executed and delivered Supplemental Indenture No. 1, dated as of August 8, 2006;

 

WHEREAS, the Company, the Guarantors and the Trustee have executed and delivered Supplemental Indenture No. 2, dated as of January 16, 2009;

 

WHEREAS, the Company, the Guarantors and the Trustee have executed and delivered Supplemental Indenture No. 3, dated as of July 27, 2012;

 

WHEREAS, the Company, the Guarantors and the Trustee have executed and delivered Supplemental Indenture No. 4, dated as of April 11, 2013;

 

WHEREAS, Section 9.01(b) of the Indenture permits execution of supplemental indentures without the consent of any Holders for the purpose of adding to the covenants of the Company or any Guarantor for the benefit of the Holders of less than all series of Securities so long as such supplemental indenture states that such covenant is expressly being included solely for the benefit of one or more particular series of Securities;

 

WHEREAS, Section 9.01(j) of the Indenture permits execution of supplemental indentures for the purpose of establishing the form or terms of Securities of any series as permitted by Sections 2.01 and 3.01 of the Indenture without the consent of any Holders;

 

 

WHEREAS, the entry into this Supplemental Indenture No. 5 by the parties hereto is authorized by the provisions of the Indenture;

 

WHEREAS, the Change of Control Repurchase Event (as defined herein) covenant, as set forth below, is expressly being included solely for the benefit of the 2014 Series Notes (as defined herein);

 

WHEREAS, the Securities issued under the Indenture pursuant to Supplemental Indenture No. 1 have matured and are no longer Outstanding; and

 

WHEREAS, all things necessary to make the 2014 Series Notes, when executed by the Company and authenticated and delivered hereunder and under the Indenture, duly issued by the Company and to make this Supplemental Indenture No. 5 a valid and binding agreement of the Company and the Guarantors, in accordance with the terms hereof and thereof, have been done.

 

NOW, THEREFORE, for and in consideration of the premises and the purchase of the 2014 Series Notes by the Holders, the Company, the Guarantors and the Trustee mutually covenant and agree, for the equal and proportionate benefit of the respective Holders from time to time of each series of the 2014 Series Notes as follows:

 

ARTICLE 1
  RELATION TO THE INDENTURE; DEFINITIONS AND
 OTHER PROVISIONS OF GENERAL APPLICATION

 

Section 1.01.  Relation to the Indenture.  This Supplemental Indenture No. 5 constitutes an integral part of the Indenture.

 

Section 1.02.  Definitions and Other Provisions of General Application.  For all purposes of this Supplemental Indenture No. 5 unless otherwise specified herein:

 

(a)                                 all terms defined in this Supplemental Indenture No. 5 which are used and not otherwise defined herein shall have the meanings they are given in the Indenture; and

 

(b)                                 the provisions of general application stated in Section 1.01 of the Indenture shall apply to this Supplemental Indenture No. 5, except that the words “herein,” “hereof,” “hereto” and “hereunder” and other words of similar import refer to this Supplemental Indenture No. 5 as a whole and not to the Indenture or any particular Article, Section or other subdivision of the Indenture or this Supplemental Indenture No. 5.

 

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ARTICLE 2
  THE SERIES OF NOTES

 

Section 2.01.  Title.  There shall be a series of Securities designated the 4.000% Notes due 2024 (the “2024 Notes”), a series of Securities designated the 4.900% Notes due 2034 (the “2034 Notes”) and a series of Securities designated the 5.100% Notes due 2044 (the “2044 Notes” and, together with the 2024 Notes and the 2034, the “2014 Series Notes”).

 

Section 2.02.  Principal Amounts.  The initial aggregate principal amount of the 2024 Notes that may be authenticated and delivered under this Supplemental Indenture No. 5 shall not exceed $750,000,000, the initial aggregate principal amount of the 2034 Notes that may be authenticated and delivered under this Supplemental Indenture No. 5 shall not exceed $500,000,000  and the initial aggregate principal amount of the 2044 Notes that may be authenticated and delivered under this Supplemental Indenture No. 5 shall not exceed $750,000,000 (except for 2014 Series Notes of each series authenticated and delivered upon registration of, transfer of, or in exchange for, or in lieu of, other 2014 Series Notes of such series pursuant to Section 3.04, 3.05, 3.06, 9.06 or 11.07 of the Indenture and except for any 2014 Series Notes which pursuant to Section 3.03 of the Indenture are deemed never to have been authenticated and delivered hereunder).

 

Section 2.03.  Maturity Dates.  The entire outstanding principal amount of the 2024 Notes shall be payable on January 15, 2024, the entire outstanding principal amount of the 2034 Notes shall be payable on January 15, 2034 and the entire outstanding principal amount of the 2044 Notes shall be payable on January 15, 2044.

 

Section 2.04.  Interest.

 

(a)                                 The 2024  Notes will bear interest at the rate of 4.000% per annum. Interest on the 2024 Notes will be computed on the basis of a 360-day year of twelve 30-day months. Interest on the 2024 Notes will be payable semi-annually in arrears on January 15 and July 15, commencing July 15, 2014, and on the date of maturity, to the Persons in whose names the 2024 Notes are registered on the preceding January 1 and July 1 (whether or not that date is a Business Day), respectively.

 

(b)                                 The 2034 Notes will bear interest at the rate of 4.900% per annum. Interest on the 2034 Notes will be computed on the basis of a 360-day year of twelve 30-day months. Interest on the 2034 Notes will be payable semi-annually in arrears on January 15 and July 15, commencing July 15, 2014, and on the date of maturity, to the Persons in whose names the 2034 Notes are registered on the preceding January 1 and July 1 (whether or not that date is a Business Day), respectively.

 

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(c)                                  The 2044 Notes will bear interest at the rate of 5.100% per annum. Interest on the 2044 Notes will be computed on the basis of a 360-day year of twelve 30-day months. Interest on the 2044 Notes will be payable semi-annually in arrears on January 15 and July 15, commencing July 15, 2014, and on the date of maturity, to the Persons in whose names the 2044 Notes are registered on the preceding January 1 and July 1 (whether or not that date is a Business Day), respectively.

 

Section 2.05.  Defeasance and Discharge; Covenant Defeasance.  The provisions of Section 13.02 and Section 13.03 of the Indenture shall apply to each series of 2014 Series Notes.

 

Section 2.06.  Optional Redemption.

 

(a)                                 The Company will have the right, at its option, to redeem the 2024  Notes in whole or in part at any time, on at least 30 days’, but no more than 60 days’, prior written notice mailed by the Company (or otherwise delivered in accordance with the applicable procedures of the Depositary) to the Holders of the 2024 Notes to be redeemed. Upon redemption of such 2024 Notes, the Company will pay a redemption price as calculated by a Reference Treasury Dealer (as defined below) selected by the Company equal to the greater of:

 

(i)                                     100% of the principal amount of the 2024 Notes to be redeemed; and

 

(ii)                                  the sum of the present values of the remaining scheduled payments of principal and interest on the 2024 Notes to be redeemed (not including any portion of such payments of interest accrued as of the redemption date), discounted to the redemption date on a semi-annual basis, assuming a 360-day year consisting of twelve 30-day months, at the Adjusted Treasury Rate described below plus 0.15% (15 basis points).

 

The redemption price will also include interest accrued to the date of redemption on the principal balance of the 2024 Notes being redeemed.

 

(b)                                 The Company will have the right, at its option, to redeem the 2034  Notes in whole or in part at any time, on at least 30 days’, but no more than 60 days’, prior written notice mailed by the Company (or otherwise delivered in accordance with the applicable procedures of the Depositary) to the Holders of the 2034 Notes to be redeemed. Upon redemption of such 2034 Notes, the Company will pay a redemption price as calculated by a Reference Treasury Dealer (as defined below) selected by the Company equal to the greater of:

 

(i)                                     100% of the principal amount of the 2034 Notes to be redeemed; and

 

(ii)                                  the sum of the present values of the remaining scheduled payments of principal and interest on the 2034 Notes to be redeemed (not 

 

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including any portion of such payments of interest accrued as of the redemption date), discounted to the redemption date on a semi-annual basis, assuming a 360-day year consisting of twelve 30-day months, at the Adjusted Treasury Rate described below plus 0.15% (15 basis points).

 

The redemption price will also include interest accrued to the date of redemption on the principal balance of the 2034 Notes being redeemed.

 

(c)                                  The Company will have the right, at its option, to redeem the 2044  Notes in whole or in part at any time, on at least 30 days’, but no more than 60 days’, prior written notice mailed by the Company (or otherwise delivered in accordance with the applicable procedures of the Depositary) to the Holders of the  2044 Notes to be redeemed. Upon redemption of such 2044 Notes, the Company will pay a redemption price as calculated by a Reference Treasury Dealer selected by the Company equal to the greater of:

 

(i)                                     100% of the principal amount of the 2044 Notes to be redeemed; and

 

(ii)                                  the sum of the present values of the remaining scheduled payments of principal and interest on the 2044 Notes to be redeemed (not including any portion of such payments of interest accrued as of the redemption date), discounted to the redemption date on a semi-annual basis, assuming a 360-day year consisting of twelve 30-day months, at the Adjusted Treasury Rate described below plus 0.20% (20 basis points).

 

The redemption price will also include interest accrued to the date of redemption on the principal balance of the 2044 Notes being redeemed.

 

“Adjusted Treasury Rate” means, with respect to any date of redemption, the rate per year 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 date of redemption.

 

“Comparable Treasury Issue” means the United States Treasury security selected by a Reference Treasury Dealer selected by the Company as having a maturity comparable to the remaining term of the 2024 Notes, 2034 Notes or 2044 Notes, as applicable, to be redeemed that would be used, at the time of selection and under customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the applicable 2014 Series Notes.

 

“Comparable Treasury Price” means, with respect to any date of redemption, the average of the Reference Treasury Dealer Quotations for the date of redemption, after excluding the highest and lowest Reference Treasury Dealer Quotations, or if the Company is provided fewer than three Reference Treasury Dealer Quotations, the average of all Reference Treasury Dealer Quotations.

 

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“Reference Treasury Dealer” means each of J.P. Morgan Securities LLC, Goldman, Sachs & Co. and Morgan Stanley & Co. LLC and their respective successors and any other primary treasury dealer the Company selects. If any of the foregoing ceases to be a primary U.S. Government securities dealer in New York City, the Company must substitute another primary treasury dealer.

 

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any date of redemption, the average 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 the Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day before the date of redemption.

 

Unless the Company defaults in payment of the redemption price, on and after the date of redemption, interest will cease to accrue on the 2014 Series Notes or portions of the 2014 Series Notes called for redemption.

