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8-K - 8-K - WALT DISNEY CO/a12-28177_48k.htm
EX-4.3 - EX-4.3 - WALT DISNEY CO/a12-28177_4ex4d3.htm
EX-4.2 - EX-4.2 - WALT DISNEY CO/a12-28177_4ex4d2.htm
EX-4.1 - EX-4.1 - WALT DISNEY CO/a12-28177_4ex4d1.htm
EX-4.4 - EX-4.4 - WALT DISNEY CO/a12-28177_4ex4d4.htm
EX-5.1 - EX-5.1 - WALT DISNEY CO/a12-28177_4ex5d1.htm

Exhibit 1.1

 

The Walt Disney Company

 

(a Delaware corporation)

 

Fixed Rate
Medium-Term Notes, Series E

 

TERMS AGREEMENT

 

November 27, 2012

 

The Walt Disney Company
500 South Buena Vista Street
Burbank, California  91521

 

Attention:  Legal Department

 

Re:          Distribution Agreement dated December 8, 2010

 

Reference is made to the Distribution Agreement dated December 8, 2010, which is incorporated herein by reference.  The several underwriters named below (the “Underwriters”) severally agree to purchase the following respective principal amounts of Medium-Term Notes, Series E, entitled 0.450% Global Notes Due 2015 (the “2015 Notes”), 1.100% Global Notes Due 2017 (the “2017 Notes”), 2.350% Global Notes Due 2022 (the “2022 Notes”) and the 3.700% Global Notes Due 2042 (the “2042 Notes” and, together with the 2015 Notes, 2017 Notes and 2022 Notes, the “Notes”) set forth opposite their names:

 

Underwriter

 

Principal
Amount of
2015 Notes

 

Principal
Amount of
2017 Notes

 

Principal
Amount of
2022 Notes

 

Principal
Amount of
2042 Notes

 

Citigroup Global Markets Inc.

 

$

69,167,000

 

$

138,334,000

 

$

138,334,000

 

$

69,167,000

 

J.P. Morgan Securities LLC

 

69,167,000

 

138,334,000

 

138,333,000

 

69,167,000

 

Goldman, Sachs & Co.

 

69,167,000

 

138,334,000

 

138,333,000

 

69,167,000

 

Merrill Lynch, Pierce, Fenner & Smith
Incorporated

 

69,167,000

 

138,334,000

 

138,334,000

 

69,167,000

 

Morgan Stanley & Co. LLC

 

69,167,000

 

138,333,000

 

138,334,000

 

69,167,000

 

RBS Securities Inc.

 

69,167,000

 

138,333,000

 

138,334,000

 

69,167,000

 

Mizuho Securities USA Inc.

 

12,000,000

 

24,000,000

 

24,000,000

 

12,000,000

 

RBC Capital Markets, LLC

 

12,000,000

 

24,000,000

 

24,000,000

 

12,000,000

 

SunTrust Robinson Humphrey, Inc.

 

12,000,000

 

24,000,000

 

24,000,000

 

12,000,000

 

U.S. Bancorp Investments, Inc.

 

12,000,000

 

24,000,000

 

24,000,000

 

12,000,000

 

Wells Fargo Securities, LLC

 

12,000,000

 

24,000,000

 

24,000,000

 

12,000,000

 

Drexel Hamilton, LLC

 

4,166,000

 

8,333,000

 

8,333,000

 

4,167,000

 

Lebenthal & Co., LLC

 

4,166,000

 

8,333,000

 

8,333,000

 

4,167,000

 

Loop Capital Markets LLC

 

4,167,000

 

8,333,000

 

8,333,000

 

4,166,000

 

Samuel A. Ramirez & Company, Inc.

 

4,167,000

 

8,333,000

 

8,333,000

 

4,166,000

 

Muriel Siebert & Co., Inc.

 

4,166,000

 

8,333,000

 

8,333,000

 

4,166,000

 

The Williams Capital Group, L.P.

