As filed with the Securities and
Exchange Commission on December 15, 2008
Registration Statement
No. 333-
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
The Travelers Companies,
Inc.
Travelers Capital Trust
II
Travelers Capital Trust
III
Travelers Capital Trust
IV
Travelers Capital Trust
V
(Exact name of Registrant as
specified in its charter)
|
|
|
Minnesota
Delaware
Delaware
Delaware
Delaware
|
|
41-0518860
41-6495364
20-1341934
20-1341964
20-1342011
|
(State or other jurisdiction of incorporation or
organization)
|
|
(I.R.S. Employer Identification No.)
|
385 Washington Street
St. Paul, Minnesota
55102
(651) 310-7911
(Address, including zip code,
and telephone number, including area code, of Registrants
principal executive offices)
Matthew S.
Furman, Esq.
Senior Vice President
The Travelers Companies,
Inc.
385 Washington Street
St. Paul, Minnesota
55102
(917) 778-6828
(Name, address, including zip
code, and telephone number, including area code, of agent for
service)
Copy to:
Avrohom J.
Kess, Esq.
Simpson Thacher & Bartlett
LLP
425 Lexington Avenue
New York, New York
10017
(212) 455-2000
Approximate date of commencement of proposed sale to the
public
: From time to time after the effective
date of this registration statement.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans,
please check the following
box.
o
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act of 1933, other than
securities offered only in connection with dividend or interest
reinvestment plans, check the following
box.
þ
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same
offering.
o
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering.
o
If this Form is a registration statement pursuant to General
Instruction I.D. or a post-effective amendment thereto that
shall become effective upon filing with the Commission pursuant
to Rule 462(e) under the Securities Act, check the
following
box.
þ
If this Form is a post-effective amendment to a registration
statement filed pursuant to General Instruction I.D. filed
to register additional securities or additional classes of
securities pursuant to Rule 413(b) under the Securities
Act, check the following
box.
o
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated
filer and smaller reporting company in
Rule 12b-2
of the Exchange Act. (Check one):
|
|
|
|
|
|
|
Large accelerated filer
þ
|
|
Accelerated filer
o
|
|
Non-accelerated filer
o
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
o
|
CALCULATION
OF REGISTRATION FEE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proposed Maximum
|
|
|
Proposed Maximum
|
|
|
Amount of
|
Title of Each Class of
|
|
|
Amount to be
|
|
|
Offering Price
|
|
|
Aggregate
|
|
|
Registration
|
Securities to be Registered
|
|
|
Registered(1)
|
|
|
per Unit(1)
|
|
|
Offering Price(1)
|
|
|
Fee(1)
|
Senior Debt Securities of The Travelers Companies, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
Subordinated Debt Securities of The Travelers Companies,
Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
Junior Subordinated Debt Securities of The Travelers Companies,
Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Stock of The Travelers Companies, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
Depositary Shares of The Travelers Companies, Inc.(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock, without par value, of The Travelers Companies,
Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrants of The Travelers Companies, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Purchase Contracts of The Travelers Companies, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
Units of The Travelers Companies, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Securities of Travelers Capital Trust II
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Securities of Travelers Capital Trust III
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Securities of Travelers Capital Trust IV
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Securities of Travelers Capital Trust V
|
|
|
|
|
|
|
|
|
|
|
|
|
The Travelers Companies, Inc. Guarantee of Preferred Securities
of Travelers Capital Trust II, Travelers Capital
Trust III, Travelers Capital Trust IV and Travelers
Capital Trust V(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
An indeterminate aggregate initial offering price or number of
the securities of each identified class is being registered as
may from time to time be offered at indeterminate prices.
Separate consideration may or may not be received for securities
that are issuable upon exercise, conversion or exchange of other
securities or that are issued in units or represented by
depositary shares. In accordance with Rules 456(b) and
457(r) of the Securities Act, the registrants are deferring
payment of all of the registration fee. Registration fees will
be paid subsequently on a pay as you go basis.
|
|
(2)
|
Each depositary share will be issued under a deposit agreement
and will be evidenced by a depositary receipt. In the event The
Travelers Companies, Inc. elects to offer to the public
fractional interests in shares of the preferred stock registered
hereunder, depositary receipts will be distributed to those
persons purchasing such fractional interests, and shares of
preferred stock will be issued to the depositary under the
deposit agreement. No separate consideration will be received
for the depositary shares.
|
|
(3)
|
The Travelers Companies, Inc. is also registering the guarantees
and other obligations that it may have with respect to preferred
securities to be issued by any of Travelers Capital
Trust II, Travelers Capital Trust III, Travelers Capital
Trust IV and Travelers Capital Trust V or with respect
to similar securities that may be issued by similar entities
formed in the future. No separate consideration will be received
for any guarantee, and pursuant to Rule 457(n) under the
Securities Act, no separate registration fee will be paid in
respect of any such guarantee.
|
PROSPECTUS
The Travelers Companies,
Inc.
Senior Debt
Securities
Subordinated Debt
Securities
Junior Subordinated Debt
Securities
Preferred Stock
Depositary Shares
Common Stock
Warrants
Stock Purchase
Contracts
and
Units
Travelers Capital
Trust II
Travelers Capital
Trust III
Travelers Capital
Trust IV
Travelers Capital
Trust V
Preferred Securities
guaranteed to the extent set
forth herein
by The Travelers Companies,
Inc.
We will provide you with more specific terms of these securities
in supplements to this prospectus. You should read this
prospectus and the applicable prospectus supplement carefully
before you invest.
We may offer these securities from time to time in amounts, at
prices and on other terms to be determined at the time of
offering. We may offer and sell these securities to or through
one or more underwriters, dealers and agents or directly to
purchasers, on a continuous or delayed basis.
The Travelers Companies, Inc.s common stock is listed on
the New York Stock Exchange under the symbol TRV.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the accuracy or adequacy of this
prospectus. Any representation to the contrary is a criminal
offense.
Prospectus dated December 15, 2008.
Table of
Contents
Unless the context otherwise indicates, the terms
Travelers, we, us or
our means The Travelers Companies, Inc. and its
consolidated subsidiaries, and the term Trusts
means, collectively, Travelers Capital Trust II, Travelers
Capital Trust III, Travelers Capital Trust IV and
Travelers Capital Trust V.
ABOUT
THIS PROSPECTUS
This prospectus is part of a registration statement that we
filed with the Securities and Exchange Commission (the
SEC) utilizing a shelf registration or continuous
process. Under this shelf process, we may sell any combination
of the securities described in this prospectus in one or more
offerings.
This prospectus provides you with a general description of the
securities we may offer. Each time we sell securities, we will
provide a prospectus supplement containing specific information
about the terms of the securities being offered. A prospectus
supplement may include or incorporate by reference a discussion
of any risk factors or other special considerations applicable
to those securities or to us. A prospectus supplement may also
add, update or change information in this prospectus. If there
is any inconsistency between the information in this prospectus
and the applicable prospectus supplement, you should rely on the
information in the prospectus supplement. You should read both
this prospectus and any prospectus supplement together with
additional information described under the heading Where
You Can Find More Information.
The registration statement containing this prospectus, including
exhibits to the registration statement, provides additional
information about us and the securities offered under this
prospectus. The registration statement can be read at the SEC
web site or at the SEC office mentioned under the heading
Where You Can Find More Information.
When acquiring any securities discussed in this prospectus, you
should rely only on the information provided in this prospectus
and in the applicable prospectus supplement, including the
information
incorporated by reference. Neither we, the Trusts nor any
underwriters or agents have authorized anyone to provide you
with different information. We are not offering the securities
in any state where the offer is prohibited. You should not
assume that the information in this prospectus, any prospectus
supplement or any document incorporated by reference is truthful
or complete at any date other than the date mentioned on the
cover page of these documents.
We may sell securities to underwriters who will sell the
securities to the public on terms fixed at the time of sale. In
addition, the securities may be sold by us directly or through
dealers or agents designated from time to time. If we, directly
or through agents, solicit offers to purchase the securities, we
reserve the sole right to accept and, together with any agents,
to reject, in whole or in part, any of those offers.
Any prospectus supplement will contain the names of the
underwriters, dealers or agents, if any, together with the terms
of offering, the compensation of those underwriters and the net
proceeds to us. Any underwriters, dealers or agents
participating in the offering may be deemed
underwriters within the meaning of the Securities
Act of 1933, as amended (the Securities Act).
Unless otherwise stated, currency amounts in this prospectus and
any prospectus supplement are stated in United States dollars
($).
A SPECIAL
NOTE REGARDING FORWARD-LOOKING
STATEMENT DISCLOSURE AND CERTAIN RISKS
This prospectus may contain, and documents incorporated by
reference herein may contain, certain forward-looking
statements within the meaning of the Private Securities
Litigation Reform Act of 1995. All statements, other than
statements of historical facts, may be forward-looking
statements. Specifically, earnings guidance, statements about
our share repurchase plans, statements about the potential
impact of the recent disruption in the investment markets and
other economic conditions on our investment portfolio and
underwriting results are forward looking, and we may make
forward-looking statements about our results of operations
(including, among others, premium volume, net and operating
income, investment income, return on equity, expected returns
and combined ratio) and financial condition (including, among
others, invested assets and liquidity); the sufficiency of our
asbestos and other reserves (including, among others, asbestos
claim payment patterns); the cost and availability of
reinsurance coverage; catastrophe losses; investment
performance; investment, economic and underwriting market
conditions; and strategic initiatives. Such statements are
subject to risks and uncertainties, many of which are difficult
to predict and generally beyond our control, that could cause
actual results to differ materially from those expressed in, or
implied or projected by, the forward-looking information and
statements.