 

Section 2.07.  Form of Notes.  Each series of the 2014 Series Notes shall be represented by one or more permanent global notes registered in the name Cede & Co. or The Depository Trust Company or its nominee. The 2024 Notes shall be in the form of Exhibit A attached hereto, the 2034 Notes shall be in the form of Exhibit B attached hereto and the 2044 Notes shall be in the form of Exhibit C attached hereto.

 

Section 2.08.  Sinking Fund.  The 2014 Series Notes shall not be subject to a sinking fund.

 

Section 2.09.  Additional Amounts.  The provisions of Section 10.06 of the Indenture shall not apply to the 2014 Series Notes.

 

Section 2.10.  Amount Not Limited.  The aggregate principal amount of 2014 Series Notes which may be authenticated and delivered under the Indenture, as supplemented from time to time, shall not be limited, and additional 2014 Series Notes may be issued from time to time without any consent of Holders or of the Trustee, provided that if the additional 2014 Series Notes are not fungible with the then-outstanding 2014 Series Notes for U.S. federal income tax purposes, the additional 2014 Series Notes shall have a separate CUSIP number.

 

ARTICLE 3
  CHANGE OF CONTROL REPURCHASE EVENT

 

Section 3.01.  Intended Beneficiary; Definitions.

 

(a)                                 The provisions of this Article 3 shall be applicable only to, and are solely for the benefit of Holders of, each series of the 2014 Series Notes and to no other Security.

 

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(b)                                 For purposes of this Supplemental Indenture No. 5:

 

“Below Investment Grade Ratings Event” means, with respect to the 2014 Series Notes, on any day within the 60-day period (which period shall be extended so long as the rating of the 2014 Series Notes is under publicly announced consideration for a possible downgrade by any Rating Agency) after the earlier of (1) the occurrence of a Change of Control, or (2) the public announcement of the occurrence of a Change of Control or the intention by the Company to effect a Change of Control, the 2014 Series Notes are rated below Investment Grade by each and every Rating Agency. Notwithstanding the foregoing, a Below Investment Grade Ratings Event otherwise arising by virtue of a particular reduction in rating shall not be deemed to have occurred in respect of a particular Change of Control (and thus shall not be deemed a Below Investment Grade Ratings Event for purposes of the definition of Change of Control Repurchase Event hereunder) if the Rating Agencies making the reduction in rating to which this definition would otherwise apply do not publicly announce or publicly confirm, or inform the Trustee in writing at the Company’s request, that the reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control shall have occurred at the time of the Below Investment Grade Ratings Event).

 

“Change of Control” means the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any “person” or “group” (as those terms are used in Section 13(d)(3) of the Exchange Act), other than (1) the Company, (2) any Subsidiary, (3) any employee benefit plan (or a trust forming a part thereof) maintained by the Company or any Subsidiary, or (4) any underwriter temporarily holding Voting Stock of the Company pursuant to an offering of such Voting Stock, 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 combined voting power of the Company’s 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 shares.

 

“Change of Control Repurchase Event” means the occurrence of both a Change of Control and a Below Investment Grade Ratings Event with respect to the 2014 Series Notes.

 

“Investment Grade” means, with respect to Moody’s, a rating of Baa3 or better (or its equivalent under any successor rating categories of Moody’s); with respect to S&P, a rating of BBB- or better (or its equivalent under any successor rating categories of S&P); and, with respect to any additional Rating Agency or Rating Agencies selected by the Company, the equivalent investment grade credit rating.

 

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“Moody’s” means Moody’s Investors Service, Inc., a subsidiary of Moody’s Corporation, and its successors.

 

“Rating Agency” means (1) each of Moody’s and S&P; and (2) if either of Moody’s or S&P ceases to rate the 2014 Series Notes or fails to make a rating of the 2014 Series Notes publicly available for reasons outside of the Company’s control, 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 both of them, as the case may be.

 

“S&P” means Standard & Poor’s Ratings Services, a division of McGraw Hill Financial, Inc., and its successors.

 

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

 

Section 3.02.  Change of Control Repurchase Event.

 

(a)                                 If a Change of Control Repurchase Event occurs with respect to the 2014 Series Notes, unless the Company has exercised its right to redeem the 2014 Series Notes pursuant to the redemption terms of each of the 2024 Notes, 2034 Notes or 2044 Notes, the Company will make an offer to each Holder of the 2014 Series Notes to repurchase all or any part (in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof) of that Holder’s 2014 Series Notes at a repurchase price (the “Repurchase Price”) in cash equal to 101% of the aggregate principal amount of such 2014 Series Notes repurchased plus any accrued and unpaid interest on such 2014 Series Notes repurchased to, but not including, the Repurchase Date (defined below).

 

(b)                                 Within 30 days following a Change of Control Repurchase Event or, at the Company’s option, prior to a Change of Control, but after the public announcement of such Change of Control, the Company will mail, or cause to be mailed, or otherwise deliver in accordance with the applicable procedures of the Depositary, a notice to each Holder of the 2014 Series Notes, with a copy to the Trustee, describing the transaction or transactions that constitute or may constitute the Change of Control Repurchase Event and offering to repurchase the 2014 Series Notes on the payment date specified in the notice (such offer the “Repurchase Offer” and such date the “Repurchase Date”), which Repurchase Date will be no earlier than 30 days and no later than 60 days from the date such notice is mailed, pursuant to the procedures described in such notice. The notice shall, if mailed or delivered prior to the date of consummation of the Change of Control, state that the Repurchase Offer is conditioned on a Change of Control Repurchase Event occurring on or prior to the Repurchase Date.

 

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(c)                                  The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations to the extent those laws and regulations are applicable in connection with the repurchase of the 2014 Series Notes as a result of a Change of Control Repurchase Event. To the extent that the provisions of any securities laws or regulations conflict with the Change of Control Repurchase Event provisions of the 2014 Series Notes, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Change of Control Repurchase Event provisions of the 2014 Series Notes by virtue of such conflict.

 

(d)                                 On the Repurchase Date following a Change of Control Repurchase Event, the Company will, to the extent lawful:

 

(i)                                     accept for payment all 2014 Series Notes or portions of 2014 Series Notes properly tendered pursuant to the Repurchase Offer;

 

(ii)                                  deposit with the Trustee or with such Paying Agent as the Trustee may designate an amount equal to the aggregate Repurchase Price for all 2014 Series Notes or portions of 2014 Series Notes properly tendered;

 

(iii)                               deliver, or cause to be delivered, to the Trustee the 2014 Series Notes properly accepted for payment by the Company, together with an Officers’ Certificate stating the aggregate principal amount of 2014 Series Notes being repurchased by the Company pursuant to the Repurchase Offer; and

 

(iv)                              deliver, or cause to be delivered, to the Trustee, for authentication by the Trustee, any new 2024 Notes, 2034 Notes or 2044 Notes required to be issued pursuant to Section 3.02(e) below, duly executed by the Company.

 

(e)                                  Upon receipt by the Trustee from the Company of a notice setting forth the Repurchase Price and the Series 2014 Notes properly tendered and accepted for payment, the Trustee will promptly mail, or cause the Paying Agent to promptly mail, or otherwise deliver in accordance with the applicable procedures of the Depositary, to each Holder of 2014 Series Notes, or portions of 2014 Series Notes, properly tendered and accepted for payment by the Company the Repurchase Price for such 2014 Series Notes or portions of 2014 Series Notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book-entry) to each such Holder a new 2024 Note, 2034 Note or 2044 Note, as applicable, duly executed by the Company equal in principal amount to any unpurchased portion of any 2014 Series Notes surrendered, as applicable; provided that each such new 2014 Series Note will be in a principal amount equal to $2,000 or integral multiples of $1,000 in excess thereof.

 

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(f)                                   The Company will not be required to make a Repurchase Offer upon a Change of Control Repurchase Event if a third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for such an offer made by the Company and such third party purchases all 2014 Series Notes or portions of 2014 Series Notes properly tendered and not withdrawn under its offer.

 

(g)                                  The Company and the Guarantors acknowledge that the Company may not have sufficient funds to repurchase all 2014 Series Notes or portions of 2014 Series Notes properly tendered upon a Change of Control Repurchase Event.

 

ARTICLE 4
  MISCELLANEOUS PROVISIONS

 

Section 4.01.  Supplemental Indenture.  The Indenture, as supplemented and amended by this Supplemental Indenture No. 5, is in all respects hereby adopted, ratified and confirmed.

 

Section 4.02.  Effectiveness.  This Supplemental Indenture No. 5 shall take effect as of the date hereof.

 

Section 4.03.  Effect of Headings.  The Article and Section headings herein are for convenience only and shall not affect the construction hereof.

 

Section 4.04.  Separability Clause.  In case any provision in this Supplemental Indenture No. 5 shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions herein shall not in any way be affected or impaired thereby.

 

Section 4.05.  Governing Law.  This Supplemental Indenture No. 5 shall be governed by and construed in accordance with the laws of the State of New York without regard to conflicts of laws principles thereof.

 

Section 4.06.  Execution by the Trustee.  The Trustee has executed this Supplemental Indenture No. 5 only upon the terms and conditions set forth in the Indenture. Without limiting the generality of the foregoing, the Trustee shall not be responsible for the correctness of the recitals contained herein, which shall be taken as statements of the Company and the Guarantors, and the Trustee makes no representation and shall have no responsibility for, or in respect of, the validity or sufficiency of this Supplemental Indenture No. 5 or the execution hereof by any Person (other than the Trustee).

 

Section 4.07.  Counterparts.  This Supplemental Indenture No. 5 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.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture No. 5 to be duly executed, all as of the day and year first above written.

