Document:

EX-10.1

 

December 1, 2004

Mr. Tim Evard

c/o OpenTV Corp.

275 Sacramento Street

San Francisco, California 94111

Dear Tim:

     This letter confirms our offer to you of the position of Senior Vice
President and General Manager of Marketing and Applications Products, reporting
directly to me in my capacity as Chief Executive Officer. You shall have the
rights, powers, duties and obligations relating to such office as are
customarily associated with such office and such other rights, powers, duties
and obligations as we may agree upon from time to time. Your principal place
of work, subject to reasonable and customary travel, shall be at the OpenTV
offices located in San Francisco, California, and you will be expected to
relocate to the San Francisco Bay area within a reasonable period of time after
you have accepted this offer. Your employment will be deemed to have commenced
on November 22, 2004, provided, however, that your grant of options will not be
made until approved by the Compensation Committee as described in more detail
below.

     During the course of your employment with OpenTV you shall devote your
full business time and efforts to OpenTV; provided, that, nothing herein shall
prevent you from (i) participating in industry, trade, professional, charitable
and community activities, (ii) serving on corporate, civic or charitable boards
or committees, and (iii) managing your personal investments and affairs, in
each case so long as such activities do not conflict with OpenTV’s interests or
interfere with the performance of your responsibilities to OpenTV.

Base Salary and Annual Bonus

     Your annual base salary will be $375,000, which shall be paid to you in
regular intervals in accordance with OpenTV’s customary payroll schedules for
salaried employees, but in no event less frequently than twice each month. For
each of the calendar years in which you are employed by OpenTV, you shall be
eligible for annual discretionary bonus awards (the target amount of which
shall be established by the Chief Executive Officer of the Company, subject to
approval by the Compensation Committee (the “Committee”) of the Board of
Directors of OpenTV (the “Board”) prior to the commencement of any calendar
year to which it relates), based on financial and strategic objectives agreed
to annually by the Committee and me. Your discretionary bonus, if any, will be
paid to you, at the option of the Committee, in a cash payment, in shares of
capital stock of OpenTV, or in a combination of cash and capital stock of
OpenTV. Your

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target bonus for 2005 is 35% of your annual base salary, which may change
in subsequent years, as described above, within the discretion of the
Committee, but such targeted bonus percentage shall not be materially less than
the target bonus percentages of other senior executives of OpenTV at the same
level. Such annual discretionary bonus awards shall be payable or issuable, as
applicable, as soon as practicable after the Committee and I can determine
whether, and the degree to which, such financial and strategic objectives have
been reached, but in no event later than any discretionary performance bonuses
are paid to other senior executives of OpenTV.

Stock Options

     Subject to approval by the Committee, the Company will grant to you stock
options under the OpenTV Corp. 2003 Incentive Plan (the “Plan”) to purchase
Two Hundred Thousand (200,000) Class A Ordinary Shares (the “Option”), with an
exercise price equal to the fair market value of the Class A Ordinary Shares on
the date of grant (the “Grant Date”). The Option shall vest in equal annual
installments on each of the second, third, fourth and fifth anniversaries of
the Grant Date and shall be evidenced by a standard stock option agreement
approved by the Committee for the grant of other stock options under the Plan,
a copy of which is attached hereto as Exhibit A and by this reference
incorporated herein, provided, that to the extent there are any inconsistencies
between the terms of this Agreement and the terms of such form of stock option
agreement, the terms of this Agreement shall govern, and, to the extent
necessary, the form of option agreement entered into by you and the Company
will be revised to make it consistent herewith. The grant date for your Option
will be deemed to be the date of this letter.

Termination

     If either: (i) OpenTV terminates your employment without Cause, as defined
below, or (ii) you resign your employment due to a material reduction of your
duties and/or responsibilities (which caused a significant amount of your duties to be
inconsistent with the duties and responsibilities normally assigned to a person
serving in the capacity of Senior Vice President and General Manager of
Marketing and Applications Products) or a material reduction in your annual
base salary, then, in each such case, you will be entitled to the following:

	 	•	 	a lump sum payment in an amount equal to the sum of (a) your annual
base salary through the date of termination, (b) vacation time not used
as of the date of termination to the extent that such vacation time has
been accrued during the calendar year of termination, calculated based
upon your base salary at the date of termination, and (c) business
expenses reimbursable under this letter, in each case to the extent not
theretofore paid;
	 
	 	•	 	continuation of your base salary then in effect, payable in accordance
with the normal payroll practices of OpenTV in effect on the date of
termination, for a period of six (6) months after the date of
termination, unless the date of such termination is within 12 months
following the date of any “Approved

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	 	 	 	Transaction”, “Board Change” or “Control Purchase” (as such terms are
defined in the Plan, and collectively referred to herein as “Change in
Control”), in which case the amount due to you pursuant to this
sub-paragraph shall be equal to 12 months of your then base salary,
payable in accordance with the normal payroll practices of OpenTV in
effect on the date of termination;

	 	•	 	continued vesting of all options granted to you under the Plan through
six (6) month anniversary of the date of your termination; provided,
however, that if a termination to which this paragraph applies occurs
within 12 months after a Change in Control (and the vesting of such
options have not otherwise been accelerated pursuant to the terms of the
Plan), then, in such event, vesting of all options granted to you under
the Plan shall continue until the 12 month anniversary of the date of
your termination; and
	 
	 	•	 	all vested stock options held by you following the termination of your
employment with OpenTV pursuant to the first sentence of this paragraph
(including any stock options that vest following the date of termination
pursuant to the immediately preceding sub-paragraph above) shall remain
exercisable for a period of 90 days following the date on which the last
options vest in accordance with the continued vesting provisions of the
immediately preceding sub-paragraph above (but not later than the
scheduled expiration of such stock option).

     If you intend to resign your employment as a result of a material
reduction of your duties or your annual base salary, you must notify OpenTV in
writing. If OpenTV fails to cure or remedy your reason for resignation within
thirty (30) days of its receipt of your notification your resignation shall be
effective on the earlier of (i) the date OpenTV notifies you in writing of its
determination not to cure or remedy your reason for resignation or (ii) the
thirtieth (30th) day following OpenTV’s receipt of your notification.

     OpenTV may terminate your employment for Cause at any time upon written
notice of such termination to you setting forth in reasonable detail the nature
of such Cause. If OpenTV terminates your employment for Cause, or you resign
for a reason other than those stated in the first paragraph under “Termination”
above, then you will be entitled to a lump sum in an amount equal to the sum of
(i) your annual base salary through the date of termination, (ii) vacation time
not used as of the date of termination to the extent that such vacation time
has been accrued during the calendar year of termination, calculated based upon
your base salary at the date of termination, and (iii) business expenses
reimbursable under this letter, in each case to the extent not theretofore
paid. In addition, upon termination of your employment by OpenTV for Cause,
all stock options granted to you, notwithstanding any prior vesting, shall
immediately terminate.

     Solely for purposes of this letter, “Cause” shall be deemed to have
occurred upon the happening of any of the following: (A) the breach by you of
any material provision of the Employee Proprietary Information and Inventions
Agreement, dated as of the date of your acceptance of this letter (the
“Employee Inventions Agreement”), a copy of which is attached hereto as Exhibit
B, (B) any breach by you of any of the provisions set

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forth under the heading “Noncompetition” below, (C) your having been
charged with a felony under the laws of the United States or any state thereof
(other than a traffic violation), (D) your act of fraud, theft, embezzlement,
other material act of dishonesty or any material breach of fiduciary duty owed
to OpenTV, (E) your willful failure to perform, or gross neglect in the
performance of, your duties and responsibilities to OpenTV (other than as a
result of illness or incapacity), and (F) your agreement to settle any charges
brought against you by the Securities and Exchange Commission with respect to
any act or omission by you, which charges involve an allegation of fraud or, in
the good faith opinion of the Board, would reasonably likely to have resulted
in a conviction had the matter proceeded.

Benefits; Vacation; Expenses; Relocation

     You will have the right to participate in and to receive benefits from all
present and future life, accident, disability, medical, pension and savings
plans and all similar benefits made available generally to executives of
OpenTV. The amount and extent of benefits to which you are entitled shall be
governed by the specific benefit plan, as it may be amended from time to time.

     You will be entitled to four weeks of paid vacation per year or such
longer period as may be provided by OpenTV. Such vacation shall be taken at
such times and intervals as shall be determined by you, subject to the
reasonable business needs of OpenTV. You shall not be permitted to accrue more
than 1.75 times your annual vacation entitlement.

     OpenTV shall pay or reimburse you promptly for all reasonable expenses and
other disbursements incurred or paid by you in the performance of your duties
and responsibilities to OpenTV, including those incurred or paid in connection
with business related travel, telecommunications and entertainment, subject to
reasonable substantiation by you in accordance with OpenTV’s policies.

     As an additional benefit, OpenTV will reimburse you for reasonable moving
expenses related to your relocation from your current residence to the San
Francisco Bay Area in accordance with the terms of the separate Relocation
Acknowledgement that you are required to sign. Reimbursable moving expenses
will include normal costs of moving household and personal items, as well as
other pre-approved relocation expenses which you may incur, and may, subject to
prior approval, include temporary housing expenses for a limited period not to
exceed two months and brokerage commissions payable in respect of a rental
apartment, but shall not, in any event, include brokerage commissions payable
in connection with the sale or purchase of a home, closing costs for the sale
or purchase of a house, loan fees or similar types of expenses. Reimbursement
is subject to your presentation to OpenTV of satisfactory receipts or other
evidence of expenses incurred.

Noncompetition

     Covenant Not to Compete. During the period of your employment with OpenTV
and ending upon the first anniversary of the date of termination of your
employment with

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OpenTV (the “Restricted Period”), you agree that you will not, directly or
indirectly, engage in, participate in, or acquire an equity interest in any
person, firm, corporation or other entity (a “Person”), which engages or
participates in any business that operates any line of business, business
activity or operations that are competitive with any line of business, business
activity or operations conducted by OpenTV during the Restricted Period (the
“Restricted Business”).

     Exceptions to Covenant Not to Compete. Notwithstanding the foregoing, the
restrictions set forth in the immediately preceding paragraph shall not be
applicable to:

	 	•	 	any acquisition of an interest in a Person, which is engaged in a
Restricted Business so long as (x) you do not control (whether through
the ownership of voting securities, by contract or otherwise) such other
Person and (y) the Restricted Business conducted by such other Person
does not constitute ten percent (10%) or more of its business (as
measured by its assets or revenues);
	 
	 	•	 	the acquisition of beneficial ownership (as defined in Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended) by you
or any member of your Immediate Family (as defined below) of an equity
interest in any Person engaged in a Restricted Business, so long as (i)
such equity interest (A) is listed or traded on a national securities
exchange or the NASDAQ Stock Market and (B) constitutes less than five
percent (5%) of the outstanding equity interests of such Person and (ii)
you are not actively involved in the management of the business of such
Person; the term “Immediate Family” shall mean your spouse, parents,
children, siblings, mothers and fathers-in-law, sons and
daughters-in-law, and brothers and sisters-in-law;
	 
	 	•	 	your engaging in or participating in the Restricted Business in
connection with your employment with OpenTV at the direction of the Board
or the Chairman of the Board;
	 
	 	•	 	situations where a termination of employment with OpenTV is (i)
terminated by you pursuant to clause (ii) of the first sentence under the
paragraph captioned “Termination,” or (ii) effected by OpenTV without
Cause or for reasons unrelated to performance, such as a result of a
reduction in workforce; or
	 
	 	•	 	you being employed by or otherwise rendering services to Liberty Media
Corporation, any of its subsidiaries or controlled affiliates of any
other person or entity to which Liberty Media Corporation may consent.

     Territory for Covenant Not to Compete. You hereby acknowledge and agree
that the Restricted Businesses engaged in by OpenTV and its subsidiaries
extends throughout the United States and in other jurisdictions in which OpenTV
conducts significant business activities (the “Restricted Territory”) and that
OpenTV and its subsidiaries may be harmed by competitive conduct anywhere in
the Restricted Territory. You therefore agree that the covenants contained in
the provisions under the heading “Noncompetition” shall be applicable in and
throughout the Restricted Territory, as well as throughout other

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areas of the world in which OpenTV and its subsidiaries may be (or have
prepared written plans to be) doing business from time to time. You further
warrant and represent that, because of your varied skill and abilities, you do
not need to compete with OpenTV and its subsidiaries in any Restricted
Business, and that this letter will therefore not prevent you from earning a
livelihood. You acknowledge that the restrictions contained in the provisions
under the heading “Noncompetition” constitute reasonable protections for OpenTV
and its subsidiaries in light of the foregoing and in light of the
consideration and promises to you contained in the letter.

Arbitration of Claims

     You hereby acknowledge and agree that, except as provided below, all
disputes concerning your employment with OpenTV, the termination thereof, the
breach by either party of the terms of this letter or any other matters
relating to or arising from your employment with OpenTV shall be resolved in
binding arbitration in a proceeding in San Francisco, California, administered
by and under the rules and regulations of the American Arbitration Association.
Both parties and the arbitrator will treat the arbitration process and the
activities that occur in the proceedings as confidential. Nothing contained in
this paragraph shall limit OpenTV’s right to seek equitable relief in any court
of competent jurisdiction in respect of the matters set forth in the
“Noncompetition” provisions above.

Employment At Will

     By signing this letter, you understand and agree that your employment with
OpenTV is at-will. Therefore, your employment can terminate, with or without
Cause, and with or without notice, at any time, at your option or OpenTV’s
option, and OpenTV can terminate or change all other terms and conditions of
your employment, with or without Cause, and with or without notice, at any
time, in all cases subject to the other terms and conditions of this letter.
This at-will relationship will remain in effect throughout your employment with
OpenTV Corp. or any of its subsidiaries or affiliates. This letter, including
the documents contained in Exhibit A, and any stock option agreement between
you and OpenTV, constitute the entire agreement, arrangement and understanding
between you and OpenTV on the nature and terms of your employment with OpenTV.
This letter supersedes any prior or contemporaneous agreement, arrangement or
understanding on this subject matter, except, subject to the third succeeding
sentence, for any stock option agreement between you and OpenTV. By executing
this letter as provided below, you expressly acknowledge the termination of any
such prior agreement, arrangement or understanding. Also, by your execution of
this letter, you affirm that no one has made any written or verbal statement
that contradicts the provisions of this letter. In the event of any
inconsistency between the terms contained in this letter and the terms
contained in any stock option agreement between you and OpenTV, the terms
contained in this letter shall control, such that the provisions regarding
vesting or termination contained in your stock option agreements shall be
superseded by the provisions of this letter to the extent of any conflict and
the non-competition covenant contained in this letter shall also be supersede
the provisions of any other similar covenant contained in your stock option
agreement to the extent of any

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conflict. The at-will nature of your employment, as set forth in this
paragraph, can be modified only by a written agreement signed by both OpenTV’s
Chief Executive Officer and you which expressly alters it. This at-will
relationship may not be modified by any oral or implied agreement, or by any
policies of OpenTV, practices or patterns of conduct.

     We are enthusiastic about your potential employment with us and the
contributions you can make to our executive management team and OpenTV. Please
retain the original offer letter for your records and return the signed copy
and required documents to me.

	 	 	 	 	 
	 	Sincerely,

OPENTV, INC.

 	 
	 	By:  	/s/ Jim Chiddix
 	 
	 	Name:  	Jim Chiddix 	 	 
	 	Title:  	Chairman and Chief Executive
Officer 	 	 
	 

Signature of Acceptance:

/s/ Tim Evard

Tim Evard

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Exhibit A

OPENTV CORP.

2003 INCENTIVE PLAN

ARTICLE I

PURPOSE AND EFFECTIVENESS

     1.1 Purpose. The purpose of the Plan is to promote the success of the
Company by providing a method whereby (i) eligible employees (including
employees who are directors) of the Company and its Affiliates, (ii)
independent directors of the Company and (iii) independent contractors
providing services to the Company or its Subsidiaries may be awarded additional
remuneration for services rendered and encouraged to invest in stock of the
Company, thereby increasing their proprietary interest in the Company’s
businesses, encouraging them to remain in the employ of, or continue to provide
service to, the Company or its Subsidiaries, and increasing their personal
interest in the continued success and progress of the Company or its
Subsidiaries. The Plan is also intended to aid in (i) attracting persons of
exceptional ability to become directors, officers and employees of the Company
and its Subsidiaries and (ii) inducing independent contractors to agree to
provide services to the Company.

     1.2 Effective Date. The Plan was adopted by the Compensation Committee of
the Board by unanimous written consent as of May 6, 2003, but shall be subject
to approval by the affirmative vote of the holders of at least a majority of
the voting power of the outstanding shares of stock of the Company represented
in person or by proxy and entitled to vote at the 2003 annual meeting of
stockholders of the Company. Any Awards under the Plan made prior to such
stockholder approval shall be conditioned upon such approval and shall be null
and void if such approval is not obtained.

ARTICLE II

DEFINITIONS

     2.1 Certain Defined Terms. Capitalized terms not defined elsewhere in the
Plan shall have the following meanings (whether used in the singular or
plural):

     “Affiliate” of a person or an Entity means any other person or
Entity that, directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with such person
or Entity.

     “Agreement” means a stock option agreement, stock appreciation
rights agreement, restricted shares agreement or stock units agreement,
or an agreement evidencing more than one type of Award, specified in
Section 10.5, as any such Agreement may be supplemented or amended from
time to time.

     “Approved Transaction” means any transaction in which the Board (or,
if approval of the Board is not required as a matter of law, the
stockholders of the Company) shall approve (i) any consolidation or
merger of the Company, or binding share exchange, pursuant to which
Ordinary Shares of the Company would be changed or converted into or
exchanged for cash, securities or other property, other than any such
transaction in which the holders of Ordinary Shares of the Company
immediately prior to such transaction have the same proportionate
ownership of the Ordinary Shares of, and voting power with respect to,
the surviving corporation immediately after such transaction, (ii) any
merger, consolidation or binding share exchange to which the Company is a
party as a result of which the persons or Entities who are holders of
Ordinary Shares of the Company immediately prior thereto have less than a
majority of the combined voting power of the outstanding capital stock of
the Company ordinarily (and apart from rights accruing under special
circumstances) having the right to vote in the election of directors
immediately following such merger, consolidation or binding share
exchange, (iii) the adoption of any plan or proposal for the liquidation
or dissolution of the Company, or (iv) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all,
or substantially all, of the assets of the Company.

 

 

     “Award” means a grant of Options, SARs, Restricted Shares, Stock
Units and/or cash under this Plan.

     “Board” means the Board of Directors of the Company.

     “Board Change” means, during any period of two consecutive years,
individuals who at the beginning of such period constituted the entire
Board cease for any reason to constitute a majority thereof unless the
election, or the nomination for election, of each new director was
approved by (i) Liberty or (ii) the vote of a majority of the directors
then still in office who were directors at the beginning of the period
(or whose nomination for election was so approved).

     “Class A Ordinary Shares” means the Class A Ordinary Shares, no par
value, of the Company (or any securities the Class A Ordinary Shares may
be exchanged for or converted into in connection with a Domestication
Transaction).

     “Code” means the Internal Revenue Code of 1986, as amended from time
to time, or any successor statute or statutes thereto. Reference to any
specific Code section shall include any successor section.

     “Committee” means the committee of the Board appointed pursuant to
Section 3.1 to administer the Plan, or if no such committee shall have
been appointed, the Board.

     “Company” means OpenTV Corp., a company organized under the laws of
the British Virgin Islands.

     “Control Purchase” means any transaction (or series of related
transactions) in which (i) any “person” (as such term is defined in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act), or other person or
Entity (other than the Company, any Subsidiary, any employee benefit plan
sponsored by the Company or any Subsidiary, or any Liberty Entity) shall
purchase any Ordinary Shares of the Company (or securities convertible
into Ordinary Shares of the Company) pursuant to a tender offer or
exchange offer (other than any such purchase that, alone and together
with any other purchase of Ordinary Shares (or securities convertible
into Ordinary Shares of the Company) by such “person” or Entity, or any
of its respective affiliates, represents less than five percent (5%) of
the combined voting power of the then outstanding securities of the
Company ordinarily (and apart from the rights accruing under special
circumstances) having the right to vote in the election of directors
(calculated as provided in Rule 13d-3(d) under the Exchange Act in the
case of rights to acquire the Company’s securities), without the prior
consent of the Board, or (ii) any person (as such term is so defined), or
other person or Entity (other than the Company, any Subsidiary, any
employee benefit plan sponsored by the Company or any Subsidiary, any
Liberty Entity, or any Enumerated Person (as defined below)) shall become
the “beneficial owner” (as such term is defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company
representing twenty percent (20%) or more of the combined voting power of
the then outstanding securities of the Company ordinarily (and apart from
the rights accruing under special circumstances) having the right to vote
in the election of directors (calculated as provided in Rule 13d-3(d)
under the Exchange Act in the case of rights to acquire the Company’s
securities), other than in a transaction (or series of transactions) (A)
to which any Liberty Entity is a party or (B) that is approved by the
Board. Anything contained herein to the contrary notwithstanding, no
such purchase or transaction shall constitute a “Control Purchase” so
long as after consummation of any such purchase or transaction the
Liberty Entities beneficially own securities of the Company representing
more than fifty percent (50%) of the combined voting power of the then
outstanding securities of the Company ordinarily (and apart from the
rights accruing under special circumstances) having the right to vote in
the election of directors (calculated as provided in Rule 13d-3(d) under
the Exchange Act in the case of rights to acquire the Company’s
securities). For purposes of this definition, “Enumerated Person” means
each of the Chairman of the Board and the President of Liberty as of the
Effective Date of this Plan and their respective family members, estates
and heirs and any trust or other investment vehicle for the primary
benefit of any of such Entities or persons or such persons’ respective
family members or heirs. As used with respect to any person, the term
“family member” means the spouse, siblings and lineal descendants of such
person.

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     “Disability” means the inability to engage in any substantial
gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or which has
lasted or can be expected to last for a continuous period of not less
than twelve (12) months.

     “Dividend Equivalents” means, with respect to Restricted Shares to
be issued at the end of the Restriction Period, to the extent specified
by the Committee only, an amount equal to all dividends and other
distributions (or the economic equivalent thereof) that are payable to
stockholders of record during the Restriction Period on a like number and
kind of Class A Ordinary Shares.

     “Domestic relations order” means a domestic relations order as
defined by the Code or Title I of the Employee Retirement Income Security
Act, or the rules thereunder.

     “Domestication Transaction” means a transaction pursuant to which
the Company or any successor thereto is incorporated under the laws of a
jurisdiction outside the British Virgin Islands in the manner provided
under those laws.

     “Effective Date” means the date on which the Plan originally became
effective.

     “Entity” means any partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated
association, joint venture or other entity of any nature.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended
from time to time, or any successor statute or statutes thereto.
Reference to any specific Exchange Act section shall include any
successor section.

     “Exercise Price” has the meaning ascribed thereto in Section 6.2.