Some of the factors that could cause actual results to differ
include, but are not limited to, the following: catastrophe
losses could materially and adversely affect our results of
operations, our financial position
and/or
liquidity and could adversely impact our ratings, our ability to
raise capital and the availability and cost of reinsurance; if
actual claims exceed our loss reserves, or if changes in the
estimated level of loss reserves are necessary, our financial
results could be materially and adversely affected; our business
could be harmed because of our potential exposure to asbestos
and environmental claims and related litigation; we are exposed
to, and may face adverse developments involving, mass tort
claims such as those relating to exposure to potentially harmful
products or substances; the effects of emerging claim and
coverage issues on our business are uncertain; we may not be
able to collect all amounts due to us from reinsurers, and
reinsurance coverage may not be available to us in the future at
commercially reasonable rates or at all; the intense competition
that we face could harm our ability to maintain or increase our
profitability and premium volume; we are exposed to credit risk
in certain of our business operations and in our investment
portfolio; the insurance industry and we are the subject of a
number of investigations by state and federal authorities in the
United States, and we cannot predict the outcome of these
investigations or their impact on our business or financial
results; our businesses are heavily regulated, and changes in
regulation may reduce our profitability and limit our growth; a
downgrade in our claims-paying and debt ratings could adversely
impact our business volumes, adversely impact our ability to
access the capital markets and increase our borrowing costs; our
investment portfolio may suffer reduced returns or losses;
deteriorating economic conditions in the United States and
abroad could
ii
adversely impact our ability to grow our business profitably,
and inflation could result in an increase in loss costs which
could negatively impact our profitability; the inability of our
insurance subsidiaries to pay dividends to our holding company
in sufficient amounts would harm our ability to meet our
obligations and to pay future shareholder dividends; disruptions
to our relationships with our independent agents and brokers
could adversely affect us; we are subject to a number of risks
associated with our business outside the United States including
operational, legal and foreign exchange rate risk; we could be
adversely affected if our controls to ensure compliance with
guidelines, policies and legal and regulatory standards are not
effective; our business success and profitability depend, in
part, on effective information technology systems and on
continuing to develop and implement improvements in technology;
certain significant multiyear technology projects are currently
in process but may not be successful; and if we experience
difficulties with technology, data security
and/or
outsourcing relationships, our ability to conduct our business
could be negatively impacted.
Our forward-looking statements speak only as of the date of this
prospectus or as of the date of the documents incorporated
herein by reference, and we undertake no obligation to update
our forward-looking statements. For a more detailed discussion
of these factors, see the information under the caption
Risk Factors in the Companys most recent
annual report on
Form 10-K
filed with the Securities and Exchange Commission and under
Managements Discussion and Analysis of Financial
Condition and Results of Operations in the
Form 10-K.
WHERE YOU
CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements
and other information with the SEC. Our SEC filings are
available to the public over the Internet at the SECs web
site at
http://www.sec.gov.
You may also read and copy any document we file with the SEC at
the SECs Public Reference Room at 100 F. Street, N.E.,
Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330
for further information on the Public Reference Room. Our common
stock is traded on the New York Stock Exchange under the symbol
TRV. You may inspect the reports, proxy statements
and other information concerning us at the offices of the
New York Stock Exchange, 20 Broad Street, New York,
New York 10005. You may find additional information about us at
our web site at
http://www.travelers.com.
The information on our web site is not part of this prospectus.
The SEC allows us to incorporate by reference the information we
file with them, which means that we can disclose important
information to you by referring you to those documents. The
information incorporated by reference is an important part of
this prospectus, and information that we file later with the SEC
will automatically update and supersede this information. We
incorporate by reference the documents listed below and any
future filings made by us with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 prior to the termination of the offering
under this prospectus:
|
|
|
|
|
Annual Report on
Form 10-K
for the year ended December 31, 2007;
|
|
|
|
Quarterly Reports on
Form 10-Q
for the quarters ended March 31, 2008, June 30, 2008
and September 30, 2008;
|
|
|
|
Current Reports on
Form 8-K
filed on May 13, 2008, June 17, 2008, August 11,
2008 and October 14, 2008; and
|
|
|
|
Form 8-A
filed on October 17, 1991, including any amendments or
supplements thereto.
|
iii
You may request a copy of these filings at no cost, by writing
or telephoning us at the following address:
The Travelers Companies, Inc.
Attn: Corporate Secretary
385 Washington Street
St. Paul, Minnesota 55102
Telephone No.:
(917) 778-6828
We have not included or incorporated by reference in this
prospectus any separate financial statements of the Trusts. We
do not believe that these financial statements would provide
holders of preferred securities with any important information
for the following reasons:
|
|
|
|
|
we will own all of the voting securities of the Trusts;
|
|
|
|
the Trusts do not and will not have any independent operations
other than to issue securities and to purchase and hold our debt
securities; and
|
|
|
|
we are fully and unconditionally guaranteeing the obligations of
the Trusts as described in this prospectus.
|
Although the Trusts would normally be required to file
information with the SEC on an ongoing basis, we expect the SEC
to exempt the Trusts from filing this information for as long as
we continue to file our information with the SEC.
iv
THE
TRAVELERS COMPANIES, INC.
The Travelers Companies, Inc. is a holding company principally
engaged, through its subsidiaries, in providing a wide range of
commercial and personal property and casualty insurance products
and services to businesses, government units, associations and
individuals. The company, known as The St. Paul Companies, Inc.,
or St. Paul, prior to its merger on April 1, 2004 with
Travelers Property Casualty Corp., or Travelers Property, is
incorporated as a general business corporation under the laws of
the State of Minnesota and is one of the oldest insurance
organizations in the United States, dating back to 1853. Upon
completion of the merger with Travelers Property, the company
was named The St. Paul Travelers Companies, Inc. The
companys name was changed to The Travelers Companies, Inc.
on February 26, 2007.
The principal executive offices of the company are located at
385 Washington Street, St. Paul, Minnesota 55102, and the
telephone number is
(651) 310-7911.
Unless the context otherwise indicates, the terms
we, us, our or
Travelers mean The Travelers Companies, Inc. and its
consolidated subsidiaries.
THE
TRUSTS
Each of Travelers Capital Trust II, Travelers Capital
Trust III, Travelers Capital Trust IV and Travelers
Capital Trust V (each a Trust and collectively
the Trusts) is a statutory trust created under
Delaware law. Each of the Trusts exists for the exclusive
purposes of:
|
|
|
|
|
issuing the preferred securities, which represent preferred
undivided beneficial ownership interests in such Trusts
assets;
|
|
|
|
issuing the common securities, which represent common undivided
beneficial ownership interests in such Trusts assets, to
us;
|
|
|
|
using the proceeds from the issuances to purchase one or more
series of securities issued by us, including senior debt
securities, subordinated debt securities, junior subordinated
debt securities and warrants;
|
|
|
|
maintaining the Trusts status as a grantor trust for
federal income tax purposes; and
|
|
|
|
engaging in only those other activities necessary, advisable or
incidental to these purposes, such as registering the transfer
of preferred securities.
|
Any senior debt securities, subordinated debt securities, junior
subordinated debt securities and warrants we sell to a Trust
will be the sole assets of such Trust, and, accordingly,
payments under the senior, subordinated or junior subordinated
debt securities will be the sole revenues of such Trust, and
such Trusts ability to distribute shares of our common
stock or other securities upon conversion of the preferred
securities, if convertible, will depend solely on our
performance under the warrants or convertible debt securities
sold by us to such Trust. We will acquire and own all of the
common securities of each of the Trusts. The common securities
will rank on a parity with, and payments will be made on the
common securities
pro rata
with, the preferred
securities, except that upon an event of default under the
applicable declaration of trust resulting from an event of
default under the senior, subordinated or junior subordinated
debt securities, our rights as holder of the common securities
to distributions and payments upon liquidation or redemption
will be subordinated to the rights of the holders of the
preferred securities.
Each Trust has a term as to be provided in each respective
declaration of trust, which will be described in the prospectus
supplement. The Trusts business and affairs are conducted
by the trustees. The trustees for the Trusts are The Bank of New
York Mellon Trust Company, N.A., as institutional trustee, BNY
Mellon Trust of Delaware, as the Delaware trustee, and two
regular trustees or administrative trustees who are
officers of The Travelers Companies, Inc. The Bank of New York
Mellon Trust Company, N.A., as institutional trustee, will act
as sole indenture trustee under the declarations of trust. The
Bank of New York Mellon Trust Company, N.A. will also act
as guarantee trustee under the guarantee and as indenture
trustee under the senior debt indenture, the subordinated debt
indenture and the junior subordinated debt indenture.
1
The duties and obligations of each trustee are governed by the
declarations of trust. As sponsor of the Trusts, we will pay all
fees, expenses, debts and obligations (other than the payment of
distributions and other payments on the preferred securities)
related to the Trusts and any offering of the Trusts
preferred securities and will pay, directly or indirectly, all
ongoing costs, expenses and liabilities of the Trusts. The
principal executive office of the Trusts is
c/o The
Travelers Companies, Inc., 385 Washington Street, St. Paul,
Minnesota 55102, and the telephone number is
(651) 310-7911.
USE OF
PROCEEDS
We intend to use the net proceeds from the sale of the
securities as set forth in the applicable prospectus supplement.
RATIOS OF
EARNINGS TO FIXED CHARGES AND EARNINGS TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth our ratio of earnings to fixed
charges and our ratio of earnings to combined fixed charges and
preferred dividend requirements for each of the periods
indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
|
|
|
|
|
|
|
|
|
|
|
|
|
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
Year Ended December 31,
|
|
|
2008
|
|
2007
|
|
2006
|
|
2005
|
|
2004
|
|
2003
|
|
Ratio of earnings to fixed charges
|
|
|
9.32
|
x
|
|
|
15.64
|
x
|
|
|
15.24
|
x
|
|
|
8.46
|
x
|
|
|
4.11
|
x
|
|
|
11.89
|
x
|
Ratio of earnings to combined fixed charges and preferred
dividend requirements
|
|
|
9.21
|
x
|
|
|
15.41
|
x
|
|
|
14.96
|
x
|
|
|
8.25
|
x
|
|
|
4.01
|
x
|
|
|
11.89
|
x
|
For accounting purposes, the merger of St. Paul and Travelers
Property was accounted for as a reverse acquisition with
Travelers Property treated as the accounting acquirer.
Accordingly, this transaction was accounted for as a purchase
business combination, using Travelers Propertys historical
financial information and applying fair value estimates to the
acquired assets, liabilities and commitments of St. Paul as of
April 1, 2004. Beginning on April 1, 2004, the results
of operations and financial condition of St. Paul were
consolidated with Travelers Property. Accordingly, all financial
information presented for the twelve months ended
December 31, 2004 reflects the accounts of Travelers
Property for the three months ended March 31, 2004 and the
consolidated accounts of St. Paul and Travelers Property for the
nine months ended December 31, 2004. The financial
information for 2003 reflects the accounts of Travelers Property.