 

 

	
 
    	
 
    	
FedEx Corporation,  
    as Issuer
    
	
Attest:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Robert T.   Molinet
    	
 
    	
By:
    	
/s/ Michael C. Lenz
    
	
 
    	
Name:
    	
Robert T. Molinet
    	
 
    	
 
    	
Name:
    	
Michael C. Lenz
    
	
 
    	
Title:
    	
Assistant   Secretary
    	
 
    	
 
    	
Title:
    	
Corporate Vice   President and Treasurer
    

 

 

	
 
    	
 
    	
Federal Express Corporation,
   as Guarantor
    
	
Attest:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Robert T.   Molinet
    	
 
    	
By:
    	
/s/ Cathy D. Ross
    
	
 
    	
Name:
    	
Robert T. Molinet
    	
 
    	
 
    	
Name:
    	
Cathy D. Ross
    
	
 
    	
Title:
    	
Secretary
    	
 
    	
 
    	
Title:
    	
Executive Vice   President and Chief Financial Officer
    

 

 

	
 
    	
 
    	
FedEx Ground Package System, Inc.,
   as Guarantor
    
	
Attest:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Robert T.   Molinet
    	
 
    	
By:
    	
/s/ Gretchen G.   Smarto
    
	
 
    	
Name:
    	
Robert T. Molinet
    	
 
    	
 
    	
Name:
    	
Gretchen G. Smarto
    
	
 
    	
Title:
    	
Secretary
    	
 
    	
 
    	
Title:
    	
Senior Vice   President – Finance and Administration, Chief Financial Officer and Treasurer
    

 

 

	
 
    	
 
    	
FedEx Freight Corporation,
   as Guarantor
    
	
Attest:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Robert T.   Molinet
    	
 
    	
By:
    	
/s/ Donald C.   Brown
    
	
 
    	
Name:
    	
Robert T. Molinet
    	
 
    	
 
    	
Name:
    	
Donald C. Brown
    
	
 
    	
Title:
    	
Secretary
    	
 
    	
 
    	
Title:
    	
Executive Vice   President – Finance and Administration and Chief Financial Officer
    

 

 

	
 
    	
 
    	
FedEx Freight, Inc.,
   as Guarantor
    
	
Attest:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Robert T.   Molinet
    	
 
    	
By:
    	
/s/ Donald C.   Brown
    
	
 
    	
Name:
    	
Robert T. Molinet
    	
 
    	
 
    	
Name:
    	
Donald C. Brown
    
	
 
    	
Title:
    	
Assistant   Secretary
    	
 
    	
 
    	
Title:
    	
Executive Vice   President – Finance and Administration and Chief Financial Officer
    

 

 

	
 
    	
 
    	
FedEx Corporate Services, Inc.,
   as Guarantor
    
	
Attest:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Robert T.   Molinet
    	
 
    	
By:
    	
/s/ Mark A.   McGough
    
	
 
    	
Name:
    	
Robert T. Molinet
    	
 
    	
 
    	
Name:
    	
Mark A. McGough
    
	
 
    	
Title:
    	
Secretary
    	
 
    	
 
    	
Title:
    	
Senior Vice   President and Chief Financial Officer
    

 

 

	
 
    	
 
    	
FedEx Office and Print Services, Inc.,
    as   Guarantor
    
	
Attest:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Robert T.   Molinet
    	
 
    	
By:
    	
/s/ Leslie M.   Benners
    
	
 
    	
Name:
    	
Robert T. Molinet
    	
 
    	
 
    	
Name:
    	
Leslie M. Benners
    
	
 
    	
Title:
    	
Secretary
    	
 
    	
 
    	
Title:
    	
Senior Vice   President and Chief Financial Officer
    

 

 

	
 
    	
 
    	
FedEx TechConnect, Inc.,
    as   Guarantor
    
	
Attest:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Robert T.   Molinet
    	
 
    	
By:
    	
/s/ Mark A.   McGough
    
	
 
    	
Name:
    	
Robert T. Molinet
    	
 
    	
 
    	
Name:
    	
Mark A. McGough
    
	
 
    	
Title:
    	
Secretary
    	
 
    	
 
    	
Title:
    	
Senior Vice   President and Chief Financial Officer
    

 

 

	
 
    	
 
    	
Federal Express Europe, Inc.,
    as   Guarantor
    
	
Attest:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Robert T.   Molinet
    	
 
    	
By:
    	
/s/ Helena Jansson
    
	
 
    	
Name:
    	
Robert T. Molinet
    	
 
    	
 
    	
Name:
    	
Helena Jansson
    
	
 
    	
Title:
    	
Assistant   Secretary
    	
 
    	
 
    	
Title:
    	
Vice President and   Chief Financial Officer
    

 

 

	
 
    	
 
    	
Federal Express Holdings S.A.,
    as   Guarantor
    
	
Attest:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Robert T.   Molinet
    	
 
    	
By:
    	
/s/ Juan N. Cento
    
	
 
    	
Name:
    	
Robert T. Molinet
    	
 
    	
 
    	
Name:
    	
Juan N. Cento
    
	
 
    	
Title:
    	
Assistant   Secretary
    	
 
    	
 
    	
Title:
    	
Chairman of the   Board, President and Chief Executive Officer
    

 

 

	
 
    	
 
    	
Federal Express International, Inc.,
    as   Guarantor
    
	
Attest:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Robert T.   Molinet
    	
 
    	
By:
    	
/s/ Ming Kwang   (Philip) Cheng
    
	
 
    	
Name:
    	
Robert T. Molinet
    	
 
    	
 
    	
Name:
    	
Ming Kwang   (Philip) Cheng
    
	
 
    	
Title:
    	
Assistant   Secretary
    	
 
    	
 
    	
Title:
    	
Vice President
    

 

 

	
 
    	
 
    	
The Bank of New York Mellon Trust Company, N.A.,
    as Trustee 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:
    	
/s/ Michael   Countryman
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
Name:
    	
Michael Countryman
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
Title:
    	
Vice President
    

 

 

Exhibit A

 

Form of 2024 Note

 

	
No. [ ]
    	
CUSIP   No. 31428X AY2
    

 

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

 

Unless this security is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to the Issuer or its agent for registration of transfer, exchange or payment, and any security 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.

 

FEDEX CORPORATION

 

4.000% Notes due 2024

 

Guaranteed as to Payment of Principal and Interest
 by the Guarantors named in the Indenture Referred to Below

 

FedEx Corporation, a Delaware corporation (the “Company,” which term includes any successor Corporation under the Indenture), for value received, hereby promises to pay to

 

Cede & Co.
 c/o The Depository Trust Company
 55 Water Street
 New York, New York 10041

 

or registered assigns, the principal sum of US$[ ] on January 15, 2024 (the “Maturity Date”) and to pay interest thereon from January 9, 2014, or from the 

 

1

 

most recent “Interest Payment Date” to which interest has been paid or duly provided for, semi-annually in arrears on January 15 and July 15 of each year, commencing July 15, 2014, and on the Maturity Date, at the rate of 4.000% per annum, until the principal hereof is paid or duly provided for. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture dated as of August 8, 2006 between the Company, the Guarantors referred to in the Indenture and The Bank of New York Mellon Trust Company, N.A. (formerly, The Bank of New York Trust Company, N.A.) as Trustee (the “Trustee,” which term includes any successor trustee pursuant to the Indenture), as supplemented by Supplemental Indenture No. 1 dated as of August 8, 2006 (the Securities issued under the Indenture pursuant to Supplemental Indenture No. 1 have matured and are no longer Outstanding and, consequently, Supplemental Indenture No. 1 is no longer in effect), as amended and supplemented by Supplemental Indenture No. 2 dated as of January 16, 2009, as further amended and supplemented by Supplemental Indenture No. 3 dated as of July 27, 2012, as further amended and supplemented by Supplemental Indenture No. 4 dated as of April 11, 2013 and as further amended and supplemented by Supplemental Indenture No. 5 dated as of January 9, 2014 (“Supplemental Indenture No. 5”), between the Company, the Guarantors named therein and the Trustee (as so amended and supplemented, the “Indenture”), be paid to the Person in whose name this Note is registered at the close of business on the “Regular Record Date” for such interest, which shall be the preceding January 1 and July 1 (whether or not a Business Day), respectively. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the registered Holder on such Regular Record Date and may either be paid to the Person in whose name this Note (or one or more Predecessor Notes) 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 of which shall be given to Holders of Notes 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 Notes of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture.

 

The Company will at all times appoint and maintain a Paying Agent (which may be the Trustee) authorized by the Company to pay the principal of and interest on any Notes of this series on behalf of the Company and having an office or agency in New York, New York and in such other cities, if any, as the Company may designate in writing to the Trustee (the “Place of Payment”) where Notes of this series may be presented or surrendered for payment and where notices, designations or requests in respect for payments with respect to Notes of this series may be served.  The Company has initially appointed The Bank of New York Mellon Trust Company, N.A. as such Paying Agent.

 

Interest payments on this Note will be computed and paid on the basis of a 360-day year of twelve 30-day months. Interest payable on this Note on any Interest Payment Date and on the Maturity Date will include interest accrued from 

 

2

 

and including the most recent Interest Payment Date to which interest has been paid or duly provided for (or from and including January 9, 2014, if no interest has been paid on this Note) to but excluding such Interest Payment Date or the Maturity Date, as the case may be.

 

If any Interest Payment Date or the Maturity Date falls on a day that is not a Business Day (as defined below), principal or interest payable with respect to such Interest Payment Date or Maturity Date, as the case may be, will be paid on the next succeeding Business Day with the same force and effect as if it were paid on the date such payment was due, and no interest shall accrue on the amount so payable for the period from and after such Interest Payment Date or the Maturity Date, as the case may be. “Business Day” means any day other than Saturday, Sunday or other day on which banking institutions in New York or Tennessee are obligated or authorized by law to close.

 

The principal and interest payable on this Note will be made by wire transfer of immediately available funds to the Holder hereof in such currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts.

 

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

 

Unless the Certificate of Authentication hereon has been executed by the Trustee by manual signature, this Note shall not be entitled to any benefit pursuant to the Indenture or be valid or obligatory for any purpose.

 

3

 

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

 

	
 
    	
FEDEX CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
Michael C. Lenz
    
	
 
    	
 
    	
Title:
    	
Corporate Vice   President and Treasurer
    

 

Attest:

 

 

	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
Robert T. Molinet
    	
 
    
	
 
    	
Title:
    	
Assistant   Secretary
    	
 
    

 

4

 

Certificate of Authentication

 

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

 

	
 
    	
THE BANK OF NEW   YORK MELLON TRUST COMPANY, N.A., as Trustee
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized   Signatory
    

 

Dated:  January 9, 2014

 

5

 

[REVERSE OF SECURITY]

 

FEDEX CORPORATION

 

4.000% Notes due 2024

 

This Note is one of a duly authorized issue of notes of the Company (herein called the “Notes”), issued pursuant to the Indenture. 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 Guarantors, the Trustee and the Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered. To the extent the terms of the Indenture and this Note are inconsistent, the terms of the Indenture shall govern. This Note is one of the series designated on the face hereof, limited in initial aggregate principal amount to US$[ ]. Capitalized terms used herein and in the Guarantee endorsed hereon but not defined herein have the meanings ascribed to such terms in the Indenture.

 

The Notes of this series are not subject to any sinking fund.