 

4,166,000

 

8,333,000

 

8,333,000

 

4,166,000

 

Total

 

$

500,000,000

 

$

1,000,000,000

 

$

1,000,000,000

 

$

500,000,000

 

 



 

Stated Maturity Date:

 

2015 Notes: December 1, 2015

 

 

2017 Notes: December 1, 2017

 

 

2022 Notes: December 1, 2022

 

 

2042 Notes: December 1, 2042

 

 

 

Original Issue Date:

 

November 30, 2012

 

 

 

Trade Date:

 

November 27, 2012

 

 

 

Public Offering Price:

 

2015 Notes: 99.255% plus accrued interest, if any, from November 30, 2012

 

 

2017 Notes: 99.289% plus accrued interest, if any, from November 30, 2012

 

 

2022 Notes: 99.232% plus accrued interest, if any, from November 30, 2012

 

 

2042 Notes: 99.282% plus accrued interest, if any, from November 30, 2012

 

 

 

Underwriting Discounts and Commissions:

 

2015 Notes: 0.200%

 

2017 Notes: 0.350%

 

 

2022 Notes: 0.450%

 

 

2042 Notes: 0.750%

 

 

 

Price Payable to the Company by the Underwriters:

 

2015 Notes: 99.055%

 

2017 Notes: 98.939%

 

2022 Notes: 98.782%

 

2042 Notes: 98.532%

 

 

 

Applicable Time:

 

4:50 p.m. (New York City time) on November 27, 2012

 

 

 

Settlement Date and Time:

 

November 30, 2012, at 7 a.m. Pacific Time

 

 

 

Additional Terms:

 

 

 

 

 

Interest Rate:

 

2015 Notes: 0.450% per annum, accruing from November 30, 2012

 

 

2017 Notes: 1.100% per annum, accruing from November 30, 2012

 

 

2022 Notes: 2.350% per annum, accruing from November 30, 2012

 

 

2042 Notes: 3.700% per annum, accruing from November 30, 2012

 

 

 

Interest Payment Dates:

 

Semi-annually on each June 1 and December 1, commencing on June 1, 2013

 

 

 

Day Count Convention:

 

30/360

 

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Denominations:

 

U.S. $2,000 or any integral multiple of U.S. $1,000 in excess of U.S. $2,000

 

The Notes shall have the further terms set forth in Schedule II hereto.

 

The certificate referred to in Section 6(a) of the Distribution Agreement and the opinions referred to in Section 6(b) of the Distribution Agreement will not be required.  The reasonable fees and disbursements of counsel to the Underwriters incurred in connection with the issuance and sale of the Notes will be paid by the Underwriters.  On the Settlement Date, The Walt Disney Company (the “Company”) shall deliver to the Underwriters a letter, dated the Original Issue Date referred to above and substantially in the form of Schedule I hereto.

 

Default by One or More of the Underwriters:  If one or more of the Underwriters shall fail at the Original Issue Date to purchase the Notes which it or they are obligated to purchase under this Terms Agreement (the “Defaulted Notes”), the Representatives (as defined on the signature pages hereof) shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters satisfactory to the Company, to purchase all, but not less than all, of the Defaulted Notes in such amounts as may be agreed upon and upon the terms herein set forth; if, however, the Representatives shall not have completed such arrangements within such 24-hour period, then:

 

(a)           if the aggregate principal amount of the Defaulted Notes does not exceed 10% of the aggregate principal amount of the Notes to be purchased hereunder, the non-defaulting Underwriters shall be obligated, severally and not jointly, to purchase the full amount thereof in the respective proportions that their respective underwriting obligations hereunder bear to the underwriting obligations of all non-defaulting Underwriters, or

 

(b)           if the aggregate principal amount of the Defaulted Notes exceeds 10% of the aggregate principal amount of the Notes to be purchased hereunder, this Terms Agreement shall terminate without liability on the part of any non-defaulting Underwriter.

 

No action taken pursuant to this provision shall relieve any defaulting Underwriter from liability in respect of its default.

 

In the event of any such default which does not result in a termination of this Terms Agreement, the Representatives or the Company shall have the right to postpone the Original Issue Date for a period not exceeding seven days in order to effect any required changes in the pricing supplement dated November 27, 2012 relating to the Notes or in any other documents or arrangements.