The ratio of earnings to fixed charges is computed by dividing
income available for fixed charges by the fixed charges. For
purposes of this ratio, fixed charges consist of that portion of
rentals deemed representative of the appropriate interest factor.
DESCRIPTION
OF DEBT SECURITIES WE MAY OFFER
We may issue senior debt securities, subordinated debt
securities or junior subordinated debt securities. None of the
senior debt securities, the subordinated debt securities or the
junior subordinated debt securities will be secured by any of
our property or assets. Thus, by owning a debt security issued
by us, you are one of our unsecured creditors.
The senior debt securities will constitute part of our senior
debt, will be issued under a senior debt indenture described
below and will rank equally with all of our other unsecured and
unsubordinated debt.
The subordinated debt securities will constitute part of our
subordinated debt, will be issued under a subordinated debt
indenture described below and will be subordinate in right of
payment to all of our senior indebtedness, as
defined in the subordinated debt indenture. The junior
subordinated debt securities will constitute part of our junior
subordinated debt, will be issued under a junior subordinated
indenture described below and will be subordinate in right of
payment to all of our senior indebtedness, including
our
2
subordinated debt, as defined in the junior subordinated
indenture. The prospectus supplement for any series of
subordinated debt securities or junior subordinated debt
securities will indicate the approximate amount of senior
indebtedness outstanding as of the end of the most recent fiscal
quarter. None of the indentures limit our ability to incur
additional indebtedness, including senior indebtedness.
Debt securities in this prospectus refers to the
senior debt securities, the subordinated debt securities and the
junior subordinated debt securities.
The debt securities are each governed by a document called an
indenture the senior debt indenture, in the case of
the senior debt securities, the subordinated debt indenture, in
the case of the subordinated debt securities, and the junior
subordinated debt indenture, in the case of the junior
subordinated debt securities. Each of the senior debt indenture
and the subordinated debt indenture is a contract between us and
The Bank of New York Mellon Trust Company, N.A., which will
act as trustee. The indentures are substantially similar, except
for (i) the covenant described below under
Restrictive Covenants Limitations
on Liens and Other Encumbrances on Voting Stock of Designated
Subsidiaries and the related provisions regarding the
treatment of liens when we merge or engage in similar
transactions (as described under Special
Situations Mergers and Similar Events), which
are included only in the senior debt indenture, (ii) the
provisions relating to subordination, which are included only in
the subordinated debt indenture and the junior subordinated debt
indenture, (iii) the definition of senior indebtedness in
the subordinated debt indenture and the junior subordinated debt
indenture, which is different in each indenture and
(iv) the events of default contained in the junior
subordinated indenture, which are limited to payment defaults
and certain events of bankruptcy.
Reference to the indenture or the trustee with respect to any
debt securities means the indenture under which those debt
securities are issued and the trustee under that indenture.
The trustee has two main roles:
|
|
|
|
|
First,
the trustee can enforce your rights against us if
we default on our obligations under the terms of the applicable
indenture or the debt securities. There are some limitations on
the extent to which the trustee acts on your behalf, described
later under Default and Related
Matters Events of Default Remedies if an
Event of Default Occurs; and
|
|
|
|
Second,
the trustee performs administrative duties for
us, such as sending you interest payments, transferring your
debt securities to a new buyer if you sell and sending you
notices.
|
The indentures and their associated documents contain the full
legal text of the matters described in this section. The
indentures and the debt securities are governed by the laws of
the State of New York. A copy of the senior debt indenture,
dated as of March 12, 2002, the form of subordinated debt
indenture and the form of junior subordinated debt indenture
appear as exhibits to our registration statement. See
Where You Can Find More Information for information
on how to obtain a copy.
We may issue as many distinct series of debt securities under
any of the indentures as we wish. This section summarizes the
material terms of the debt securities that are common to all
series, although the prospectus supplement which describes the
terms of each series of debt securities may also describe
differences with the material terms summarized here.
Because this section is a summary, it does not describe every
aspect of the debt securities. This summary is subject to and
qualified in its entirety by reference to all the provisions of
the indentures, including definitions of some of the terms used
in the indentures. We describe the meaning for only the more
important terms. Whenever we refer to the defined terms of the
indentures in this prospectus or in the prospectus supplement,
those defined terms are incorporated by reference in this
prospectus or in the prospectus supplement. You must look to the
indentures for the most complete description of what we describe
in summary form in this prospectus or in the prospectus
supplement.
This summary also is subject to and qualified by reference to
the description of the particular terms of your series described
in the prospectus supplement. Those terms may vary from the
terms described in this prospectus. The prospectus supplement
relating to each series of debt securities will be attached to
the front of this prospectus.
3
There may also be a further prospectus supplement, known as a
pricing supplement, which contains the precise terms of debt
securities you are offered.
We may issue the debt securities as original issue discount
securities, which are securities that are offered and sold at a
substantial discount to their stated principal amount. The
prospectus supplement relating to original issue discount
securities will describe federal income tax consequences and
other special considerations applicable to them. The debt
securities may also be issued as indexed securities or
securities denominated in foreign currencies or currency units,
as described in more detail in the prospectus supplement
relating to any of the particular debt securities. The
prospectus supplement relating to specific debt securities will
also describe any special considerations and any material
additional tax considerations applicable to such debt securities.
In addition, the specific financial, legal and other terms
particular to a series of debt securities will be described in
the prospectus supplement and the pricing supplement, if any,
relating to the series. The prospectus supplement relating to a
series of debt securities will describe the following terms of
the series:
|
|
|
|
|
the title of the series of debt securities;
|
|
|
|
whether it is a series of senior debt securities, a series of
subordinated debt securities or a series of junior subordinated
debt securities;
|
|
|
|
any limit on the aggregate principal amount of the series of
debt securities;
|
|
|
|
the person to whom interest on a debt security is payable, if
other than the holder on the regular record date;
|
|
|
|
the date or dates on which the series of debt securities will
mature;
|
|
|
|
the rate or rates, which may be fixed or variable, per annum at
which the series of debt securities will bear interest, if any,
and the date or dates from which that interest, if any, will
accrue;
|
|
|
|
the place or places where the principal of (and premium, if any)
and interest on the debt securities are payable;
|
|
|
|
the dates on which interest, if any, on the series of debt
securities will be payable, the regular record dates for the
interest payment dates and whether interest payments may be
deferred;
|
|
|
|
any mandatory or optional sinking funds or analogous provisions
or provisions for redemption at our option or the option of the
holder;
|
|
|
|
the date, if any, after which and the price or prices at which
the series of debt securities may, in accordance with any
optional or mandatory redemption provisions, be redeemed and the
other detailed terms and provisions of those optional or
mandatory redemption provisions, if any;
|
|
|
|
if the debt securities may be converted into or exercised or
exchanged for our common stock or preferred stock or any other
of our securities, the terms on which conversion, exercise or
exchange may occur, including whether conversion, exercise or
exchange is mandatory, at the option of the holder or at our
option, the date on or the period during which conversion,
exercise or exchange may occur, the initial conversion, exercise
or exchange price or rate and the circumstances or manner in
which the amount of common stock or preferred stock or other
securities issuable upon conversion, exercise or exchange may be
adjusted;
|
|
|
|
if other than denominations of $2,000 and any integral multiple
of $1,000 in excess of $2,000, the denominations in which the
series of debt securities will be issuable;
|
|
|
|
if other than the principal amount thereof, the portion of the
principal amount of the series of debt securities which will be
payable upon the declaration of acceleration of the maturity of
such series of debt securities;
|
|
|
|
the currency of payment of principal, premium, if any, and
interest on the series of debt securities;
|
4
|
|
|
|
|
if the currency of payment for principal, premium, if any, and
interest on the series of debt securities is subject to our or a
holders election, the currency or currencies in which
payment can be made and the period within which, and the terms
and conditions upon which, the election can be made;
|
|
|
|
any index, formula or other method used to determine the amount
of payment of principal or premium, if any, and interest on the
series of debt securities;
|
|
|
|
the applicability of the provisions described under
Restrictive Covenants
Defeasance;
|
|
|
|
any event of default under the series of debt securities if
different from those described under Default
and Related Matters Events of Default
What Is an Event of Default?;
|
|
|
|
if the series of debt securities will be issuable only in the
form of a global security, as described under
Legal Ownership Global
Securities, the depository or its nominee with respect to
the series of debt securities and the circumstances under which
the global security may be registered for transfer or exchange
in the name of a person other than the depository or its nominee;
|
|
|
|
any proposed listing of the series of debt securities on any
securities exchange; and
|
|
|
|
any other special feature of the series of debt securities.
|
Those terms may vary from the terms described here. Accordingly,
this summary also is subject to and qualified by reference to
the description of the terms of the series described in the
prospectus supplement. The prospectus supplement relating to
each series of debt securities will be attached to the front of
this prospectus.
Legal
Ownership
Street
Name and Other Indirect Holders
Investors who hold debt securities in accounts at banks or
brokers will generally not be recognized by us as legal holders
of debt securities. This is called holding in street
name. Instead, we would recognize only the bank or broker
or the financial institution the bank or broker uses to hold its
debt securities. These intermediary banks, brokers and other
financial institutions pass along principal, interest and other
payments on the debt securities, either because they agree to do
so in their customer agreements or because they are legally
required to do so. If you hold debt securities in street name,
you should check with your own institution to find out:
|
|
|
|
|
how it handles securities payments and notices;
|
|
|
|
whether it imposes fees or charges;
|
|
|
|
how it would handle voting if ever required;
|
|
|
|
whether and how you can instruct it to send you debt securities
registered in your own name so you can be a direct holder as
described below; and
|
|
|
|
how it would pursue rights under the debt securities if there
were a default or other event triggering the need for holders to
act to protect their interests.
|
Direct
Holders
Our obligations, as well as the obligations of the trustees and
those of any third parties employed by us or the trustees, run
only to persons or entities who are the direct holders of debt
securities (
i.e.
, those who are registered as holders of
debt securities). As noted above, we do not have obligations to
you if you hold in street name or through other indirect means,
either because you choose to hold debt securities in that manner
or because the debt securities are issued in the form of global
securities as described below. For example, once we make payment
to the registered holder, we have no further responsibility for
the payment even if that registered holder is legally required
to pass the payment along to you as a street name customer but
does not do so.
5
Global
Securities
What Is a Global Security?