 

The Company will have the right, at its option, to redeem the Notes of this series in whole or in part at any time on at least 30 days’, but no more than 60 days’, prior written notice mailed to the registered address of each Holder of the Notes of this series to be redeemed. Upon redemption of such Notes, the Company will pay a redemption price as calculated by a Reference Treasury Dealer (as defined in Supplemental Indenture No. 5) selected by the Company equal to the greater of (i) 100% of the principal amount of the Notes of this series to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the Notes of this series to be redeemed (not including any portion of such payments of interest accrued as of the redemption date), discounted to the redemption date on a semi-annual basis, assuming a 360-day year consisting of twelve 30-day months, at the Adjusted Treasury Rate (as defined in Supplemental Indenture No. 5) plus 0.15% (15 basis points).

 

The redemption price will also include interest accrued to the date of redemption on the principal balance of the Notes of this series being redeemed.

 

Unless the Company defaults in payment of the redemption price, on and after the date of redemption, interest will cease to accrue on the Notes or portions of the Notes of this series called for redemption.

 

If a Change of Control Repurchase Event (as defined in Supplemental Indenture No. 5) occurs with respect to Notes of this series, unless the Company has exercised its right to redeem the affected Notes, the Company will make an offer, as provided in, and subject to the terms of, Supplemental Indenture No. 5, to each Holder of the Notes of this series to repurchase all or any part (in minimum denominations of $2,000 or integral multiples of $1,000 in excess thereof) of that Holder’s Notes at a repurchase price in cash equal to 101% of the 

 

6

 

aggregate principal amount of such Notes repurchased plus any accrued and unpaid interest on such Notes repurchased to, but not including, the date of repurchase.

 

The Notes of this series are fully and unconditionally guaranteed as to the due and punctual payment of the principal and interest in respect thereof by the Guarantors as evidenced by their guarantees (the “Guarantees”) set forth hereon. The Guarantees are the direct and unconditional obligations of such Guarantors and rank and will rank equally in priority of payment and in all other respects with all other unsecured and unsubordinated obligations of such Guarantors now or hereafter outstanding.

 

In case an Event of Default with respect to the Notes of this series shall occur and be continuing, the principal of the Notes of this series may be declared due and payable in the manner and with the effect provided in the Indenture.

 

The Indenture contains provisions for defeasance at any time of (i) the entire indebtedness of this Note or (ii) certain respective covenants and Events of Default with respect to this Note, in each case upon compliance with certain conditions set forth therein, which provisions apply to the Notes.

 

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 Guarantors and the rights of the Holders of the Notes of each series to be affected pursuant to the Indenture at any time by the Company, the Guarantors and the Trustee with the consent of the Holders of a majority in principal amount of such Notes at the time Outstanding (voting as a single class). The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Notes of each series at the time Outstanding, on behalf of the Holders of all Notes of such series, to waive compliance by the Company and the Guarantors with certain provisions of the Indenture and certain past defaults pursuant to 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 or Notes issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.

 

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, places and rate, and in the currency herein prescribed.

 

As provided in the Indenture and subject to certain limitations herein and 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 the Place of Payment, duly endorsed by, or accompanied by a 

 

7

 

written instrument of transfer in form satisfactory to the Company and the Security Registrar, duly executed by, the Holder hereof or its attorney-in-fact duly authorized in writing, and thereupon one or more new Notes of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

 

The Notes of this series are issuable only in registered form without coupons in denominations equal to $2,000 and integral multiples of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations herein and therein set forth, Notes of this series are exchangeable for the same aggregate principal amount of Notes of this series and of like tenor and authorized denominations, as requested by the Holder surrendering the same.

 

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

 

Prior to due presentment of this Note for registration of transfer, the Company, the Guarantors, the Trustee and any agent of the Company, a Guarantor 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 Guarantors, the Trustee nor any such agent shall be affected by notice to the contrary.

 

No recourse under or upon any obligation, covenant or agreement of the Company or any Guarantor in the Indenture or any indenture supplemental thereto or in any Note, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, officer, director or employee, as such, past, present or future, of the Company or any Guarantor or of any successor thereto, either directly or through the Company or any Guarantor or any successor thereto, under any rule of law, statute or constitutional provision or by the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all such liability being expressly waived and released by the acceptance hereof and as part of the consideration for the issue hereof.

 

This Note shall be governed by and construed in accordance with the laws of the State of New York.

 

8

 

Schedule 1

 

SCHEDULE OF CHANGES IN OUTSTANDING PRINCIPAL AMOUNT

 

The following notations in respect of changes in the outstanding principal amount of this Note have been made:

 

	
Date
    	
 
    	
Initial Principal Amount
    	
 
    	
Change in Outstanding
   Principal Amount
    	
 
    	
New
   Balance
    	
 
    	
Notation Made
   by
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

9

 

Exhibit B

 

Form of 2034 Note

 

	
No. [ ]
    	
CUSIP No.   31428X AX4
    

 

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

 

Unless this security is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to the Issuer or its agent for registration of transfer, exchange or payment, and any security 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.

 

FEDEX CORPORATION

 

4.900% Notes due 2034

 

Guaranteed as to Payment of Principal and Interest
 by the Guarantors named in the Indenture Referred to Below

 

FedEx Corporation, a Delaware corporation (the “Company,” which term includes any successor Corporation under the Indenture), for value received, hereby promises to pay to

 

Cede & Co.
 c/o The Depository Trust Company
 55 Water Street
 New York, New York 10041

 

or registered assigns, the principal sum of US$[ ] on January 15, 2034 (the “Maturity Date”) and to pay interest thereon from January 9, 2014, or from the 

 

1

 

most recent “Interest Payment Date” to which interest has been paid or duly provided for, semi-annually in arrears on January 15 and July 15 of each year, commencing July 15, 2014, and on the Maturity Date, at the rate of 4.900% per annum, until the principal hereof is paid or duly provided for. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture dated as of August 8, 2006 between the Company, the Guarantors referred to in the Indenture and The Bank of New York Mellon Trust Company, N.A. (formerly, The Bank of New York Trust Company, N.A.) as Trustee (the “Trustee,” which term includes any successor trustee pursuant to the Indenture), as supplemented by Supplemental Indenture No. 1 dated as of August 8, 2006 (the Securities issued under the Indenture pursuant to Supplemental Indenture No. 1 have matured and are no longer Outstanding and, consequently, Supplemental Indenture No. 1 is no longer in effect), as amended and supplemented by Supplemental Indenture No. 2 dated as of January 16, 2009, as further amended and supplemented by Supplemental Indenture No. 3 dated as of July 27, 2012, as further amended and supplemented by Supplemental Indenture No. 4 dated as of April 11, 2013 and as further amended and supplemented by Supplemental Indenture No. 5 dated as of January 9, 2014 (“Supplemental Indenture No. 5”), between the Company, the Guarantors named therein and the Trustee (as so amended and supplemented, the “Indenture”), be paid to the Person in whose name this Note is registered at the close of business on the “Regular Record Date” for such interest, which shall be the preceding January 1 and July 1 (whether or not a Business Day), respectively. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the registered Holder on such Regular Record Date and may either be paid to the Person in whose name this Note (or one or more Predecessor Notes) 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 of which shall be given to Holders of Notes 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 Notes of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture.

 

The Company will at all times appoint and maintain a Paying Agent (which may be the Trustee) authorized by the Company to pay the principal of and interest on any Notes of this series on behalf of the Company and having an office or agency in New York, New York and in such other cities, if any, as the Company may designate in writing to the Trustee (the “Place of Payment”) where Notes of this series may be presented or surrendered for payment and where notices, designations or requests in respect for payments with respect to Notes of this series may be served.  The Company has initially appointed The Bank of New York Mellon Trust Company, N.A. as such Paying Agent.

 

Interest payments on this Note will be computed and paid on the basis of a 360-day year of twelve 30-day months. Interest payable on this Note on any Interest Payment Date and on the Maturity Date will include interest accrued from 

 

2

 

and including the most recent Interest Payment Date to which interest has been paid or duly provided for (or from and including January 9, 2014, if no interest has been paid on this Note) to but excluding such Interest Payment Date or the Maturity Date, as the case may be.

 

If any Interest Payment Date or the Maturity Date falls on a day that is not a Business Day (as defined below), principal or interest payable with respect to such Interest Payment Date or Maturity Date, as the case may be, will be paid on the next succeeding Business Day with the same force and effect as if it were paid on the date such payment was due, and no interest shall accrue on the amount so payable for the period from and after such Interest Payment Date or the Maturity Date, as the case may be. “Business Day” means any day other than Saturday, Sunday or other day on which banking institutions in New York or Tennessee are obligated or authorized by law to close.

 

The principal and interest payable on this Note will be made by wire transfer of immediately available funds to the Holder hereof in such currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts.

 

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

 

Unless the Certificate of Authentication hereon has been executed by the Trustee by manual signature, this Note shall not be entitled to any benefit pursuant to the Indenture or be valid or obligatory for any purpose.

 

3

 

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

 

	
 
    	
FEDEX CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
Michael C. Lenz
    
	
 
    	
 
    	
Title:
    	
Corporate Vice   President and Treasurer
    

 

Attest:

 

 

	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
Robert T. Molinet
    	
 
    
	
 
    	
Title:
    	
Assistant   Secretary
    	
 
    

 

4

 

Certificate of Authentication

 

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

 

	
 
    	
THE BANK OF NEW   YORK MELLON TRUST COMPANY, N.A., as Trustee
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized   Signatory
    

 

Dated:  January 9, 2014

 

5

 

[REVERSE OF SECURITY]

 

FEDEX CORPORATION

 

4.900% Notes due 2034

 

This Note is one of a duly authorized issue of notes of the Company (herein called the “Notes”), issued pursuant to the Indenture. 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 Guarantors, the Trustee and the Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered. To the extent the terms of the Indenture and this Note are inconsistent, the terms of the Indenture shall govern. This Note is one of the series designated on the face hereof, limited in initial aggregate principal amount to US$[ ]. Capitalized terms used herein and in the Guarantee endorsed hereon but not defined herein have the meanings ascribed to such terms in the Indenture.

 

The Notes of this series are not subject to any sinking fund.

 

The Company will have the right, at its option, to redeem the Notes of this series in whole or in part at any time on at least 30 days’, but no more than 60 days’, prior written notice mailed to the registered address of each Holder of the Notes of this series to be redeemed. Upon redemption of such Notes, the Company will pay a redemption price as calculated by a Reference Treasury Dealer (as defined in Supplemental Indenture No. 5) selected by the Company equal to the greater of (i) 100% of the principal amount of the Notes of this series to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the Notes of this series to be redeemed (not including any portion of such payments of interest accrued as of the redemption date), discounted to the redemption date on a semi-annual basis, assuming a 360-day year consisting of twelve 30-day months, at the Adjusted Treasury Rate (as defined in Supplemental Indenture No. 5) plus 0.15% (15 basis points).