     “Fair Market Value” of a Class A Ordinary Share on any day means the
last sale price (or, if no last sale price is reported, the average of
the high bid and low asked prices) for a Class A Ordinary Share on such
day (or, if such day is not a trading day, on the next preceding trading
day) as reported on Nasdaq, or, if not reported on Nasdaq, as quoted by
the National Quotation Bureau Incorporated, or if Class A Ordinary Shares
are listed on an exchange, on the principal exchange on which the Class A
Ordinary Shares are listed. If for any day the Fair Market Value of a
Class A Ordinary Share is not determinable by any of the foregoing means
(or if the Committee determines for any purpose that the Fair Market
Value of a Class A Ordinary Share should be determined on an intra-day
basis), then the Fair Market Value for such day (or at a given time on
such day) shall be determined in good faith by the Committee on the basis
of such quotations and other considerations as the Committee deems
appropriate.

     “Free Standing SAR” has the meaning ascribed thereto in Section 7.1.

     “Holder” means an employee (including any employee who is a
director) of the Company or any of its Affiliates, an Independent
Director or an independent contractor who has received an Award under
this Plan.

     “Incentive Stock Option” means a stock option granted under Article
VI with respect to Class A Ordinary Shares that is intended to be an
incentive stock option within the meaning of Section 422 of the Code.

     “Independent Director” means a director of the Company who is not an
employee of (i) the Company or any Subsidiary of the Company, or (ii) any
Entity controlling, or under common control with, the Company.

     “Liberty” means Liberty Media Corporation and any direct or indirect
successor by merger, consolidation, binding share exchange, transfer or
otherwise to all or substantially all of the assets of Liberty Media
Corporation.

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     “Liberty Entity” means (i) Liberty, (ii) any Affiliate of Liberty,
or (iii) any employee benefit plan sponsored by Liberty or any Affiliate
of Liberty.

     “Nasdaq” means The Nasdaq Stock Market.

     “Nonqualified Stock Option” means a stock option granted under
Article VI with respect to Class A Ordinary Shares that is designated a
nonqualified stock option.

     “Option” means any Incentive Stock Option or Nonqualified Stock
Option.

     “Ordinary Shares” means the Class A Ordinary Shares and the Class B
Ordinary Shares, no par value, of the Company (or any securities the
Class B Ordinary Shares may be exchanged for or converted into in
connection with a Domestication Transaction).

     “Plan” means the Company’s 2003 Incentive Plan, as set forth in this
document.

     “Restricted Shares” means Class A Ordinary Shares or the right to
receive Class A Ordinary Shares, as the case may be, awarded pursuant to
Article VIII.

     “Restriction Period” means a period of time beginning on the date of
each Award of Restricted Shares and ending on the Vesting Date with
respect to such Award.

     “Retained Distribution” has the meaning ascribed thereto in Section
8.3.

     “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act, or
any successor Rule. References to paragraphs of Rule 16b-3 shall include
the comparable provisions of any successor Rule.

     “SARs” means stock appreciation rights, awarded pursuant to Article
VII, with respect to Class A Ordinary Shares.

     “Section 162(m)” means Section 162(m) of the Code and all Treasury
Regulations promulgated thereunder, including without limitation Treasury
Regulation § 1.162-27(e)(2)(i) and any successor Treasury Regulation.

     “Stock Unit Award” has the meaning ascribed thereto in Section 9.1.

     “Subsidiary” of the Company means any present or future subsidiary
(as defined in Section 424(f) of the Code) of the Company or any Entity
in which the Company owns directly or indirectly, fifty percent (50%) or
more of the voting, capital or profits interests. An Entity shall be
deemed a subsidiary of the Company for purposes of this definition only
for such periods as the requisite ownership or control relationship is
maintained.

     “Tandem SARs” has the meaning ascribed thereto in Section 7.1.

     “Vesting Date” with respect to any Restricted Shares awarded
hereunder means the date on which such Restricted Shares cease to be
subject to a risk of forfeiture, as designated in or determined in
accordance with the Agreement with respect to such Award of Restricted
Shares pursuant to Article VIII. If more than one Vesting Date is
designated for an Award of Restricted Shares, reference in the Plan to a
Vesting Date in respect of such Award shall be deemed to refer to each
part of such Award and the Vesting Date for such part.

4

 

ARTICLE III

ADMINISTRATION

     3.1 Committee. The Plan shall be administered by the Compensation
Committee of the Board unless a different committee is appointed by the Board.
The Committee shall be comprised of not less than two persons. The Board may
from time to time appoint members of the Committee in substitution for or in
addition to members previously appointed, may fill vacancies in the Committee
and may remove members of the Committee. With respect to Awards granted to a
person subject to Rule 16b-3, unless otherwise determined by the Board, the
Committee granting such Award (a) shall be the entire Board or (b) shall be
comprised solely of two or more “non-employee directors” as defined by Rule
16b-3. With respect to Awards granted to a “covered employee” under Section
162(m), unless otherwise determined by the Board, the Committee granting such
Award shall be comprised solely of two or more “outside directors” as defined
by Section 162(m). With respect to Awards granted to a person subject to both
Rule 16b-3 and Section 162(m), unless otherwise determined by the Board, all
grants will be made in a manner that complies with both Rule 16b-3 and Section
162(m). The Committee may select one of its members as its chairman and shall
hold its meetings at such times and places as it shall deem advisable. A
majority of its members shall constitute a quorum and all determinations shall
be made by a majority of such quorum. Any determination reduced to writing and
signed by all of the members shall be fully as effective as if it had been made
by a majority vote at a meeting duly called and held.

     3.2 Powers. The Committee shall have full power and authority to grant to
eligible persons Options under Article VI of the Plan and, subject to the last
sentence of this Section 3.2 shall have full power and authority to grant to
eligible persons SARs under Article VII of the Plan, Restricted Shares under
Article VIII of the Plan, and/or Stock Units under Article IX of the Plan, to
determine (subject to the express provisions of the Plan) the terms and
conditions (which need not be identical) of all Awards so granted, to interpret
the provisions of the Plan and any Agreements relating to Awards granted under
the Plan, and to supervise the administration of the Plan. If provided in the
applicable form of Agreement, the Committee in making an Award may provide for
the granting or issuance of additional, replacement or alternative Awards upon
the occurrence of specified events, including the exercise of the original
Award. The Committee shall have sole authority in the selection of persons to
whom Awards may be granted under the Plan and in the determination of the
timing, pricing and amount of any such Award, subject only to the express
provisions of the Plan. In making determinations hereunder, the Committee may
take into account the nature of the services rendered by the respective
employees, Independent Directors and independent contractors, their present and
potential contributions to the success of the Company and its Subsidiaries and
such other factors as the Committee in its discretion deems relevant. Anything
contained herein to the contrary notwithstanding, the Committee shall not grant
any Awards in the form of Tandem SARs, Free Standing SARs, Restricted Shares
and/or Stock Units in any calendar year unless the Board (taking into account
tax and accounting consequences and other relevant circumstances) shall first
have determined that Awards in such form may be granted in such calendar year
and shall have approved a form of Agreement applicable to such Award, and any
and all such Awards shall be subject to such terms and conditions as the Board
shall adopt at or before such determination and approval.

     3.3 Interpretation. The Committee is authorized, subject to the
provisions of the Plan, to establish, amend and rescind such rules and
regulations as it deems necessary or advisable for the proper administration of
the Plan and to take such other action in connection with or in relation to the
Plan as it deems necessary or advisable. Each action and determination made or
taken pursuant to the Plan by the Committee, including any interpretation or
construction of the Plan, shall be final and conclusive for all purposes and
upon all persons. No member of the Committee shall be liable for any action or
determination made or taken by him or the Committee in good faith with respect
to the Plan.

ARTICLE IV

SHARES SUBJECT TO THE PLAN

     4.1 Number of Shares. Subject to the provisions of this Article IV, the
maximum number of Class A Ordinary Shares with respect to which Awards may be
granted during the term of the Plan (whether as Options,

5

 

SARs, Restricted Shares or Stock Units) shall be 5,000,000 shares. Class
A Ordinary Shares will be made available from the authorized but unissued
shares of the Company or from shares reacquired by the Company, including
shares purchased in the open market. The Class A Ordinary Shares subject to
(i) any Award granted under the Plan that shall expire, terminate or be
annulled for any reason without having been exercised (or considered to have
been exercised as provided in Section 7.2), (ii) any Award of any SARs granted
under the Plan that shall be exercised for cash and (iii) any Award of
Restricted Shares or Stock Units that shall be forfeited prior to becoming
vested (provided that the Holder received no benefits of ownership of such
Restricted Shares or Stock Units other than voting rights and the accumulation
of Retained Distributions and unpaid Dividend Equivalents that are likewise
forfeited), shall again be available for purposes of the Plan. Without
limiting the provisions of Section 10.1(b), no person may be granted in any
calendar year Awards covering more than 400,000 Class A Ordinary Shares as such
number may be adjusted hereafter as provided in Section 4.2.

     4.2 Adjustments. If the Company subdivides its outstanding Class A
Ordinary Shares into a greater number of Class A Ordinary Shares (by stock
dividend, stock split, reclassification or otherwise) or combines its
outstanding Class A Ordinary Shares into a smaller number of Class A Ordinary
Shares (by reverse stock split, reclassification or otherwise), or if the
Committee determines that any stock dividend, extraordinary cash dividend,
reclassification, recapitalization, reorganization, split-up, spin-off,
combination, exchange of shares, warrants or rights offering to purchase Class
A Ordinary Shares, or other similar corporate event (including mergers or
consolidations other than those that constitute Approved Transactions,
adjustments with respect to which shall be governed by Section 10.1(b)) affects
the Class A Ordinary Shares such that an adjustment is required in order to
preserve the benefits or potential benefits intended to be made available under
this Plan, then the Committee, in its sole discretion and in such manner as the
Committee may deem equitable and appropriate, may make such adjustments to any
or all of (i) the number and kind of shares which thereafter may be awarded,
optioned, or otherwise made subject to the benefits contemplated by the Plan,
(ii) the number and kind of shares subject to outstanding Awards, and (iii) the
purchase or exercise price and the relevant appreciation base with respect to
any of the foregoing, provided, however, that the number of shares subject to
any Award shall always be a whole number. Notwithstanding the foregoing, if
all Class A Ordinary Shares are redeemed, then each outstanding Award shall be
adjusted to substitute for the Class A Ordinary Shares subject thereto the kind
and amount of cash, securities or other assets issued or paid in the redemption
of the equivalent number of Class A Ordinary Shares and otherwise the terms of
such Award, including, in the case of Options or similar rights, the total
exercise price, and, in the case of SARs, the base price, shall remain constant
before and after the substitution (unless otherwise determined by the Committee
and provided in the applicable Agreement). The Committee may, if deemed
appropriate, provide for a cash payment to any Holder of an Award in connection
with or in lieu of any adjustment made pursuant to this Section 4.2.

ARTICLE V

ELIGIBILITY

     The persons who shall be eligible to participate in the Plan and to
receive Awards under the Plan shall be such employees (including employees who
are directors) of the Company and its Affiliates, Independent Directors, and
independent contractors of the Company and its Subsidiaries as the Committee
shall select. Awards may be made to any such employee, Independent Director or
independent contractor whether or not he or she holds or has held Awards under
this Plan or any similar or other Awards under any other plan of the Company or
any of its Affiliates.

ARTICLE VI

STOCK OPTIONS

     6.1 Grant of Options. Subject to the limitations of the Plan, the
Committee shall designate from time to time those eligible persons to be
granted Options, the time when each Option shall be granted to such eligible
persons, the number of Class A Ordinary Shares subject to such Option, whether
such Option is an Incentive Stock Option or a Nonqualified Stock Option and,
subject to Section 6.2, the purchase price of the Class A Ordinary Shares
subject to such Option. Subject to the other provisions of the Plan, the same
person may receive Incentive

6

 

Stock Options and Nonqualified Stock Options at the same time and pursuant
to the same Agreement, provided that Incentive Stock Options and Nonqualified
Stock Options are clearly designated as such.

     6.2 Option Price. The price at which shares may be purchased upon
exercise of an Option (“Exercise Price”) shall be fixed by the Committee and
may be more than, less than or equal to the Fair Market Value per Class A
Ordinary Share as of the date the Option is granted; provided, however, that
the per share Exercise Price of an Option shall not be less than the Fair
Market Value per Class A Ordinary Share on the date the Option is granted (or,
if the Committee determines to measure Fair Market Value for this purpose on an
intra-day basis, at the time the Option is granted) without the prior approval
of the Board.

     6.3 Term of Options. Subject to the provisions of the Plan and the
applicable Agreement with respect to death, retirement and termination of
employment, the term of each Option shall be for such period as the Committee
shall determine as set forth in the applicable Agreement, but shall in no event
be longer than ten (10) years from the date of grant unless otherwise
determined by the Committee and provided in the applicable Agreement.

     6.4 Exercise of Options. Each Option granted under the Plan shall become
(and remain) exercisable during the term of the Option to the extent provided
in the applicable Agreement and this Plan; provided, however, that no Option
shall be exercisable prior to the second anniversary of the date of grant, or
become exercisable as to more than twenty-five percent (25%) of the shares
subject thereto (on a cumulative basis) on each of the second, third, fourth
and fifth anniversaries of the date of grant, without the prior approval of the
Board. Unless the Agreement otherwise provides, each Option granted under this
Plan may be exercised to the extent exercisable, in whole or in part, at any
time and from time to time during the term of such Option; provided, however,
that subsequent to the grant of an Option, the Board (or, if the Board
expressly provides, the Committee), at any time before complete termination of
such Option, may accelerate the time or times at which such Option may be
exercised in whole or in part (without reducing the term of such Option except
as otherwise provided herein).

     6.5 Manner of Exercise.

     (a) Form of Payment. An Option shall be exercised by written notice
to the Company upon such terms and conditions as the Agreement may
provide and in accordance with such other procedures for the exercise of
Options as the Committee may establish from time to time. The method or
methods of payment of the purchase price for the shares to be purchased
upon exercise of an Option and of any amounts required by Section 10.10
shall be as set forth in the applicable Agreement and may consist of the
following:

     (i) cash,

     (ii) check,

     (iii) whole Class A Ordinary Shares owned by such
Holder immediately prior to the exercise of such Option,

     (iv) the withholding of Class A Ordinary Shares
issuable upon such exercise of the Option,

     (v) delivery, together with such other documentation
as the Company in its sole and absolute discretion shall
require, of irrevocable instructions by Holder to an approved
broker to (A) sell the shares issuable upon exercise of the
Option and (B) deliver to the Company the amount of sale
proceeds required to pay the Exercise Price; provided, that:
(x) the delivery by the Company to the approved broker of shares sold pursuant to the Holder’s instructions, (y) the
broker’s delivery of the Exercise Price to the Company, and
(z) the broker’s delivery of the net proceeds of the sale to
the Holder, take place on the same date (the “Settlement
Date”) and; provided, further, that the Settlement Date is no
later than three (3) days following the date the Holder
provides the approved broker with instructions to sell the
shares issuable upon the exercise of the Option,

7

 

     (vi) any combination of the foregoing methods of
payment, or

     (vii) such other consideration and method of payment
as may be permitted for the issuance of shares under
applicable law.

     The permitted method or methods of payment of the amounts payable upon
exercise of an Option, if other than in cash, shall be set forth in the
applicable Agreement and may be subject to such conditions and/or limitations
as the Committee (or, if applicable, the Board) deems appropriate. Without
limiting the generality of the foregoing, if a Holder is permitted to elect to
have Class A Ordinary Shares issuable upon exercise of an Option withheld to
pay all or any part of the amounts payable in connection with such exercise,
then the Committee or the Board may each reserve the discretion to approve or
disapprove such election.

     (b) Value of Shares. Unless otherwise determined by the Committee
and provided in the applicable Agreement, Class A Ordinary Shares
delivered in payment of all or any part of the amounts payable in
connection with the exercise of an Option, and Class A Ordinary Shares
withheld for such payment, if permitted, shall be valued for such purpose
at their Fair Market Value as of the exercise date (or, if the Committee
determines to measure Fair Market Value for this purpose on an intra-day
basis, at the time of exercise).

     (c) Issuance of Shares. The Company shall effect the transfer of
the Class A Ordinary Shares purchased under the Option as soon as
practicable after the exercise thereof and payment in full of the
purchase price therefor and of any amounts required by Section 10.10, and
within a reasonable time thereafter such transfer shall be evidenced on
the books of the Company. Unless otherwise determined by the Committee
and provided in the applicable Agreement, (i) no Holder or other person
exercising an Option shall have any of the rights of a stockholder of the
Company with respect to Class A Ordinary Shares subject to an Option
granted under the Plan until due exercise and full payment has been made;
and (ii) no adjustment shall be made for cash dividends or other rights
for which the record date is prior to the date of such due exercise and
full payment.

     6.6 Nontransferability. Unless otherwise determined by the Committee and
provided in the applicable Agreement, Options shall not be transferable other
than by will or the laws of descent and distribution or pursuant to a domestic
relations order and, except as otherwise required pursuant to a domestic
relations order, Options may be exercised during the lifetime of the Holder
thereof only by such Holder (or his or her court appointed legal
representative).

ARTICLE VII

SARS

     7.1 Grant of SARs. Subject to the limitations of the Plan, including the
last sentence of Section 3.2 and any terms and conditions imposed by the Board
in connection with any Board action authorizing SAR Awards pursuant thereto,
SARs may be granted by the Committee to such eligible persons in such numbers,
and at such times during the term of the Plan as the Committee shall determine.
An SAR may be granted to a Holder of an Option (hereinafter called a “related
Option”) with respect to all or a portion of the Class A Ordinary Shares
subject to the related Option (a “Tandem SAR”) or may be granted separately to
an eligible person (a “Free Standing SAR”). Subject to the limitations of the
Plan, SARs shall be exercisable in whole or in part upon notice to the Company
upon such terms and conditions as are provided in the Agreement.

     7.2 Tandem SARs. A Tandem SAR may be granted either concurrently with the
grant of the related Option or (if the related Option is a Nonqualified Option)
at any time thereafter prior to the complete exercise, termination, expiration
or cancellation of such related Option. Tandem SARs shall be exercisable only
at the time and to the extent that the related Option is exercisable (and may
be subject to such additional limitations on exercisability as the Agreement
may provide), and in no event after the complete termination or full exercise
of the related Option. Upon any exercise or termination of the related Option,
the Tandem SARs with respect thereto shall be canceled automatically to the
extent of the number of Class A Ordinary Shares with respect to which the
related

8

 

Option was so exercised or terminated. Subject to the limitations of the
Plan, upon the exercise of a Tandem SAR, and unless otherwise determined by the
Committee and provided in the applicable Agreement, (i) the Holder thereof
shall be entitled to receive from the Company, for each Class A Ordinary Share
with respect to which the Tandem SAR is being exercised, consideration (in the
form determined as provided in Section 7.4) equal in value to the excess of the
Fair Market Value of a Class A Ordinary Share on the date of exercise over the
related Option purchase price per share (or, if the Committee determines to
measure Fair Market Value for this purpose on an intra-day basis, at the time
of exercise), provided, however, that the Committee may, in any Agreement
granting Tandem SARs, provide that the appreciation realizable upon exercise
thereof shall be measured from a base higher than the related Option purchase
price, and (ii) the related Option with respect thereto shall be cancelled
automatically to the extent of the number Class A Ordinary Shares with respect
to which the Tandem SAR was so exercised.

     7.3 Free Standing SARs. Free Standing SARs shall be exercisable at the
time, to the extent and upon the terms and conditions set forth in the
applicable Agreement. The base price of a Free Standing SAR shall be not less
than 100% of the Fair Market Value of a Class A Ordinary Share on the date of
grant of the Free Standing SAR. Subject to the limitations of the Plan, upon
the exercise of a Free Standing SAR and unless otherwise determined by the
Committee and provided in the applicable Agreement, the Holder thereof shall be
entitled to receive from the Company, for each Class A Ordinary Share with
respect to which the Free Standing SAR is being exercised, consideration (in
the form determined as provided in Section 7.4) equal in value to the excess of
the Fair Market Value of a Class A Ordinary Share on the date of exercise over
the base price per share of such Free Standing SAR.

     7.4 Consideration. The consideration to be received upon the exercise of
an SAR by the Holder shall be paid in cash, Class A Ordinary Shares (valued at
Fair Market Value on the date of exercise of such SAR, or at any time on such
date as determined by the Committee) or a combination of cash and Class A
Ordinary Shares or such other consideration, in each case, as specified in the
Agreement, or, if so provided in the Agreement, either as determined by the
Committee in its sole discretion or as elected by the Holder, provided that the
Committee (and/or the Board, if it so provides in connection with any action
pursuant to the last sentence of Section 3.2 hereof) shall have the power to
approve or disapprove the election by a Holder to receive cash in full or
partial settlement of an SAR, which approval or disapproval may be given at any
time. The Company’s obligation arising upon the exercise of an SAR may be paid
currently or on a deferred basis with such interest or earnings equivalent as
the Committee may determine. No fractional Class A Ordinary Shares shall be
issuable upon exercise of an SAR and, unless otherwise provided in the
applicable Agreement, the Holder will receive cash in lieu of fractional
shares. Unless the Committee (or the Board) shall otherwise determine, to the
extent an SAR is exercisable, it will be exercised automatically for stock on
its expiration date.

     7.5 Limitations. The applicable Agreement may provide for a limit on the
amount payable to a Holder upon exercise of SARs at any time or in the
aggregate, for a limit on the number or aggregate value of SARs that may be
exercised by the Holder in whole or in part for cash during any specified
period, for a limit on the time periods during which a Holder may exercise SARs
and for such other limits on the rights of the Holder and such other terms and
conditions of the SAR as the Committee (or the Board) may determine, including,
without limitation, a condition that the SAR may be exercised only in
accordance with rules and regulations adopted by the Committee or the Board
from time to time. Unless otherwise so provided in the applicable Agreement,
any such limit relating to a Tandem SAR shall not restrict the exercisability
of the related Option. Such rules and regulations may govern the right to
exercise SARs granted prior to the adoption or amendment of such rules and
regulations as well as SARs granted thereafter.

     7.6 Exercise. For purposes of this Article VII, the date of exercise of
an SAR shall mean the date on which the Company shall have received notice from
the Holder of the SAR of the exercise of such SAR (unless otherwise determined
by the Committee and provided in the applicable Agreement).

     7.7 Nontransferability. Unless otherwise determined by the Committee and
provided in the applicable Agreement, (i) SARs shall not be transferable other
than by will or the laws of descent and distribution or pursuant to a domestic
relations order, and (ii) except as otherwise required pursuant to a domestic
relations order, SARs may be exercised during the lifetime of the Holder
thereof only by such Holder (or his or her court appointed legal
representative).

9

 

ARTICLE VIII

RESTRICTED SHARES

     8.1 Grant. Subject to the limitations of the Plan, including the last
sentence of Section 3.2 and any terms and conditions imposed by the Board in
connection with any Board action authorizing Restricted Share Awards pursuant
thereto, the Committee shall designate those eligible persons to be granted
Awards of Restricted Shares, shall determine the time when each such Award
shall be granted, whether Class A Ordinary Shares covered by Awards of
Restricted Shares will be issued at the beginning or the end of the Restriction
Period and whether Dividend Equivalents will be paid during the Restriction
Period in the event Class A Ordinary Shares are to be issued at the end of the
Restriction Period, and shall designate (or set forth the basis for
determining) the Vesting Date or Vesting Dates for each Award of Restricted
Shares and may prescribe other restrictions, terms and conditions applicable to
the vesting of such Restricted Shares in addition to those provided in the
Plan. The Committee (or the Board) shall determine the price, if any, to be
paid by the Holder for the Restricted Shares; provided, however, that the
issuance of Restricted Shares shall be made for at least the minimum
consideration necessary to permit such Restricted Shares to constitute fully
paid and nonassessable shares. All determinations made by the Committee and/or
the Board pursuant to this Section 8.1 shall be specified in the Agreement.