A global security is a special
type of indirectly held security, as described above under
Street Name and Other Indirect Holders.
If we choose to issue debt securities in the form of global
securities, the ultimate beneficial owners can only be indirect
holders. We do this by requiring that the global security be
registered in the name of a financial institution we select and
by requiring that the debt securities included in the global
security not be transferred to the name of any other direct
holder unless the special circumstances described below occur.
The financial institution that acts as the sole direct holder of
the global security is called the depositary.
Any person wishing to own a debt security included in the global
security must do so indirectly by virtue of an account with a
broker, bank or other financial institution that in turn has an
account with the depositary. The prospectus supplement indicates
whether your series of debt securities will be issued only in
the form of global securities.
Special Investor Considerations for Global
Securities.
As an indirect holder, an
investors rights relating to a global security will be
governed by the account rules of the investors financial
institution and of the depositary, as well as general laws
relating to securities transfers. We do not recognize this type
of investor as a registered holder of debt securities and
instead deal only with the depositary that holds the global
security.
If you are an investor in debt securities that are issued only
in the form of global securities, you should be aware that:
|
|
|
|
|
you cannot get debt securities registered in your own name;
|
|
|
|
you cannot receive physical certificates for your interest in
the debt securities;
|
|
|
|
you will be a street name holder and must look to your own bank
or broker for payments on the debt securities and protection of
your legal rights relating to the debt securities. See
Street Name and Other Indirect Holders;
|
|
|
|
you may not be able to sell interests in the debt securities to
some insurance companies and other institutions that are
required by law to own their securities in the form of physical
certificates;
|
|
|
|
the depositarys policies will govern payments, transfers,
exchange and other matters relating to your interest in the
global security. We and the trustee have no responsibility for
any aspect of the depositarys actions or for its records
of ownership interests in the global security. We and the
trustee also do not supervise the depositary in any way; and
|
|
|
|
the depositary will require that interests in a global security
be purchased or sold within its system using
same-day
funds for settlement.
|
Special Situations When Global Security Will Be
Terminated.
In a few special situations described
later, the global security will terminate and interests in it
will be exchanged for physical certificates representing debt
securities. After that exchange, the choice of whether to hold
debt securities directly or in street name will be up to you.
You must consult your own bank or broker to find out how to have
your interests in debt securities transferred to your own name,
so that you will be a direct holder. The rights of street name
investors and direct holders in the debt securities have been
previously described in the subsections entitled,
Street Name and Other Indirect Holders
and Direct Holders.
The special situations for termination of a global security are:
|
|
|
|
|
when the depositary notifies us that it is unwilling, unable or
no longer qualified to continue as depositary;
|
|
|
|
when we notify the trustee that we wish to terminate the global
security; or
|
|
|
|
when an event of default on the debt securities has occurred and
has not been cured.
|
Defaults are discussed below under Default and
Related Matters.
6
The prospectus supplement may also list additional situations
for terminating a global security that would apply only to the
particular series of debt securities covered by the prospectus
supplement. When a global security terminates, the depositary
(and not we or the applicable trustee) is responsible for
deciding the names of the institutions that will be the initial
direct holders.
In the remainder of this description you means
direct holders and not street name or other indirect holders of
debt securities. Indirect holders should read the previous
subsection entitled Street Name and Other
Indirect Holders.
Overview
of the Remainder of this Description
The remainder of this description summarizes:
|
|
|
|
|
Additional Mechanics
relevant to the debt securities
under normal circumstances, such as how you transfer ownership
and where we make payments;
|
|
|
|
your rights under several
Special Situations
, such as if
we merge with another company or if we want to change a term of
the debt securities;
|
|
|
|
Subordination Provisions
in the subordinated debt
indenture and the junior subordinated indenture that may
prohibit us from making payments on those securities;
|
|
|
|
a
Restrictive Covenant
contained in the senior debt
indenture that restricts our ability to incur liens and other
encumbrances on the voting stock of some of our subsidiaries. A
particular series of debt securities may have additional
restrictive covenants, which will be described in the prospectus
supplement;
|
|
|
|
situations in which we may invoke the provisions relating to
Defeasance
;
|
|
|
|
your rights if we
Default
or experience other financial
difficulties; and
|
|
|
|
our
Relationship With the Trustee
.
|
Additional
Mechanics
Form,
Exchange and Transfer
The debt securities will be issued:
|
|
|
|
|
only in fully registered form;
|
|
|
|
without interest coupons; and
|
|
|
|
unless otherwise indicated in the prospectus supplement, in
denominations of $2,000 and multiples of $1,000 in excess of
$2,000.
|
You may have your debt securities broken into more debt
securities of smaller denominations or combined into fewer debt
securities of larger denominations, as long as the total
principal amount is not changed. This is called an exchange.
You may exchange or transfer debt securities at the office of
the trustee. The trustee acts as our agent for registering debt
securities in the names of holders and transferring debt
securities. We may change this appointment to another entity or
perform the service ourselves. The entity performing the role of
maintaining the list of registered direct holders is called the
security registrar. It will also register transfers of the debt
securities.
You will not be required to pay a service charge to transfer or
exchange debt securities, but you may be required to pay for any
tax or other governmental charge associated with the exchange or
transfer. The transfer or exchange will only be made if the
security registrar is satisfied with your proof of ownership.
7
If we designate additional transfer agents, they will be named
in the prospectus supplement. We may cancel the designation of
any particular transfer agent. We may also approve a change in
the office through which any transfer agent acts.
If the debt securities are redeemable and we redeem less than
all of the debt securities of a particular series, we may block
the issuance, transfer or exchange of debt securities during the
period beginning at the opening of business 15 days before
the day we mail the notice of redemption and ending at the close
of business on the day of that mailing, in order to freeze the
list of holders to prepare the mailing. We may also refuse to
register transfers or exchanges of debt securities selected for
redemption, except that we will continue to permit transfers and
exchanges of the unredeemed portion of any debt security being
partially redeemed.
Payment
and Paying Agents
We will pay interest to you if you are a direct holder listed in
the trustees records at the close of business on a
particular day in advance of each due date for interest, even if
you no longer own the debt security on the interest due date.
That particular day, usually about two weeks in advance of the
interest due date, is called the regular record date and is
stated in the prospectus supplement. Holders buying and selling
debt securities must work out between them how to compensate for
the fact that we will pay all the interest for an interest
period to the one who is the registered holder on the regular
record date. The most common manner is to adjust the sales price
of the debt securities to prorate interest fairly between buyer
and seller. This prorated interest amount is called accrued
interest.
We will pay interest, principal and any other money due on the
debt securities at the corporate trust office of the trustee in
New York City. You must make arrangements to have your payments
picked up at or wired from that office. We may also choose to
pay interest by mailing checks.
Street name and other indirect holders should consult their
banks or brokers for information on how they will receive
payments.
We may also arrange for additional payment offices and may
cancel or change these offices, including our use of the
trustees corporate trust office. These offices are called
paying agents. We may also choose to act as our own paying
agent. We must notify you of changes in the paying agents for
any particular series of debt securities.
Notices
We and the trustee will send notices regarding the debt
securities only to direct holders, using their addresses as
listed in the trustees records.
Regardless of who acts as paying agent, all money paid by us to
a paying agent that remains unclaimed at the end of one year
after the amount is due to direct holders will be repaid to us.
After that one-year period, you may look only to us for payment
and not to the trustee, any other paying agent or anyone else.
Special
Situations
Mergers
and Similar Events
We are generally permitted to consolidate or merge with another
company or firm. We are also permitted to sell or lease
substantially all of our assets to another firm, or to buy or
lease substantially all of the assets of another firm. However,
we may not take any of these actions unless the following
conditions (among others) are met:
|
|
|
|
|
Where we merge out of existence or sell or lease substantially
all our assets, the other firm may not be organized under a
foreign countrys laws; that is, it must be a corporation,
partnership or trust organized under the laws of a State of the
United States or the District of Columbia or under federal law,
and it must agree to be legally responsible for the debt
securities.
|
8
|
|
|
|
|
The merger, sale of assets or other transaction must not cause a
default on the debt securities, and we must not already be in
default, unless the merger or other transaction would cure the
default. For purposes of this no-default test, a default would
include an event of default that has occurred and not been
cured. A default for this purpose would also include any event
that would be an event of default if the requirements for giving
us notice of our default or our default having to exist for a
specific period of time were disregarded.
|
|
|
|
It is possible that the merger, sale of assets or other
transaction would cause some of our property to become subject
to a mortgage or other legal mechanism giving lenders
preferential rights in that property over other lenders,
including the direct holders of the senior debt securities, or
over our general creditors if we fail to pay them back. We have
promised in our senior debt indenture to limit these
preferential rights on voting stock of any designated
subsidiaries, called liens, as discussed under
Restrictive Covenants Limitation
on Liens and Other Encumbrances on Voting Stock of Designated
Subsidiaries. If a merger or other transaction would
create any liens on the voting stock of our designated
subsidiaries, we must comply with that restrictive covenant. We
would do this either by deciding that the liens were permitted,
or by following the requirements of the restrictive covenant to
grant an equivalent or higher-ranking lien on the same voting
stock to the direct holders of the senior debt securities.
|
Modification
and Waiver
There are four types of changes we can make to either indenture
and the debt securities issued under that indenture.
Changes Requiring Your Approval.
First, there
are changes that cannot be made to your debt securities without
your specific approval. The following is a list of those types
of changes:
|
|
|
|
|
change the payment due date of the principal or interest on a
debt security;
|
|
|
|
reduce any amounts due on a debt security;
|
|
|
|
reduce the amount of principal payable upon acceleration of the
maturity of a debt security (including the amount payable on an
original issue discount security) following a default;
|
|
|
|
change the place or currency of payment on a debt security;
|
|
|
|
impair your right to sue for payment of any amount due on your
debt security;
|
|
|
|
impair any right that you may have to exchange or convert the
debt security for or into securities or other property;
|
|
|
|
reduce the percentage of direct holders of debt securities whose
consent is needed to modify or amend the applicable indenture;
|
|
|
|
reduce the percentage of direct holders of debt securities whose
consent is needed to waive our compliance with certain
provisions of the applicable indenture or to waive certain
defaults; and
|
|
|
|
modify any other aspect of the provisions dealing with
modification and waiver of the applicable indenture.
|
Changes Requiring a Majority Vote.