 

European Economic Area:  In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), each Underwriter severally represents and agrees that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation Date”) it has not made and will not make an offer of Notes which are the subject of the offering contemplated hereby to the public in that Relevant Member State other than:

 

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(a)           to any legal entity which is a qualified investor as defined in the Prospectus Directive;

 

(b)           to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus Directive), subject to obtaining the prior consent of the Representatives for any such offer; or

 

(c)           in any other circumstances falling within Article 3(2) of the Prospectus Directive,

 

provided that no such offer of Notes referred to in (a) to (c) above shall require the Company or any Underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Directive, or supplement a prospectus pursuant to Article 16 of the Prospectus Directive.

 

For the purposes of this provision, the expression an “offer of Notes to the public” in relation to any Notes in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Notes to be offered so as to enable an investor to decide to purchase or subscribe the Notes, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State, the expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.

 

United Kingdom:  Each Underwriter severally represents and agrees that:

 

·                  it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 (the “FSMA”)) received by it in connection with the issue or sale of the Notes in circumstances in which Section 21(1) of the FSMA does not apply to the Company; and

 

·                  it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Notes in, from or otherwise involving the United Kingdom.

 

Each Underwriter severally represents to and agrees with the Company that it has not offered, sold or delivered and that it will not offer, sell or deliver, directly or indirectly, any of the Notes or distribute the pricing supplement and accompanying prospectus supplement and prospectus or any other material relating to the Notes, in or from any jurisdiction except under circumstances that will, to the best of its knowledge and belief, result in compliance with the applicable laws and regulations thereof.

 

Without prejudice to the other provisions of this Terms Agreement and the Distribution Agreement, and except for registration under the Securities Act of 1933, as amended, and compliance with the rules and regulations of the Securities and Exchange Commission

 

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thereunder, the Company shall not have any responsibility for, and each Underwriter severally agrees with the Company that such Underwriter and its respective affiliates will obtain, any consent, approval or authorization required by them for the subscription, offer, sale or delivery by them of any of the Notes under the laws and regulations in force in any foreign jurisdiction to which they are subject or in or from which they make such subscription, offer, sale or delivery of any of the Notes.

 

THIS TERMS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES CREATED HEREBY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF TITLE 14 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND NEW YORK CIVIL PRACTICE LAW RULE 327(b).

 

If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Underwriters a counterpart hereof, whereupon this instrument along with all counterparts will become a binding agreement between the Company and the Underwriters in accordance with its terms.

 

5



 

 

Very truly yours,

 

 

 

Citigroup Global Markets Inc.

 

 

 

By:

/s/ Brian D. Bednarski

 

 

Name: Brian D. Bednarski

 

 

Title: Managing Director

 

 

 

 

 

J.P. Morgan Securities LLC

 

 

 

By:

/s/ Stephen L. Sheiner

 

 

Name: Stephen L. Sheiner

 

 

Title: Executive Director

 

 

 

 

 

Goldman, Sachs & Co.

 

 

 

 

 

By:

/s/ Adam T. Greene

 

 

Name: Adam T. Greene

 

 

Title: Vice President

 

 

 

 

 

Merrill Lynch, Pierce, Fenner & Smith

 

Incorporated

 

 

 

 

 

By:

/s/ Keith Harman

 

 

Name: Keith Harman

 

 

Title: Managing Director

 

 

 

 

 

Morgan Stanley & Co. LLC

 

 

 

 

 

By:

/s/ Yurij Slyz

 

 

Name: Yurij Slyz

 

 

Title: Executive Director

 

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RBS Securities Inc.

 

 

 

 

 

By:

/s/ Thomas Bausano

 

 

Name: Thomas Bausano

 

 

Title: Managing Director

 

 

 

 

 

 

 

For themselves and as Representatives (the “Representatives”) of the other Underwriters named herein

 

7



 

Accepted and agreed:

 

 

 

THE WALT DISNEY COMPANY

 

 

 

 

 

By:

/s/ Christine M. McCarthy

 

 

Name: Christine M. McCarthy

 

 

Title: Executive Vice President – Corporate Real Estate, Sourcing, Alliances and Treasurer

 

 

 

 

 

November 27, 2012

 

 

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SCHEDULE I

 

November 30, 2012

 

Citigroup Global Markets Inc.

J.P. Morgan Securities LLC

Goldman, Sachs & Co.

Merrill Lynch, Pierce, Fenner & Smith
Incorporated

Morgan Stanley & Co. LLC

RBS Securities Inc.