     8.2 Issuance of Restricted Shares at Beginning of the Restriction Period.
If Class A Ordinary Shares are issued at the beginning of the Restriction
Period, the stock certificate or certificates representing such Restricted
Shares shall be registered in the name of the Holder to whom such Restricted
Shares shall have been awarded. During the Restriction Period, certificates
representing the Restricted Shares and any securities constituting Retained
Distributions shall bear a restrictive legend to the effect that ownership of
the Restricted Shares (and such Retained Distributions), and the enjoyment of
all rights appurtenant thereto, are subject to the restrictions, terms and
conditions provided in the Plan and the applicable Agreement. Such
certificates shall remain in the custody of the Company and the Holder shall
deposit with the Company stock powers or other instruments of assignment, each
endorsed in blank, so as to permit retransfer to the Company of all or any
portion of the Restricted Shares and any securities constituting Retained
Distributions that shall be forfeited or otherwise not become vested in
accordance with the Plan and the applicable Agreement.

     8.3 Restrictions. Restricted Shares issued at the beginning of the
Restriction Period shall constitute issued and outstanding Class A Ordinary
Shares for all corporate purposes. The Holder will have the right to vote such
Restricted Shares, to receive and retain such dividends and distributions paid
or distributed on such Restricted Shares as the Committee (or the Board) may
designate, and to exercise all other rights, powers and privileges of a Holder
of Class A Ordinary Shares with respect to such Restricted Shares; except, that
unless otherwise determined by the Committee and provided in the applicable
Agreement, (a) the Holder will not be entitled to delivery of the stock
certificate or certificates representing such Restricted Shares until the
Restriction Period shall have expired and unless all other vesting requirements
with respect thereto shall have been fulfilled or waived; (b) the Company will
retain custody of the stock certificate or certificates representing the
Restricted Shares during the Restriction Period as provided in Section 8.2; (c)
other than such dividends and distributions as the Committee or the Board may
designate, the Company will retain custody of all distributions (“Retained
Distributions”) made or declared with respect to the Restricted Shares (and
such Retained Distributions will be subject to the same restrictions, terms and
vesting and other conditions as are applicable to the Restricted Shares) until
such time, if ever, as the Restricted Shares with respect to which such
Retained Distributions shall have been made, paid or declared shall have become
vested, and such Retained Distributions shall not bear interest or be
segregated in a separate account; (d) the Holder may not sell, assign,
transfer, pledge, exchange, encumber or dispose of the Restricted Shares or any
Retained Distributions or his interest in any of them during the Restriction
Period; and (e) a breach of any restrictions, terms or conditions provided in
the Plan or applicable Agreement or established by the Committee (or the Board)
with respect to any Restricted Shares or Retained Distributions will cause a
forfeiture of such Restricted Shares and any Retained Distributions with
respect thereto.

     8.4 Issuance of Stock at End of the Restriction Period. Restricted Shares
issued at the end of the Restriction Period shall not constitute issued and
outstanding Class A Ordinary Shares and the Holder shall not have any of the
rights of a stockholder with respect to the Class A Ordinary Shares covered by
such an Award of Restricted Shares, in each case until such shares shall have
been transferred to the Holder at the end of the

10

 

Restriction Period. If and to the extent that Class A Ordinary Shares are
to be issued at the end of the Restriction Period, the Holder shall be entitled
to receive Dividend Equivalents with respect to the Class A Ordinary Shares
covered thereby (if at all) to such extent, at such time and in such manner as
the Committee or the Board may specify in the Agreement.

     8.5 Cash Awards. The Agreement in connection with an Award of Restricted
Shares may provide for the payment of a cash amount to the Holder of such
Restricted Shares at any time after such Restricted Shares shall have become
vested. Any such cash Awards shall be payable in accordance with such
additional restrictions, terms and conditions as shall be prescribed by the
Committee or the Board in the Agreement and shall be in addition to any other
salary, incentive, bonus or other compensation payments which such Holder shall
be otherwise entitled or eligible to receive from the Company.

     8.6 Completion of Restriction Period. On the Vesting Date with respect to
each Award of Restricted Shares, and the satisfaction of any other applicable
restrictions, terms and conditions (a) all or the applicable portion of such
Restricted Shares shall become vested, (b) any Retained Distributions and (to
the extent specified in the Agreement) any unpaid Dividend Equivalents with
respect to such Restricted Shares shall become vested to the extent that the
Restricted Shares related thereto shall have become vested and (c) any cash
Award to be received by the Holder with respect to such Restricted Shares shall
become payable, all in accordance with the terms of the applicable Agreement.
Any such Restricted Shares, Retained Distributions and any unpaid Dividend
Equivalents that shall not become vested shall be forfeited to the Company, and
the Holder shall not thereafter have any rights (including dividend and voting
rights) with respect to such Restricted Shares, Retained Distributions and any
unpaid Dividend Equivalents that shall have been so forfeited. The Committee
or the Board may provide that the delivery of any Restricted Shares, Retained
Distributions and unpaid Dividend Equivalents that shall have become vested,
and payment of any cash Awards that shall have become payable, shall be
deferred until such date or dates as the recipient may elect. Any election of
a recipient pursuant to the preceding sentence shall be filed in writing with
the Committee in accordance with such rules and regulations, including any
deadline for the making of such an election, as the Committee may provide.

ARTICLE IX

STOCK UNITS

     9.1 Grant. Subject to the limitations of the Plan, including the last
sentence of Section 3.2 and any terms and conditions imposed by the Board in
connection with any Board action authorizing Stock Unit Awards pursuant
thereto, the Committee shall have authority to grant to eligible persons Awards
of Stock Units (each such Award, a “Stock Unit Award”), which may be in the
form of Class A Ordinary Shares or units, the value of which is based, in whole
or in part, on the Fair Market Value of Class A Ordinary Shares. Subject to
the provisions of the Plan, including rules established pursuant to Section
9.2, Awards of Stock Units shall be subject to such terms, restrictions,
conditions, vesting requirements and payment rules as the Committee (or Board)
may determine in its sole discretion, which need not be identical for each
Award. The determinations made by the Committee (and/or Board) pursuant to
this Section 9.1 shall be specified in the applicable Agreement.

     9.2 Rules. The Committee may, in its sole discretion, establish any or
all of the following rules for application to an Award of Stock Units:

     (a) Any Class A Ordinary Shares that are part of an Award of Stock
Units may not be assigned, sold, transferred, pledged or otherwise
encumbered prior to the date on which the shares are issued, or if later,
the date provided by the Committee at the time of the Award.

     (b) Such Awards may provide for the payment of cash consideration by
the person to whom such Award is granted or provide that the Award, and
Class A Ordinary Shares to be issued in connection therewith, if
applicable, shall be delivered without the payment of cash consideration;
provided, however, that the issuance of any Class A Ordinary Shares in
connection with an Award of Stock Units shall be for at least the minimum
consideration necessary to permit such shares to be deemed fully paid and
nonassessable.

11

 

     (c) Awards of Stock Units may relate in whole or in part to
performance or other criteria established by the Committee at the time of
grant.

     (d) Awards of Stock Units may provide for deferred payment
schedules, vesting over a specified period of employment, the payment (on
a current or deferred basis) of dividend equivalent amounts with respect
to the number of Class A Ordinary Shares covered by the Award, and
elections by the person to defer payment of the Award or the lifting of
restrictions on the Award, if any.

     (e) If the Board action required by the last sentence of Section 3.2
of this Plan expressly authorizes, in such circumstances as the Committee
may deem advisable, the Committee may waive or otherwise remove, in whole
or in part, any restrictions or limitations to which a Stock Unit Award
was made subject at the time of grant.

ARTICLE X

GENERAL PROVISIONS

10.1 Acceleration of Options, SARs, Restricted Shares and Stock Units.

     (a) Death or Disability. If a Holder’s employment (or in the case
of an Independent Director, service as a director of the Company) shall
terminate by reason of death or Disability, notwithstanding any contrary
waiting period, installment period, vesting schedule or Restriction
Period in any Agreement or in the Plan, unless the applicable Agreement
provides otherwise: (i) in the case of an Option or SAR, each outstanding
Option or SAR granted under the Plan shall immediately become exercisable
in full in respect of the aggregate number of shares covered thereby;
(ii) in the case of Restricted Shares, the Restriction Period applicable
to each such Award of Restricted Shares shall be deemed to have expired
and all such Restricted Shares, any related Retained Distributions and
(to the extent provided in the applicable Agreement) any unpaid Dividend
Equivalents shall become vested and any cash amounts payable pursuant to
the applicable Agreement shall be adjusted in such manner as may be
provided in the Agreement, and (iii) in the case of Stock Units, each
such Award of Stock Units shall become vested in full.

     (b) Approved Transactions; Board Change; Control Purchase. In the
event of any Approved Transaction, Board Change or Control Purchase,
notwithstanding any contrary waiting period, installment period, vesting
schedule or Restriction Period in any Agreement or in the Plan, unless
the applicable Agreement provides otherwise, but subject in any event to
the last sentence of this Section 10.1(b): (i) in the case of an Option
or SAR, each such outstanding Option or SAR granted under the Plan shall
become exercisable in full in respect of the aggregate number of shares
covered thereby; (ii) in the case of Restricted Shares, the Restriction
Period applicable to each such Award of Restricted Shares shall be deemed
to have expired and all such Restricted Shares, any related Retained
Distributions and any unpaid Dividend Equivalents shall become vested and
any cash amounts payable pursuant to the applicable Agreement shall be
adjusted in such manner as may be provided in the Agreement; and (iii) in
the case of Stock Units, each such Award of Stock Units shall become
vested in full, in each case effective upon the Board Change or Control
Purchase or two (2) business days prior to consummation of the Approved
Transaction; provided, however, that any Options, SARs or, if applicable,
Stock Units not theretofore exercised shall terminate upon consummation
of the Approved Transaction. Notwithstanding the foregoing, unless
otherwise provided in the applicable Agreement, the Board (or, if the
Board expressly provides, the Committee) may, in its discretion,
determine that any or all outstanding Awards of any or all types granted
pursuant to the Plan will not vest or become exercisable on an
accelerated basis, and/or that any or all outstanding Awards of any or
all types will not terminate if not exercised prior to consummation of
the Approved Transaction, if the Board or the surviving or acquiring
corporation, as the case may be, shall have taken, or made effective
provision for the taking of, such action as in the opinion of the Board
(or, if the Board expressly provides, the Committee) is equitable and
appropriate to substitute a new Award for such Award or to assume such
Award and in order to make such new or assumed Award, as nearly as may be
practicable, equivalent to the old Award (without giving effect to any
acceleration of the vesting or

12

 

exercisability thereof), taking into account, to the extent
applicable, the kind and amount of securities, cash or other assets into
or for which the Class A Ordinary Shares may be changed, converted or
exchanged in connection with the Approved Transaction.

10.2 Termination of Employment.

     (a) General. If a Holder’s employment shall terminate (or in the
case of an Independent Director, such director shall cease to serve as a
director) prior to the complete exercise of an Option or SAR (or deemed
exercise thereof, as provided in Section 7.2) or during the Restriction
Period with respect to any Restricted Shares or prior to the vesting or
complete exercise of any Stock Units, then such Option, SAR, or Stock
Unit shall thereafter be exercisable, and the Holder’s rights to any
unvested Restricted Shares, Retained Distributions, unpaid Dividend
Equivalents and cash amounts and any such unvested Stock Units shall
thereafter vest, in each case solely to the extent provided in the
applicable Agreement; provided, however, that, unless otherwise
determined by the Committee and provided in the applicable Agreement, (i)
no Option or SAR may be exercised after the scheduled expiration date
thereof; (ii) if the Holder’s employment terminates (or in the case of an
Independent Director, such director ceases to serve as a director) by
reason of death or Disability, the Option or SAR shall remain exercisable
for a period of at least one year following such termination (but not
later than the scheduled expiration of such Option or SAR); and (iii) any
termination by the Company for cause will be treated in accordance with
the provisions of Section 10.2(b).

	 	(b)	 	Termination for Cause.
	 
	 	(i)	 	Termination of Employee by Company for Cause. If
a Holder’s employment with the Company or a Subsidiary shall
be terminated by the Company or such Subsidiary during the
Restriction Period with respect to any Restricted Shares, or
prior to the exercise of any Option or SAR, or prior to the
vesting or complete exercise of any Stock Unit, for cause (for
these purposes, cause shall have the meaning ascribed thereto
in any employment agreement to which such Holder is a party
or, in the absence thereof, shall include but not be limited
to, insubordination, dishonesty, incompetence, moral
turpitude, other misconduct of any kind and the refusal to
perform his or her duties and responsibilities for any reason
other than illness or incapacity; provided, however, that,
unless the Agreement (or such an employment agreement)
otherwise provides, if such termination occurs within twelve
(12) months after an Approved Transaction, a Control Purchase
or a Board Change, termination for cause shall mean only the
commission of a fraud, misappropriation, embezzlement or other
material act of dishonesty or bad faith, as determined by the
Board in good faith and confirmed by the final judgment of any
civil or criminal court of proper jurisdiction, which
confirmation may be obtained after the effective date of any
such termination), then, unless otherwise determined by the
Committee and provided in the applicable Agreement, (x) all
Options and SARs, notwithstanding any prior vesting, and all
unvested or unexercised Stock Units held by such Holder shall
immediately terminate and (y) such Holder’s rights to all
Restricted Shares, Retained Distributions, any unpaid Dividend
Equivalents and any cash Awards shall be forfeited
immediately. If a Holder whose employment is terminated with
the Company or any Subsidiary for cause is also a director of
the Company or Subsidiary, then all Awards held by such Holder
shall terminate and all unvested Awards shall be forfeited as
provided in this Section 10.2(b)(i) regardless of whether such
Award was granted to such Holder for service as an employee or
as a director of the Company or any Subsidiary.
	 
	 	(ii)	 	Removal of Director by Company for Cause. If a
Holder who is an Independent Director is removed as a director
during the Restriction Period with respect to any Restricted
Shares, or prior to the exercise of any Option or SAR, or
prior to the vesting or complete exercise of any Stock Unit,
for cause (for these purposes, cause shall mean, in addition
to any meaning ascribed thereto in the Company’s Articles of
Association (if any), any of

13

 

	 	 	 	the following: (x) engagement by such Holder in illegal or
other wrongful conduct substantially detrimental to the
business or reputation of the Company or any of its
Affiliates, (y) such Holder being charged with or convicted
of a felony, or (z) engagement by such Holder in any fraud,
embezzlement, misappropriation, material act of dishonesty or
similar conduct against the Company or any of its
Affiliates), then, unless otherwise determined by the
Committee and provided in the applicable Agreement, (A) all
Options and SARs, notwithstanding any prior vesting, and all
unvested or unexercised Stock Units held by such Holder shall
immediately terminate and (B) such Holder’s rights to all
Restricted Shares, Retained Distributions, any unpaid
Dividend Equivalents and any cash Awards shall be forfeited
immediately.

     (c) Miscellaneous. The Committee may determine whether any given
leave of absence constitutes a termination of employment; provided,
however, that for purposes of the Plan (i) a leave of absence, duly
authorized in writing by the Company for military service or sickness, or
for any other purpose approved by the Company if the period of such leave
does not exceed ninety (90) days, and (ii) a leave of absence in excess
of ninety (90) days, duly authorized in writing by the Company, if the
employee’s right to reemployment following such leave is guaranteed
either by statute or contract, shall not be deemed a termination of
employment. Unless otherwise determined by the Committee and provided in
the applicable Agreement, Awards made under the Plan shall not be
affected by any change of employment so long as the Holder continues to
be an employee of the Company or any Subsidiary.

     10.3 No Right to Employment or Directorship. Nothing contained in the
Plan or in any Award, and no action of the Company, the Board or the Committee
with respect thereto, shall (a) confer or be construed to confer on any Holder
any right to continue in the employ of the Company or any of its Subsidiaries
or interfere in any way with the right of the Company or a Subsidiary to
terminate the employment of the Holder at any time, with or without cause;
subject, however, to the provisions of any employment agreement between the
Holder and the Company or any Subsidiary or (b) impose upon the Company, the
Board or any directors of the Company any obligation to nominate any Holder for
election as a director, or interfere in any way with the right of the
stockholders of the Company to remove any person as a director of the Company
at any time, with or without cause.

     10.4 Nonalienation of Benefits. No right or benefit under the Plan shall
be subject to anticipation, alienation, sale, assignment, hypothecation,
pledge, exchange, transfer, encumbrance or charge, and any attempt to
anticipate, alienate, sell, assign, hypothecate, pledge, exchange, transfer,
encumber or charge the same shall be void. No right or benefit hereunder shall
in any manner be liable for or subject to the debts, contracts, liabilities or
torts of the person entitled to such benefits.

     10.5 Written Agreement. Each grant of an Option under the Plan shall be
evidenced by a stock option agreement which shall designate the Options granted
thereunder as Incentive Stock Options or Nonqualified Stock Options; each SAR
shall be evidenced by a stock appreciation rights agreement; each Award of
Restricted Shares shall be evidenced by a restricted shares agreement; each
Award of Stock Units shall be evidenced by a stock units agreement, each in
such form and containing such terms and provisions not inconsistent with the
provisions of the Plan as the Board (or, if the Board expressly provides, the
Committee) from time to time shall approve; provided, however, that if more
than one type of Award is made to the same Holder, such Awards may be evidenced
by a single agreement with such Holder. Each grantee of an Option, SAR,
Restricted Shares or Stock Units shall be notified promptly of such grant and a
written Agreement shall be promptly executed and delivered by the Company and
the grantee, provided that, in the discretion of the Committee, such grant of
Options, SARs, Restricted Shares or Stock Units shall terminate if such written
Agreement is not signed by such grantee (or his attorney) and delivered to the
Company within sixty (60) days after the date the Committee approved such
grant. Any such written Agreement may contain (but shall not be required to
contain) such provisions as the Committee deems appropriate (i) to insure that
the penalty provisions of Section 4999 of the Code will not apply to any stock
or cash received by the Holder from the Company or (ii) if the Board expressly
so authorizes, to provide cash payments to the Holder to mitigate the impact of
such penalty provisions upon the Holder. Any such Agreement may be
supplemented or amended from time to time as approved by the Committee as
contemplated by Section 10.8(b).

14

 

     10.6 Designation of Beneficiaries. Each person who shall be granted an
Award under the Plan may designate a beneficiary or beneficiaries and may
change such designation from time to time by filing a written designation of
beneficiary or beneficiaries with the Committee on a form to be prescribed by
it, provided that no such designation shall be effective unless so filed prior
to the death of such person.

     10.7 Right of First Refusal. The Agreements may contain such provisions
as the Committee shall determine to the effect that if a Holder elects to sell
all or any Class A Ordinary Shares that such Holder acquired upon the exercise
of an Option or SAR or upon the vesting of Restricted Shares or Stock Units
awarded under the Plan, then such Holder shall not sell such shares unless such
Holder shall have first offered in writing to sell such shares to the Company
at Fair Market Value on a date specified in such offer (which date shall be at
least three business days and not more than ten business days following the
date of such offer). In any such event, certificates representing shares
issued upon exercise of Options or SARs and the vesting of Restricted Shares or
Stock Units shall bear a restrictive legend to the effect that transferability
of such shares are subject to the restrictions contained in the Plan and the
applicable Agreement and the Company may cause the transfer agent for the Class
A Ordinary Shares to place a stop transfer order with respect to such shares.

     10.8 Termination and Amendment.

     (a) General. Unless the Plan shall theretofore have been terminated
as hereinafter provided, no Awards may be made under the Plan on or after
the tenth anniversary of the Effective Date. The Board may at any time
prior to the tenth anniversary of the Effective Date terminate the Plan,
and may, from time to time, suspend or discontinue the Plan or modify or
amend the Plan in such respects as it shall deem advisable; except that
no such modification or amendment shall be effective prior to approval by
the Company’s stockholders to the extent such approval is then required
by any applicable legal requirements.

     (b) Modification. No termination, modification or amendment of the
Plan may, without the consent of the person to whom any Award shall
theretofore have been granted, adversely affect the rights of such person
with respect to such Award. No modification, extension, renewal or other
change in any Award granted under the Plan shall be made after the grant
of such Award, unless the same is consistent with the provisions of the
Plan. With the consent of the Holder and subject to the terms and
conditions of the Plan (including Section 10.8(a), the last sentence of
Section 3.2, and any terms and conditions imposed by the Board in
connection with any Board action pursuant to Section 3.2), the Committee
may amend outstanding Agreements with any Holder, including, without
limitation, any amendment that would (i) accelerate the time or times at
which the Award may be exercised and/or (ii) extend the scheduled
expiration date of the Award. Without limiting the generality of the
foregoing, the Committee may, but solely with the Holder’s consent unless
otherwise provided in the Agreement, agree to cancel any Award under the
Plan and issue a new Award in substitution therefor, provided that the
Award so substituted shall satisfy all of the requirements of the Plan as
of the date such new Award is made. Nothing contained in the foregoing
provisions of this Section 10.8(b) shall be construed to prevent the
Committee from providing in any Agreement that the rights of the Holder
with respect to the Award evidenced thereby shall be subject to such
rules and regulations as the Committee (or the Board) may, subject to the
express provisions of the Plan, adopt from time to time, or impair the
enforceability of any such provision.

     10.9 Government and Other Regulations. The obligation of the Company with
respect to Awards shall be subject to all applicable laws, rules and
regulations and such approvals by any governmental agencies as may be required,
including, without limitation, the effectiveness of any registration statement
required under the Securities Act of 1933, and the rules and regulations of any
securities exchange or association on which the Class A Ordinary Shares may be
listed or quoted. For so long as any of the Class A Ordinary Shares are
registered under the Exchange Act, the Company shall use its reasonable efforts
to comply with any legal requirements (i) to maintain a registration statement
in effect under the Securities Act of 1933 with respect to all Class A Ordinary
Shares that may be issued to Holders under the Plan, and (ii) to file in a
timely manner all reports required to be filed by it under the Exchange Act.

     10.10 Withholding. The Company’s obligation to deliver Class A Ordinary
Shares or pay cash in respect of any Award under the Plan shall be subject to
applicable federal, state and local tax withholding requirements.

15

 

Federal, state and local withholding tax due at the time of an Award, upon
the exercise of any Option or SAR or upon the vesting of, or expiration of
restrictions with respect to, Restricted Shares or Stock Units, as appropriate,
may, in the discretion of the Board (or, if the Board expressly provides, the
Committee), be paid in Class A Ordinary Shares already owned by the Holder or
through the withholding of shares otherwise issuable to such Holder, upon such
terms and conditions (including, without limitation, the conditions referenced
in Section 6.5) as the Board (or the Committee) shall determine. If the Holder
shall fail to pay, or make arrangements satisfactory to the Board and the
Committee for the payment to the Company of all such federal, state and local
taxes required to be withheld by the Company, then the Company shall, to the
extent permitted by law, have the right to deduct from any payment of any kind
otherwise due to such Holder an amount equal to any federal, state or local
taxes of any kind required to be withheld by the Company with respect to such
Award, as determined by the Committee on such basis as the Committee shall deem
appropriate.