The second
type of change to a particular indenture and the debt securities
is the kind that requires a vote in favor by direct holders of
debt securities owning a majority of the principal amount of all
series affected thereby, voting together as a single class. Most
changes, including waivers, as described below, fall into this
category, except for changes noted above as requiring the
approval of the holders of each security affected thereby, and,
as noted below, changes not requiring approval.
Each indenture provides that a supplemental indenture which
changes or eliminates any covenant or other provision of the
applicable 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
9
respect to such covenant or other provision, shall be deemed not
to affect the rights under the applicable indenture of the
holders of securities of any other series.
Changes Not Requiring Approval.
The third type
of change does not require any vote by holders of debt
securities. This type is limited to clarifications and certain
other changes that would not adversely affect holders of the
debt securities.
Changes by Waiver Requiring a Majority
Vote.
Fourth, we need a vote by direct holders of
senior debt securities owning a majority of the principal amount
of the particular series affected to obtain a waiver of certain
of the restrictive covenants, including the one described later
under Restrictive Covenants
Limitation on Liens and Other Encumbrances on Voting Stock of
Designated Subsidiaries. We also need such a majority vote
to obtain a waiver of any past default, except a payment default
listed in the first category described later under
Default and Related Matters Events
of Default.
Modification of Subordination Provisions.
In
addition, we may not modify the subordination provisions of the
subordinated debt indenture or the junior subordinated indenture
in a manner that would adversely affect the outstanding
subordinated debt securities or junior subordinated debt
securities, as the case may be, of any one or more series in any
material respect, without the consent of the direct holders of a
majority in aggregate principal amount of all affected series,
voting together as one class.
Further Details Concerning Voting.
When taking
a vote, we will use the following rules to decide how much
principal amount to attribute to a debt security:
|
|
|
|
|
for original issue discount securities, we will use the
principal amount that would be due and payable on the voting
date if the maturity of the debt securities were accelerated to
that date because of a default;
|
|
|
|
for debt securities whose principal amount is not known (for
example, because it is based on an index) we will use a special
rule for that debt security described in the prospectus
supplement; or
|
|
|
|
for debt securities denominated in one or more foreign
currencies or currency units, we will use the U.S. dollar
equivalent.
|
Debt securities will not be considered outstanding, and
therefore will not be eligible to vote, if we have deposited or
set aside in trust for you money for their payment or
redemption. Debt securities will also not be eligible to vote if
they have been fully defeased as described under
Defeasance Full Defeasance.
We will generally be entitled to set any day as a record date
for the purpose of determining the direct holders of outstanding
debt securities that are entitled to vote or take other action
under the applicable indenture. In some circumstances, the
trustee will be entitled to set a record date for action by
direct holders. If we or the trustee set a record date for a
vote or other action to be taken by holders of a particular
series, that vote or action may be taken only by persons who are
direct holders of outstanding securities of that series on the
record date and must be taken within 90 days following the
record date.
Street name and other indirect holders should consult their
banks or brokers for information on how approval may be granted
or denied if we seek to change an indenture or the debt
securities or request a waiver.
Subordination
Provisions
Direct holders of subordinated debt securities or junior
subordinated debt securities should recognize that contractual
provisions in the subordinated debt indenture and junior
subordinated debt indenture may prohibit us from making payments
on those securities. Subordinated debt securities are
subordinate and junior in right of payment, to the extent and in
the manner stated in the subordinated debt indenture, to all of
our senior indebtedness, as defined in the subordinated debt
indenture, including all debt securities we have issued and will
issue under the senior debt indenture. Junior subordinated debt
securities are subordinate and junior in right of payment, to
the extent and in the manner stated in the junior subordinated
debt indenture, to all of our
10
senior indebtedness, as defined in the junior subordinated debt
indenture, including all debt securities we have issued and will
issue under the senior debt indenture and subordinated debt
indenture.
Subject to the qualifications described below, the term
senior indebtedness is defined in the subordinated
debt indenture to include principal of, and interest and premium
(if any) on, and any other payment due pursuant to any of the
following, whether incurred prior to, on or after the date of
this prospectus:
|
|
|
|
|
all of our obligations (other than obligations pursuant to the
subordinated debt indenture, the subordinated debt securities,
the junior subordinated debt indenture and the junior
subordinated debt securities) for borrowed money;
|
|
|
|
all of our obligations evidenced by notes, debentures, bonds or
other similar instruments, including obligations incurred in
connection with the acquisition of property, assets or
businesses;
|
|
|
|
all of our obligations under leases required or permitted to be
capitalized under generally accepted accounting principles;
|
|
|
|
all of our reimbursement obligations with respect to letters of
credit, bankers acceptances or similar facilities issued
for our account;
|
|
|
|
all of our obligations issued or assumed as the deferred
purchase price of property or services, including all
obligations under master lease transactions pursuant to which we
or any of our subsidiaries have agreed to be treated as owner of
the subject property for federal income tax purposes (but
excluding trade accounts payable or accrued liabilities arising
in the ordinary course of business);
|
|
|
|
all of our payment obligations under interest rate swap or
similar agreements or foreign currency hedge, exchange or
similar agreements at the time of determination, including any
such obligations we incurred solely to act as a hedge against
increases in interest rates that may occur under the terms of
other outstanding variable or floating rate indebtedness of ours;
|
|
|
|
all obligations of the types referred to in the preceding bullet
points of another person and all dividends of another person the
payment of which, in either case, we have assumed or guaranteed
or for which we are responsible or liable, directly or
indirectly, jointly or severally, as obligor, guarantor or
otherwise;
|
|
|
|
all compensation and reimbursement obligations of ours to the
trustee pursuant to the subordinated debt indenture and the
junior subordinated indenture; and
|
|
|
|
all amendments, modifications, renewals, extensions,
refinancings, replacements and refundings of any of the above
types of indebtedness.
|
Notwithstanding anything to the contrary in the foregoing, under
the subordinated debt indenture, senior indebtedness will not
include:
|
|
|
|
|
indebtedness we owe to a subsidiary of ours or our employees;
|
|
|
|
indebtedness which, by its terms, expressly provides that it
does not rank senior to the subordinated debt securities;
|
|
|
|
indebtedness incurred for the purchase of goods, materials or
property, or for services obtained in the ordinary course of
business or for other liabilities arising in the ordinary course
of business; and
|
|
|
|
indebtedness we may incur in violation of the subordinated debt
indenture.
|
Subject to the qualifications described below, the term
senior indebtedness is defined in the junior
subordinated indenture to include principal of, and interest and
premium (if any) on, and any other payment due pursuant to any
of the following, whether incurred prior to, on or after the
date of this prospectus:
|
|
|
|
|
all of our obligations (other than obligations pursuant to the
junior subordinated indenture and the junior subordinated debt
securities) for money borrowed;
|
11
|
|
|
|
|
all of our obligations evidenced by notes, debentures, bonds or
other similar instruments, including obligations incurred in
connection with the acquisition of property, assets or
businesses and including all other debt securities issued by us
to any trust or a trustee of such trust, or to a partnership or
other affiliate that acts as a financing vehicle for us, in
connection with the issuance of securities by such vehicles
(including but not limited to the junior subordinated
debentures, series A, issued pursuant to the indenture
dated as of December 24, 1996, between USF&G
Corporation and The Bank of New York, as amended, the
junior subordinated debentures, series C, issued pursuant
to the indenture dated as of July 8, 1997, between
USF&G Corporation and The Bank of New York, as amended and
the junior subordinated deferrable interest debentures, issued
pursuant to the indenture dated as of December 23, 1997
between MMI Companies, Inc. and The Bank of New York, as
amended);
|
|
|
|
all of our obligations under leases required or permitted to be
capitalized under generally accepted accounting principles;
|
|
|
|
all of our reimbursement obligations with respect to letters of
credit, bankers acceptances or similar facilities issued
for our account;
|
|
|
|
all of our obligations issued or assumed as the deferred
purchase price of property or services, including all
obligations under master lease transactions pursuant to which we
or any of our subsidiaries have agreed to be treated as owner of
the subject property for federal income tax purposes (but
excluding trade accounts payable or accrued liabilities arising
in the ordinary course of business);
|
|
|
|
all of our payment obligations under interest rate swap or
similar agreements or foreign currency hedge, exchange or
similar agreements at the time of determination, including any
such obligations we incurred solely to act as a hedge against
increases in interest rates that may occur under the terms of
other outstanding variable or floating rate indebtedness of ours;
|
|
|
|
all obligations of the types referred to in the preceding bullet
points of another person and all dividends of another person the
payment of which, in either case, we have assumed or guaranteed
or for which we are responsible or liable, directly or
indirectly, jointly or severally, as obligor, guarantor or
otherwise;
|
|
|
|
all compensation and reimbursement obligations of ours to the
trustee pursuant to the junior subordinated indenture; and
|
|
|
|
all amendments, modifications, renewals, extensions,
refinancings, replacements and refundings of any of the above
types of indebtedness.
|
The junior subordinated debt securities will rank senior to all
of our equity securities.
The senior indebtedness will continue to be senior indebtedness
and entitled to the benefits of the subordination provisions
irrespective of any amendment, modification or waiver of any
term of the senior indebtedness or extension or renewal of the
senior indebtedness.
Notwithstanding anything to the contrary in the foregoing, under
the junior subordinated indenture, senior indebtedness will not
include:
|
|
|
|
|
indebtedness incurred for the purchase of goods, materials or
property, or for services obtained in the ordinary course of
business or for other liabilities arising in the ordinary course
of business;
|
|
|
|
any indebtedness which by its terms expressly provides that it
is not superior in right of payment to the junior subordinated
debt securities; or
|
|
|
|
any of our indebtedness owed to a person who is our subsidiary
or our employees.
|
12
Each of the subordinated debt indenture and junior subordinated
debt indenture provides that no payment or other distribution
may be made in respect of any subordinated debt securities or
junior subordinated debt securities, as the case may be, in the
following circumstances:
|
|
|
|
|
in the event of any default in the payment of principal of (or
premium, if any) or interest on any senior indebtedness (as
defined in the applicable indenture) when due, whether at the
stated maturity of any such payment or by declaration of
acceleration, call for redemption, mandatory payment or
prepayment or otherwise (senior payment default),
unless and until such senior payment default has been cured or
waived; or
|
|
|
|
|
|
in the event of any senior nonmonetary default (as defined
below), during the period commencing on the date of receipt by
us and the trustee of written notice of such senior nonmonetary
default from the holder of such senior indebtedness and ending
(subject to any blockage of payments that may then or thereafter
be in effect as the result of any senior payment default) on the
earlier of (i) the date on which the senior indebtedness to
which such senior nonmonetary default relates is discharged or
such senior nonmonetary default has been cured or waived in
writing or has ceased to exist and any acceleration of senior
indebtedness to which such senior nonmonetary default relates
has been rescinded or annulled or (ii) the 179th day
after the date of such receipt of such written notice.