As Representatives of the several Underwriters

 

Gentlemen:

 

I am Associate General Counsel of The Walt Disney Company, a Delaware corporation (“Disney”), and have acted as such in connection with the issuance and sale by Disney of Medium-Term Notes, Series E, entitled 0.450% Global Notes Due 2015 (the “2015 Notes”), 1.100% Global Notes Due 2017 (the “2017 Notes”), 2.350% Global Notes Due 2022 (the “2022 Notes”) and the 3.700% Global Notes Due 2042 (the “2042 Notes” and, together with the 2015 Notes, 2017 Notes and 2022 Notes, the “Notes”) pursuant to the Terms Agreement, dated November 27, 2012 (the “Terms Agreement”), between Disney and each of Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. LLC and RBS Securities Inc., as representatives of the several underwriters named therein (collectively, the “Underwriters”).

 

This letter is being furnished to you pursuant to the Terms Agreement.

 

In connection with this letter, I have examined and am familiar with originals or copies, certified or otherwise identified to my satisfaction, of such documents as I have deemed necessary or appropriate as a basis for this letter, including (a) the Registration Statement on Form S-3 (Registration No. 333-171048), filed with the Securities and Exchange Commission (the “Commission”) on December 8, 2010 (such Registration Statement (including the documents incorporated or deemed to be incorporated by reference in the Registration Statement or the Prospectus (as defined below) pursuant to Item 12 of Form S-3 under the Securities Act of 1933 (the “Incorporated Documents”)) being hereinafter referred to collectively as the “Registration Statement”), pertaining to Disney’s debt securities and other securities, (b) the Prospectus, dated December 8, 2010 (the “Base Prospectus”), the accompanying Prospectus Supplement, dated December 8, 2010 (the “Prospectus Supplement”) and the Pricing Supplement, dated November 27, 2012 (the “Pricing Supplement”), relating to the Notes, each of which was filed with the Commission pursuant to Rule 424(b) under the Securities Act of 1933 (such Base Prospectus (including the Incorporated Documents), Prospectus Supplement and Pricing Supplement being hereinafter referred to collectively as the “Prospectus”), (c) an executed copy of the Terms Agreement and (d) the Pricing Term Sheet dated November 27, 2012 filed with the Commission as a free writing prospectus pursuant to Rule 433 under the Securities Act of 1933 (the “Term Sheet”).

 



 

I have made such inquiry of such officers of Disney and its subsidiaries and counsel for Disney and examined such corporate records, certificates of officers of Disney, officers of Disney’s subsidiaries and of public officials and such other documents and such questions of law and fact as I have considered necessary or appropriate for the purposes of this letter.  In connection with my participation in the preparation of the Registration Statement, Prospectus and the Term Sheet, I have not verified, independently, nor do I pass upon or assume any responsibility for, explicitly or implicitly, the accuracy, completeness or fairness of the statements contained therein.

 

Based upon and subject to the foregoing, nothing has come to my attention that leads me to believe that (a) the Registration Statement at the time such Registration Statement became effective contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (b) the Pricing Disclosure Package, at the Applicable Time specified in the Terms Agreement, contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, or (c) the Prospectus, as of the date of the Terms Agreement or as of the date hereof, contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except that, in each case, I express no opinion with respect to the financial statements, schedules and other financial data included or incorporated by reference therein or excluded therefrom or the exhibits to the Registration Statement, including the Trustee’s Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended.  As used in this paragraph, “Pricing Disclosure Package” means the Base Prospectus (including the Incorporated Documents) and the accompanying Prospectus Supplement, together with the Term Sheet.

 

This letter is rendered to you and the Underwriters, in their capacity as Underwriters, in connection with the offering and sale of the Notes, and this letter may not be used, circulated, quoted or otherwise referred to or relied upon for any other purpose or by any other person without my prior express written permission.

 

 

Very truly yours,

 

 

 

 

 

10



 

SCHEDULE II

 

Filed Pursuant to Rule 433

Registration No. 333-171048

Pricing Term Sheet

November 27, 2012

 

The Walt Disney Company

 

0.450% Global Notes Due 2015
1.100% Global Notes Due 2017
2.350% Global Notes Due 2022
3.700% Global Notes Due 2042

 

This free writing prospectus relates only to the securities of The Walt Disney Company (the “Company”) described below and should be read together with the Company’s prospectus supplement dated December 8, 2010 (the “Prospectus Supplement”), the accompanying prospectus dated December 8, 2010 (the “Prospectus”) and the documents incorporated and deemed to be incorporated by reference therein.