     10.11 Separability. It is the intent of the Company that Awards under
this Plan comply with certain exemptive provisions of Rule 16b-3 with respect
to persons subject to Section 16 of the Exchange Act and with certain exemptive
provisions of Section 162(m) of the Code with respect to persons covered
thereby, unless otherwise provided herein or in an Award Agreement, that any
ambiguities or inconsistencies in the construction of this Plan be interpreted
to give effect to such intentions, and that if any provision of this Plan is
found not to be consistent with the availability of either of such exemptive
provisions or with any other requirement of law, such provision shall be null
and void to the extent required to comply with such exemptive provisions and/or
applicable law.

     10.12 Non-Exclusivity of the Plan. Neither the adoption of the Plan by
the Board nor the submission of the Plan to the stockholders of the Company for
approval shall be construed as creating any limitations on the power of the
Board to adopt such other incentive arrangements as it may deem desirable,
including, without limitation, the granting of stock options and the awarding
of stock and cash otherwise than under the Plan, and such arrangements may be
either generally applicable or applicable only in specific cases.

     10.13 Exclusion from Pension and Profit-Sharing Computation. By
acceptance of an Award, unless otherwise provided in the applicable Agreement,
each Holder shall be deemed to have agreed that such Award is special incentive
compensation that will not be taken into account, in any manner, as salary,
compensation or bonus in determining the amount of any payment under any
pension, retirement or other employee benefit plan, program or policy of the
Company or any Subsidiary. In addition, each beneficiary of a deceased Holder
shall be deemed to have agreed that such Award will not affect the amount of
any life insurance coverage, if any, provided by the Company on the life of the
Holder that is payable to such beneficiary under any life insurance plan
covering employees of the Company or any Subsidiary.

     10.14 Unfunded Plan. Neither the Company nor any Subsidiary shall be
required to segregate any cash or any Class A Ordinary Shares which may at any
time be represented by Awards and the Plan shall constitute an “unfunded” plan
of the Company. Except as provided in Article VIII with respect to Awards of
Restricted Shares and except as expressly set forth in an Agreement, no person
shall have voting or other rights with respect to the Class A Ordinary Shares
covered by an Award prior to the delivery of such shares. Neither the Company
nor any Subsidiary shall, by any provisions of the Plan, be deemed to be a
trustee of any Class A Ordinary Shares or any other property, and the
liabilities of the Company and any Subsidiary to any person pursuant to the
Plan shall be those of a debtor pursuant to such contract obligations as are
created by or pursuant to the Plan, and the rights of any employee, former
employee or beneficiary under the Plan shall be limited to those of a general
creditor of the Company or the applicable Subsidiary, as the case may be. In
its sole discretion, the Board may authorize the creation of trusts or other
arrangements to meet the obligations of the Company under the Plan, provided,
however, that the existence of such trusts or other arrangements is consistent
with the unfunded status of the Plan.

     10.15 Governing Law. The Plan shall be governed by, and construed in
accordance with, the laws of the State of Delaware.

     10.16 Accounts. The delivery of any Class A Ordinary Shares and the
payment of any amount in respect of an Award shall be for the account of the
Company or the applicable Subsidiary, as the case may be, and any such

16

 

delivery or payment shall not be made until the recipient shall have paid
or made satisfactory arrangements for the payment of any applicable withholding
taxes as provided in Section 10.10.

     10.17 Legends. In addition to any legend contemplated by Section 10.7,
each certificate evidencing Class A Ordinary Shares subject to an Award shall
bear such legends as the Committee deems necessary or appropriate to reflect or
refer to any terms, conditions or restrictions of the Award applicable to such
shares, including, without limitation, any to the effect that the shares
represented thereby may not be disposed of unless the Company has received an
opinion of counsel, acceptable to the Company, that such disposition will not
violate any federal or state securities laws.

     10.18 Company’s Rights. The grant of Awards pursuant to the Plan shall
not affect in any way the right or power of the Company to make
reclassifications, reorganizations or other changes of or to its capital or
business structure or to merge, consolidate, liquidate, sell or otherwise
dispose of all or any part of its business or assets.

17

 

Exhibit B

EMPLOYEE PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

     In consideration of my employment or continued employment by OpenTV, Inc.
and its affiliates and related entities (collectively referred to as the
“Company”), and the compensation now and hereafter paid to me, I hereby agree
as follows:

     1. EMPLOYMENT AT WILL. I agree and understand that nothing in this
Agreement shall confer any right with respect to continuation of employment by
the Company, nor shall it interfere in any way with my right or the Company’s
right to terminate my employment at any time, with or without cause or notice.

     2. DEFINITIONS.

          2.1. Proprietary Information. The term “Proprietary Information” shall
mean any and all trade secrets, confidential and/or proprietary knowledge, data
or information of or concerning the Company. By way of illustration but not
limitation, “Proprietary Information” includes information concerning the
organization, business, corporate structure or finances of the Company such as
(a) trade secrets, inventions, mask works, ideas, processes, formulas, source
and object codes, data, programs, other works of authorship, know-how,
improvements, discoveries, developments, designs and techniques; (b)
information regarding plans for research, development, new products, marketing
and selling, business plans, budgets and unpublished financial statements,
licenses, prices and costs, suppliers and customers; and (c) information
regarding personnel matters such as the skills, performance, compensation and
employment status of other employees of the Company. Notwithstanding the
foregoing, it is understood that, “Proprietary Information” does not include
information that is generally known in the trade or industry, which is not
gained as result of a breach of this Agreement.

          2.2. Third Party Information. The term “Third Party Information” means
confidential or proprietary information that the Company has received and in
the future will receive from third parties. The Company has a duty to maintain
the confidentiality of such information and to use it only for certain limited
purposes.

          2.3. Proprietary Rights. The term “Proprietary Rights” shall mean all
trade secret, patent, copyright (including any renewal or extensions thereof),
mask work and other intellectual property rights throughout the world.

          2.4. Inventions.

          2.4.1. Inventions. “Inventions” shall mean any new or useful art,
discovery, improvement or invention whether or not patentable, and all related
know-how, designs, mask works, trademarks, formulae, processes, manufacturing
techniques, trade secrets, ideas, art work or software, and all patents,
copyrights, trade secrets and other Proprietary Rights therein.

          2.4.2. Employer Inventions. “Employer Inventions” shall mean all
Inventions that are solely or jointly conceived, made, reduced to practice,
fixed in a tangible medium, and that are a) learned by me in the course of any
work performed for the Company, b) developed on the

 

 

Company’s time or with the Company’s equipment, or c) assigned to the
Company or to a third party at the direction of the Company pursuant to the
terms of this Agreement.

          2.4.3. Prior Inventions. “Prior Inventions” shall include all Inventions
that I have a) alone or jointly with others, conceived, developed or reduced to
practice prior to the commencement of my employment with the Company, or b)
caused to be conceived, developed or reduced to practice prior to the
commencement of my employment with the Company, and that I consider to be my
property or the property of third parties and that I wish to have excluded from
the scope of this Agreement. Prior Inventions shall not be affected by this
Agreement. As described below (see Section 4.1), I agree to disclose promptly
in writing to the Company all Inventions that are Prior Inventions.

     3. NONDISCLOSURE; PROHIBITED ACTIONS

          3.1. Nondisclosure of Proprietary Information and Inventions. At all
times during my employment and at all times thereafter, I will hold in
strictest confidence and will not disclose, use, lecture upon or publish any
Proprietary Information of the Company or any Invention (including Employer
Inventions) assigned or assignable to the Company pursuant to this Agreement
except as such disclosure, use or publication may be required in connection
with my work for the Company, or unless an officer of the Company expressly
authorizes such disclosure or use in writing (see Section 3.4 below).

          3.2. Nondisclosure of Third Party Information. In addition, at all times
during my employment and at all times thereafter I will hold Third Party
Information in the strictest confidence and will not disclose to anyone (other
than Company personnel who need to know such information in connection with
their work for the Company), Third Party Information unless expressly
authorized by an officer of the Company in writing (see Section 3.4 below).

          3.3. No Improper Use of Information of Prior Employers and Others. During
my employment by the Company I will not improperly use or disclose any
confidential information or trade secrets, if any, of any former employer or
any other person to whom I have an obligation of confidentiality, and I will
not bring onto the premises of the Company any unpublished documents or any
property belonging to any former employer or any other person to whom I have an
obligation of confidentiality unless consented to in writing by that former
employer or person. I will use in the performance of my duties only
information which is generally known and used by persons with training and
experience comparable to my own, which is common knowledge in the industry or
otherwise legally in the public domain, or which is otherwise provided or
developed by the Company.

          3.4. Written Approval for Disclosure/Use. I understand that only an
authorized officer of the Company may give written approval for disclosure or
use of any Proprietary Information, any Invention (including Employer
Inventions) assigned or assignable to the Company pursuant to this Agreement or
any Third Party Information not expressly permitted by this Agreement. In
addition, I will obtain written approval from an authorized officer of the
Company before publishing or submitting for publication any material (written,
verbal, or otherwise) that relates to my work at Company and/or incorporates or
refers to any such Proprietary Information, Invention (including Employer
Inventions), or Third Party Information.

 

 

     4. ASSIGNMENT OF INVENTIONS.

          4.1. Prior Inventions. Inventions, if any, patented or unpatented, which I
made prior to the commencement of my employment with the Company are excluded
from the scope of this Agreement. To preclude any possible uncertainty, I have
set forth in Exhibit A (Prior Inventions) attached hereto, a complete list of
all Prior Inventions. If disclosure of any such Prior Invention would cause me
to violate any prior confidentiality agreement, I understand that I am not to
list such Prior Inventions in Exhibit A but am only to disclose a cursory name
for each such invention, a listing of the party(ies) to whom it belongs and the
fact that full disclosure as to such inventions has not been made for that
reason. A space is provided on Exhibit A for such purpose. If no such
disclosure is attached, I represent that there are no Prior Inventions. If, in
the course of my employment with the Company, I incorporate a Prior Invention
into a Company product, process or machine, the Company is hereby granted and
shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide
license (with rights to sublicense through multiple tiers of sublicenses) to
make, have made, modify, use and sell such Prior Invention. Notwithstanding
the foregoing, I agree that I will not incorporate, or permit to be
incorporated, Prior Inventions in any Invention (including any Employer
Invention) assigned or assignable to the Company pursuant to this Agreement
without the Company’s prior written consent.

          4.2. Assignment of Inventions. Subject to Sections 4.3, and 4.5, I hereby
assign and agree to assign in the future (when any such Inventions (including
Employer Inventions) or Proprietary Rights are first reduced to practice or
first fixed in a tangible medium, as applicable) to the Company all my right,
title and interest in and to any and all Inventions (including Employer
Inventions) assigned or assignable to the Company pursuant to this Agreement
(and all Proprietary Rights with respect thereto) whether or not patentable or
registrable under copyright or similar statutes, made or conceived or reduced
to practice or learned by me, either alone or jointly with others, during the
period of my employment with the Company, except as provided in Section 4.7.

          4.3. Obligation to Keep Company Informed. During the period of my
employment and for six (6) months after termination of my employment with the
Company, I will promptly disclose to the Company fully and in writing all
Inventions that relate to or arise out of work that I performed for the
Company. In addition, I will promptly disclose to the Company all patent
applications related to inventions or developments that relate to or arise out
of work that I performed for the Company filed by me or on my behalf within a
year after termination of employment.

          4.4. Government or Third Party. I also agree to assign all my right,
title and interest in and to any particular Invention (including Employer
Inventions) assigned or assignable to the Company pursuant to this Agreement to
a third party, including without limitation the United States, as directed by
the Company.

          4.5. Works for Hire. I acknowledge that all original works of authorship
which are made by me (solely or jointly with others) within the scope of my
employment and which are protectable by copyright are “works made for hire”,
pursuant to United States Copyright Act (17 U.S.C., Section 101). Further, I
acknowledge that such “works for hire” are and will be prepared wholly within
the scope of my employment and such work has been and will be specially

 

 

ordered or commissioned by the Company. As between myself and the
Company, the Company shall exclusively and perpetually own all now known or
hereafter existing rights of every kind throughout the universe in and to such
results and proceeds. The Company shall have the right, but not the
obligation, to use, adapt, change, or revise any work or product of myself or
any part thereof and to combine the same with other material or works and I
expressly waive any so-called “moral rights” of authors in the work.
Furthermore, to the extent I may have or acquire any right, title, or interest
in the result of any work which I perform or work product which I create during
my employment with the Company, I hereby assign to the Company any and all such
right, title, and interest. The Company shall also have the exclusive right,
throughout the universe and in perpetuity, to use and reproduce and license
others to use and reproduce, my name and likeness in connection with my
services hereunder. I expressly agree to take any and all actions necessary to
establish and preserve the Company’s rights under this Section.

          4.6. Enforcement of Proprietary Rights. I will assist the Company in
every proper way to obtain, and from time to time enforce, United States and
foreign Proprietary Rights relating to any and all Inventions (including
Employer Inventions) assigned or assignable to the Company pursuant to this
Agreement in any and all countries. To that end, I will execute, verify and
deliver such documents and perform such other acts (including appearances as a
witness) as the Company may reasonably request for use in applying for,
obtaining, perfecting, evidencing, sustaining and enforcing such Proprietary
Rights and the assignment thereof. In addition, I will execute, verify and
deliver assignments of such Proprietary Rights to the Company or its designee.
My obligation to assist the Company with respect to Proprietary Rights relating
to such Inventions (including Employer Inventions) in any and all countries
shall continue beyond the termination of my employment, but the Company shall
compensate me at a reasonable rate after my termination for the time actually
spent by me at the Company’s request on such assistance.

     In the event the Company is unable for any reason, after reasonable
effort, to secure my signature on any document needed in connection with the
actions specified in the preceding paragraphs, I hereby irrevocably designate
and appoint the Company and its duly authorized officers and agents as my agent
and attorney in fact, which appointment is coupled with an interest, to act for
and in my behalf to execute, verify and file any such documents and to do all
other lawfully permitted acts to further the purposes of the preceding
paragraph with the same legal force and effect as if executed by me. I hereby
waive and quitclaim to the Company any and all claims, of any nature
whatsoever, which I now or may hereafter have for infringement of any
Proprietary Rights assigned hereunder to the Company.

          4.7. Exception to Assignments. I understand that the provisions of this
Agreement requiring assignment of Inventions (including Employer Inventions) to
the Company do not apply to any Invention that qualifies fully under the
provisions of California Labor Code Section 2870 (attached hereto as Exhibit B)
or similar local law. I will advise the Company promptly in writing of any
Inventions that I believe meet the criteria in this Section and not otherwise
disclosed on Exhibit A.

     5. RECORDS. I agree to keep and maintain adequate and current records (in
the form of notes, sketches, drawings and in any other form that may be
required by the Company) of all Proprietary Information developed by me and all
Inventions (including Employer Inventions)

 

 

made by me during the period of my employment at the Company, which
records shall be available to and remain the sole property of the Company at
all times.

     6. CONFLICTING EMPLOYMENT.

          6.1. During Employment with the Company. I agree that during the period
of my employment by the Company I will not, without the Company’s express
written consent, engage in any employment or business activity which is
competitive with, or would otherwise conflict with, my employment by the
Company.

          6.2. After Employment with the Company Ends. I acknowledge and agree that
solicitation of employees, clients or customers of the Company on behalf of
another employer whose business competes with the Company where such other
employer is located either a) in the nine-county San Francisco Bay Area, or b)
if I am employed outside the San Francisco Bay Area then within 50 miles of my
place of employment with the Company, would require me to use Proprietary
Information gained through my employment with the Company. I acknowledge and
agree that the covenants in this section are essential to adequately protect
the Proprietary Information of the Company. I hereby agree that I shall not,
in any manner (other than as authorized in writing by the Company, which
authorization may be granted or withheld in the Company’s sole discretion),
during the twelve (12) months after my employment with the Company ends,
directly or indirectly, on my own behalf or in the service of or on behalf of
any other individual or entity, either as a proprietor, employee, agent,
independent contractor, consultant, director, officer, member, partner or
stockholder:

          6.2.1. divert, solicit, attempt to solicit or accept business from any (a)
current or former client of the Company or (b) prospective client of the
Company that was actively sought as a client of the Company while I was an
employee of the Company, for the purposes of providing products or services
that are competitive with the Company’s;

          6.2.2. solicit for employment, directly or indirectly, any person who is
or was employed by the Company while I was an employee of the Company; or

          6.2.3. interfere with, disrupt or attempt to disrupt the past, present or
prospective relationship, contractual or otherwise, between the Company and any
third party with whom I had material contact while I was an employee of the
Company. The term “prospective relationship” is defined as any relationship in
which I had actually sought an individual or entity as a prospective client,
supplier, consultant or vendor to the Company.

     7. NO CONFLICTING OBLIGATION. I represent that my performance of all the
terms of this Agreement and as an employee of the Company does not and will not
breach any agreement to keep in confidence information acquired by me in
confidence or in trust prior to my employment by the Company. I have not
entered into, and I agree I will not enter into, any agreement either written
or oral in conflict herewith.

     8. RETURN OF COMPANY DOCUMENTS. When I leave the employ of the Company, I
will deliver to the Company any and all drawings, notes, memoranda,
specifications, devices, formulas, and documents, together with all copies
thereof, and any other material containing or disclosing any Inventions
(including Employer Inventions) assigned or assignable to the

 

 

Company pursuant to this Agreement, Third Party Information or Proprietary
Information of the Company. I further agree that any property situated on the
Company’s premises and owned by the Company, including disks and other storage
media, filing cabinets or other work areas, is subject to inspection by Company
personnel at any time with or without notice. Prior to leaving, I will
cooperate with the Company in completing and signing the form attached as
Exhibit C.

     9. NOTIFICATION TO NEW EMPLOYER. In the event that I leave the employ of
the Company, I hereby consent to the notification to my new employer of my
rights and obligations under this Agreement.

     10. GENERAL PROVISIONS.

          10.1. Legal and Equitable Remedies. Because my services are personal and
unique and because I may have access to and become acquainted with the
Proprietary Information of the Company, the Company shall have the right to
enforce this Agreement and any of its provisions by injunction, specific
performance or other equitable relief, without bond and without prejudice to
any other rights and remedies that the Company may have for a breach of this
Agreement.

          10.2. Governing Law; Consent to Personal Jurisdiction. This Agreement
will be governed by and construed according to the laws of the State of
California. I hereby expressly consent to the personal jurisdiction of the
state and federal courts located in San Francisco County, California for any
lawsuit filed there against me by Company arising from or related to this
Agreement.

          10.3. Severability. In case any one or more of the provisions contained
in this Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect the other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein. To the extent permitted by law, if any one or
more of the provisions contained in this Agreement shall for any reason be held
to be excessively broad as to duration, geographical scope, activity or
subject, it shall be construed by limiting and reducing it, so as to be
enforceable to the extent compatible with the applicable law as it shall then
appear.

          10.4. Successors and Assigns. This Agreement cannot be assigned by me and
shall be binding upon my heirs, executors, administrators and other legal
representatives. The Company shall have the right to assign this Agreement to
its successors and assigns, and all covenants hereunder shall inure to the
benefit of and be enforceable by said successors and assigns.

          10.5. Survival. The provisions of this Agreement shall survive the
termination of my employment and the assignment of this Agreement by the
Company to any successor in interest or other assignee.

          10.6. Waiver. No waiver by the Company of any breach of this Agreement
shall be a waiver of any preceding or succeeding breach. No waiver by the
Company of any right under this Agreement shall be construed as a waiver of any
other right. The Company shall

 

 

not be required to give notice to enforce strict adherence to all terms of
this Agreement.

          10.7. Notices. Any notices required or permitted hereunder shall be given
to the appropriate party at the address specified below or at such other
address as the party shall specify in writing. Such notice shall be deemed
given upon personal delivery to the appropriate address or if sent by certified
or registered mail, three (3) days after the date of mailing.

          10.8. Entire Agreement. Except as expressly provided herein, the
obligations set forth in this Agreement shall apply to any time during which I
was previously employed, or am in the future employed, by the Company as a
consultant if no other agreement governs nondisclosure and assignment of
inventions during such period. This Agreement is the final, complete and
exclusive agreement of the parties with respect to the subject matter hereof
and supersedes and merges all prior discussions between us. No modification of
or amendment to this Agreement, nor any waiver of any rights under this
Agreement, will be effective unless in writing and signed by the party to be
charged. Any subsequent change or changes in my duties, salary or compensation
will not affect the validity or scope of this Agreement.

     This Agreement shall be effective as of the first day of my employment
with the Company, namely:                                       ,           .

     I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS. I HAVE
COMPLETELY FILLED OUT EXHIBIT A TO THIS AGREEMENT.

Dated:                                       

(Signature)

(Printed Name)

 

 

EXHIBIT A

TO:      OpenTV, Inc.

FROM:

DATE:

SUBJECT:      Previous Inventions

     1. Except as listed in Section 2 below, the following is a complete list
of all inventions or improvements relevant to the subject matter of my
employment by OpenTV, Inc. (the “Company”) that have been made or conceived or
first reduced to practice by me alone or jointly with others prior to my
engagement by the Company:

          o No inventions or improvements.

          o See below:

o Additional sheet attached.

     2. Due to a prior confidentiality agreement, I cannot complete the
disclosure under Section 1 above with respect to inventions or improvements
generally listed below, the proprietary rights and duty of confidentiality with
respect to which I owe to the following party(ies):

                    Invention or Improvement                                         Party(ies)      
                                   Relationship

     1.

     2.

     3.

o Additional sheets attached.

 

 

EXHIBIT B

CALIFORNIA LABOR CODE SECTION 2870

Employment Agreements; Assignment Of Rights

     . . .

     (a) Any provisions in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights in an
invention to his or her employer shall not apply to an invention that the
employee developed entirely on his or her own time without using the employer’s
equipment, supplies, facilities, or trade secret information except for those
inventions that either:

          (1) Relate at the time of conception or reduction to practice of the
invention to the employer’s business, or actual or demonstrably anticipated
research or development of the employer.

          (2) Result from any work performed by the employee for the employer.

               (b) To the extent a provision in an employment agreement purports to
require an employee to assign an invention otherwise excluded from being
required to be assigned under subdivision (a), the provision is against the
public policy of this state and is unenforceable.

     . . .

 

 

EXHIBIT C

TERMINATION CERTIFICATION

     My signature certifies that I do not have in my possession, nor have I
failed to return, any devices, records, data, notes, reports, proposals, lists,
correspondence, materials, equipment, other documents or property, or
reproductions of any such items belonging to OpenTV, Inc. or any of its
affiliates and related entities.

     My signature further certifies that I will preserve as confidential all
trade secrets, confidential knowledge, or other proprietary information
relating to products, processes, know-how, designs, formulas, developmental or
experimental work, computer programs, data bases, other original works of
authorship, customer lists, business plans, financial information or other
subject matter pertaining to any business of OpenTV, Inc. or any of its
employees, clients, consultants or licensees.