 

The redemption price will also include interest accrued to the date of redemption on the principal balance of the Notes of this series being redeemed.

 

Unless the Company defaults in payment of the redemption price, on and after the date of redemption, interest will cease to accrue on the Notes or portions of the Notes of this series called for redemption.

 

If a Change of Control Repurchase Event (as defined in Supplemental Indenture No. 5) occurs with respect to Notes of this series, unless the Company has exercised its right to redeem the affected Notes, the Company will make an offer, as provided in, and subject to the terms of, Supplemental Indenture No. 5, to each Holder of the Notes of this series to repurchase all or any part (in minimum denominations of $2,000 or integral multiples of $1,000 in excess thereof) of that Holder’s Notes at a repurchase price in cash equal to 101% of the 

 

6

 

aggregate principal amount of such Notes repurchased plus any accrued and unpaid interest on such Notes repurchased to, but not including, the date of repurchase.

 

The Notes of this series are fully and unconditionally guaranteed as to the due and punctual payment of the principal and interest in respect thereof by the Guarantors as evidenced by their guarantees (the “Guarantees”) set forth hereon. The Guarantees are the direct and unconditional obligations of such Guarantors and rank and will rank equally in priority of payment and in all other respects with all other unsecured and unsubordinated obligations of such Guarantors now or hereafter outstanding.

 

In case an Event of Default with respect to the Notes of this series shall occur and be continuing, the principal of the Notes of this series may be declared due and payable in the manner and with the effect provided in the Indenture.

 

The Indenture contains provisions for defeasance at any time of (i) the entire indebtedness of this Note or (ii) certain respective covenants and Events of Default with respect to this Note, in each case upon compliance with certain conditions set forth therein, which provisions apply to the Notes.

 

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 Guarantors and the rights of the Holders of the Notes of each series to be affected pursuant to the Indenture at any time by the Company, the Guarantors and the Trustee with the consent of the Holders of a majority in principal amount of such Notes at the time Outstanding (voting as a single class). The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Notes of each series at the time Outstanding, on behalf of the Holders of all Notes of such series, to waive compliance by the Company and the Guarantors with certain provisions of the Indenture and certain past defaults pursuant to 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 or Notes issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.

 

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, places and rate, and in the currency herein prescribed.

 

As provided in the Indenture and subject to certain limitations herein and 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 the Place of Payment, duly endorsed by, or accompanied by a 

 

7

 

written instrument of transfer in form satisfactory to the Company and the Security Registrar, duly executed by, the Holder hereof or its attorney-in-fact duly authorized in writing, and thereupon one or more new Notes of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

 

The Notes of this series are issuable only in registered form without coupons in denominations equal to $2,000 and integral multiples of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations herein and therein set forth, Notes of this series are exchangeable for the same aggregate principal amount of Notes of this series and of like tenor and authorized denominations, as requested by the Holder surrendering the same.

 

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

 

Prior to due presentment of this Note for registration of transfer, the Company, the Guarantors, the Trustee and any agent of the Company, a Guarantor 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 Guarantors, the Trustee nor any such agent shall be affected by notice to the contrary.

 

No recourse under or upon any obligation, covenant or agreement of the Company or any Guarantor in the Indenture or any indenture supplemental thereto or in any Note, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, officer, director or employee, as such, past, present or future, of the Company or any Guarantor or of any successor thereto, either directly or through the Company or any Guarantor or any successor thereto, under any rule of law, statute or constitutional provision or by the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all such liability being expressly waived and released by the acceptance hereof and as part of the consideration for the issue hereof.

 

This Note shall be governed by and construed in accordance with the laws of the State of New York.

 

8

 

Schedule 1

 

SCHEDULE OF CHANGES IN OUTSTANDING PRINCIPAL AMOUNT

 

The following notations in respect of changes in the outstanding principal amount of this Note have been made:

 

	
Date
    	
 
    	
Initial Principal Amount
    	
 
    	
Change in Outstanding
   Principal Amount
    	
 
    	
New
   Balance
    	
 
    	
Notation Made
   by
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

9

 

Exhibit C

 

Form of 2044 Note

 

	
No. [ ]
    	
CUSIP No.   31428X AW6
    

 

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

 

Unless this security is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to the Issuer or its agent for registration of transfer, exchange or payment, and any security 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.

 

FEDEX CORPORATION

 

5.100% Notes due 2044

 

Guaranteed as to Payment of Principal and Interest
 by the Guarantors named in the Indenture Referred to Below

 

FedEx Corporation, a Delaware corporation (the “Company,” which term includes any successor Corporation under the Indenture), for value received, hereby promises to pay to

 

Cede & Co.
 c/o The Depository Trust Company
 55 Water Street
 New York, New York 10041

 

or registered assigns, the principal sum of US$[ ] on January 15, 2044 (the “Maturity Date”) and to pay interest thereon from January 9, 2014, or from the 

 

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most recent “Interest Payment Date” to which interest has been paid or duly provided for, semi-annually in arrears on January 15 and July 15 of each year, commencing July 15, 2014, and on the Maturity Date, at the rate of 5.100% per annum, until the principal hereof is paid or duly provided for. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture dated as of August 8, 2006 between the Company, the Guarantors referred to in the Indenture and The Bank of New York Mellon Trust Company, N.A. (formerly, The Bank of New York Trust Company, N.A.) as Trustee (the “Trustee,” which term includes any successor trustee pursuant to the Indenture), as supplemented by Supplemental Indenture No. 1 dated as of August 8, 2006 (the Securities issued under the Indenture pursuant to Supplemental Indenture No. 1 have matured and are no longer Outstanding and, consequently, Supplemental Indenture No. 1 is no longer in effect), as amended and supplemented by Supplemental Indenture No. 2 dated as of January 16, 2009, as further amended and supplemented by Supplemental Indenture No. 3 dated as of July 27, 2012, as further amended and supplemented by Supplemental Indenture No. 4 dated as of April 11, 2013 and as further amended and supplemented by Supplemental Indenture No. 5 dated as of January 9, 2014 (“Supplemental Indenture No. 5”), between the Company, the Guarantors named therein and the Trustee (as so amended and supplemented, the “Indenture”), be paid to the Person in whose name this Note is registered at the close of business on the “Regular Record Date” for such interest, which shall be the preceding January 1 and July 1 (whether or not a Business Day), respectively. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the registered Holder on such Regular Record Date and may either be paid to the Person in whose name this Note (or one or more Predecessor Notes) 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 of which shall be given to Holders of Notes 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 Notes of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture.

 

The Company will at all times appoint and maintain a Paying Agent (which may be the Trustee) authorized by the Company to pay the principal of and interest on any Notes of this series on behalf of the Company and having an office or agency in New York, New York and in such other cities, if any, as the Company may designate in writing to the Trustee (the “Place of Payment”) where Notes of this series may be presented or surrendered for payment and where notices, designations or requests in respect for payments with respect to Notes of this series may be served.  The Company has initially appointed The Bank of New York Mellon Trust Company, N.A. as such Paying Agent.

 

Interest payments on this Note will be computed and paid on the basis of a 360-day year of twelve 30-day months. Interest payable on this Note on any Interest Payment Date and on the Maturity Date will include interest accrued from 

 

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and including the most recent Interest Payment Date to which interest has been paid or duly provided for (or from and including January 9, 2014, if no interest has been paid on this Note) to but excluding such Interest Payment Date or the Maturity Date, as the case may be.

 

If any Interest Payment Date or the Maturity Date falls on a day that is not a Business Day (as defined below), principal or interest payable with respect to such Interest Payment Date or Maturity Date, as the case may be, will be paid on the next succeeding Business Day with the same force and effect as if it were paid on the date such payment was due, and no interest shall accrue on the amount so payable for the period from and after such Interest Payment Date or the Maturity Date, as the case may be. “Business Day” means any day other than Saturday, Sunday or other day on which banking institutions in New York or Tennessee are obligated or authorized by law to close.

 

The principal and interest payable on this Note will be made by wire transfer of immediately available funds to the Holder hereof in such currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts.

 

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

 

Unless the Certificate of Authentication hereon has been executed by the Trustee by manual signature, this Note shall not be entitled to any benefit pursuant to the Indenture or be valid or obligatory for any purpose.

 

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

 

 

	
 
    	
FEDEX CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
Michael C. Lenz
    
	
 
    	
 
    	
Title:
    	
Corporate Vice   President and Treasurer
    

 

Attest:

 

 

	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
Robert T. Molinet
    	
 
    
	
 
    	
Title:
    	
Assistant   Secretary
    	
 
    

 

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Certificate of Authentication

 

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

 

	
 
    	
THE BANK OF NEW   YORK MELLON TRUST COMPANY, N.A., as Trustee
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized   Signatory
    

 

Dated:  January 9, 2014

 

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[REVERSE OF SECURITY]

 

FEDEX CORPORATION

 

5.100% Notes due 2044

 

This Note is one of a duly authorized issue of notes of the Company (herein called the “Notes”), issued pursuant to the Indenture. 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 Guarantors, the Trustee and the Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered. To the extent the terms of the Indenture and this Note are inconsistent, the terms of the Indenture shall govern. This Note is one of the series designated on the face hereof, limited in initial aggregate principal amount to US$[ ]. Capitalized terms used herein and in the Guarantee endorsed hereon but not defined herein have the meanings ascribed to such terms in the Indenture.

 

The Notes of this series are not subject to any sinking fund.

 

The Company will have the right, at its option, to redeem the Notes of this series in whole or in part at any time on at least 30 days’, but no more than 60 days’, prior written notice mailed to the registered address of each Holder of the Notes of this series to be redeemed. Upon redemption of such Notes, the Company will pay a redemption price as calculated by a Reference Treasury Dealer (as defined in Supplemental Indenture No. 5) selected by the Company equal to the greater of (i) 100% of the principal amount of the Notes of this series to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the Notes of this series to be redeemed (not including any portion of such payments of interest accrued as of the redemption date), discounted to the redemption date on a semi-annual basis, assuming a 360-day year consisting of twelve 30-day months, at the Adjusted Treasury Rate (as defined in Supplemental Indenture No. 5) plus 0.20% (20 basis points).

 

The redemption price will also include interest accrued to the date of redemption on the principal balance of the Notes of this series being redeemed.