 

Issuer:

The Walt Disney Company (the “Company”)

 

 

Title of Securities:

0.450% Global Notes Due 2015 (the “2015 Notes”)

1.100% Global Notes Due 2017 (the “2017 Notes”)

2.350% Global Notes Due 2022 (the “2022 Notes”)

3.700% Global Notes Due 2042 (the “2042 Notes”)

 

The 2015 Notes, 2017 Notes, 2022 Notes and 2042 Notes (collectively, the “Notes”) will be part of a single series of the Company’s senior debt securities under the indenture (as defined in the Prospectus Supplement) designated as Medium-Term Notes, Series E. The 2015 Notes, 2017 Notes, 2022 Notes and 2042 Notes are sometimes referred to, individually, as a “tranche” of Notes.

 

 

Trade Date:

November 27, 2012

 

 

Settlement Date (T+3):

November 30, 2012

 

 

Maturity Date:

2015 Notes: December 1, 2015

2017 Notes: December 1, 2017

2022 Notes: December 1, 2022

2042 Notes: December 1, 2042

 



 

Aggregate Principal Amount Offered:

2015 Notes: $500,000,000

2017 Notes: $1,000,000,000

2022 Notes: $1,000,000,000

2042 Notes: $500,000,000

 

 

Price to Public (Issue Price):

2015 Notes: 99.255% plus accrued interest, if any, from November 30, 2012

2017 Notes: 99.289% plus accrued interest, if any, from November 30, 2012

2022 Notes: 99.232% plus accrued interest, if any, from November 30, 2012

2042 Notes: 99.282% plus accrued interest, if any, from November 30, 2012

 

 

Interest Rate:

2015 Notes: 0.450% per annum, accruing from November 30, 2012

2017 Notes: 1.100% per annum, accruing from November 30, 2012

2022 Notes: 2.350% per annum, accruing from November 30, 2012

2042 Notes: 3.700% per annum, accruing from November 30, 2012

 

 

Interest Payment Dates:

Semi-annually on each June 1 and December 1, commencing on June 1, 2013

 

 

Regular Record Dates:

May 15 or November 15, as the case may be, immediately preceding the applicable interest payment date

 

 

Use of Proceeds:

The Company intends to use the net proceeds from the sale of the Notes for general corporate purposes, which may include among others, to repay the Company’s indebtedness and to fund share repurchases and dividend payments and for other general corporate purposes identified in the Prospectus.

 

 

Proceeds to the Company:

Approximately $2,965,145,000 (after deducting the underwriting discounts and commissions but before deducting estimated offering expenses payable by the Company).

 

 

Underwriting Discounts and Commissions:

2015 Notes: 0.200%

2017 Notes: 0.350%

2022 Notes: 0.450%

2042 Notes: 0.750%

 

2



 

CUSIP No.:

2015 Notes: 25468 PCU8

2017 Notes: 25468 PCV6

2022 Notes: 25468 PCW4

2042 Notes: 25468 PCX2

 

 

ISIN No.:

2015 Notes: US25468PCU84

2017 Notes: US25468PCV67

2022 Notes: US25468PCW41

2042 Notes: US25468PCX24

 

 

Make-Whole Redemption:

The Notes of any tranche may be redeemed, in whole or in part, at the option of the Company, at any time or from time to time prior to their stated maturity, at a redemption price equal to the greater of the following amounts:

 

 

 

(1)         100% of the principal amount of the Notes of such tranche to be redeemed; or

 

 

 

(2)         as determined by the Independent Investment Banker (as defined below), the sum of the present values of the remaining scheduled payments of principal of and interest on the Notes of such tranche to be redeemed (not including any portion of any payments of interest accrued to the applicable redemption date) discounted to such redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined below) plus 5 basis points in the case of the 2015 Notes, 10 basis points in the case of the 2017 Notes, 15 basis points in the case of the 2022 Notes or 15 basis points in the case of the 2042 Notes,

 

 

 

plus, in the case of both clauses (1) and (2) above, accrued and unpaid interest on the principal amount of the Notes of such tranche being redeemed to such redemption date.