     My signature I further certifies that I have complied with all the terms
of OpenTV, Inc.’s Employee Proprietary Information Agreement signed by me,
including the reporting of any inventions and original works of authorship (as
defined in the Agreement), conceived or made by me (alone or jointly with
others) and covered by that Agreement.

     Date:                                       

     Employee Signature:                                                          

     Employee Name:<PAGE>

                                                                     Exhibit 4.1

                       AMERICAN INTERNATIONAL GROUP, INC.

                                       TO

                              THE BANK OF NEW YORK
                                           Trustee

                                 --------------

                                    INDENTURE

                           Dated as of ____________

                                 --------------

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                              Page
                                                                                              ----
<S>                                                                                           <C>
PARTIES.....................................................................................    1

RECITALS OF THE COMPANY.....................................................................    1

                                        ARTICLE ONE

                  DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 101.    Definitions.................................................................    1
Section 102.    Compliance Certificates and Opinions........................................    6
Section 103.    Form of Documents Delivered to Trustee......................................    7
Section 104.    Acts of Holders; Record Dates...............................................    7
Section 105.    Notices, Etc., to Trustee and Company.......................................    9
Section 106.    Notice to Holders; Waiver...................................................    9
Section 107.    Conflict with Trust Indenture Act...........................................   10
Section 108.    Effect of Headings and Table of Contents....................................   10
Section 109.    Successors and Assigns......................................................   10
Section 110.    Separability Clause.........................................................   10
Section 111.    Benefits of Indenture.......................................................   10
Section 112.    Governing Law...............................................................   10
Section 113.    Legal Holidays..............................................................   10

                                        ARTICLE TWO

                                      SECURITY FORMS

Section 201.    Forms Generally.............................................................   11
Section 202.    Form of Face of Security....................................................   11
Section 203.    Form of Reverse of Security.................................................   13
Section 204.    Form of Legend for Global Securities........................................   16
Section 205.    Form of Trustee's Certificate of Authentication.............................   16

                                       ARTICLE THREE

                                      THE SECURITIES

Section 301.    Amount Unlimited; Issuable in Series........................................   17
Section 302.    Denominations...............................................................   19
Section 303.    Execution, Authentication, Delivery and Dating..............................   19
Section 304.    Temporary Securities........................................................   21
Section 305.    Registration, Registration of Transfer and Exchange.........................   21
Section 306.    Mutilated, Destroyed, Lost and Stolen Securities............................   23
Section 307.    Payment of Interest; Interest Rights Preserved..............................   23
Section 308.    Persons Deemed Owners.......................................................   25
Section 309.    Cancellation................................................................   25
Section 310.    Computation of Interest.....................................................   25
</TABLE>

----------------
NOTE: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.

<PAGE>

<TABLE>
<CAPTION>
                                                                                              Page
                                                                                              ----
<S>                                                                                           <C>
Section 311.    CUSIP Numbers...............................................................   25
Section 312.    Original Issue Discount.....................................................   25

                                       ARTICLE FOUR

                                SATISFACTION AND DISCHARGE

Section 401.    Satisfaction and Discharge of Indenture.....................................   26
Section 402.    Application of Trust Money..................................................   27

                                       ARTICLE FIVE

                                         REMEDIES

Section 501.    Events of Default...........................................................   27
Section 502.    Acceleration of Maturity; Rescission and Annulment..........................   28
Section 503.    Collection of Indebtedness and Suits for Enforcement by Trustee.............   29
Section 504.    Trustee May File Proofs of Claim............................................   29
Section 505.    Trustee May Enforce Claims Without Possession of Securities.................   30
Section 506.    Application of Money Collected..............................................   30
Section 507.    Limitation on Suits.........................................................   30
Section 508.    Unconditional Right of Holders to Receive Principal, Premium and Interest...   31
Section 509.    Restoration of Rights and Remedies..........................................   31
Section 510.    Rights and Remedies Cumulative..............................................   31
Section 511.    Delay or Omission Not Waiver................................................   32
Section 512.    Control by Holders..........................................................   32
Section 513.    Waiver of Past Defaults.....................................................   32
Section 514.    Undertaking for Costs.......................................................   32
Section 515.    Waiver of Usury, Stay or Extension Laws.....................................   33

                                        ARTICLE SIX

                                        THE TRUSTEE

Section 601.    Certain Duties and Responsibilities.........................................   33
Section 602.    Notice of Defaults..........................................................   33
Section 603.    Certain Rights of Trustee...................................................   33
Section 604.    Not Responsible for Recitals or Issuance of Securities......................   34
Section 605.    May Hold Securities.........................................................   35
Section 606.    Money Held in Trust.........................................................   35
Section 607.    Compensation and Reimbursement..............................................   35
Section 608.    Conflicting Interests.......................................................   35
Section 609.    Corporate Trustee Required; Eligibility.....................................   36
Section 610.    Resignation and Removal; Appointment of Successor...........................   36
Section 611.    Acceptance of Appointment by Successor......................................   37
Section 612.    Merger, Conversion, Consolidation or Succession to Business.................   38
Section 613.    Preferential Collection of Claims Against Company...........................   39
</TABLE>

                                      -ii-

<PAGE>

<TABLE>
<CAPTION>
                                                                                              Page
                                                                                              ----
<S>                                                                                           <C>
                                       ARTICLE SEVEN

                     HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

Section 701.    Company to Furnish Trustee Names and Addresses of Holders...................   39
Section 702.    Preservation of Information; Communications to Holders......................   39
Section 703.    Reports by Trustee..........................................................   40
Section 704.    Reports by Company..........................................................   40

                                       ARTICLE EIGHT

                   CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

Section 801.    Company May Consolidate, Etc., Only on Certain Terms........................   40
Section 802.    Successor Substituted.......................................................   41

                                       ARTICLE NINE

                                  SUPPLEMENTAL INDENTURES

Section 901.    Supplemental Indentures Without Consent of Holders..........................   41
Section 902.    Supplemental Indentures With Consent of Holders.............................   42
Section 903.    Execution of Supplemental Indentures........................................   43
Section 904.    Effect of Supplemental Indentures...........................................   43
Section 905.    Conformity with Trust Indenture Act.........................................   43
Section 906.    Reference in Securities to Supplemental Indentures..........................   44

                                        ARTICLE TEN

                                         COVENANTS

Section 1001.   Payment of Principal, Premium and Interest..................................   44
Section 1002.   Maintenance of Office or Agency.............................................   44
Section 1003.   Money for Securities Payments to Be Held in Trust...........................   44
Section 1004.   Statement by Officers as to Default.........................................   45
Section 1005.   Existence...................................................................   46
Section 1006.   Waiver of Certain Covenants.................................................   46

                                      ARTICLE ELEVEN

                                 REDEMPTION OF SECURITIES

Section 1101.   Applicability of Article....................................................   46
Section 1102.   Election to Redeem; Notice to Trustee.......................................   46
Section 1103.   Selection by Trustee of Securities to Be Redeemed...........................   46
Section 1104.   Notice of Redemption........................................................   47
Section 1105.   Deposit of Redemption Price.................................................   48
Section 1106.   Securities Payable on Redemption Date.......................................   48
Section 1107.   Securities Redeemed in Part.................................................   48
</TABLE>

                                     -iii-

<PAGE>

<TABLE>
<CAPTION>
                                                                                              Page
                                                                                              ----
<S>                                                                                           <C>
                                      ARTICLE TWELVE

                                       SINKING FUNDS

Section 1201.   Applicability of Article....................................................   49
Section 1202.   Satisfaction of Sinking Fund Payments with Securities.......................   49
Section 1203.   Redemption of Securities for Sinking Fund...................................   49

                                     ARTICLE THIRTEEN

                            DEFEASANCE AND COVENANT DEFEASANCE

Section 1301.   Company's Option to Effect Defeasance or Covenant Defeasance................   50
Section 1302.   Defeasance and Discharge....................................................   50
Section 1303.   Covenant Defeasance.........................................................   50
Section 1304.   Conditions to Defeasance or Covenant Defeasance.............................   51
Section 1305.   Deposited Money and U.S. Government Obligations to Be Held in Trust;
                Miscellaneous Provisions....................................................   53
Section 1306.   Reinstatement...............................................................   53

TESTIMONIUM.................................................................................   54
SIGNATURES..................................................................................   54
ACKNOWLEDGMENTS.............................................................................   55
</TABLE>

                                      -iv-

<PAGE>

    CERTAIN SECTIONS OF THIS INDENTURE RELATING TO SECTIONS 310 THROUGH 318,
                 INCLUSIVE, OF THE TRUST INDENTURE ACT OF 1939:

<TABLE>
<CAPTION>
TRUST INDENTURE
  ACT SECTION                                      INDENTURE SECTION
<S>                                                <C>
Section 310(a)(1).............................     609
(a)(2)........................................     609
(a)(3)........................................     Not Applicable
(a)(4)........................................     Not Applicable
(b)...........................................     608
                                                   610
Section 311(a)................................     613
(b)...........................................     613
Section 312(a)................................     701
                                                   702
(b)...........................................     702
(c)...........................................     702
Section 313(a)................................     703
(b)...........................................     703
(c)...........................................     703
(d)...........................................     703
Section 314(a)................................     704
(a)(4)........................................     101
                                                   1004
(b)...........................................     Not Applicable
(c)(1)........................................     102
(c)(2)........................................     102
(c)(3)........................................     Not Applicable
(d)...........................................     Not Applicable
(e)...........................................     102
Section 315(a)................................     601
(b)...........................................     602
(c)...........................................     601
(d)...........................................     601
(e)...........................................     514
Section 316(a)................................     101
(a)(1)(A).....................................     502
                                                   512
(a)(1)(B).....................................     513
(a)(2)........................................     Not Applicable
(b)...........................................     508
(c)...........................................     104
Section 317(a)(1).............................     503
(a)(2)........................................     504
(b)...........................................     1003
Section 318(a)................................     107
</TABLE>

-------------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.

<PAGE>

      INDENTURE, dated as of _________________, between American International
Group, Inc., a corporation duly organized and existing under the laws of the
State of Delaware (herein called the "COMPANY"), having its principal office at
70 Pine Street, New York, New York 10270, and The Bank of New York, a New York
banking corporation, as Trustee (herein called the "TRUSTEE").

                             RECITALS OF THE COMPANY

      The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"SECURITIES"), to be issued in one or more series as in this Indenture provided.

      All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.

      NOW, THEREFORE, THIS INDENTURE WITNESSETH:

      For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof, as
follows:

                                  ARTICLE ONE

                        DEFINITIONS AND OTHER PROVISIONS
                             OF GENERAL APPLICATION

Section 101. Definitions.

      For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:

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

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

            (3) all accounting terms not otherwise defined herein have the
      meanings assigned to them in accordance with generally accepted accounting
      principles, and, except as otherwise herein expressly provided, the term
      "generally accepted accounting principles" with respect to any computation
      required or permitted hereunder shall mean such accounting principles as
      are generally accepted at the date of such computation;

            (4) unless the context otherwise requires, any reference to an
      "Article" or a "Section" refers to an Article or a Section, as the case
      may be, of this Indenture; and

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

<PAGE>

      "ACT", when used with respect to any Holder, has the meaning specified in
Section 104.

      "AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

      "BOARD OF DIRECTORS" means either the board of directors of the Company or
any duly authorized committee of that board.

      "BOARD RESOLUTION" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

      "BUSINESS DAY", when used with respect to any Place of Payment, means,
unless otherwise specified as contemplated by Section 301, each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions
in that Place of Payment are authorized or obligated by law or executive order
to close.

      "COMMISSION" means the Securities and Exchange Commission, from time to
time constituted, created under the Exchange Act, or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.

      "COMPANY" means the Person named as the "Company" in the first paragraph
of this instrument until a successor Person shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.

      "COMPANY REQUEST" or "COMPANY ORDER" means a written request or order
signed in the name of the Company by its Chairman, one of its Vice Chairman, its
President or one of its Vice Presidents (or any Person designated by one of them
in writing as authorized to execute and deliver Company Requests and Company
Orders), and by its Treasurer, one of its Assistant Treasurers, its Secretary or
one of its Assistant Secretaries (or any Person designated by one of them in
writing as authorized to execute and deliver Company Requests and Company
Orders), and delivered to the Trustee.

      "CORPORATE TRUST OFFICE" means the principal office of the Trustee in New
York, New York at which at any particular time its corporate trust business
shall be administered.

      "CORPORATION" means a corporation, association, company, limited liability
company, joint-stock company or business trust.

      "COVENANT DEFEASANCE" has the meaning specified in Section 1303.

      "DEFAULTED INTEREST" has the meaning specified in Section 307.

      "DEFEASANCE" has the meaning specified in Section 1302.

                                      -2-

<PAGE>

      "DEPOSITARY" means, with respect to Securities of any series issuable in
whole or in part in the form of one or more Global Securities, any Person that
is designated to act as Depositary for such Securities as contemplated by
Section 301.

      "EVENT OF DEFAULT" has the meaning specified in Section 501.

      "EXCHANGE ACT" means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time.

      "EXPIRATION DATE" has the meaning specified in Section 104.

      "GLOBAL SECURITY" means a Security that evidences all or part of the
Securities of any series and bears the legend set forth in Section 204 (or such
legend as may be specified as contemplated by Section 301 for such Securities).

      "HOLDER" means a Person in whose name a Security is registered in the
Security Register.

      "INDENTURE" means this instrument as originally executed and as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of particular
series of Securities established as contemplated by Section 301.

      "INTEREST", when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity.

      "INTEREST PAYMENT DATE", when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.

      "INVESTMENT COMPANY ACT" means the Investment Company Act of 1940 and any
statute successor thereto, in each case as amended from time to time.

      "MATURITY", when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.

      "NOTICE OF DEFAULT" means a written notice of the kind specified in
Section 501(4).

      "OFFICERS' CERTIFICATE" means a certificate signed by the Chairman, a
Vice Chairman, the President or a Vice President, and by the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company,
and delivered to the Trustee. One of the officers signing an Officers'
Certificate given pursuant to Section 1004 shall be the principal executive,
financial or accounting officer of the Company.

      "OPINION OF COUNSEL" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee.

                                      -3-

<PAGE>

      "ORIGINAL ISSUE DISCOUNT SECURITY" means any Security which provides for
an amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.

      "OUTSTANDING", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:

            (1) Securities theretofore cancelled by the Trustee or delivered to
      the Trustee for cancellation;

            (2) Securities for whose payment or redemption money in the
      necessary amount has been theretofore deposited with the Trustee or any
      Paying Agent (other than the Company) in trust or set aside and segregated
      in trust by the Company (if the Company shall act as its own Paying Agent)
      for the Holders of such Securities; provided that, if such Securities are
      to be redeemed, notice of such redemption has been duly given pursuant to
      this Indenture or provision therefor satisfactory to the Trustee has been
      made;

            (3) Securities as to which Defeasance has been effected pursuant to
      Section 1302; and

            (4) Securities which have been paid pursuant to Section 306 or in
      exchange for or in lieu of which other Securities have been authenticated
      and delivered pursuant to this Indenture, other than any such Securities
      in respect of which there shall have been presented to the Trustee proof
      satisfactory to it that such Securities are held by a bona fide purchaser
      in whose hands such Securities are valid obligations of the Company;

provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder as of any date, (A) the principal amount of an Original Issue
Discount Security which shall be deemed to be Outstanding shall be the amount of
the principal thereof which would be due and payable as of such date upon
acceleration of the Maturity thereof to such date pursuant to Section 502, (B)
if, as of such date, the principal amount payable at the Stated Maturity of a
Security is not determinable, the principal amount of such Security which shall
be deemed to be Outstanding shall be the amount as specified or determined as
contemplated by Section 301, (C) the principal amount of a Security denominated
in one or more foreign currencies or currency units which shall be deemed to be
Outstanding shall be the U.S. dollar equivalent, determined as of such date in
the manner provided as contemplated by Section 301, of the principal amount of
such Security (or, in the case of a Security described in Clause (A) or (B)
above, of the amount determined as provided in such Clause), and (D) Securities
owned by the Company or any other obligor upon the Securities or any Affiliate
of the Company or of such other obligor shall be disregarded and deemed not to
be Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent, waiver or other action, only Securities which a Responsible
Officer of the Trustee knows to be so owned shall be so disregarded. Securities
so owned which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Securities and that the pledgee is not the
Company or any other obligor upon the Securities or any Affiliate of the Company
or of such other obligor.

                                      -4-
<PAGE>

      "PAYING AGENT" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.

      "PERSON" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.

      "PLACE OF PAYMENT", when used with respect to the Securities of any
series, means the place or places where the principal of and any premium and
interest on the Securities of that series are payable as specified as
contemplated by Section 301.

      "PREDECESSOR SECURITY" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.

      "REDEMPTION DATE", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.

      "REDEMPTION PRICE", when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.

      "REGULAR RECORD DATE" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 301.

      "RESPONSIBLE OFFICER" when used with respect to the Trustee, means any
vice president, any assistant vice president, any senior trust officer or
assistant trust officer, any trust officer, or any other officer associated with
the corporate trust department of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of such person's knowledge of and
familiarity with the particular subject.

      "SECURITIES" has the meaning stated in the first recital of this Indenture
and more particularly means any Securities authenticated and delivered under
this Indenture.

      "SECURITIES ACT" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time.

      "SECURITY REGISTER" and "SECURITY REGISTRAR" have the respective meanings
specified in Section 305.

      "SPECIAL RECORD DATE" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.

      "STATED MATURITY", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.

                                      -5-
<PAGE>

      "SUBSIDIARY" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
For the purposes of this definition, "voting stock" means stock which ordinarily
has voting power for the election of directors, whether at all times or only so
long as no senior class of stock has such voting power by reason of any
contingency.

      "TRUST INDENTURE ACT" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.

      "TRUSTEE" means the Person named as the "Trustee" in the first paragraph
of this instrument until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall mean
or include each Person who is then a Trustee hereunder, and if at any time there
is more than one such Person, "Trustee" as used with respect to the Securities
of any series shall mean the Trustee with respect to Securities of that series.

      "U.S. GOVERNMENT OBLIGATION" has the meaning specified in Section 1304.

      "VICE PRESIDENT", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".

Section 102. Compliance Certificates and Opinions.

      Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.

      Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (except for certificates provided for
in Section 1004) shall include,

            (1) a statement that each individual signing such certificate or
      opinion has read such covenant or condition and the definitions herein
      relating thereto;

            (2) a brief statement as to the nature and scope of the examination
      or investigation upon which the statements or opinions contained in such
      certificate or opinion are based;

            (3) a statement that, in the opinion of each such individual, such
      individual has made such examination or investigation as is necessary to
      enable him or her to express an informed opinion as to whether or not such
      covenant or condition has been complied with; and

                                      -6-
<PAGE>

            (4) a statement as to whether, in the opinion of each such
      individual, such condition or covenant has been complied with.

Section 103. Form of Documents Delivered to Trustee.

      In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.

      Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.

      Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

Section 104. Acts of Holders; Record Dates.

      Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Indenture to be given, made or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.

      The fact and date of the execution by any Person of any such instrument or
writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which the Trustee deems sufficient.

                                      -7-
<PAGE>

      The ownership of Securities shall be proved by the Security Register.

      Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.

      The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
give, make or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given, made or taken by Holders of Securities of such series, provided that the
Company may not set a record date for, and the provisions of this paragraph
shall not apply with respect to, the giving or making of any notice,
declaration, request or direction referred to in the next paragraph. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of the relevant series on such record date, and no other Holders,
shall be entitled to take the relevant action, whether or not such Holders
remain Holders after such record date; provided that no such action shall be
effective hereunder unless taken on or prior to the applicable Expiration Date
by Holders of the requisite principal amount of Outstanding Securities of such
series on such record date. Nothing in this paragraph shall be construed to
prevent the Company from setting a new record date for any action for which a
record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person
be cancelled and of no effect), and nothing in this paragraph shall be construed
to render ineffective any action taken by Holders of the requisite principal
amount of Outstanding Securities of the relevant series on the date such action
is taken. Promptly after any record date is set pursuant to this paragraph, the
Company, at its own expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be given to the
Trustee in writing and to each Holder of Securities of the relevant series in
the manner set forth in Section 106.

      The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to join
in the giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 502, (iii) any request to institute
proceedings referred to in Section 507(2) or (iv) any direction referred to in
Section 512, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Trustee, at the Company's expense, shall cause
notice of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Company in writing and to each Holder of
Securities of the relevant series in the manner set forth in Section 106.

                                      -8-
<PAGE>

      With respect to any record date set pursuant to this Section, the party
hereto which sets such record dates may designate any day as the "Expiration
Date" and from time to time may change the Expiration Date to any earlier or
later day; provided that no such change shall be effective unless notice of the
proposed new Expiration Date is given to the other party hereto in writing, and
to each Holder of Securities of the relevant series in the manner set forth in
Section 106, on or prior to the existing Expiration Date. If an Expiration Date
is not designated with respect to any record date set pursuant to this Section,
the party hereto which set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph.

      Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Security may do so with regard to
all or any part of the principal amount of such Security or by one or more duly
appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.

Section 105. Notices, Etc., to Trustee and Company.

      Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,

            (1) the Trustee by any Holder or by the Company shall be sufficient
      for every purpose hereunder if made, given, furnished or filed in writing
      to or with the Trustee at its Corporate Trust Office; or

            (2) the Company by the Trustee or by any Holder shall be sufficient
      for every purpose hereunder (unless otherwise herein expressly provided)
      if in writing and mailed, first-class postage prepaid, to the Company
      addressed to it at the address of its principal office specified in the
      first paragraph of this instrument, Attention Secretary, or at any other
      address previously furnished in writing to the Trustee by the Company.

Section 106. Notice to Holders; Waiver.

      Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his or her address as it appears in the Security Register, not
later than the latest date (if any), and not earlier than the earliest date (if
any), prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.

      In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail, then
such notification as shall be made

                                      -9-
<PAGE>

with the approval of the Trustee shall constitute a sufficient notification for
every purpose hereunder.

Section 107. Conflict with Trust Indenture Act.

      If any provision hereof limits, qualifies or conflicts with a provision of
the Trust Indenture Act which is required under such Act to be a part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
which may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be.

Section 108. Effect of Headings and Table of Contents.

      The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.

Section 109. Successors and Assigns.

      All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.

Section 110. Separability Clause.

      In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

Section 111. Benefits of Indenture.

      Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors hereunder
and the Holders, any benefit or any legal or equitable right, remedy or claim
under this Indenture.

Section 112. Governing Law.

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

Section 113. Legal Holidays.

      In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the Securities
(other than a provision of any Security which specifically states that such
provision shall apply in lieu of this Section)) payment of interest or principal
(and premium, if any) need not be made at such Place of Payment on such date,
but may be made on the next succeeding Business Day at such Place of Payment
with the same force and effect as if made on the Interest Payment Date or
Redemption Date, or at the Stated Maturity; provided, however, that no interest
shall accrue for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be, to the date of such
payment.

                                      -10-
<PAGE>

                                  ARTICLE TWO

                                 SECURITY FORMS

Section 201. Forms Generally.