 

Unless the Company defaults in payment of the redemption price, on and after the date of redemption, interest will cease to accrue on the Notes or portions of the Notes of this series called for redemption.

 

If a Change of Control Repurchase Event (as defined in Supplemental Indenture No. 5) occurs with respect to Notes of this series, unless the Company has exercised its right to redeem the affected Notes, the Company will make an offer, as provided in, and subject to the terms of, Supplemental Indenture No. 5, to each Holder of the Notes of this series to repurchase all or any part (in minimum denominations of $2,000 or integral multiples of $1,000 in excess thereof) of that Holder’s Notes at a repurchase price in cash equal to 101% of the 

 

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aggregate principal amount of such Notes repurchased plus any accrued and unpaid interest on such Notes repurchased to, but not including, the date of repurchase.

 

The Notes of this series are fully and unconditionally guaranteed as to the due and punctual payment of the principal and interest in respect thereof by the Guarantors as evidenced by their guarantees (the “Guarantees”) set forth hereon. The Guarantees are the direct and unconditional obligations of such Guarantors and rank and will rank equally in priority of payment and in all other respects with all other unsecured and unsubordinated obligations of such Guarantors now or hereafter outstanding.

 

In case an Event of Default with respect to the Notes of this series shall occur and be continuing, the principal of the Notes of this series may be declared due and payable in the manner and with the effect provided in the Indenture.

 

The Indenture contains provisions for defeasance at any time of (i) the entire indebtedness of this Note or (ii) certain respective covenants and Events of Default with respect to this Note, in each case upon compliance with certain conditions set forth therein, which provisions apply to the Notes.

 

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 Guarantors and the rights of the Holders of the Notes of each series to be affected pursuant to the Indenture at any time by the Company, the Guarantors and the Trustee with the consent of the Holders of a majority in principal amount of such Notes at the time Outstanding (voting as a single class). The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Notes of each series at the time Outstanding, on behalf of the Holders of all Notes of such series, to waive compliance by the Company and the Guarantors with certain provisions of the Indenture and certain past defaults pursuant to 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 or Notes issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.

 

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, places and rate, and in the currency herein prescribed.

 

As provided in the Indenture and subject to certain limitations herein and 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 the Place of Payment, duly endorsed by, or accompanied by a 

 

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written instrument of transfer in form satisfactory to the Company and the Security Registrar, duly executed by, the Holder hereof or its attorney-in-fact duly authorized in writing, and thereupon one or more new Notes of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

 

The Notes of this series are issuable only in registered form without coupons in denominations equal to $2,000 and integral multiples of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations herein and therein set forth, Notes of this series are exchangeable for the same aggregate principal amount of Notes of this series and of like tenor and authorized denominations, as requested by the Holder surrendering the same.

 

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

 

Prior to due presentment of this Note for registration of transfer, the Company, the Guarantors, the Trustee and any agent of the Company, a Guarantor 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 Guarantors, the Trustee nor any such agent shall be affected by notice to the contrary.

 

No recourse under or upon any obligation, covenant or agreement of the Company or any Guarantor in the Indenture or any indenture supplemental thereto or in any Note, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, officer, director or employee, as such, past, present or future, of the Company or any Guarantor or of any successor thereto, either directly or through the Company or any Guarantor or any successor thereto, under any rule of law, statute or constitutional provision or by the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all such liability being expressly waived and released by the acceptance hereof and as part of the consideration for the issue hereof.

 

This Note shall be governed by and construed in accordance with the laws of the State of New York.

 

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Schedule 1

 

SCHEDULE OF CHANGES IN OUTSTANDING PRINCIPAL AMOUNT

 

The following notations in respect of changes in the outstanding principal amount of this Note have been made:

 

	
Date
    	
 
    	
Initial Principal Amount
    	
 
    	
Change in Outstanding
   Principal Amount
    	
 
    	
New
   Balance
    	
 
    	
Notation Made
   by
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

9Exhibit 4.1

 

 

ARIZONA PUBLIC SERVICE COMPANY

 

TO

 

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

 

As Trustee under Arizona Public Service Company’s Indenture dated as of January 15, 1998

 

Fourteenth Supplemental Indenture

 

Dated as of January 10, 2014

 

4.70% Notes due 2044

 

 

 

This FOURTEENTH SUPPLEMENTAL INDENTURE, dated as of January 10, 2014, is between Arizona Public Service Company, a corporation duly organized and existing under the laws of the State of Arizona (herein called the “Company”), having its principal office at 400 North Fifth Street, Phoenix, Arizona 85004, and The Bank of New York Mellon Trust Company, N.A., successor to JPMorgan Chase Bank, N.A. (formerly known as The Chase Manhattan Bank), a national banking association, as Trustee (herein called the “Trustee”) under the Indenture dated as of January 15, 1998 between the Company and the Trustee (the “Indenture”).

 

RECITALS OF THE COMPANY

 

The Company has executed and delivered the Indenture to the Trustee to provide for the issuance from time to time of its unsecured debentures, notes or other evidences of indebtedness (the “Securities”), said Securities to be issued in one or more series as provided in the Indenture.

 

Section 901(7) of the Indenture provides that, without the consent of any Holders, the Company and the Trustee may enter into one or more indentures supplemental to the Indenture for the purpose of establishing the form or terms of Securities of any series.

 

Pursuant to the terms of the Indenture, the Company desires to provide for the establishment of a new series of its Securities to be known as its 4.70% Notes due 2044 (herein called the “Notes”), the forms and substance of such Notes and the terms, provisions, and conditions thereof to be set forth as provided in the Indenture and this Fourteenth Supplemental Indenture.

 

All things necessary to make this Fourteenth Supplemental Indenture a valid agreement of the Company, and to make the Notes described herein, when executed by the Company and authenticated and delivered by the Trustee, the valid obligations of the Company, have been done.

 

NOW, THEREFORE, THIS FOURTEENTH 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 form and substance of each of the Notes and the terms, provisions, and conditions thereof, it is mutually agreed, for the equal and proportionate benefit of all Holders of the Notes, as applicable, as follows:

 

ARTICLE ONE

 

GENERAL TERMS AND CONDITIONS OF THE NOTES

 

SECTION 101.                                      Authentication and Delivery.  There shall be and is hereby authorized a series of Securities designated the “4.70% Notes due 2044” initially limited in aggregate principal amount to $250,000,000, which amount shall be as set forth in any Company Order for the authentication and delivery of Notes.  The Notes shall mature and the principal shall be due and payable together with all accrued and unpaid interest thereon on January 15, 2044, and the Notes shall be issued in the form of registered Securities without coupons.

 

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The foregoing principal amount of the Notes may be increased from time to time as permitted by Section 301 of the Indenture.  All Notes need not be issued at the same time and such series may be reopened at any time, without notice to, or the consent of, the then existing Holders, for issuance of additional Notes.  Any such additional Notes will be equal in rank and have the same respective maturity, payment terms, redemption features, and other terms as the Notes initially issued, except for the issue date, public offering price, payment of interest accruing prior to the issue date, and first payment of interest following the issue date of the additional Notes, but the Company will not issue such additional Notes unless the additional Notes are fungible with the previously issued Notes for U.S. federal income tax purposes or are issued with a separate CUSIP number.

 

SECTION 102.                                      Global Security.  The Notes shall be issued in certificated form, except that the Notes shall be issued initially as a Global Security to and registered in the name of Cede & Co., as nominee of The Depository Trust Company, as Depositary therefor.  Any Notes to be issued or transferred to, or to be held by, Cede & Co. (or any successor thereof) for such purpose shall bear the depositary legend in substantially the form set forth at the top of the form of Note in Section 301 hereof (in lieu of that set forth in Section 204 of the Indenture), unless otherwise agreed by the Company, such agreement to be confirmed in writing to the Trustee.  Each such Global Security may be exchanged in whole or in part for Notes registered, and any transfer of such Global Security in whole or in part may be registered, in the name(s) of Persons other than such Depositary or a nominee thereof only under the circumstances set forth in clause (2) of the last paragraph of Section 305 of the Indenture, or such other circumstances in addition to or in lieu of those set forth in clause (2) of the last paragraph of Section 305 of the Indenture as to which the Company shall agree, such agreement to be confirmed in writing to the Trustee.  Upon the occurrence of any such event, the Notes will be issued in such names as the Depositary shall instruct the Trustee.

 

SECTION 103.                                      Place of Payment and Place for Registration of Transfers and Exchange. Principal of, and premium, if any, and interest on, the Notes will be payable, the transfer of Notes will be registrable and the Notes will be exchangeable for Notes bearing identical terms and provisions, at the office or agency of the Company in the Borough of Manhattan, The City and State of New York; provided, however, that payment of interest may be made at the option of the Company by wire transfer to any Holder or by deposit to the account of the Holder of any such Notes if such account is maintained with the Trustee, in each case according to the written instructions given by such Holder on or prior to the applicable record date to the Trustee, which written instructions shall remain in effect until revised by such Holder by an instrument in writing delivered to the Trustee.

 

SECTION 104.                                      Payment of Interest.  The Notes will bear interest at the rate of 4.70% per annum from January 10, 2014 or from the most recent Interest Payment Date (as hereinafter defined) to which interest has been paid or duly provided for until the principal thereof is paid or made available for payment, payable on January 15 and July 15 of each year (each, an “Interest Payment Date”), commencing on July 15, 2014, to the person in whose name such Note or any Predecessor Security is registered, at the close of business on January 1 and July 1, as the case may be, whether or not a Business Day, immediately preceding the Interest Payment Date. Any such interest installment not punctually paid or duly provided for shall forthwith cease to be payable to the Holders on such Regular Record Date, and may be paid to

 

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the Person in whose name such Note (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date to be fixed by the Trustee for the payment of such Defaulted Interest, notice whereof shall be given to the Holders of the Notes not less than 10 days prior to such Special Record Date, or may 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 described in the Indenture.

 

The amount of interest payable for any period will be computed on the basis of a 360-day year of twelve 30-day months.  Interest will accrue from January 10, 2014 or from the most recent Interest Payment Date to which interest has been paid or duly provided for to, but not including, the relevant payment date.  In the event that any date on which interest is payable on the Notes is not a Business Day, then payment of interest payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay), in each case with the same force and effect as if made on such date.  A “Business Day” shall mean any day except a Saturday, a Sunday or a legal holiday in The City of New York on which banking institutions are authorized or required by law, regulation or executive order to close.