 

 

 

Notwithstanding the foregoing, installments of interest on the Notes of any tranche that are due and payable on an interest payment date falling on or prior to a redemption date for the Notes of such tranche will be payable to the registered holders of such Notes (or one or more predecessor Notes of such tranche) of record at the close of business on the relevant regular record date, all as provided in the indenture.

 

3



 

 

“Treasury Rate” means, with respect to any redemption date for the Notes of any tranche, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date.

 

 

 

The Treasury Rate will be calculated on the third business day preceding the applicable redemption date. As used in the preceding sentence and in the definition of “Reference Treasury Dealer Quotation” below, the term “business day” means any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which commercial banks are authorized or required by law, regulation or executive order to close in The City of New York.

 

 

 

“Comparable Treasury Issue” means, with respect to any redemption date for the Notes of any tranche, the United States Treasury security selected by the Independent Investment Banker as having a maturity comparable to the remaining term of the Notes of such tranche that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such Notes.

 

 

 

“Comparable Treasury Price” means, with respect to any redemption date for the Notes of any tranche, (i) if the Independent Investment Banker obtains six Reference Treasury Dealer Quotations for that redemption date, the average of those Reference Treasury Dealer Quotations after excluding the highest and lowest of those Reference Treasury Dealer Quotations, (ii) if the Independent Investment Banker obtains fewer than six such Reference Treasury Dealer Quotations, the average of all of those quotations, or (iii) if the Independent Investment Banker obtains only one such Reference Treasury Dealer Quotation, such quotation.

 

 

 

“Independent Investment Banker” means one of Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. LLC and RBS Securities Inc. and their respective successors appointed by the Company to act as the Independent Investment Banker from time to time, or if any such firm is unwilling or unable to serve in that capacity, an independent investment banking institution of national standing appointed by the Company.

 

4



 

 

“Reference Treasury Dealer” means, with respect to any redemption date for the Notes of any tranche, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. LLC and RBS Securities Inc. and their respective successors; provided that, if any such firm ceases to be a primary U.S. Government securities dealer in the United States (a “Primary Treasury Dealer”), the Company will substitute another Primary Treasury Dealer.

 

 

 

“Reference Treasury Dealer Quotation” means, with respect to each Reference Treasury Dealer and any redemption date for the Notes of any tranche, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker by such Reference Treasury Dealer at 5:00 p.m. (New York City time) on the third business day preceding that redemption date.

 

 

 

Notice of any redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each holder of the Notes of any tranche to be redeemed. If fewer than all of the Notes of any tranche and all Additional Notes (as defined in the Prospectus Supplement), if any, with the same stated maturity and other terms (other than original issue date, issue price and first payment of interest) as the Notes of such tranche are to be redeemed at any time, selection of such Notes and Additional Notes, if any, for redemption will be made by the trustee (as defined in the Prospectus Supplement) by such method as the trustee shall deem fair and appropriate.

 

 

 

Unless the Company defaults in payment of the redemption price, interest on each Note or portion thereof called for redemption will cease to accrue on the applicable redemption date.

 

5



 

Additional Amounts:

The provisions described in the Prospectus Supplement under the caption “Description of the Notes — Payment of Additional Amounts” will apply to the Notes; provided, that subparagraph (i) of such provisions (which subparagraph (i) appears on page S-35 of the Prospectus Supplement) shall be amended and restated, solely insofar as it applies to the Notes, in its entirety as follows (as used below, the term “Code” means the U.S. Internal Revenue Code of 1986, as amended):

 

“(i)       any tax, assessment, withholding or deduction required by sections 1471 through 1474 of the Code (“FATCA”), any Treasury Regulations or rulings promulgated thereunder, any treaty, law, regulation or other official guidance enacted in any jurisdiction implementing FATCA, any intergovernmental agreement between the United States and any other jurisdiction pursuant to the implementation of FATCA, or any other agreement pursuant to the implementation of FATCA; or”

 

 

Tax Redemption:

The Company may, at its option, redeem, as a whole but not in part, the Notes of any tranche and all Additional Notes, if any, with the same stated maturity and other terms (other than original issue date, issue price and first payment of interest) as the Notes of such tranche at a redemption price equal to 100% of the principal amount thereof plus accrued and unpaid interest to the redemption date on the other terms and subject to the conditions described in the Prospectus Supplement under the caption “Description of the Notes — Redemption for Tax Purposes.” Notwithstanding the foregoing, installments of interest that are due and payable on an interest payment date falling on or prior to the redemption date of a Note of any tranche will be payable to the registered holder of such Note (or one or more predecessor Notes of that tranche) of record at the close of business on the relevant regular record date, all as provided in the indenture.