Senior nonmonetary default is defined as the
occurrence and continuance of any default (other than a senior
payment default) or any event which, after notice or lapse of
time (or both), would become an event of default (other than a
senior payment default), under the terms of any instrument or
agreement pursuant to which any senior indebtedness is
outstanding, permitting a holder of such senior indebtedness (or
a trustee or agent on behalf of the holder) to declare such
senior indebtedness due and payable prior to the date on which
it would otherwise become due and payable.
|
If the trustee under the subordinated debt indenture or junior
subordinated debt indenture, as the case may be, or any direct
holders of the subordinated debt securities or junior
subordinated debt securities, as the case may be, receive any
payment or distribution that is prohibited under the
subordination provisions, then the trustee or the direct holders
will have to repay that money to the direct holders of the
senior indebtedness.
Even if the subordination provisions prevent us from making any
payment when due on the subordinated debt securities or junior
subordinated debt securities, as the case may be, of any series,
we will be in default on our obligations under that series if we
do not make the payment when due. This means that the trustee
under the subordinated debt indenture or the junior subordinated
debt indenture, as the case may be, and the direct holders of
that series can take action against us, but they will not
receive any money until the claims of the direct holders of
senior indebtedness have been fully satisfied.
Restrictive
Covenants
General
We have made certain promises in each indenture called
covenants where, among other things, we promise to
maintain our corporate existence and all licenses and material
permits necessary for our business. In addition, in the senior
debt indenture, we have made the promise described in the next
paragraph. The subordinated debt indenture and junior
subordinated debt indenture do not include the promise described
in the next paragraph.
Limitation
on Liens and Other Encumbrances on Voting Stock of Designated
Subsidiaries
Some of our property may be subject to a mortgage or other legal
mechanism that gives our lenders preferential rights in that
property over other lenders, including the direct holders of the
senior debt securities, or over our general creditors if we fail
to pay them back. These preferential rights are called liens. In
the senior debt indenture, we promise not to create, issue,
assume, incur or guarantee any indebtedness for borrowed money
that is secured by a mortgage, pledge, lien, security interest
or other encumbrance on any voting stock of a designated
subsidiary, unless we also secure all the senior debt securities
that are deemed outstanding under the senior debt indenture
equally and ratably with, or prior to, the indebtedness being
secured, together with, at our election, any of our or any
designated subsidiarys other indebtedness. This promise
does not restrict our ability to sell or otherwise dispose of
our interests in any designated subsidiary.
13
As used here:
|
|
|
|
|
voting stock means all classes of stock (including any interest
in such stock) outstanding of a designated subsidiary that are
normally entitled to vote in elections of directors;
|
|
|
|
designated subsidiary means any of our subsidiaries that,
together with its subsidiaries, has assets exceeding 20% of our
consolidated assets. As of the date of this prospectus, St. Paul
Fire and Marine Insurance Company, Travelers Property and its
wholly-owned subsidiaries, Travelers Insurance Group Holdings
Inc., The Travelers Indemnity Company and Travelers Casualty and
Surety Company are the only subsidiaries satisfying this 20%
test. For purposes of applying the 20% test, the assets of a
subsidiary and our consolidated assets are both determined as of
the last day of the most recent calendar quarter ended at least
30 days prior to the date of the 20% test and in accordance
with generally accepted accounting principles as in effect on
the last day of such calendar quarter; and
|
|
|
|
|
|
subsidiary means a corporation in which we
and/or
one
or more of our other subsidiaries owns at least 50% of the
voting stock, which is a kind of stock that ordinarily permits
its owners to vote for election of directors.
|
Defeasance
The following discussion of full defeasance and covenant
defeasance will be applicable to your series of debt securities
only if we choose to have them apply to that series. If we do so
choose, we will state that in the prospectus supplement.
Full
Defeasance
If there is a change in federal tax law, as described below, we
can legally release ourselves from any payment or other
obligations on the debt securities, called full defeasance, if
we put in place the following arrangements for you to be repaid:
|
|
|
|
|
we must deposit in trust for your benefit and the benefit of all
other direct holders of the debt securities a combination of
money and U.S. government or U.S. government agency
notes or bonds that will generate enough cash to make interest,
principal and any other payments on the debt securities on their
various due dates;
|
|
|
|
there must be a change in current federal tax law or a
U.S. Internal Revenue Service ruling that lets us make the
above deposit without causing you to be taxed on the debt
securities any differently than if we did not make the deposit
and such defeasance had not occurred. (Under current federal tax
law, the deposit and our legal release from the debt securities
would be treated as though we took back your debt securities and
gave you your share of the cash and notes or bonds deposited in
trust. In that event, you could recognize gain or loss on the
debt securities you give back to us.);
|
|
|
|
we must deliver to the trustee a legal opinion of our counsel
confirming the tax law change described above; and
|
|
|
|
in the case of the subordinated debt securities and junior
subordinated debt securities, the following requirements must
also be met:
|
|
|
|
|
|
no event or condition may exist that, under the provisions
described above under Subordination
Provisions, would prevent us from making payments of
principal, premium or interest on those subordinated debt
securities or junior subordinated debt securities, as the case
may be, on the date of the deposit referred to above or during
the 90 days after that date; and
|
|
|
|
we must deliver to the trustee an opinion of counsel to the
effect that (a) the trust funds will not be subject to any
rights of direct holders of senior indebtedness and
(b) after the
90-day
period referred to above, the trust funds will not be subject to
any applicable bankruptcy, insolvency, reorganization or similar
laws affecting creditors rights generally, except that if
a court were to rule under any of those laws in any case or
proceeding that the trust funds remained our property, then the
relevant trustee and the direct holders of the subordinated debt
securities or junior subordinated debt
|
14
|
|
|
|
|
securities, as the case may be, would be entitled to some
enumerated rights as secured creditors in the trust funds.
|
If we accomplished full defeasance, as described above, you
would have to rely solely on the trust deposit for repayment on
the debt securities. In addition, in the case of subordinated
debt securities and junior subordinated debt securities, the
provisions described above under Subordination
Provisions will not apply. You could not look to us for
repayment in the unlikely event of any shortfall. Conversely,
the trust deposit would most likely be protected from claims of
our lenders and other creditors if we ever become bankrupt or
insolvent.
Covenant
Defeasance
Under current federal tax law, we can make the same type of
deposit described above and be released from some of the
restrictive covenants in the debt securities. This is called
covenant defeasance. In that event, you would lose the
protection of those restrictive covenants but would gain the
protection of having money and securities set aside in trust to
repay the debt securities. In order to achieve covenant
defeasance, we must do the following:
|
|
|
|
|
we must deposit in trust for your benefit and the benefit of all
other direct holders of the debt securities a combination of
money and U.S. government or U.S. government agency
notes or bonds that will generate enough cash to make interest,
principal and any other payments on the debt securities on their
various due dates; and
|
|
|
|
we must deliver to the trustee a legal opinion of our counsel
confirming that under current federal income tax law we may make
the above deposit without causing you to be taxed on the debt
securities any differently than if we did not make the deposit
and such covenant defeasance had not occurred.
|
If we accomplish covenant defeasance, the following provisions,
among others, of the indentures and the debt securities would no
longer apply:
|
|
|
|
|
our promises regarding conduct of our business previously
described under Limitation on Liens and Other
Encumbrances on Voting Stock of Designated Subsidiaries
and any other covenants applicable to the series of debt
securities described in the prospectus supplement;
|
|
|
|
the condition regarding the treatment of liens when we merge or
engage in similar transactions, as described under
Special Situations Mergers and
Similar Events; and
|
|
|
|
the events of default relating to breach of covenants, described
under Default and Related Matters
Events of Default What Is an Event of Default?.
|
In addition, in the case of subordinated debt securities and
junior subordinated debt securities, the provisions described
above under Subordination Provisions
will not apply if we accomplish covenant defeasance.
If we accomplish covenant defeasance, you could still look to us
for repayment of the debt securities if there were a shortfall
in the trust deposit. In fact, if one of the remaining events of
default occurs, such as our bankruptcy, and the debt securities
become immediately due and payable, there may be a shortfall in
the trust deposit. Depending on the event causing the default,
you may not be able to obtain payment of the shortfall.
Default
and Related Matters
Ranking
With Our Other Unsecured Creditors
The debt securities are not secured by any of our property or
assets. Accordingly, your ownership of debt securities means
that you are one of our unsecured creditors. The senior debt
securities are not subordinated to any of our debt obligations,
and therefore, they rank equally with all of our other unsecured
and unsubordinated indebtedness. The subordinated debt
securities and the junior subordinated debt securities are
subordinate and junior in right of payment to all of our senior
indebtedness, as defined in the subordinated debt indenture and
the junior subordinated debt indenture, as the case may be.
15
Events
of Default
You will have special rights if an event of default occurs and
is not cured, as described later in this subsection.
What Is an Event of Default?
The term
event of default generally means any of the
following:
|
|
|
|
|
we do not pay the principal or any premium on a debt security on
its due date;
|
|
|
|
we do not pay interest on a debt security within 30 days of
its due date;
|
|
|
|
we do not deposit money into a separate custodial account, known
as sinking fund, when such deposit is due, if we agree to
maintain any such sinking fund;
|
|
|
|
we remain in breach of the restrictive covenant described
previously under Restrictive
Covenants Limitation on Liens and Other Encumbrances
on Voting Stock of Designated Subsidiaries or any other
term of the applicable indenture for 90 days after we
receive a notice of default stating we are in breach. The notice
must be sent by either the trustee or direct holders of at least
25% of the principal amount of debt securities of the affected
series;
|
|
|
|
we file for bankruptcy or certain other events of bankruptcy,
insolvency or reorganization occur; or
|
|
|
|
any other event of default described in the prospectus
supplement occurs.
|
However, unless otherwise specified in the applicable prospectus
supplement, under the terms of the junior subordinated debt
indenture, a covenant default and failure to deposit money into
a sinking fund when required are not an event of default.