 

SECTION 105.                                      Redemption of the Notes.  The Company may redeem all or any portion of the Notes, at its option, at any time or from time to time, upon notice as provided in the Indenture.  The Redemption Price for any of the Notes to be redeemed on any Redemption Date prior to July 15, 2043 will be equal to the greater of the following amounts:

 

(a)                                 100% of the principal amount of the Notes being redeemed on the Redemption Date; or

 

(b)                                 the sum of the present values of the remaining scheduled payments of principal and interest on the Notes being redeemed on that Redemption Date (not including any portion of any payments of interest accrued to the Redemption Date) discounted to the Redemption Date on a semiannual basis at the Adjusted Treasury Rate plus 15 basis points as determined by a Reference Treasury Dealer appointed by the Company for such purpose;

 

plus, in each case, accrued and unpaid interest thereon to the Redemption Date.  The Redemption Price for any of the Notes to be redeemed on any Redemption Date on or after July 15, 2043 will be equal to 100% of the principal amount of the Notes being redeemed on the Redemption Date plus accrued and unpaid interest thereon to the Redemption Date.

 

Notwithstanding the foregoing, installments of interest on the Notes that are due and payable on Interest Payment Dates falling on or prior to a Redemption Date will be payable on the Interest Payment Date to the Holders as of the close of business on the relevant record date in accordance with the terms of such Notes and the Indenture.  The Redemption Price will be calculated on the basis of a 360-day year consisting of twelve 30-day months.

 

For purposes of this Section 105, the following terms shall have the following meanings:

 

“Adjusted Treasury Rate” means, with respect to any applicable Redemption Date, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury

 

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Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date.

 

“Comparable Treasury Issue” means the U.S. Treasury security selected by a Reference Treasury Dealer appointed by the Company for such purpose as having a maturity comparable to the remaining term of the Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such Notes.

 

“Comparable Treasury Price” means, with respect to any applicable Redemption Date, (A) if the Company obtains three or more Reference Treasury Dealer Quotations, the average of such Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest of such Reference Treasury Dealer Quotations, (B) if the Company obtains two such Reference Treasury Dealer Quotations, the average of such quotations, or (C) if only one Reference Treasury Dealer Quotation is received, such quotation.

 

“Primary Treasury Dealer” means a primary U.S. government securities dealer in the United States.

 

“Reference Treasury Dealer” means (A) Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, UBS Securities LLC and a Primary Treasury Dealer selected by U.S. Bancorp Investments, Inc.; provided, however, that if any of the foregoing shall cease to be a Primary Treasury Dealer, the Company will substitute therefor another Primary Treasury Dealer; and (B) any other Primary Treasury Dealer(s) selected by the Company.

 

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any applicable Redemption Date, the average 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 such Reference Treasury Dealer at 5:00 p.m. (New York City time) on the third Business Day preceding such Redemption Date.  The Company shall give the Trustee written notice of the Redemption Price, promptly after the calculation thereof.

 

The Trustee shall be under no duty to inquire into, may conclusively presume the correctness of, and shall be fully protected in acting upon, the Company’s calculation of any Redemption Price.

 

No Notes of $2,000 principal amount or less can be redeemed in part.

 

Notwithstanding Section 1104 of the Indenture, any notice of redemption given pursuant to said Section with respect to the foregoing redemption need not set forth the Redemption Price but only the manner of calculation thereof.

 

SECTION 106.                                      Defeasance of the Notes.  The Notes shall be defeasible pursuant to Section 1302 or 1303 of the Indenture.

 

SECTION 107.                                      Minimum Denominations.  The Notes shall be issuable in denominations of $2,000 and any integral multiple of $1,000 in excess thereof.

 

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ARTICLE TWO

 

ADDITIONAL COVENANT

 

SECTION 201.                                      Negative Lien Covenant.  (a) So long as any of the Notes are Outstanding, the Company will not issue, assume, guarantee or permit to exist any Debt secured by any mortgage, security interest, pledge or lien (herein referred to as a “Mortgage”) of or upon any Operating Property of the Company, whether owned at the date of this Fourteenth Supplemental Indenture or hereafter acquired, without effectively securing the Notes (together with, if the Company shall so determine, any other indebtedness or obligations of the Company ranking senior to, or equally with, the Notes) equally and ratably with such Debt (but only so long as such Debt is so secured); provided, however, that the foregoing restriction shall not apply to Debt secured by any of the following:

 

(1)                                 Mortgages on any property existing at the time of acquisition thereof (which Mortgages may also extend to subsequent repairs, alterations and improvements to that property);

 

(2)                                 Mortgages on property of a corporation existing at the time such corporation is merged into or consolidated with the Company or at the time of a sale, lease or other disposition of the properties of such corporation or a division thereof as an entirety or substantially as an entirety to the Company;

 

(3)                                 Mortgages on property to secure all or part of the cost of acquiring, constructing, developing or substantially repairing, altering or improving such property or to secure indebtedness incurred to provide funds for any such purpose or for reimbursement of funds previously expended for any such purpose, provided such Mortgages are created or assumed contemporaneously with, or within eighteen (18) months after, such acquisition or completion of construction, development or substantial repair, alteration or improvement;

 

(4)                                 Mortgages in favor of the United States of America or any State thereof, or any department, agency, instrumentality or political subdivision of the United States of America or any State thereof, or for the benefit of holders of securities issued by any such entity (or providers of credit enhancement with respect to those securities), to secure any Debt (including the Company’s obligations with respect to industrial development, pollution control or similar revenue bonds) incurred for the purpose of financing or refinancing all or any part of the purchase price or the cost of constructing, developing or substantially repairing, altering or improving the property of the Company;

 

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(5)                                 Mortgages to compensate the Trustee as provided in the Indenture; or

 

(6)                                 any extension, renewal or replacement (or successive extensions, renewals or replacements), in whole or in part, of any Mortgage referred to in the foregoing clauses (1) to (5), inclusive; provided, however, that the principal amount of Debt secured thereby and not otherwise authorized by said clauses (1) to (5), inclusive, shall not exceed the principal amount of Debt, plus any premium or fee payable in connection with any such extension, renewal or replacement, so secured at the time of such extension, renewal or replacement.

 

(b)                                 Notwithstanding the provisions of Section 201(a), the Company may issue, assume or guarantee or permit to exist Debt, secured by Mortgages that would otherwise be subject to the restrictions set forth above in connection with the Company’s existing sale and lease-back transactions relating to Unit 2 of the Palo Verde Nuclear Generating Station (the “Unit 2 Sale and Lease-Back Transactions”), including but not limited to Mortgages on the leased interests in Unit 2 of the Palo Verde Nuclear Generating Station and related rights if the Company reacquires ownership in any of those interests or acquires any of the equity or owner participants’ interests in the trusts that hold title to such leased interests, whether or not it also directly assumes the Sale Leaseback Obligation Bonds, and Mortgages on the Company’s interests in the trusts that hold title to such leased interests and related rights in the event that the Company acquires any of the equity or owner participants’ interests in such trusts pursuant to a “special transfer” under the Unit 2 Sale and Lease-Back Transactions.  In addition, the Company may issue, assume or guarantee or permit to exist Debt that is secured by Mortgages that would otherwise be subject to the restrictions set forth above up to an aggregate principal amount that, together with the principal amount of all other Debt of the Company secured by such Mortgages, does not at the time exceed ten percent (10%) of Tangible Assets.

 

(c)                                  For purposes of this Section 201, the following terms shall have the following meanings:

 

“Debt” means any outstanding debt of the Company for money borrowed evidenced by notes, debentures, bonds or other securities, or guarantees of any thereof.

 

“Operating Property” means (i) any interest in real property owned by the Company and (ii) any asset owned by the Company that is depreciable in accordance with generally accepted accounting principles, excluding in any case any interest of the Company as lessee under any lease.

 

“Sale Leaseback Obligation Bonds” means PVNGS II Funding Corp.’s: (i) 8.00% Secured Lease Obligation Bonds, Series 1993, due 2015; (ii) any other bonds issued in connection with the Unit 2 Sale and Lease-Back Transactions; and (iii) any refinancing or refunding of the obligations specified in subclauses (i) and (ii) above.

 

“Tangible Assets” means the amount shown as total assets on the most recent balance

 

6

 

sheet of the Company, less: (i) intangible assets, including, but without limitation, goodwill, trademarks, trade names, patents and unamortized debt discount and expense and (ii) appropriate adjustments, if any, on account of minority interests; provided, however, that if, subsequent to the date of the most recent balance sheet of the Company, the Company acquires any property, whether by acquisition (including by way of capital lease) from a third party, through merger or consolidation, through construction, development or substantial repair, alteration or improvement of property, or by any other means, and such property is or becomes subject to any Mortgage securing Debt, the Company may prepare a pro forma balance sheet to include the value of such property in any calculation of Tangible Assets hereunder.  Subject to the foregoing, Tangible Assets shall be determined in accordance with generally accepted accounting principles and practices applicable to the type of business in which the Company is engaged and that are approved by the independent accountants regularly retained by the Company, and may be determined as of a date not more than 60 days prior to the happening of the event for which such determination is being made.

 

ARTICLE THREE

 

FORM OF NOTES

 

SECTION 301.                                      Form of Notes. The Notes and the Trustee’s certificate of authentication thereon shall be substantially in the following forms:

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO ARIZONA PUBLIC SERVICE 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.

 

ARIZONA PUBLIC SERVICE COMPANY

 

4.70% Note due 2044

 

	
No. 1
    	
$250,000,000
    
	
 
    	
CUSIP   No. 040555 CP7
    

 

Arizona Public Service Company, a corporation duly organized and existing under the laws of the State of Arizona (the “Company”, which term includes any successor Person under

 

7

 

the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of Two Hundred Fifty Million Dollars ($250,000,000) on January 15, 2044, and to pay interest thereon and on any overdue interest from January 10, 2014 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually in arrears on January 15 and July 15 of each year, commencing July 15, 2014 at the rate of 4.70% per annum, until the principal hereof is paid or made available for payment. The amount of interest payable for any period will be computed on the basis of a 360-day year of twelve 30-day months.

 

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 (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be January 1 or July 1, as the case may be, immediately preceding the Interest Payment Date (whether or not a Business Day). 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 (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 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 the Indenture.

 

Payment of the principal of (and premium, if any) and any interest on this Security will be made at the office or agency of the Company maintained for that purpose through 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 payment of interest may be made at the option of the Company by wire transfer to any Holder or by deposit to the account of the Holder of any such Securities if such account is maintained with the Trustee, in each case according to the written instructions given by such Holder on or prior to the applicable record date to the Trustee, which written instructions shall remain in effect until revised by such Holder by an instrument in writing delivered to the Trustee.