      The Securities of each series shall be in substantially the form set forth
in this Article, or in such other form as shall be established by or pursuant to
a Board Resolution or in one or more indentures supplemental hereto, in each
case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or Depositary therefor or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution thereof. If the form of Securities of any series is established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 303 for the authentication and delivery of such
Securities. If all of the Securities of any series established by action taken
pursuant to a Board Resolution are not to be issued at one time, it shall not be
necessary to deliver a record of such action at the time of issuance of each
Security of such series, but an appropriate record of such action shall be
delivered at or before the time of issuance of the first Security of such
series.

      The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as determined
by the officers executing such Securities, as evidenced by their execution of
such Securities.

Section 202. Form of Face of Security.

      [Insert any legend required by the Internal Revenue Code and the
regulations thereunder.]

                       American International Group, Inc.

No. ______                                                             $ _______

      American International Group, Inc., a corporation duly organized and
existing under the laws of Delaware (herein called the "Company", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to _____________________, or registered
assigns, the principal sum of _____________________ Dollars on
______________________________ [if the Security is to bear interest prior to
Maturity, insert -- , and to pay interest thereon from _________ or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for, semi-annually on _________ and ________ in each year, commencing
_________ , at the rate of ____% per annum, until the principal hereof is paid
or made available for payment [if applicable, insert -- , provided that any
principal and premium, and any such installment of interest, which is overdue
shall bear interest at the rate of ____% per annum (to the extent that the
payment of such interest shall be legally enforceable), from the

                                      -11-
<PAGE>

dates such amounts are due until they are paid or made available for payment,
and such interest shall be payable on demand]. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in 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 the _____ or _____
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on such Regular Record Date
and may either be paid to the Person in whose name this Security (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 said Indenture].

      [If the Security is not to bear interest prior to Maturity, insert -- The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal and any overdue premium shall
bear interest at the rate of ____% per annum (to the extent that the payment of
such interest shall be legally enforceable), from the dates such amounts are due
until they are paid or made available for payment. Interest on any overdue
principal or premium shall be payable on demand.]

      Payment of the principal of (and premium, if any) and [if applicable,
insert -- any such] interest on this Security will be made at the office or
agency of the Company maintained for that purpose in the Borough of Manhattan,
The City of New York], 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 [if applicable, insert -- ; provided, however, that at the option of the
Company payment of interest may be made by check mailed to the address of the
Person entitled thereto as such address shall appear in the Security Register].

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

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

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

Dated:

                                              American International Group, Inc.

                                              By _______________________________
Attest:

__________________

                                      -12-
<PAGE>

Section 203. Form of Reverse of Security.

      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 ________________ (herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and The Bank of New York, as Trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), and reference is hereby made to the Indenture for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the 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 [if applicable,
insert -- , [initially] limited in aggregate principal amount to $_______][,
provided that the Company may, without the consent of any Holder, at any time
and from time to time, increase the initial principal amount.]

      [If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, [if applicable, insert --
(1) on ________ in any year commencing with the year ____ and ending with the
year ____ through operation of the sinking fund for this series at a Redemption
Price equal to 100% of the principal amount, and (2)] at any time [if
applicable, insert -- on or after ______, ___], as a whole or in part, at the
election of the Company, at the following Redemption Prices (expressed as
percentages of the principal amount): If redeemed [if applicable, insert -- on
or before ________, __%, and if redeemed] during the 12-month period beginning
______ of the years indicated,

<TABLE>
<CAPTION>
                          Redemption                                 Redemption
    Year                    Price                  Year                Price
    ----                  ----------               ----              -----------
<S>                       <C>                      <C>               <C>
</TABLE>

and thereafter at a Redemption Price equal to ____% of the principal amount,
together in the case of any such redemption [if applicable, insert -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]

      [If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, (1) on ________ in any
year commencing with the year ____ and ending with the year _____ through
operation of the sinking fund for this series at the Redemption Prices for
redemption through operation of the sinking fund (expressed as percentages of
the principal amount) set forth in the table below, and (2) at any time [if
applicable, insert -- on or after ________], as a whole or in part, at the
election of the Company, at the Redemption Prices for redemption otherwise than
through operation of the sinking fund (expressed as percentages of the principal
amount) set forth in the table below: If redeemed during the 12-month period
beginning ________ of the years indicated,

                                      -13-
<PAGE>

<TABLE>
<CAPTION>
                            Redemption Price
                             For Redemption                Redemption Price For
                            Through Operation              Redemption Otherwise
                                 of the                   Than Through Operation
          Year               Sinking Fund                  of the Sinking Fund
          ----              -----------------              ---------------------
<S>                         <C>                           <C>
</TABLE>

and thereafter at a Redemption Price equal to ____% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]

      [If applicable, insert -- Notwithstanding the foregoing, the Company may
not, prior to _____, redeem any Securities of this series as contemplated by [if
applicable, insert -- Clause (2) of] the preceding paragraph as a part of, or in
anticipation of, any refunding operation by the application, directly or
indirectly, of moneys borrowed having an interest cost to the Company
(calculated in accordance with generally accepted financial practice) of less
than ____% per annum.]

      [If applicable, insert -- The sinking fund for this series provides for
the redemption on ________ in each year beginning with the year _____ and ending
with the year _____ of [if applicable, insert -- not less than $_______
("mandatory sinking fund") and not more than] $_______ aggregate principal
amount of Securities of this series. Securities of this series acquired or
redeemed by the Company otherwise than through [if applicable, insert --
mandatory] sinking fund payments may be credited against subsequent [if
applicable, insert -- mandatory] sinking fund payments otherwise required to be
made [if applicable, insert -- , in the inverse order in which they become
due].]

      [If the Security is subject to redemption of any kind, insert -- 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.]

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

      [If the Security is not an Original Issue Discount Security, insert -- 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.]

                                      -14-
<PAGE>

      [If the Security is an Original Issue Discount Security, insert -- If an
Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- insert formula for determining the
amount. Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal, premium and interest (in each
case to the extent that the payment of such interest shall be legally
enforceable), all of the Company's obligations in respect of the payment of the
principal of and premium and interest, if any, on the Securities of this series
shall terminate.]

      The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this 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 thereunder, 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 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
attorney duly authorized in writing, and thereupon one

                                      -15-

<PAGE>

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 $________ and any integral multiple 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 owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

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

Section 204. Form of Legend for Global Securities.

      Unless otherwise specified as contemplated by Section 301 for the
Securities evidenced thereby, every Global Security authenticated and delivered
hereunder shall bear a legend in substantially the following form:

      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 THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

Section 205. Form of Trustee's Certificate of Authentication.

      The Trustee's certificates of authentication shall be in substantially the
following form:

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

Dated:                                                      The Bank of New York
                                                            --------------------
                                                                      As Trustee

                                                    By
                                                      --------------------------
                                                            Authorized Signatory

                                      -16-

<PAGE>

                                  ARTICLE THREE

                                 THE SECURITIES

Section 301. Amount Unlimited; Issuable in Series.

      The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited.

      The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 303,
set forth, or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any series,

            (1) the title of the Securities of the series (which shall
      distinguish the Securities of the series from Securities of any other
      series);

            (2) any limit upon the aggregate principal amount of the Securities
      of the series which may be authenticated and delivered under this
      Indenture (except for Securities authenticated and delivered upon
      registration of transfer of, or in exchange for, or in lieu of, other
      Securities of the series pursuant to Section 304, 305, 306, 906, 1107 or
      1203 and except for any Securities which, pursuant to Section 303, are
      deemed never to have been authenticated and delivered hereunder);

            (3) the Person to whom any interest on a Security of the series
      shall be payable, if other than the Person in whose name that Security (or
      one or more Predecessor Securities) is registered at the close of business
      on the Regular Record Date for such interest;

            (4) the date or dates on which the principal of any Securities of
      the series is payable;

            (5) the rate or rates at which any Securities of the series shall
      bear interest, if any, the date or dates from which any such interest
      shall accrue, the Interest Payment Dates on which any such interest shall
      be payable and the Regular Record Date for any such interest payable on
      any Interest Payment Date;

            (6) the place or places where the principal of and any premium and
      interest on any Securities of the series shall be payable;

            (7) the period or periods within which, the price or prices at which
      and the terms and conditions upon which any Securities of the series may
      be redeemed, in whole or in part, at the option of the Company and, if
      other than by a Board Resolution, the manner in which any election by the
      Company to redeem the Securities shall be evidenced;

            (8) the obligation, if any, of the Company to redeem or purchase any
      Securities of the series pursuant to any sinking fund or analogous
      provisions or at the option of the Holder thereof and the period or
      periods within which, the price or prices at

                                      -17-

<PAGE>

      which and the terms and conditions upon which any Securities of the series
      shall be redeemed or purchased, in whole or in part, pursuant to such
      obligation;

            (9) if other than denominations of $1,000 and any integral multiple
      thereof, the denominations in which any Securities of the series shall be
      issuable;

            (10) if the amount of principal of or any premium or interest on any
      Securities of the series may be determined with reference to a financial
      or economic measure or pursuant to a formula, the manner in which such
      amounts shall be determined;

            (11) if other than the currency of the United States of America, the
      currency, currencies or currency units in which the principal of or any
      premium or interest on any Securities of the series shall be payable and
      the manner of determining the equivalent thereof in the currency of the
      United States of America for any purpose, including for purposes of the
      definition of "Outstanding" in Section 101;

            (12) if the principal of or any premium or interest on any
      Securities of the series is to be payable, at the election of the Company
      or the Holder thereof, in one or more currencies or currency units other
      than that or those in which such Securities are stated to be payable, the
      currency, currencies or currency units in which the principal of or any
      premium or interest on such Securities as to which such election is made
      shall be payable, the periods within which and the terms and conditions
      upon which such election is to be made and the amount so payable (or the
      manner in which such amount shall be determined);

            (13) if other than the entire principal amount thereof, the portion
      of the principal amount of any Securities of the series which shall be
      payable upon declaration of acceleration of the Maturity thereof pursuant
      to Section 502;

            (14) if the principal amount payable at the Stated Maturity of any
      Securities of the series will not be determinable as of any one or more
      dates prior to the Stated Maturity, the amount which shall be deemed to be
      the principal amount of such Securities as of any such date for any
      purpose thereunder or hereunder, including the principal amount thereof
      which shall be due and payable upon any Maturity other than the Stated
      Maturity or which shall be deemed to be Outstanding as of any date prior
      to the Stated Maturity (or, in any such case, the manner in which such
      amount deemed to be the principal amount shall be determined);

            (15) if other than by a Board Resolution, the manner in which any
      election by the Company to defease any Securities of the series pursuant
      to Section 1302 or Section 1303 shall be evidenced; whether any Securities
      of the series other than Securities denominated in U.S. dollars and
      bearing interest at a fixed rate are to be subject to Section 1302 or
      Section 1303; or, in the case of Securities denominated in U.S. dollars
      and bearing interest at a fixed rate, if applicable, that the Securities
      of the series, in whole or any specified part, shall not be defeasible
      pursuant to Section 1302 or Section 1303 or both such Sections;

            (16) if applicable, that any Securities of the series shall be
      issuable in whole or in part in the form of one or more Global Securities
      and, in such case, the respective Depositaries for such Global Securities,

                                      -18-

<PAGE>

      the form of any legend or legends which shall be borne by any such Global
      Security in addition to or in lieu of that set forth in Section 204 and
      any circumstances in addition to or in lieu of those set forth in Clause
      (2) of the last paragraph of Section 305 in which any such Global Security
      may be exchanged in whole or in part for Securities registered, and any
      transfer of such Global Security in whole or in part may be registered, in
      the name or names of Persons other than the Depositary for such Global
      Security or a nominee thereof;

            (17) any addition to or change in the Events of Default which
      applies to any Securities of the series and any change in the right of the
      Trustee or the requisite Holders of such Securities to declare the
      principal amount thereof due and payable pursuant to Section 502;

            (18) any addition to, deletion from or change in the covenants set
      forth in Article Ten which applies to Securities of the series; and

            (19) any other terms of the series (which terms shall not be
      inconsistent with the provisions of this Indenture, except as permitted by
      Section 901(5)).

      All Securities of any one series shall be substantially identical except
as to denomination and except as may otherwise be provided in or pursuant to the
Board Resolution referred to above and (subject to Section 303) set forth, or
determined in the manner provided, in the Officers' Certificate referred to
above or in any such indenture supplemental hereto. All Securities of any one
series need not be issued at one time and, unless otherwise provided in or
pursuant to the Board Resolution referred to above and (subject to Section 303)
set forth, or determined in the manner provided, in the Officers' Certificate
referred to above or in any such indenture supplemental hereto with respect to a
series of Securities, additional Securities of a series may be issued, at the
option of the Company, without the consent of any Holder, at any time and from
time to time.

      If any of the terms of the series are established by action taken pursuant
to a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.

Section 302. Denominations.

      The Securities of each series shall be issuable only in registered form
without coupons and only in such denominations as shall be specified as
contemplated by Section 301. In the absence of any such specified denomination
with respect to the Securities of any series, the Securities of such series
shall be issuable in denominations of $1,000 and any integral multiple thereof.

Section 303. Execution, Authentication, Delivery and Dating.

      The Securities shall be executed on behalf of the Company by its
Chairman, one of its Vice Chairman, its President, its Treasurer or one of its
Vice Presidents and attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile.

                                      -19-

<PAGE>

      Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.

      At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities. If the
form or terms of the Securities of the series have been established by or
pursuant to one or more Board Resolutions as permitted by Sections 201 and 301,
in authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to Section 601) shall be fully protected in
relying upon, an Opinion of Counsel stating,

            (1) if the form of such Securities has been established by or
      pursuant to Board Resolution as permitted by Section 201, that such form
      has been established in conformity with the provisions of this Indenture;

            (2) if the terms of such Securities have been established by or
      pursuant to Board Resolution as permitted by Section 301, that such terms
      have been established in conformity with the provisions of this Indenture;
      and

            (3) that such Securities, when authenticated and delivered by the
      Trustee and issued by the Company in the manner and subject to any
      conditions specified in such Opinion of Counsel, will constitute valid and
      legally binding obligations of the Company enforceable in accordance with
      their terms, subject to bankruptcy, insolvency, fraudulent transfer,
      reorganization, moratorium and similar laws of general applicability
      relating to or affecting creditors' rights and to general equity
      principles.

      If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.

      Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, including in the event that the size of a series of Outstanding Securities
is increased as contemplated by Section 301, it shall not be necessary to
deliver the Officers' Certificate otherwise required pursuant to Section 301 or
the Company Order and Opinion of Counsel otherwise required pursuant to such
preceding paragraph at or prior to the authentication of each Security of such
series if such documents are delivered at or prior to the authentication upon
original issuance of the first Security of such series to be issued.

      Each Security shall be dated the date of its authentication.

      No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate

                                      -20-

<PAGE>

upon any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder. Notwithstanding
the foregoing, if any Security shall have been authenticated and delivered
hereunder but never issued and sold by the Company, and the Company shall
deliver such Security to the Trustee for cancellation as provided in Section
309, for all purposes of this Indenture such Security shall be deemed never to
have been authenticated and delivered hereunder and shall never be entitled to
the benefits of this Indenture.

Section 304. Temporary Securities.

      Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.

      If temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive Securities of such series, the temporary
Securities of such series shall be exchangeable for definitive Securities of
such series upon surrender of the temporary Securities of such series at the
office or agency of the Company in a Place of Payment for that series, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities of any series, the Company shall execute and the Trustee
shall authenticate and deliver in exchange therefor one or more definitive
Securities of the same series, of any authorized denominations and of like tenor
and aggregate principal amount. Until so exchanged, the temporary Securities of
any series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of such series and tenor.

Section 305. Registration, Registration of Transfer and Exchange.

      The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "SECURITY REGISTER") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is hereby
appointed "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.

      Upon surrender for registration of transfer of any Security of a series at
the office or agency of the Company in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
the same series, of any authorized denominations and of like tenor and aggregate
principal amount.

      At the option of the Holder, Securities of any series may be exchanged for
other Securities of the same series, of any authorized denominations and of like
tenor and aggregate principal amount, upon surrender of the Securities to be
exchanged at such office or agency. Whenever any Securities are so surrendered
for exchange, the Company shall execute, and the

                                      -21-

<PAGE>

Trustee shall authenticate and deliver, the Securities which the Holder making
the exchange is entitled to receive.

      All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.

      Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.

      No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906, 1107 or 1203 not involving any transfer.

      If the Securities of any series (or of any series and specified tenor) are
to be redeemed in part, the Company shall not be required (A) to issue, register
the transfer of or exchange any Securities of that series (or of that series and
specified tenor, as the case may be) during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of any
such Securities selected for redemption under Section 1103 and ending at the
close of business on the day of such mailing, or (B) to register the transfer of
or exchange any Security so selected for redemption in whole or in part, except
the unredeemed portion of any Security being redeemed in part.

      The provisions of Clauses (1), (2), (3) and (4) below shall apply only to
Global Securities:

            (1) Each Global Security authenticated under this Indenture shall be
      registered in the name of the Depositary designated for such Global
      Security or a nominee thereof and delivered to such Depositary or a
      nominee thereof or custodian therefor, and each such Global Security shall
      constitute a single Security for all purposes of this Indenture.

            (2) Notwithstanding any other provision in this Indenture, no Global
      Security may be exchanged in whole or in part for Securities registered,
      and no transfer of a Global Security in whole or in part may be
      registered, in the name of any Person other than the Depositary for such
      Global Security or a nominee thereof unless (A) such Depositary has
      notified the Company that it is unwilling or unable or no longer permitted
      under applicable law to continue as Depositary for such Global Security,
      (B) there shall have occurred and be continuing an Event of Default with
      respect to such Global Security, (C) the Company so directs the Trustee by
      a Company Order or (D) there shall exist such circumstances, if any, in
      addition to or in lieu of the foregoing as have been specified for this
      purpose as contemplated by Section 301.

            (3) Subject to Clause (2) above, any exchange of a Global Security
      for other Securities may be made in whole or in part, and all Securities
      issued in exchange for a

                                      -22-

<PAGE>

      Global Security or any portion thereof shall be registered in such names
      as the Depositary for such Global Security shall direct.

            (4) Every Security authenticated and delivered upon registration of
      transfer of, or in exchange for or in lieu of, a Global Security or any
      portion thereof, whether pursuant to this Section, Section 304, 306, 906,
      1107 or 1203 or otherwise, shall be authenticated and delivered in the
      form of, and shall be, a Global Security, unless such Security is
      registered in the name of a Person other than the Depositary for such
      Global Security or a nominee thereof.

Section 306. Mutilated, Destroyed, Lost and Stolen Securities.

      If any mutilated Security is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Security of the same series and of like tenor and principal amount and
bearing a number not contemporaneously outstanding.

      If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.

      In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.

      Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.

      Every new Security of any series issued pursuant to this Section in lieu
of any mutilated, destroyed, lost or stolen Security shall constitute an
original additional contractual obligation of the Company, whether or not the
mutilated, destroyed, lost or stolen Security shall be at any time enforceable
by anyone, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Securities of that series duly issued
hereunder.

      The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.

Section 307. Payment of Interest; Interest Rights Preserved.

      Except as otherwise provided as contemplated by Section 301 with respect
to any series of Securities, interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the Person in whose name that Security (or one

                                      -23-

<PAGE>

or more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest.

      Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "DEFAULTED INTEREST") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:

            (1) The Company may elect to make payment of any Defaulted Interest
      to the Persons in whose names the Securities of such series (or their
      respective Predecessor Securities) are registered at the close of business
      on a Special Record Date for the payment of such Defaulted Interest, which
      shall be fixed in the following manner. The Company shall notify the
      Trustee in writing of the amount of Defaulted Interest proposed to be paid
      on each Security of such series and the date of the proposed payment, and
      at the same time the Company shall deposit with the Trustee an amount of
      money equal to the aggregate amount proposed to be paid in respect of such
      Defaulted Interest or shall make arrangements satisfactory to the Trustee
      for such deposit prior to the date of the proposed payment, such money
      when deposited to be held in trust for the benefit of the Persons entitled
      to such Defaulted Interest as in this Clause provided. Thereupon the
      Trustee shall fix a Special Record Date for the payment of such Defaulted
      Interest which shall be not more than 15 days and not less than 10 days
      prior to the date of the proposed payment and not less than 10 days after
      the receipt by the Trustee of the notice of the proposed payment. The
      Trustee shall promptly notify the Company of such Special Record Date and,
      in the name and at the expense of the Company, shall cause notice of the
      proposed payment of such Defaulted Interest and the Special Record Date
      therefor to be given to each Holder of Securities of such series in the
      manner set forth in Section 106, not less than 10 days prior to such
      Special Record Date. Notice of the proposed payment of such Defaulted
      Interest and the Special Record Date therefor having been so mailed, such
      Defaulted Interest shall be paid to the Persons in whose names the
      Securities of such series (or their respective Predecessor Securities) are
      registered at the close of business on such Special Record Date and shall
      no longer be payable pursuant to the following Clause (2).

            (2) The Company may make payment of any Defaulted Interest on the
      Securities of any series in any other lawful manner not inconsistent with
      the requirements of any securities exchange on which such Securities may
      be listed, and upon such notice as may be required by such exchange, if,
      after notice given by the Company to the Trustee of the proposed payment
      pursuant to this Clause, such manner of payment shall be deemed
      practicable by the Trustee.

      Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.

                                      -24-
<PAGE>

Section 308. Persons Deemed Owners.

      Prior to due presentment of a 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 such Security is registered as the owner of such Security
for the purpose of receiving payment of principal of and any premium and
(subject to Section 307) any interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.

Section 309. Cancellation.

      All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Company has not issued and sold, and all Securities so
delivered shall be promptly cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Securities held by the Trustee shall be disposed of in accordance with its
customary procedures.

Section 310. Computation of Interest.

      Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.

Section 311. CUSIP Numbers.

      The Company in issuing any series of the Securities may use CUSIP numbers,
if then generally in use, and thereafter with respect to such series, the
Trustee may use such numbers in any notice of redemption with respect to such
series, provided that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Securities of
that series or as contained in any notice of a redemption and that reliance may
be placed only on the other identification numbers printed on the Securities of
that series, and any such redemption shall not be affected by any defect in or
omission of such numbers.

Section 312. Original Issue Discount.

      If any of the Securities is an Original Issue Discount Security, the
Company shall file with the Trustee promptly at the end of each calendar year
(i) a written notice specifying the amount of original issue discount (including
daily rates and accrual periods) accrued on such Outstanding Original Issue
Discount Securities as of the end of such year and (ii) such other specific
information relating to such original issue discount as may then be relevant
under the Internal Revenue Code of 1986, as amended from time to time.

                                     -25-
<PAGE>

                                  ARTICLE FOUR

                           SATISFACTION AND DISCHARGE

Section 401. Satisfaction and Discharge of Indenture.