Remedies If an Event of Default Occurs.
If you
are a holder of a subordinated debt or junior subordinated debt
security, all remedies available upon the occurrence of an event
of default under the applicable indenture will be subject to the
restrictions on the subordinated debt securities and junior
subordinated debt securities, as the case may be, described
above under Subordination Provisions. If
an event of default has occurred and has not been cured, the
trustee or the direct holders of 25% in principal amount of the
debt securities of the affected series may declare the entire
principal amount (or, in the case of original issue discount
securities, the portion of the principal amount that is
specified in the terms of the affected debt security) of all the
debt securities of that series to be due and immediately
payable. This is called a declaration of acceleration of
maturity. However, a declaration of acceleration of maturity may
be canceled by the direct holders of at least a majority in
principal amount of the debt securities of the affected series.
Reference is made to the prospectus supplement relating to any
series of debt securities which are original issue discount
securities for the particular provisions relating to
acceleration of the maturity of a portion of the principal
amount of original issue discount securities upon the occurrence
of an event of default and its continuation.
Except in cases of default, where the trustee has some special
duties, the trustee is not required to take any action under the
indentures at the request of any holders unless the direct
holders offer the trustee reasonable protection from expenses
and liability, called an indemnity. If reasonable indemnity is
provided, the direct holders of a majority in principal amount
of the outstanding debt securities of the relevant series may
direct the time, method and place of conducting any lawsuit or
other formal legal action seeking any remedy available to the
trustee. These majority direct holders may also direct the
trustee in performing any other action under the applicable
indenture with respect to the debt securities of that series.
Before you bypass the trustee and bring your own lawsuit or
other formal legal action or take other steps to enforce your
rights or protect your interests relating to the debt
securities, the following must occur:
|
|
|
|
|
you must give the trustee written notice that an event of
default has occurred and remains uncured;
|
|
|
|
the direct holders of 25% in principal amount of all outstanding
debt securities of the relevant series must make a written
request that the trustee take action because of the default and
must offer reasonable indemnity to the trustee against the cost
and other liabilities of taking that action;
|
16
|
|
|
|
|
the trustee must have not received from direct holders of a
majority in principal amount of the outstanding debt securities
of that series a direction inconsistent with the written
notice; and
|
|
|
|
the trustee must have not taken action for 90 days after
receipt of the above notice and offer of indemnity.
|
However, you are entitled at any time to bring a lawsuit for the
payment of money due on your debt security on or after its due
date.
Street name and other indirect holders should consult their
banks or brokers for information on how to give notice or
direction to or make a request of the trustee and to make or
cancel a declaration of acceleration.
We will furnish to the trustee every year a written statement of
certain of our officers certifying that to their knowledge we
are in compliance with the applicable indenture and the debt
securities issued under it, or else specifying any default.
Our
Relationship With the Trustee
The Bank of New York Mellon Trust Company, N.A. is the
trustee under the senior debt indenture, the subordinated debt
indenture and the junior subordinated indenture. The Bank of New
York Mellon is also a lender under a revolving credit agreement
among us and certain banks named therein providing for aggregate
borrowing by us of a maximum of $1.0 billion. No borrowings
under this facility were outstanding at September 30, 2008.
At September 30, 2008, The Bank of New York Mellon had
issued $32.4 million in letters of credit on our behalf.
The Bank of New York Mellon or its affiliates are also the
trustee under other indentures pursuant to which we or our
subsidiaries have issued debt securities and have provided, and
may in the future provide, commercial and investment banking
services to us from time to time.
DESCRIPTION
OF PREFERRED STOCK WE MAY OFFER
We may issue preferred stock in one or more series, as described
below. The following briefly summarizes the provisions of our
amended and restated articles of incorporation that would be
important to holders of our preferred stock. The following
description may not be complete and is subject to, and qualified
in its entirety by reference to, the terms and provisions of our
amended and restated articles of incorporation which is an
exhibit to the registration statement which contains this
prospectus.
The description of most of the financial and other specific
terms of your series will be in the prospectus supplement
accompanying this prospectus. Those terms may vary from the
terms described here.
As you read this section, please remember that the specific
terms of your series of preferred stock as described in your
prospectus supplement will supplement and, if applicable, may
modify or replace the general terms described in this section.
If there are differences between your prospectus supplement and
this prospectus, your prospectus supplement will control. Thus,
the statements we make in this section may not apply to your
series of preferred stock.
Reference to a series of preferred stock means all of the shares
of preferred stock issued as part of the same series under a
certificate of designations filed as part of our amended and
restated articles of incorporation. Reference to your prospectus
supplement means the prospectus supplement describing the
specific terms of the preferred stock you purchase. The terms
used in your prospectus supplement will have the meanings
described in this prospectus, unless otherwise specified.
Our
Authorized Preferred Stock
Under our amended and restated articles of incorporation, our
board of directors is authorized, without further action by our
shareholders, to establish from the 5,000,000 undesignated
shares authorized by our amended and restated articles of
incorporation one or more classes and series of shares, to
designate each such class and series, to fix the relative rights
and preferences of each such class and series and to issue such
17
shares. Such rights and preferences may be superior to common
stock as to dividends, distributions of assets (upon liquidation
or otherwise) and voting rights. Undesignated shares may be
convertible into shares of any other series or class of stock,
including common stock, if our board of directors so determines.
Our board of directors will fix the terms of the series of
preferred stock it designates by resolution adopted before we
issue any shares of the series of preferred stock.
The prospectus supplement relating to the particular series of
preferred stock will contain a description of the specific terms
of that series as fixed by our board of directors, including, as
applicable:
|
|
|
|
|
the offering price at which we will issue the preferred stock;
|
|
|
|
the title, designation of number of shares and stated value of
the preferred stock;
|
|
|
|
the dividend rate or method of calculation, the payment dates
for dividends and the place or places where the dividends will
be paid, whether dividends will be cumulative or noncumulative,
and, if cumulative, the dates from which dividends will begin to
cumulate;
|
|
|
|
any conversion or exchange rights;
|
|
|
|
whether the preferred stock will be subject to redemption and
the redemption price and other terms and conditions relative to
the redemption rights;
|
|
|
|
any liquidation rights;
|
|
|
|
any sinking fund provisions;
|
|
|
|
any voting rights; and
|
|
|
|
any other rights, preferences, privileges, limitations and
restrictions that are not inconsistent with the terms of our
amended and restated articles of incorporation.
|
When we issue and receive payment for shares of preferred stock,
the shares will be fully paid and nonassessable, which means
that its holders will have paid their purchase price in full and
that we may not ask them to surrender additional funds. Unless
otherwise specified in the prospectus supplement relating to a
particular series of preferred stock, holders of preferred stock
will not have any preemptive or subscription rights to acquire
more of our stock. Unless otherwise specified in the prospectus
supplement relating to a particular series of preferred stock,
each series of preferred stock will rank on a parity in all
respects with each other series of preferred stock and prior to
our common stock as to dividends and any distribution of our
assets.
Unless otherwise specified in the prospectus supplement relating
to a particular series of preferred stock, the rights of holders
of the preferred stock offered may be adversely affected by the
rights of holders of any shares of preferred stock that may be
issued in the future. Our board of directors may cause shares of
preferred stock to be issued in public or private transactions
for any proper corporate purposes, which may include issuances
to obtain additional financing in connection with acquisitions
and issuances to officers, directors and employees pursuant to
benefit plans. Our board of directors ability to issue
shares of preferred stock may discourage attempts by others to
acquire control of us without negotiation with our board of
directors, as it may make it difficult for a person to acquire
us without negotiating with our board of directors.
Redemption
If so specified in the applicable prospectus supplement, a
series of preferred stock may be redeemable at any time, in
whole or in part, at our option or the holders and may be
mandatorily redeemed.
Any restriction on the repurchase or redemption by us of our
preferred stock while we are in arrears in the payment of
dividends will be described in the applicable prospectus
supplement.
Any partial redemptions of preferred stock will be made in a way
that our board of directors decides is equitable.
18
Unless we default in the payment of the redemption price,
dividends will cease to accrue after the redemption date on
shares of preferred stock called for redemption, and all rights
of holders of these shares will terminate except for the right
to receive the redemption price.
Dividends
Holders of each series of preferred stock will be entitled to
receive dividends when, as and if declared by our board of
directors from funds legally available for payment of dividends.
The rates and dates of payment of dividends will be set forth in
the applicable prospectus supplement relating to each series of
preferred stock. Dividends will be payable to holders of record
of preferred stock as they appear on our books on the record
dates fixed by the board of directors. Dividends on any series
of preferred stock may be cumulative or noncumulative, as set
forth in the applicable prospectus supplement.
We may not declare, pay or set apart funds for payment of
dividends on a particular series of preferred stock unless full
dividends on any other series of preferred stock that ranks
equally with or senior to the series of preferred stock have
been paid or sufficient funds have been set apart for payment
for either of the following:
|
|
|
|
|
all prior dividend periods of the other series of preferred
stock that pay dividends on a cumulative basis; or
|
|
|
|
the immediately preceding dividend period of the other series of
preferred stock that pay dividends on a noncumulative basis.
|
Partial dividends declared on shares of any series of preferred
stock and other series of preferred stock ranking on an equal
basis as to dividends will be declared
pro rata.
A
pro
rata
declaration means that the ratio of dividends declared
per share to accrued dividends per share will be the same for
each series of preferred stock.
Conversion
or Exchange Rights
The prospectus supplement relating to any series of preferred
stock that is convertible, exercisable or exchangeable will
state the terms on which shares of that series are convertible
into or exercisable or exchangeable for shares of common stock,
another series of our preferred stock or any other securities.
Liquidation
Preference
In the event of our voluntary or involuntary liquidation,
dissolution or
winding-up,
holders of each series of our preferred stock will have the
right to receive distributions upon liquidation in the amount
described in the applicable prospectus supplement relating to
each series of preferred stock, plus an amount equal to any
accrued and unpaid dividends. These distributions will be made
before any distribution is made on the common stock or on any
securities ranking junior to the preferred stock upon
liquidation, dissolution or
winding-up.