 

 

Form of Notes:

The Notes of each tranche will be issued in the form of one or more global Notes in book-entry form and will be delivered to investors through the facilities of The Depository Trust Company for the accounts of its participants, which may include Clearstream Banking, société anonyme, and Euroclear Bank S.A./N.V., against payment.

 

 

Currency:

The Notes will be denominated and payable in U.S. dollars.

 

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Other:

The Notes will not be entitled to the benefit of any sinking fund and the Company will not be required to repurchase Notes at the option of the holders. The Notes are “fixed rate notes” as defined in the Prospectus Supplement.

 

 

Material United States Federal Tax Considerations:

For a discussion of the material United States federal tax considerations related to the acquisition, ownership and disposition of the Notes, please see “Material United States Federal Tax Considerations” in the Prospectus Supplement, as supplemented by the discussion in the immediately following paragraphs captioned “Scheduled Increase in Backup Withholding Rates,” “Medicare Tax on Net Investment Income” and “Foreign Account Tax Compliance Act.”

 

 

 

Scheduled Increase in Backup Withholding Rates

 

 

 

The backup withholding rate is currently 28% and is scheduled to increase to 31% for payments on the Notes (including gross proceeds from a sale of the Notes) that are subject to backup withholding and are made after December 31, 2012.

 

 

 

Medicare Tax on Net Investment Income

 

 

 

For taxable years beginning after December 31, 2012, a United States Holder (as defined in the Prospectus Supplement) that is an individual or estate, or a trust that does not fall into a special class of trusts that is exempt from such tax, will be subject to a 3.8% tax on the lesser of (1) the United States Holder’s “net investment income” (in the case of individuals) or “undistributed net investment income” (in the case of estates and trusts) for the relevant taxable year and (2) the excess of the United States Holder’s “modified adjusted gross income” (in the case of individuals) or “adjusted gross income” (in the case of estates and trusts) for the taxable year over a certain threshold (which in the case of individuals will be between $125,000 and $250,000, depending on the individual’s circumstances).  A United States Holder’s net investment income generally will include its interest income on the Notes and its net gains from the disposition of the Notes, unless such interest income or net gains are derived in the ordinary course of the conduct of a trade or business (other than a trade or business that consists of certain passive or trading activities).  If you are a United States Holder that is an individual, estate or trust, you are urged to consult your tax advisors regarding the applicability of the Medicare tax to your income and gains in respect of your investment in the Notes.

 

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Foreign Account Tax Compliance Act

 

 

 

On March 18, 2010, the Hiring Incentives to Restore Employment Act (the “HIRE Act”) was signed into law. Under certain circumstances, the HIRE Act will impose a withholding tax of 30% on payments of U.S. source income on, and the gross proceeds from a disposition of, Notes made to certain foreign entities unless various information reporting requirements are satisfied.  These rules generally would apply to payments made after December 31, 2012. However, under the HIRE Act, the withholding and reporting requirements generally will not apply to payments made on, or gross proceeds from a disposition of, debt instruments, such as the Notes, outstanding as of March 18, 2012 (the “Grandfather Date”).  Despite the December 31, 2012 date set forth in the HIRE Act, the U.S. Internal Revenue Service (the “IRS”) has issued proposed regulations and preliminary guidance indicating that the withholding tax on U.S. source income will not be imposed with respect to payments made prior to January 1, 2014 and that the withholding tax on gross proceeds from a disposition of debt instruments will not be imposed with respect to payments made prior to January 1, 2017.  In addition, the proposed regulations would extend the Grandfather Date to January 1, 2013.  These proposed regulations would be effective once finalized. Prospective purchasers should consult their tax advisors regarding the HIRE Act.

 

 

Joint Bookrunning Managers:

Citigroup Global Markets Inc.