 

Reference is hereby made to the further provisions of this Security set forth following the Company’s signature hereto, 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 following the Company’s signature hereto by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

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

 

8

 

	
ARIZONA   PUBLIC SERVICE COMPANY
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By
    	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Attest:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    

 

This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of January 15, 1998 (such instrument as originally executed and delivered and as supplemented or amended from time to time, the “Indenture”), between the Company and The Bank of New York Mellon Trust Company, N.A., successor to JPMorgan Chase Bank, N.A. (formerly known as The Chase Manhattan Bank), as Trustee (the “Trustee,” which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture for a description 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. This Security is one of the series designated on the face hereof.

 

The Company may redeem all or any portion of the Securities of this series, at its option, at any time or from time to time, (A) prior to July 15, 2043, at a Redemption Price equal to the greater of (a) 100% of the principal amount of the Securities of this series being redeemed on the Redemption Date or (b) the sum of the present values of the remaining scheduled payments of principal and interest on the Securities of this series being redeemed on that Redemption Date (not including the portion of any payments of interest accrued to the Redemption Date) discounted to the Redemption Date on a semiannual basis at the Adjusted Treasury Rate plus 15 basis points, as determined by a Reference Treasury Dealer appointed by the Company for such purpose; and (B) on or after July 15, 2043, at a Redemption Price equal to 100% of the principal amount of the Securities of this series being redeemed on the Redemption Date; plus, in each case, accrued and unpaid interest thereon to the Redemption Date.  Notwithstanding the foregoing, installments of interest on Securities of this series that are due and payable on Interest Payment Dates falling on or prior to a Redemption Date will be payable on the Interest Payment Date to the Holders as of the close of business on the relevant record date in accordance with the terms of the Securities of this series and the Indenture.  The Redemption Price will be calculated on the basis of a 360-day year consisting of twelve 30-day months.

 

If notice has been given as provided in the Indenture and funds for the redemption of any Securities of this series (or any portion thereof) called for redemption shall have been made available on the Redemption Date referred to in such notice, such Securities (or any portion thereof) will cease to bear interest on the date fixed for such redemption specified in such notice

 

9

 

and the only right of the Holders of such Securities will be to receive payment of the Redemption Price.

 

Notice of any optional redemption of Securities of this series (or any portion thereof) will be given to Holders at their addresses, as shown in the Security Register for such Securities, not more than 60 nor less than 30 days prior to the date fixed for redemption. The notice of redemption will specify, among other items, (i) the Redemption Price or the manner of calculation of the Redemption Price and (ii) the principal amount of the Securities of this series held by such Holder to be redeemed if less than all of such Securities.  If less than all of the Securities of this series are to be redeemed at the option of the Company, the Securities to be redeemed will be selected in accordance with the procedures of the Depositary.

 

As used herein:

 

“Adjusted Treasury Rate” means, with respect to any applicable Redemption Date, the rate per annum equal to the semiannual 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 such Redemption Date.

 

“Comparable Treasury Issue” means the U.S. Treasury security selected by a Reference Treasury Dealer appointed by the Company for such purpose as having a maturity comparable to the remaining term of this Security to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such Security.

 

“Comparable Treasury Price” means, with respect to any applicable Redemption Date, (A) if the Company obtains three or more Reference Treasury Dealer Quotations, the average of such Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest of such Reference Treasury Dealer Quotations, (B) if the Company obtains two such Reference Treasury Dealer Quotations, the average of such quotations, or (C) if only one Reference Treasury Dealer Quotation is received, such quotation.

 

“Primary Treasury Dealer” means a primary U.S. government securities dealer in the United States.

 

“Reference Treasury Dealer” means (A) Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, UBS Securities LLC and a Primary Treasury Dealer selected by U.S. Bancorp Investments, Inc.; provided, however, that if any of the foregoing shall cease to be a Primary Treasury Dealer, the Company will substitute therefor another Primary Treasury Dealer; and (B) any other Primary Treasury Dealer(s) selected by the Company.

 

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any applicable Redemption Date, the average 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 such Reference Treasury Dealer at 5:00 p.m. (New York City time) on the third Business Day preceding such Redemption Date.

 

The Securities of this series will not be subject to any sinking fund.

 

10

 

In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.

 

The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Security and 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.

 

The Indenture contains provisions limiting the Company’s ability to issue, assume, guarantee or permit to exist any Debt secured by any mortgage, security interest, pledge or lien upon any of its Operating Property, subject to the exceptions and qualifications set forth in the Indenture.

 

If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.

 

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 without the consent of such Holders in certain circumstances, or with the consent of the Holders of 66-2/3% in principal amount of the affected Securities at the time Outstanding. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the affected Securities at the time Outstanding, on behalf of the Holders of all such Securities, 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 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.

 

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 under the Indenture, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in 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 and offered the Trustee reasonable indemnity, and the Trustee shall not have received from the Holders of a majority in principal amount of Securities of this series 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 this Security 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 Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay

 

11

 

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

 

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 and interest on this Security 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 or her 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.

 

The Securities of this series 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, 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.

 

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

 

Prior to due presentment of this 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 absolute owner hereof for all purposes, whether or not this Security be overdue, and none of the Company, the Trustee or any such agent shall be affected by notice to the contrary.

 

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

 

Form of Trustee’s Certificate of Authentication.

 

CERTIFICATE OF AUTHENTICATION

 

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

 

Dated:

 

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

 

12

 

	
 
    	
By
    	
 
    
	
 
    	
Authorized Officer
    

 

SECTION 302.                                      General Provisions.  The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage.  The terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Fourteenth Supplemental Indenture, and the Company, by its execution and delivery of this Fourteenth Supplemental Indenture, expressly agrees to such terms and provisions and to be bound thereby.  However, to the extent any provision of the Notes conflicts with the express provisions of this Fourteenth Supplemental Indenture or the Indenture, the provisions of this Fourteenth Supplemental Indenture or the Indenture, as applicable, shall govern and be controlling.

 

ARTICLE FOUR

ORIGINAL ISSUE OF NOTES

 

SECTION 401.                                      Issuance of Notes.  Subject to Section 101, Notes in the aggregate principal amount of $250,000,000 may, upon execution of this Fourteenth Supplemental Indenture, or from time to time thereafter, be executed by the Company and delivered to the Trustee for authentication, and the Trustee shall thereupon authenticate and deliver said Notes, in accordance with a Company Order delivered to the Trustee by the Company, without any further action by the Company.

 

ARTICLE FIVE

PAYING AGENT AND REGISTRAR

 

SECTION 501.                                      Appointment of Paying Agent and Registrar.  The Bank of New York Mellon Trust Company, N.A. will be the Paying Agent and Security Registrar for the Notes.

 

ARTICLE SIX

SUNDRY PROVISIONS

 

SECTION 601.                                      Associate Secretary.  For all purposes relating to this Fourteenth Supplemental Indenture and the Notes, the term “Assistant Secretary” when used in the Indenture with respect to the Company will include an Associate Secretary of the Company.

 

SECTION 602.                                      Defined Terms.  Except as otherwise expressly provided in this Fourteenth Supplemental Indenture or in the form of the Notes, or otherwise clearly required by

 

13

 

the context hereof or thereof, all terms used herein or in said form of the Notes that are defined in the Indenture shall have the several meanings respectively assigned to them thereby.

 

SECTION 603.                                      Ratification of Indenture.  The Indenture, as heretofore supplemented and amended, and as supplemented by this Fourteenth Supplemental Indenture, is in all respects ratified and confirmed, and this Fourteenth Supplemental Indenture shall be deemed part of the Indenture in the manner and to the extent herein and therein provided.

 

SECTION 604.                                      About the Trustee.  The Trustee hereby accepts the trusts herein declared, provided, created, supplemented or amended and agrees to perform the same upon the terms and conditions herein and in the Indenture, as heretofore supplemented and amended, set forth and upon the following terms and conditions:

 

The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Fourteenth Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made by the Company solely. Each and every term and condition contained in Article Six of the Indenture shall apply to and form a part of this Fourteenth Supplemental Indenture with the same force and effect as if the same were herein set forth in full with such omissions, variations and insertions, if any, as may be appropriate to make the same conform to the provisions of this Fourteenth Supplemental Indenture.

 

The Trustee agrees to accept and act upon instructions or directions pursuant to this Fourteenth Supplemental Indenture sent by unsecured e-mail, pdf, facsimile transmission or other similar unsecured electronic methods; provided, however, that (a) the party providing such written instructions, subsequent to such transmission of written instructions, shall provide the originally executed instructions or directions to the Trustee in a timely manner, and (b) such originally executed instructions or directions shall be signed by an authorized representative of the party providing such instructions or directions.  If the party elects to give the Trustee e-mail or facsimile instructions (or instructions by a similar electronic method) and the Trustee in its discretion elects to act upon such instructions, the Trustee’s understanding of such instructions shall be deemed controlling.  The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction.  The party providing electronic instructions agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk or interception and misuse by third parties.

 

In no event shall the Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.  Delivery of reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates).

 

14

 

SECTION 605.                                      Counterparts.  This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

15

 

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

 

	
 
    	
ARIZONA   PUBLIC SERVICE COMPANY
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Lee   R. Nickloy
    
	
 
    	
 
    	
Vice   President and Treasurer
    
	
Attest:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Shirley   A. Baum
    	
 
    
	
Associate   Secretary
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
THE   BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
					

 

[Signature Page to Fourteenth Supplemental Indenture]

 

 

	
 
    	
 
    
	
STATE   OF ARIZONA
    	
)
    	
 
    
	
 
    	
)   ss.:
    	
 
    
	
COUNTY   OF MARICOPA
    	
)
    	
 
    

 

On      day of January, 2014, before me personally came Lee R. Nickloy, to me known, who, being by me duly sworn, did depose and say that he is the Vice President and Treasurer of Arizona Public Service Company, one of the corporations described in and which executed the foregoing instrument and that he signed his name thereto by authority of the Board of Directors of said corporation.

 

 

	
 
    	
 
    	
 
    
	
Notary   Public
    	
 
    
	
My   Commission Expires
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
STATE   OF CALIFORNIA
    	
)
    	
 
    
	
 
    	
)   ss.:
    	
 
    
	
COUNTY   OF
    	
)
    	
 
    
				

 

On                                   , before me,                     , a notary public, personally appeared                                                                             , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

 

I certify under PENALTY OF PERJURY under the laws of the State of California that the forgoing paragraph is true and correct.

 

WITNESS my hand and official seal.

 

 

	
Signature
    	
 
    	
(seal)

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