      This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when

            (1)   either

            (A)   all Securities theretofore authenticated and delivered (other
      than (i) Securities which have been mutilated, destroyed, lost or stolen
      and which have been replaced or paid as provided in Section 306 and (ii)
      Securities for whose payment money has theretofore been deposited in trust
      or segregated and held in trust by the Company and thereafter repaid to
      the Company or discharged from such trust, as provided in Section 1003)
      have been delivered to the Trustee for cancellation; or

            (B)   all such Securities not theretofore delivered to the Trustee
      for cancellation

                  (i)   have become due and payable, or

                  (ii)  will become due and payable at their Stated Maturity
            within one year, or

                  (iii) are to be called for redemption within one year under
            arrangements satisfactory to the Trustee for the giving of notice of
            redemption by the Trustee in the name, and at the expense, of the
            Company,

      and the Company, in the case of (i), (ii) or (iii) above, has deposited or
      caused to be deposited with the Trustee as trust funds in trust for the
      purpose money in an amount sufficient to pay and discharge the entire
      indebtedness on such Securities not theretofore delivered to the Trustee
      for cancellation, for principal and any premium and interest to the date
      of such deposit (in the case of Securities which have become due and
      payable) or to the Stated Maturity or Redemption Date, as the case may be;

            (2)   the Company has paid or caused to be paid all other sums
      payable hereunder by the Company; and

            (3)   the Company has delivered to the Trustee an Officers'
      Certificate and an Opinion of Counsel, each stating that all conditions
      precedent herein provided for relating to the satisfaction and discharge
      of this Indenture have been complied with.

      Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607 and, if money shall
have been deposited with the

                                     -26-
<PAGE>

Trustee pursuant to subclause (B) of Clause (1) of this Section, the obligations
of the Trustee under Section 402 and the last paragraph of Section 1003 shall
survive.

Section 402. Application of Trust Money.

      Subject to the provisions of the last paragraph of Section 1003, all money
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited with the Trustee.

                                  ARTICLE FIVE

                                    REMEDIES

Section 501. Events of Default.

      "EVENT OF DEFAULT", wherever used herein with respect to Securities of any
series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):

            (1)   default in the payment of any interest upon any Security of
      that series when it becomes due and payable, and continuance of such
      default for a period of 30 days; or

            (2)   default in the payment of the principal of or any premium on
      any Security of that series at its Maturity, and continuance of such
      default for a period of five days; or

            (3)   default in the deposit of any sinking fund payment, when and
      as due by the terms of a Security of that series, and the continuance of
      such default for a period of five days; or

            (4)   default in the performance, or breach, of any covenant or
      warranty of the Company in this Indenture (other than a covenant or
      warranty a default in whose performance or whose breach is elsewhere in
      this Section specifically dealt with or which has expressly been included
      in this Indenture solely for the benefit of series of Securities other
      than that series), and continuance of such default or breach for a period
      of 60 days after there has been given, by registered or certified mail, to
      the Company by the Trustee or to the Company and the Trustee by the
      Holders of at least 25% in principal amount of the Outstanding Securities
      of that series a written notice specifying such default or breach and
      requiring it to be remedied and stating that such notice is a "Notice of
      Default" hereunder; or

            (5)   the entry by a court having jurisdiction in the premises of
      (A) a decree or order for relief in respect of the Company in an
      involuntary case or proceeding under any

                                     -27-
<PAGE>

      applicable Federal or State bankruptcy, insolvency, reorganization or
      other similar law or (B) a decree or order adjudging the Company bankrupt
      or insolvent, or approving as properly filed a petition seeking
      reorganization, arrangement, adjustment or composition of or in respect of
      the Company under any applicable Federal or State law, or appointing a
      custodian, receiver, liquidator, assignee, trustee, sequestrator or other
      similar official of the Company or of any substantial part of its
      property, or ordering the winding up or liquidation of its affairs, and
      the continuance of any such decree or order for relief or any such other
      decree or order unstayed and in effect for a period of 60 consecutive
      days; or

            (6)   the commencement by the Company of a voluntary case or
      proceeding under any applicable Federal or State bankruptcy, insolvency,
      reorganization or other similar law or of any other case or proceeding to
      be adjudicated bankrupt or insolvent, or the consent by it to the entry
      of a decree or order for relief in respect of the Company in an
      involuntary case or proceeding under any applicable Federal or State
      bankruptcy, insolvency, reorganization or other similar law or to the
      commencement of any bankruptcy or insolvency case or proceeding against
      it, or the filing by it of a petition or answer or consent seeking
      reorganization or relief under any applicable Federal or State law, or the
      consent by it to the filing of such petition or to the appointment of or
      taking possession by a custodian, receiver, liquidator, assignee, trustee,
      sequestrator or other similar official of the Company or of any
      substantial part of its property, or the making by it of an assignment for
      the benefit of creditors, or the admission by it in writing of its
      inability to pay its debts generally as they become due, or the taking of
      corporate action by the Company in furtherance of any such action; or

            (7)   any other Event of Default provided with respect to Securities
      of that series.

Section 502. Acceleration of Maturity; Rescission and Annulment.

      If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then in every such case the Trustee
or the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount of all the Securities
of that series (or, if any Securities of that series are Original Issue Discount
Securities, such portion of the principal amount of such Securities as may be
specified by the terms thereof) to be due and payable immediately, by a notice
in writing to the Company (and to the Trustee if given by Holders), and upon any
such declaration such principal amount (or specified amount) shall become
immediately due and payable.

      At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if

            (1)   the Company has paid or deposited with the Trustee a sum
      sufficient to pay

            (A)   all overdue interest on all Securities of that series,

                                     -28-
<PAGE>

            (B)   the principal of (and premium, if any, on) any Securities of
      that series which have become due otherwise than by such declaration of
      acceleration and any interest thereon at the rate or rates prescribed
      therefor in such Securities,

            (C)   to the extent that payment of such interest is lawful,
      interest upon overdue interest at the rate or rates prescribed therefor in
      such Securities, and

            (D)   all sums paid or advanced by the Trustee hereunder and the
      reasonable compensation, expenses, disbursements and advances of the
      Trustee, its agents and counsel;

      and

            (2)   all Events of Default with respect to Securities of that
      series, other than the non-payment of the principal of Securities of that
      series which have become due solely by such declaration of acceleration,
      have been cured or waived as provided in Section 513.

No such rescission shall affect any subsequent default or impair any right
consequent thereon.

Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee.

      The Company covenants that if

            (1)   default is made in the payment of any interest on any Security
      when such interest becomes due and payable and such default continues for
      a period of 30 days, or

            (2)   default is made in the payment of the principal of (or
      premium, if any, on) any Security at the Maturity thereof and such default
      continues for a period of five days,

the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.

      If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.

Section 504. Trustee May File Proofs of Claim.

      In case of any judicial proceeding relative to the Company (or any other
obligor upon the Securities), its property or its creditors, the Trustee shall
be entitled and empowered, by

                                     -29-
<PAGE>

intervention in such proceeding or otherwise, to take any and all actions
authorized under the Trust Indenture Act in order to have claims of the Holders
and the Trustee allowed in any such proceeding. In particular, the Trustee shall
be authorized to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 607.

      No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and be a member of a creditors' or
other similar committee.

Section 505. Trustee May Enforce Claims Without Possession of Securities.

      All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Securities in respect of which such judgment has been
recovered.

Section 506. Application of Money Collected.

      Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or any premium
or interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:

            FIRST: To the payment of all amounts due the Trustee under Section
      607; and

            SECOND: To the payment of the amounts then due and unpaid for
      principal of and any premium and interest on the Securities in respect of
      which or for the benefit of which such money has been collected, ratably,
      without preference or priority of any kind, according to the amounts due
      and payable on such Securities for principal and any premium and interest,
      respectively.

Section 507. Limitation on Suits.

      No Holder of any Security of any series shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless

                                     -30-
<PAGE>

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

            (2)   the Holders of not less than 25% in principal amount of the
      Outstanding Securities of that series shall have made written request to
      the Trustee to institute proceedings in respect of such Event of Default
      in its own name as Trustee hereunder;

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

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

            (5)   no direction inconsistent with such written request has been
      given to the Trustee during such 60-day period by the Holders of a
      majority in principal amount of the Outstanding Securities of that series;

it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.

Section 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest.

      Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of and any premium and (subject to Section 307)
interest on such Security on the respective Stated Maturities expressed in such
Security (or, in the case of redemption or repayment, on the Redemption Date or
date for repayment, as the case may be) and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without
the consent of such Holder.

Section 509. Restoration of Rights and Remedies.

      If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.

Section 510. Rights and Remedies Cumulative.

      Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be

                                     -31-
<PAGE>

cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.

Section 511. Delay or Omission Not Waiver.

      No delay or omission of the Trustee or of any Holder of any Securities to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.

Section 512. Control by Holders.

      The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that

            (1)   such direction shall not be in conflict with any rule of law
      or with this Indenture, and

            (2)   the Trustee may take any other action deemed proper by the
      Trustee which is not inconsistent with such direction.

Section 513. Waiver of Past Defaults.

      The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default

            (1)   in the payment of the principal of or any premium or interest
      on any Security of such series, or

            (2)   in respect of a covenant or provision hereof which under
      Article Nine cannot be modified or amended without the consent of the
      Holder of each Outstanding Security of such series affected.

      Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.

Section 514. Undertaking for Costs.

      In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess reasonable
costs against any such party litigant, in the manner and to the extent provided
in the

                                     -32-
<PAGE>

Trust Indenture Act; provided that neither this Section nor the Trust Indenture
Act shall be deemed to authorize any court to require such an undertaking or to
make such an assessment in any suit instituted by the Company.

Section 515. Waiver of Usury, Stay or Extension Laws.

      The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.

                                   ARTICLE SIX

                                   THE TRUSTEE

Section 601. Certain Duties and Responsibilities.

      The duties and responsibilities of the Trustee shall be as provided by the
Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.

Section 602. Notice of Defaults.

      If a default occurs hereunder with respect to Securities of any series,
the Trustee shall give the Holders of Securities of such series notice of such
default as and to the extent provided by the Trust Indenture Act; provided,
however, that in the case of any default of the character specified in Section
501(4) with respect to Securities of such series, no such notice to Holders
shall be given until at least 30 days after the occurrence thereof. For the
purpose of this Section, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default with respect
to Securities of such series.

Section 603. Certain Rights of Trustee.

      Subject to the provisions of Section 601:

            (1)   the Trustee may conclusively rely and shall be protected in
      acting or refraining from acting upon any resolution, certificate,
      statement, instrument, opinion, report, notice, request, direction,
      consent, order, bond, debenture, note, other evidence of indebtedness or
      other paper or document believed by it to be genuine and to have been
      signed or presented by the proper party or parties;

                                     -33-
<PAGE>

            (2)   any request or direction of the Company mentioned herein shall
      be sufficiently evidenced by a Company Request or Company Order, and any
      resolution of the Board of Directors shall be sufficiently evidenced by a
      Board Resolution;

            (3)   whenever in the administration of this Indenture the Trustee
      shall deem it desirable that a matter be proved or established prior to
      taking, suffering or omitting any action hereunder, the Trustee (unless
      other evidence be herein specifically prescribed) may, in the absence of
      bad faith on its part, conclusively rely upon an Officers' Certificate;

            (4)   the Trustee may consult with counsel and the written advice of
      such counsel or any Opinion of Counsel shall be full and complete
      authorization and protection in respect of any action taken, suffered or
      omitted by it hereunder in good faith and in reliance thereon;

            (5)   the Trustee shall be under no obligation to exercise any of
      the rights or powers vested in it by this Indenture at the request or
      direction of any of the Holders pursuant to this Indenture, unless such
      Holders shall have offered to the Trustee security or indemnity reasonably
      satisfactory to it against the costs, expenses and liabilities which might
      be incurred by it in compliance with such request or direction;

            (6)   the Trustee shall not be bound to make any investigation into
      the facts or matters stated in any resolution, certificate, statement,
      instrument, opinion, report, notice, request, direction, consent, order,
      bond, debenture, note, other evidence of indebtedness or other paper or
      document, but the Trustee, in its discretion, may make such further
      inquiry or investigation into such facts or matters as it may see fit,
      and, if the Trustee shall determine to make such further inquiry or
      investigation, it shall be entitled to examine the books, records and
      premises of the Company, personally or by agent or attorney;

            (7)   the Trustee may execute any of the trusts or powers hereunder
      or perform any duties hereunder either directly or by or through agents or
      attorneys and the Trustee shall not be responsible for any misconduct or
      negligence on the part of any agent or attorney appointed with due care by
      it hereunder; and

            (8)   the rights, privileges, protections, immunities and benefits
      given to the Trustee, including, without limitation, its right to be
      indemnified, are extended to, and shall be enforceable by, the Trustee in
      each of its capacities hereunder.

Section 604. Not Responsible for Recitals or Issuance of Securities.

      The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee assumes no responsibility for their correctness. The Trustee
makes no representations as to the validity or sufficiency of this Indenture or
of the Securities. The Trustee shall not be accountable for the use or
application by the Company of Securities or the proceeds thereof.

                                     -34-
<PAGE>

Section 605. May Hold Securities.

      The Trustee, any Paying Agent, any Security Registrar or any other agent
of the Company, in its individual or any other capacity, may become the owner or
pledgee of Securities and, subject to Sections 608 and 613, may otherwise deal
with the Company with the same rights it would have if it were not Trustee,
Paying Agent, Security Registrar or such other agent.

Section 606. Money Held in Trust.

      Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Company.

Section 607. Compensation and Reimbursement.

      The Company agrees

            (1) to pay to the Trustee from time to time such compensation as
      shall be agreed to in writing between the Company and the Trustee for all
      services rendered by it hereunder (which compensation shall not be limited
      by any provision of law in regard to the compensation of a trustee of an
      express trust);

            (2) except as otherwise expressly provided herein, to reimburse the
      Trustee upon its request for all reasonable expenses, disbursements and
      advances incurred or made by the Trustee in accordance with any provision
      of this Indenture (including the reasonable compensation and the
      reasonable expenses and disbursements of its agents and counsel), except
      any such expense, disbursement or advance as may be attributable to its
      negligence or bad faith; and

            (3) to indemnify the Trustee for, and to hold it harmless against,
      any loss, liability or expense incurred without negligence or bad faith on
      its part, arising out of or in connection with the acceptance or
      administration of the trust or trusts hereunder, including the reasonable
      costs and expenses of defending itself against any claim or liability in
      connection with the exercise or performance of any of its powers or duties
      hereunder.

      When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 501(5) or Section 501(6), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or state bankruptcy, insolvency or
other similar law.

      The provisions of this Section shall survive the termination of this
Indenture and the resignation or removal of the Trustee.

Section 608. Conflicting Interests.

      If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.

                                      -35-
<PAGE>

To the extent permitted by such Act, the Trustee shall not be deemed to have a
conflicting interest by virtue of being a trustee under this Indenture with
respect to Securities of more than one series or a trustee under the Indenture,
dated as of April 15, 1983, as supplemented by the First Supplemental Indenture,
dated as of September 9, 1986, between the Company and the Trustee; the
Indenture, dated as of July 15, 1989, as supplemented by the First Supplemental
Indenture, dated as of May 15, 2003, between the Company and the Trustee; and
the Indenture, dated as of November 9, 2001, between the Company and the
Trustee, as amended or supplemented.

Section 609. Corporate Trustee Required; Eligibility.

      There shall at all times be one (and only one) Trustee hereunder with
respect to the Securities of each series, which may be Trustee hereunder for
Securities of one or more other series. Each Trustee shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such, has a combined
capital and surplus of at least $50,000,000 and has its Corporate Trust Office
in the Borough of Manhattan, The City of New York. If any such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of its supervising or examining authority, then for the purposes of this Section
and to the extent permitted by the Trust Indenture Act, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee with respect to the Securities of any series shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.

Section 610. Resignation and Removal; Appointment of Successor.

      No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 611.

      The Trustee may resign at any time with respect to the Securities of one
or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee, at the expense of the Company, may
petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Securities of such series.

      The Trustee may be removed at any time with respect to the Securities of
any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 611 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of removal, the Trustee being removed, at the expense
of the Company, may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.

      If at any time:

            (1) the Trustee shall fail to comply with 0 after written request
      therefor by the Company or by any Holder who has been a bona fide Holder
      of a Security for at least six months, or

                                      -36-
<PAGE>

            (2) the Trustee shall cease to be eligible under Section 609 and
      shall fail to resign after written request therefor by the Company or by
      any such Holder, or

            (3) the Trustee shall become incapable of acting or shall be
      adjudged bankrupt or insolvent or a receiver of the Trustee or of its
      property shall be appointed or any public officer shall take charge or
      control of the Trustee or of its property or affairs for the purpose of
      rehabilitation, conservation or liquidation,

then, in any such case, (A) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (B) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.

      If the Trustee shall resign, be removed or become incapable of acting, or
if a vacancy shall occur in the office of Trustee for any cause, with respect to
the Securities of one or more series, the Company, by a Board Resolution, shall
promptly appoint a successor Trustee or Trustees with respect to the Securities
of that or those series (it being understood that any such successor Trustee may
be appointed with respect to the Securities of one or more or all of such series
and that at any time there shall be only one Trustee with respect to the
Securities of any particular series) and shall comply with the applicable
requirements of Section 611. If, within one year after such resignation, removal
or incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any series shall be appointed by Act of the Holders
of a majority in principal amount of the Outstanding Securities of such series
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in accordance
with the applicable requirements of Section 611, become the successor Trustee
with respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee with respect
to the Securities of any series shall have been so appointed by the Company or
the Holders and accepted appointment in the manner required by Section 611, any
Holder who has been a bona fide Holder of a Security of such series for at least
six months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.

      The Company shall give notice of each resignation and each removal of the
Trustee with respect to the Securities of any series and each appointment of a
successor Trustee with respect to the Securities of any series to all Holders of
Securities of such series in the manner provided in Section 106. Each notice
shall include the name of the successor Trustee with respect to the Securities
of such series and the address of its Corporate Trust Office.

Section 611. Acceptance of Appointment by Successor.

      In case of the appointment hereunder of a successor Trustee with respect
to all Securities, every such successor Trustee so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on the request of the
Company or the successor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an

                                      -37-
<PAGE>

instrument transferring to such successor Trustee all the rights, powers and
trusts of the retiring Trustee and shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such retiring Trustee
hereunder.

      In case of the appointment hereunder of a successor Trustee with respect
to the Securities of one or more (but not all) series, the Company, the retiring
Trustee and each successor Trustee with respect to the Securities of one or more
series shall execute and deliver an indenture supplemental hereto wherein each
successor Trustee shall accept such appointment and which (1) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Trustee all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates, (2) if the retiring Trustee
is not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.

      Upon request of any such successor Trustee, the Company shall execute any
and all instruments for more fully and certainly vesting in and confirming to
such successor Trustee all such rights, powers and trusts referred to in the
first or second preceding paragraph, as the case may be.

      No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.

Section 612. Merger, Conversion, Consolidation or Succession to Business.

      Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion, consolidation or sale to such authenticating Trustee may adopt

                                      -38-
<PAGE>

such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.

Section 613. Preferential Collection of Claims Against Company.

      If and when the Trustee shall be or become a creditor of the Company (or
any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).

                                 ARTICLE SEVEN

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

Section 701. Company to Furnish Trustee Names and Addresses of Holders.

      The Company will furnish or cause to be furnished to the Trustee

            (1) semi-annually either (i) not later than March 31 and September
      30 in each year in the case of any series of Securities consisting solely
      of Original Issue Discount Securities which by their terms do not bear
      interest prior to Maturity, or (ii) not more than 15 days after each
      Regular Record Date in the case of Securities of any other series, a list,
      in such form as the Trustee may reasonably require, of the names and
      addresses of the Holders of Securities of each series as of the preceding
      March 16 or September 15 or as of such Regular Record Date, as the case
      may be; and

            (2) at such other times as the Trustee may request in writing,
      within 30 days after the receipt by the Company of any such request, a
      list of similar form and content as of a date not more than 15 days prior
      to the time such list is furnished;

      excluding from any such list names and addresses received by the Trustee
in its capacity as Security Registrar.

Section 702. Preservation of Information; Communications to Holders.

      The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.

      The rights of Holders to communicate with other Holders with respect to
their rights under this Indenture or under the Securities, and the corresponding
rights and privileges of the Trustee, shall be as provided by the Trust
Indenture Act.

      Every Holder of Securities, by receiving and holding the same, agrees with
the Company and the Trustee that neither the Company nor the Trustee nor any
agent of either of them shall be held accountable by reason of any disclosure of
information as to names and addresses of Holders made pursuant to the Trust
Indenture Act.

                                      -39-
<PAGE>

Section 703. Reports by Trustee.

      The Trustee shall transmit to Holders such reports concerning the Trustee
and its actions under this Indenture as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant thereto.

      A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.

SECTION 704. Reports by Company.

      The Company shall file with the Trustee and the Commission, and transmit
to Holders, such information, documents and other reports, and such summaries
thereof, as may be required pursuant to the Trust Indenture Act at the times and
in the manner provided pursuant to such Act.

      Delivery of such 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 conclusively rely exclusively on Officers' Certificates).

                                 ARTICLE EIGHT

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.

      The Company shall not consolidate with or merge into any other Person or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person, unless:

            (1) in case the Company shall consolidate with or merge into another
      Person or convey, transfer or lease its properties and assets
      substantially as an entirety to any Person, the Person formed by such
      consolidation or into which the Company is merged or the Person which
      acquires by conveyance or transfer, or which leases, the properties and
      assets of the Company substantially as an entirety shall be a corporation,
      partnership or trust, shall be organized and validly existing under the
      laws of the United States of America, any State thereof or the District of
      Columbia and shall expressly assume, by an indenture supplemental hereto,
      executed and delivered to the Trustee, in form satisfactory to the
      Trustee, the due and punctual payment of the principal of and any premium
      and interest on all the Securities and the performance or observance of
      every covenant of this Indenture on the part of the Company to be
      performed or observed;

            (2) immediately after giving effect to such transaction, no Event of
      Default, and no event which, after notice or lapse of time or both, would
      become an Event of Default, shall have happened and be continuing; and

                                      -40-
<PAGE>

            (3) the Company has delivered to the Trustee an Officers'
      Certificate and an Opinion of Counsel, each stating that such
      consolidation, merger, conveyance, transfer or lease and, if a
      supplemental indenture is required in connection with such transaction,
      such supplemental indenture comply with this Article and that all
      conditions precedent herein provided for relating to such transaction have
      been complied with.

SECTION 802. Successor Substituted.

      Upon any consolidation of the Company with, or merger of the Company into,
any other Person or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety in accordance with Section
801, the successor Person formed by such consolidation or into which the Company
is merged or to which such conveyance, transfer or lease is made shall succeed
to, and be substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such successor Person
had been named as the Company herein, and thereafter, except in the case of a
lease, the predecessor Person shall be relieved of all obligations and covenants
under this Indenture and the Securities.

                                  ARTICLE NINE

                             SUPPLEMENTAL INDENTURES

SECTION 901. Supplemental Indentures Without Consent of Holders.

      Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:

            (1) to evidence the succession of another Person to the Company and
      the assumption by any such successor of the covenants of the Company
      herein and in the Securities; or

            (2) to add to the covenants for the benefit of the Holders of all or
      any series of Securities (and if such covenants are to be for the benefit
      of less than all series of Securities, stating that such covenants are
      expressly being included solely for the benefit of such series) or to
      surrender any right or power herein conferred upon the Company; or

            (3) to add any additional Events of Default for the benefit of the
      Holders of all or any series of Securities (and if such additional Events
      of Default are to be for the benefit of less than all series of
      Securities, stating that such additional Events of Default are expressly
      being included solely for the benefit of such series); or

            (4) to add to or change any of the provisions of this Indenture to
      such extent as shall be necessary to permit or facilitate the issuance of
      Securities in bearer form, registrable or not registrable as to principal,
      and with or without interest coupons, or to permit or facilitate the
      issuance of Securities in uncertificated form; or

            (5) to add to, change or eliminate any of the provisions of this
      Indenture in respect of one or more series of Securities, provided that
      any such addition, change or

                                      -41-
<PAGE>

      elimination (A) shall neither (i) apply to any Security of any series
      created prior to the execution of such supplemental indenture and entitled
      to the benefit of such provision nor (ii) modify the rights of the Holder
      of any such Security with respect to such provision or (B) shall become
      effective only when there is no Security described in clause (i)
      Outstanding; or

            (6) to secure the Securities; or

            (7) to establish the form or terms of Securities of any series as
      permitted by Sections 201 and 301; or

            (8) to evidence and provide for the acceptance of appointment
      hereunder by a successor Trustee with respect to the Securities of one or
      more series and to add to or change any of the provisions of this
      Indenture as shall be necessary to provide for or facilitate the
      administration of the trusts hereunder by more than one Trustee, pursuant
      to the requirements of Section 611; or

            (9) to cure any ambiguity, to correct or supplement any provision
      herein which may be defective or inconsistent with any other provision
      herein, or to make any other provisions with respect to matters or
      questions arising under this Indenture, provided that such action pursuant
      to this Clause (9) shall not adversely affect the interests of the Holders
      of Securities of any series in any material respect.

SECTION 902. Supplemental Indentures With Consent of Holders.

      With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,

            (1) change the Stated Maturity of the principal of, or any
      installment of principal of or interest on, any Security, or reduce the
      principal amount thereof or the rate of interest thereon or any premium
      payable upon the redemption thereof, or reduce the amount of the principal
      of an Original Issue Discount Security or any other Security which would
      be due and payable upon a declaration of acceleration of the Maturity
      thereof pursuant to Section 502, or change any Place of Payment where, or
      the coin or currency in which, any Security or any premium or interest
      thereon is payable, or impair the right to institute suit for the
      enforcement of any such payment on or after the Stated Maturity thereof
      (or, in the case of redemption, on or after the Redemption Date); or

            (2) reduce the percentage in principal amount of the Outstanding
      Securities of any series, the consent of whose Holders is required for any
      such supplemental indenture, or the consent of whose Holders is required
      for any waiver (of compliance with certain provisions of this Indenture or
      certain defaults hereunder and their consequences) provided for in this
      Indenture; or

                                      -42-
<PAGE>

            (3) modify any of the provisions of this Section, Section 513 or
      Section 1006, except to increase any such percentage or to provide that
      certain other provisions of this Indenture cannot be modified or waived
      without the consent of the Holder of each Outstanding Security affected
      thereby; provided, however, that this clause shall not be deemed to
      require the consent of any Holder with respect to changes in the
      references to "the Trustee" and concomitant changes in this Section and
      Section 1006, or the deletion of this proviso, in accordance with the
      requirements of Sections 611 and 901(8).

A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.

      It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.

      After a supplemental indenture under this Section 902 becomes effective,
the Company shall mail to the Trustee a notice briefly describing such
supplemental indenture or a copy of such supplemental indenture and the Trustee
shall mail such notice or supplemental indenture to Holders affected thereby.
Any failure of the Company to mail such notice, or any defect therein, or any
failure of the Company to mail such supplemental indenture, shall not in any way
impair or affect the validity of any such supplemental indenture.

SECTION 903. Execution of Supplemental Indentures.

      In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.

SECTION 904. Effect of Supplemental Indentures.

      Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.

SECTION 905. Conformity with Trust Indenture Act.

      Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.

                                      -43-
<PAGE>

SECTION 906. Reference in Securities to Supplemental Indentures.

      Securities of any series authenticated and delivered after the execution
of any supplemental indenture pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental indenture. If the Company shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.

                                  ARTICLE TEN

                                   COVENANTS

SECTION 1001. Payment of Principal, Premium and Interest.

      The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of and any premium
and interest on the Securities of that series in accordance with the terms of
the Securities and this Indenture.

SECTION 1002. Maintenance of Office or Agency.

      The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands.

      The Company may also from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in each Place of Payment for Securities of any series for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.

Section 1003. Money for Securities Payments to Be Held in Trust.

      If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities, it will, on or before each due date of the
principal of or any premium or interest on any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal and any premium and interest so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of its action or failure so to
act.

                                      -44-
<PAGE>

      Whenever the Company shall have one or more Paying Agents for any series
of Securities, it will, prior to each due date of the principal of or any
premium or interest on any Securities of that series, deposit with a Paying
Agent a sum sufficient to pay such amount, such sum to be held as provided by
the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its action or failure so to act.

      The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will (1) comply with the provisions of
the Trust Indenture Act applicable to it as a Paying Agent and (2) during the
continuance of any default by the Company (or any other obligor upon the
Securities of that series) in the making of any payment in respect of the
Securities of that series, upon the written request of the Trustee, forthwith
pay to the Trustee all sums held in trust by such Paying Agent for payment in
respect of the Securities of that series.

      The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.

      Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of or any premium or
interest on any Security of any series and remaining unclaimed for two years
after such principal, premium or interest has become due and payable shall be
paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Security shall thereafter,
as an unsecured general creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the Borough of
Manhattan, The City of New York, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.

SECTION 1004. Statement by Officers as to Default.

      The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.

                                      -45-
<PAGE>

SECTION 1005. Existence.

      Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence.

Section 1006. Waiver of Certain Covenants.

      Except as otherwise specified as contemplated by Section 301 for
Securities of such series, the Company may, with respect to the Securities of
any series, omit in any particular instance to comply with any term, provision
or condition set forth in any covenant provided pursuant to Section 301(18),
901(2) or 901(7) for the benefit of the Holders of such series or in Section
1005, if before the time for such compliance the Holders of at least a majority
in principal amount of the Outstanding Securities of such series shall, by Act
of such Holders, either waive such compliance in such instance or generally
waive compliance with such term, provision or condition, but no such waiver
shall extend to or affect such term, provision or condition except to the extent
so expressly waived, and, until such waiver shall become effective, the
obligations of the Company and the duties of the Trustee in respect of any such
term, provision or condition shall remain in full force and effect.

                                 ARTICLE ELEVEN

                            REDEMPTION OF SECURITIES

SECTION 1101. Applicability of Article.

      Securities of any series which are redeemable before their Stated Maturity
shall be redeemable in accordance with their terms and (except as otherwise
specified as contemplated by Section 301 for such Securities) in accordance with
this Article.

SECTION 1102. Election to Redeem; Notice to Trustee.

      The election of the Company to redeem any Securities shall be evidenced by
a Board Resolution or in another manner specified as contemplated by Section 301
for such Securities. In case of any redemption at the election of the Company of
the Securities of any series (including any such redemption affecting only a
single Security), the Company shall, at least 60 days prior to the Redemption
Date fixed by the Company (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date, of the principal amount of
Securities of such series to be redeemed and, if applicable, of the tenor of the
Securities to be redeemed. In the case of any redemption of Securities prior to
the expiration of any restriction on such redemption provided in the terms of
such Securities or elsewhere in this Indenture, the Company shall furnish the
Trustee with an Officers' Certificate evidencing compliance with such
restriction.

SECTION 1103. Selection by Trustee of Securities to Be Redeemed.

      If less than all the Securities of any series are to be redeemed (unless
all the Securities of such series and of a specified tenor are to be redeemed or
unless such redemption affects only a single Security), the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities of such series
not previously called for redemption, by such method as the Trustee shall deem
fair and appropriate

                                      -46-
<PAGE>

and which may provide for the selection for redemption of a portion of the
principal amount of any Security of such series, provided that the unredeemed
portion of the principal amount of any Security shall be in an authorized
denomination (which shall not be less than the minimum authorized denomination)
for such Security. If less than all the Securities of such series and of a
specified tenor are to be redeemed (unless such redemption affects only a single
Security), the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series and specified tenor not previously called for
redemption in accordance with the preceding sentence.

      The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption as aforesaid and, in case of any Securities selected for
partial redemption as aforesaid, the principal amount thereof to be redeemed.

      The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.

      For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.

Section 1104. Notice of Redemption.

      Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Securities to be redeemed, at his address appearing in the
Security Register.

      All notices of redemption shall state:

            (1)   the Redemption Date;

            (2)   the Redemption Price;

            (3)   if less than all the Outstanding Securities of any series
      consisting of more than a single Security are to be redeemed, the
      identification (and, in the case of partial redemption of any such
      Securities, the principal amounts) of the particular Securities to be
      redeemed and, if less than all the Outstanding Securities of any series
      consisting of a single Security are to be redeemed, the principal amount
      of the particular Security to be redeemed;

            (4)   that on the Redemption Date the Redemption Price will become
      due and payable upon each such Security to be redeemed and, if applicable,
      that interest thereon will cease to accrue on and after said date;

            (5)   the place or places where each such Security is to be
      surrendered for payment of the Redemption Price;

                                      -47-
<PAGE>

            (6)   that the redemption is for a sinking fund, if such is the
      case; and

            (7)   if applicable, the CUSIP numbers of the Securities of that
      series.

      Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and, unless otherwise
specified or contemplated by Section 301, shall be irrevocable.

Section 1105. Deposit of Redemption Price.

      Prior to any Redemption Date, the Company shall deposit with the Trustee
or with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 1003) an amount of money
sufficient to pay the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date or the Securities of the series provide
otherwise) accrued interest on, all the Securities which are to be redeemed on
that date.

Section 1106. Securities Payable on Redemption Date.

      Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together, if applicable, with
accrued interest to the Redemption Date; provided, however, that, unless
otherwise specified as contemplated by Section 301, installments of interest
whose Stated Maturity is on or prior to the Redemption Date will be payable to
the Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business on the relevant Record Dates
according to their terms and the provisions of Section 307.

      If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor in the
Security.

Section 1107. Securities Redeemed in Part.

      Any Security which is to be redeemed only in part shall be surrendered at
a Place of Payment therefor (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of the same series and of like tenor, of
any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.

                                      -48-
<PAGE>

                                 ARTICLE TWELVE

                                  SINKING FUNDS

Section 1201. Applicability of Article.

      The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of any series except as otherwise specified as
contemplated by Section 301 for such Securities.

      The minimum amount of any sinking fund payment provided for by the terms
of any series of Securities is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of such Securities is herein referred to as an "optional sinking fund
payment". If provided for by the terms of any series of Securities, the cash
amount of any sinking fund payment may be subject to reduction as provided in
Section 1202. Each sinking fund payment shall be applied to the redemption of
Securities of the series as provided for by the terms of such Securities.

Section 1202. Satisfaction of Sinking Fund Payments with Securities.

      The Company (1) may deliver Outstanding Securities of a series (other than
any previously called for redemption) and (2) may apply as a credit Securities
of a series which have been redeemed either at the election of the Company
pursuant to the terms of such Securities or through the application of permitted
optional sinking fund payments pursuant to the terms of such Securities, in each
case in satisfaction of all or any part of any sinking fund payment with respect
to any Securities of such series required to be made pursuant to the terms of
such Securities as and to the extent provided for by the terms of such
Securities; provided that the Securities to be so credited have not been
previously so credited. The Securities to be so credited shall be received and
credited for such purpose by the Trustee at the Redemption Price, as specified
in the Securities so to be redeemed, for redemption through operation of the
sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.

Section 1203. Redemption of Securities for Sinking Fund.

      Not less than 60 days prior to each sinking fund payment date for any
Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for such
Securities pursuant to the terms of such Securities, the portion thereof, if
any, which is to be satisfied by payment of cash and the portion thereof, if
any, which is to be satisfied by delivering and crediting Securities pursuant to
Section 1202 and will also deliver to the Trustee any Securities to be so
delivered. Not less than 30 days prior to each such sinking fund payment date,
the Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 1103 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 1104. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 1106 and 1107.

                                      -49-
<PAGE>

                                ARTICLE THIRTEEN

                       DEFEASANCE AND COVENANT DEFEASANCE

Section 1301. Company's Option to Effect Defeasance or Covenant Defeasance.

      Unless otherwise provided as contemplated by Section 301, Sections 1302
and 1303 shall apply to any Securities or any series of Securities, as the case
may be, in either case, denominated in U.S. dollars and bearing interest at a
fixed rate, in accordance with any applicable requirements provided pursuant to
Section 301 and upon compliance with the conditions set forth below in this
Article; and the Company may elect, at its option at any time, to have Sections
1302 and 1303 applied to any Securities or any series of Securities, as the case
may be, designated pursuant to Section 301 as being defeasible pursuant to such
Section 1302 or 1303, in accordance with any applicable requirements provided
pursuant to Section 301 and upon compliance with the conditions set forth below
in this Article. Any such election to have or not to have Sections 1302 and 1303
apply, as the case may be, shall be evidenced by a Board Resolution or in
another manner specified as contemplated by Section 301 for such Securities.

Section 1302. Defeasance and Discharge.

      Upon the Company's exercise of its option (if any) to have this Section
applied to any Securities or any series of Securities, as the case may be, or if
this Section shall otherwise apply to any Securities or any series of
Securities, as the case may be, the Company shall be deemed to have been
discharged from its obligations with respect to such Securities as provided in
this Section on and after the date the conditions set forth in Section 1304 are
satisfied (hereinafter called "DEFEASANCE"). For this purpose, such Defeasance
means that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by such Securities and to have satisfied all its other
obligations under such Securities and this Indenture insofar as such Securities
are concerned (and the Trustee, at the expense of the Company, shall execute
proper instruments acknowledging the same), subject to the following which shall
survive until otherwise terminated or discharged hereunder: (1) the rights of
Holders of such Securities to receive, solely from the trust fund described in
Section 1304 and as more fully set forth in such Section, payments in respect of
the principal of and any premium and interest on such Securities when payments
are due, (2) the Company's obligations with respect to such Securities under
Sections 304, 305, 306, 1002 and 1003, (3) the rights, powers, trusts, duties
and immunities of the Trustee hereunder and (4) this Article. Subject to
compliance with this Article, the Company may exercise its option (if any) to
have this Section applied to the Securities of any series notwithstanding the
prior exercise of its option (if any) to have Section 1303 applied to such
Securities.

Section 1303. Covenant Defeasance.

      Upon the Company's exercise of its option (if any) to have this Section
applied to any Securities or any series of Securities, as the case may be, or if
this Section shall otherwise apply to any Securities or any series of
Securities, as the case may be, (1) the Company shall be released from its
obligations under Section 1005 and any covenants provided pursuant to Section
301(18), 901(2) or 901(7) for the benefit of the Holders of such Securities and
(2) the occurrence of any event specified in Sections 501(4) (with respect to
Section 1005 and any such covenants provided pursuant to Section 301(18), 901(2)
or 901(7)) and

                                      -50-
<PAGE>

501(7) shall be deemed not to be or result in an Event of Default, in each case
with respect to such Securities as provided in this Section on and after the
date the conditions set forth in Section 1304 are satisfied (hereinafter called
"COVENANT DEFEASANCE"). For this purpose, such Covenant Defeasance means that,
with respect to such Securities, the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such specified Section (to the extent so specified in the case of Section
501(4)), whether directly or indirectly by reason of any reference elsewhere
herein to any such Section or by reason of any reference in any such Section to
any other provision herein or in any other document, but the remainder of this
Indenture and such Securities shall be unaffected thereby.

Section 1304. Conditions to Defeasance or Covenant Defeasance.

      The following shall be the conditions to the application of Section 1302
or 1303 to any Securities or any series of Securities, as the case may be:

            (1)   The Company shall irrevocably have deposited or caused to be
      deposited with the Trustee (or another trustee which satisfies the
      requirements contemplated by Section 609 and agrees to comply with the
      provisions of this Article applicable to it) as trust funds in trust for
      the purpose of making the following payments, specifically pledged as
      security for, and dedicated solely to, the benefits of the Holders of such
      Securities, (A) money in an amount, or (B) U.S. Government Obligations
      which through the scheduled payment of principal and interest in respect
      thereof in accordance with their terms will provide, not later than one
      day before the due date of any payment, money in an amount, or (C) a
      combination thereof, in each case sufficient, in the opinion of a
      nationally recognized firm of independent public accountants expressed in
      a written certification thereof delivered to the Trustee, to pay and
      discharge, and which shall be applied by the Trustee (or any such other
      qualifying trustee) to pay and discharge, the principal of and any premium
      and interest on such Securities on the respective Stated Maturities, in
      accordance with the terms of this Indenture and such Securities. As used
      herein, "U.S. GOVERNMENT OBLIGATION" means (x) any security which is (i) a
      direct obligation of the United States of America for the payment of which
      the full faith and credit of the United States of America is pledged or
      (ii) an obligation of a Person controlled or supervised by and acting as
      an agency or instrumentality of the United States of America the payment
      of which is unconditionally guaranteed as a full faith and credit
      obligation by the United States of America, which, in either case (i) or
      (ii), is not callable or redeemable at the option of the issuer thereof,
      and (y) any depositary receipt issued by a bank (as defined in Section
      3(a)(2) of the Securities Act) as custodian with respect to any U.S.
      Government Obligation which is specified in Clause (x) above and held by
      such bank for the account of the holder of such depositary receipt, or
      with respect to any specific payment of principal of or interest on any
      U.S. Government Obligation which is so specified and held, provided that
      (except as required by law) such custodian is not authorized to make any
      deduction from the amount payable to the holder of such depositary receipt
      from any amount received by the custodian in respect of the U.S.
      Government Obligation or the specific payment of principal or interest
      evidenced by such depositary receipt.

            (2)   In the event of an election to have Section 1302 apply to any
      Securities or any series of Securities, as the case may be, the Company
      shall have delivered to the Trustee an Opinion of Counsel stating that (A)
      the Company has received from, or there

                                      -51-
<PAGE>

      has been published by, the Internal Revenue Service a ruling or (B) since
      the date of this instrument, there has been a change in the applicable
      Federal income tax law, in either case (A) or (B) to the effect that, and
      based thereon such opinion shall confirm that, the Holders of such
      Securities will not recognize gain or loss for Federal income tax purposes
      as a result of the deposit, Defeasance and discharge to be effected with
      respect to such Securities and will be subject to Federal income tax on
      the same amount, in the same manner and at the same times as would be the
      case if such deposit, Defeasance and discharge were not to occur.

            (3)   In the event of an election to have Section 1303 apply to any
      Securities or any series of Securities, as the case may be, the Company
      shall have delivered to the Trustee an Opinion of Counsel to the effect
      that the Holders of such Securities will not recognize gain or loss for
      Federal income tax purposes as a result of the deposit and Covenant
      Defeasance to be effected with respect to such Securities and will be
      subject to Federal income tax on the same amount, in the same manner and
      at the same times as would be the case if such deposit and Covenant
      Defeasance were not to occur.

            (4)   The Company shall have delivered to the Trustee an Officers'
      Certificate to the effect that neither such Securities nor any other
      Securities of the same series, if then listed on any securities exchange,
      will be delisted as a result of such deposit.

            (5)   No event which is, or after notice or lapse of time or both
      would become, an Event of Default with respect to such Securities or any
      other Securities shall have occurred and be continuing at the time of such
      deposit or, with regard to any such event specified in Sections 501(5) and
      (6), at any time on or prior to the 90th day after the date of such
      deposit (it being understood that this condition shall not be deemed
      satisfied until after such 90th day).

            (6)   Such Defeasance or Covenant Defeasance shall not cause the
      Trustee to have a conflicting interest within the meaning of the Trust
      Indenture Act (assuming all Securities are in default within the meaning
      of such Act).

            (7)   Such Defeasance or Covenant Defeasance shall not result in a
      breach or violation of, or constitute a default under, any other agreement
      or instrument to which the Company is a party or by which it is bound.

            (8)   Such Defeasance or Covenant Defeasance shall not result in the
      trust arising from such deposit constituting an investment company within
      the meaning of the Investment Company Act unless such trust shall be
      registered under such Act or exempt from registration thereunder.

            (9)   The Company shall have delivered to the Trustee an Officers'
      Certificate and an Opinion of Counsel, each stating that all conditions
      precedent with respect to such Defeasance or Covenant Defeasance have been
      complied with (in each case, subject to the satisfaction of the condition
      in clause (5)).

                                      -52-
<PAGE>

Section 1305. Deposited Money and U.S. Government Obligations to Be Held in
              Trust; Miscellaneous Provisions.

      Subject to the provisions of the last paragraph of Section 1003, all money
and U.S. Government Obligations (including the proceeds thereof) deposited with
the Trustee or other qualifying trustee (solely for purposes of this Section and
Section 1306, the Trustee and any such other trustee are referred to
collectively as the "TRUSTEE") pursuant to Section 1304 in respect of any
Securities shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and this Indenture, to the payment, either
directly or through any such Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Holders of such
Securities, of all sums due and to become due thereon in respect of principal
and any premium and interest, but money so held in trust need not be segregated
from other funds except to the extent required by law.

      The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 1304 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of Outstanding Securities.

      Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or U.S. Government Obligations held by it as provided in Section 1304 with
respect to any Securities which, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect the Defeasance or Covenant Defeasance, as
the case may be, with respect to such Securities.

Section 1306. Reinstatement.

      If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article with respect to any Securities by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, then the obligations under this
Indenture and such Securities from which the Company has been discharged or
released pursuant to Section 1302 or 1303 shall be revived and reinstated as
though no deposit had occurred pursuant to this Article with respect to such
Securities, until such time as the Trustee or Paying Agent is permitted to apply
all money held in trust pursuant to Section 1305 with respect to such Securities
in accordance with this Article; provided, however, that if the Company makes
any payment of principal of or any premium or interest on any such Security
following such reinstatement of its obligations, the Company shall be subrogated
to the rights (if any) of the Holders of such Securities to receive such payment
from the money so held in trust.

      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.

                                      -53-
<PAGE>

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

                                        AMERICAN INTERNATIONAL GROUP, INC.

                                        By:__________________________________
                                           Name:
                                           Title:

Attest:

______________________________________
Name:
Title:

                                        THE BANK OF NEW YORK

                                        By:__________________________________
                                           Name:
                                           Title:
Attest:

______________________________________
Name:
Title:

                                      -54-
<PAGE>

STATE OF NEW YORK      )
                       )  ss.:
COUNTY OF NEW YORK     )

      On the ____ day of ___________, before me personally came __________, to
me known, who, being by me duly sworn, did depose and say that he or she is
___________ of American International Group, Inc., one of the corporations
described in and which executed the foregoing instrument; and that he or she
signed his or her name thereto by authority of the Board of Directors.

                                                           _____________________

STATE OF NEW YORK      )
                       )  ss.:
COUNTY OF NEW YORK     )

      On the ______ day of ___________ before me personally came
___________________________, to me known, who, being by me duly sworn, did
depose and say that he or she is ____________________ of
The Bank of New York, one of the corporations described in and which
executed the foregoing instrument; and that he or she signed his or her name
thereto by authority of the Board of Directors.

                                                           _____________________

                                      -55-

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