J.P. Morgan Securities LLC

Goldman, Sachs & Co.

Merrill Lynch, Pierce, Fenner & Smith
Incorporated

Morgan Stanley & Co. LLC

RBS Securities Inc.

 

 

Co-Managers:

Mizuho Securities USA Inc.
RBC Capital Markets, LLC
SunTrust Robinson Humphrey, Inc.
U.S. Bancorp Investments, Inc.
Wells Fargo Securities, LLC

 

 

Junior Co-Managers:

Drexel Hamilton, LLC

Lebenthal & Co., LLC

Loop Capital Markets LLC

Samuel A. Ramirez & Company, Inc.

Muriel Siebert & Co., Inc.

The Williams Capital Group, L.P.

 

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Pursuant to a terms agreement dated the date hereof, the joint bookrunning managers, co-managers and junior co-managers (collectively, the “underwriters”) named above, acting as principal, have severally agreed to purchase the Notes from the Company.  The several obligations of the underwriters to purchase the Notes are subject to conditions and they are obligated to purchase all of the Notes if any are purchased.  If an underwriter defaults, the terms agreement provides that the purchase commitments of the non-defaulting underwriters may be increased or the terms agreement may be terminated.

 

The Company estimates that expenses of the offering payable by the Company, excluding underwriting discounts and commissions, will be approximately $1,475,000.

 

European Economic Area.   This free writing prospectus is not a prospectus for purposes of the Prospectus Directive (as defined below) as implemented in Member States of the European Economic Area.  Neither the Company nor the underwriters have authorized, nor does the Company or the underwriters authorize, the making of any offer of the Notes through any financial intermediary other than offers made by the underwriters which constitute the final placement of the Notes contemplated in this free writing prospectus.  In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), each underwriter has severally represented and agreed that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation Date”) it has not made and will not make an offer of Notes which are the subject of the offering contemplated hereby to the public in that Relevant Member State other than:

 

(a)                                 to any legal entity which is a qualified investor as defined in the Prospectus Directive;

 

(b)                                 to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus Directive), subject to obtaining the prior consent of the joint bookrunning managers named above for any such offer; or

 

(c)                                  in any other circumstances falling within Article 3(2) of the Prospectus Directive,

 

provided that no such offer of Notes referred to in (a) to (c) above shall require the Company or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Directive, or supplement a prospectus pursuant to Article 16 of the Prospectus Directive.

 

For the purposes of this provision, the expression an “offer of Notes to the public” in relation to any Notes in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Notes to be offered so as to enable an investor to decide to purchase or subscribe the Notes, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State, the expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member

 

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State), and includes any relevant implementing measure in the Relevant Member State, and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.

 

The information under this caption “European Economic Area” supersedes and replaces the information in the Prospectus Supplement under the caption “Plan of Distribution—European Economic Area.”

 

United Kingdom.  Each underwriter severally has represented and agreed that:

 

·                              it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 (the “FMSA”)) received by it in connection with the issue or sale of the Notes in circumstances in which Section 21(1) of the FSMA does not apply to the Company; and

 

·                              it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Notes in, from or otherwise involving the United Kingdom.

 

The information under this caption “United Kingdom” supersedes and replaces the information in the Prospectus Supplement under the caption “Plan of Distribution — United Kingdom.”

 

The issuer has filed a Registration Statement (including a prospectus) with the Securities and Exchange Commission for the offering to which this communication relates.  Before you invest, you should read the prospectus and prospectus supplement in that registration statement and other documents the issuer has filed with the Securities and Exchange Commission for more complete information about the issuer and this offering.  You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov.  Alternatively, the issuer, any underwriter or any dealer participating in the offering will arrange to send you the prospectus and prospectus supplement if you request it by contacting Citigroup Global Markets Inc. by telephone (toll free) at 1-800-831-9146, J.P. Morgan Securities LLC by telephone (collect) at 1-212-834-4533, Goldman, Sachs & Co. by telephone (toll free) at 1-866-471-2526, Merrill Lynch, Pierce, Fenner & Smith Incorporated by telephone (toll free) at 1-800-294-1322, Morgan Stanley & Co. LLC by telephone (toll free) at 1-866-718-1649 or RBS Securities Inc. by telephone (toll free) at 1-866-884-2071.

 

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