If the liquidation amounts payable relating to the preferred
stock of any series and any other securities ranking on a parity
regarding liquidation rights are not paid in full, the holders
of the preferred stock of that series and the other securities
will have the right to a ratable portion of our available
assets, up to the full liquidation preference of each security.
Holders of these series of preferred stock or other securities
will not be entitled to any other amounts from us after they
have received their full liquidation preference.
Voting
Rights
The holders of shares of preferred stock will have no voting
rights, except:
|
|
|
|
|
as otherwise stated in the applicable prospectus supplement;
|
|
|
|
as otherwise stated in the certificate of designations
establishing the series; or
|
|
|
|
as required by applicable law.
|
19
Transfer
Agent and Registrar
The transfer agent, registrar and dividend disbursement agent
for the preferred stock will be stated in the applicable
prospectus supplement. The registrar for shares of preferred
stock will send notices to shareholders of any meetings at which
holders of the preferred stock have the right to elect directors
or to vote on any other matter.
DESCRIPTION
OF DEPOSITARY SHARES WE MAY OFFER
The following briefly summarizes the provisions of the
depositary shares and depositary receipts that we may issue from
time to time and which would be important to holders of
depositary receipts, other than pricing and related terms which
will be disclosed in the applicable prospectus supplement. The
prospectus supplement will also state whether any of the
generalized provisions summarized below do not apply to the
depositary shares or depositary receipts being offered and
provide any additional provisions applicable to the depositary
shares or depositary receipts being offered. The following
description and any description in a prospectus supplement may
not be complete and is subject to, and qualified in its entirety
by reference to, the terms and provisions of the form of deposit
agreement, which will be filed as an exhibit to the registration
statement which contains this prospectus.
Description
of Depositary Shares
We may offer depositary shares evidenced by depositary receipts.
Each depositary share represents a fraction or a multiple of a
share of the particular series of preferred stock issued and
deposited with a depositary. The fraction or the multiple of a
share of preferred stock which each depositary share represents
will be set forth in the applicable prospectus supplement.
We will deposit the shares of any series of preferred stock
represented by depositary shares according to the provisions of
a deposit agreement to be entered into between us and a bank or
trust company which we will select as our preferred stock
depositary. We will name the depositary in the applicable
prospectus supplement. Each holder of a depositary share will be
entitled to all the rights and preferences of the underlying
preferred stock in proportion to the applicable fraction or
multiple of a share of preferred stock represented by the
depositary share. These rights include dividend, voting,
redemption, conversion and liquidation rights. The depositary
will send the holders of depositary shares all reports and
communications that we deliver to the depositary and which we
are required to furnish to the holders of depositary shares.
Depositary
Receipts
The depositary shares will be evidenced by depositary receipts
issued pursuant to the deposit agreement. Depositary receipts
will be distributed to anyone who is buying a fraction or a
multiple of a share of preferred stock in accordance with the
terms of the applicable prospectus supplement.
Withdrawal
of Preferred Stock
Unless the related depositary shares have previously been called
for redemption, a holder of depositary shares may receive the
number of whole shares of the related series of preferred stock
and any money or other property represented by the holders
depositary receipts after surrendering the depositary receipts
at the corporate trust office of the depositary, paying any
taxes, charges and fees provided for in the deposit agreement
and complying with any other requirement of the deposit
agreement. Partial shares of preferred stock will not be issued.
If the surrendered depositary shares exceed the number of
depositary shares that represent the number of whole shares of
preferred stock the holder wishes to withdraw, then the
depositary will deliver to the holder at the same time a new
depositary receipt evidencing the excess number of depositary
shares. Once the holder has withdrawn the preferred stock, the
holder will not be entitled to re-deposit that preferred stock
under the deposit agreement or to receive depositary shares in
exchange for such preferred stock. We do not expect that there
will be any public trading market for withdrawn shares of
preferred stock.
20
Dividends
and Other Distributions
The depositary will distribute to record holders of depositary
shares any cash dividends or other cash distributions it
receives on preferred stock, after deducting its fees and
expenses. Each holder will receive these distributions in
proportion to the number of depositary shares owned by the
holder. The depositary will distribute only whole
U.S. dollars and cents. The depositary will add any
fractional cents not distributed to the next sum received for
distribution to record holders of depositary shares.
In the event of a non-cash distribution, the depositary will
distribute property to the record holders of depositary shares,
unless the depositary determines that it is not feasible to make
such a distribution. If this occurs, the depositary may, with
our approval, sell the property and distribute the net proceeds
from the sale to the holders.
The amounts distributed to holders of depositary shares will be
reduced by any amounts required to be withheld by the preferred
stock depositary or by us on account of taxes or other
governmental charges.
Redemption
of Depositary Shares
If the series of preferred stock represented by depositary
shares is subject to redemption, then we will give the necessary
proceeds to the depositary. The depositary will then redeem the
depositary shares using the funds they received from us for the
preferred stock. The redemption price per depositary share will
be equal to the redemption price payable per share for the
applicable series of the preferred stock and any other amounts
per share payable with respect to the preferred stock multiplied
by the fraction or multiple of a share of preferred stock
represented by one depositary share. Whenever we redeem shares
of preferred stock held by the depositary, the depositary will
redeem the depositary shares representing the shares of
preferred stock on the same day provided we have paid in full to
the depositary the redemption price of the preferred stock to be
redeemed and any accrued and unpaid dividends. If fewer than all
the depositary shares of a series are to be redeemed, the
depositary shares will be selected by lot or ratably or by any
other equitable methods as the depositary will decide.
After the date fixed for redemption, the depositary shares
called for redemption will no longer be considered outstanding.
Therefore, all rights of holders of the depositary shares will
cease, except that the holders will still be entitled to receive
any cash payable upon the redemption and any money or other
property to which the holder was entitled at the time of
redemption. To receive this amount or other property, the
holders must surrender the depositary receipts evidencing their
depositary shares to the preferred stock depositary. Any funds
that we deposit with the preferred stock depositary for any
depositary shares that the holders fail to redeem will be
returned to us after a period of one year from the date we
deposit the funds.
Voting
the Preferred Stock
Upon receipt of notice of any meeting at which the holders of
preferred stock are entitled to vote, the depositary will notify
holders of depositary shares of the upcoming vote and arrange to
deliver our voting materials to the holders. The record date for
determining holders of depositary shares that are entitled to
vote will be the same as the record date for the preferred
stock. The materials the holders will receive will
(1) describe the matters to be voted on and
(2) explain how the holders, on a certain date, may
instruct the depositary to vote the shares of preferred stock
underlying the depositary shares. For instructions to be valid,
the depositary must receive them on or before the date
specified. To the extent possible, the depositary will vote the
shares as instructed by the holder. We agree to take all
reasonable actions that the depositary determines are necessary
to enable it to vote as a holder has instructed. If the
depositary does not receive specific instructions from the
holders of any depositary shares, it will vote all shares of
that series held by it proportionately with instructions
received.
Conversion
or Exchange
The depositary, with our approval or at our instruction, will
convert or exchange all depositary shares if the preferred stock
underlying the depositary shares is converted or exchanged. In
order for the depositary to do so, we will need to deposit the
other preferred stock, common stock or other securities into
which the preferred stock is to be converted or for which it
will be exchanged.
21
The exchange or conversion rate per depositary share will be
equal to:
|
|
|
|
|
the exchange or conversion rate per share of preferred stock,
multiplied by the fraction or multiple of a share of preferred
stock represented by one depositary share;
|
|
|
|
plus all money and any other property represented by one
depositary share; and
|
|
|
|
including all amounts per depositary share paid by us for
dividends that have accrued on the preferred stock on the
exchange or conversion date and that have not been paid.
|
The depositary shares, as such, cannot be converted or exchanged
into other preferred stock, common stock, securities of another
issuer or any other of our securities or property. Nevertheless,
if so specified in the applicable prospectus supplement, a
holder of depositary shares may be able to surrender the
depositary receipts to the depositary with written instructions
asking the depositary to instruct us to convert or exchange the
preferred stock represented by the depositary shares into other
shares of our preferred stock or common stock or to exchange the
preferred stock for any other securities registered pursuant to
the registration statement of which this prospectus forms a
part. If the depositary shares carry this right, we would agree
that, upon the payment of any applicable fees, we will cause the
conversion or exchange of the preferred stock using the same
procedures as we use for the delivery of preferred stock. If a
holder is only converting part of the depositary shares
represented by a depositary receipt, new depositary receipts
will be issued for any depositary shares that are not converted
or exchanged.
Amendment
and Termination of the Deposit Agreement
We may agree with the depositary to amend the deposit agreement
and the form of depositary receipt without consent of the holder
at any time. However, if the amendment adds or increases fees or
charges (other than any change in the fees of any depositary,
registrar or transfer agent) or prejudices an important right of
holders, it will only become effective with the approval of
holders of at least a majority of the affected depositary shares
then outstanding. We will make no amendment that impairs the
right of any holder of depositary shares, as described above
under Withdrawal of Preferred Stock, to
receive shares of preferred stock and any money or other
property represented by those depositary shares, except in order
to comply with mandatory provisions of applicable law. If an
amendment becomes effective, holders are deemed to agree to the
amendment and to be bound by the amended deposit agreement if
they continue to hold their depositary receipts.
The deposit agreement automatically terminates if:
|
|
|
|
|
all outstanding depositary shares have been redeemed or
converted or exchanged for any other securities into which they
or the underlying preferred stock are convertible or
exchangeable;
|
|
|
|
each share of preferred stock has been converted into or
exchanged for common stock; or
|
|
|
|
a final distribution in respect of the preferred stock has been
made to the holders of depositary receipts in connection with
our liquidation, dissolution or
winding-up.
|
We may also terminate the deposit agreement at any time we wish.
If we do so, the depositary will give notice of termination to
the record holders not less than 30 days before the
termination date. Once depositary receipts are surrendered to
the depositary, it will send to each holder the number of whole
or fractional shares of the series of preferred stock underlying
that holders depositary receipts.
Charges
of Depositary and Expenses
We will pay the fees, charges and expenses of the depositary
provided in the deposit agreement to be payable by us. Holders
of depositary receipts will pay any taxes and governmental
charges and any charges provided in the deposit agreement to be
payable by them. If the depositary incurs fees, charges or
expenses for which it is not otherwise liable at the election of
a holder of a depositary receipt or other person, that holder or
other person will be liable for those fees, charges and expenses.
22
Limitations
on Our Obligations and Liability to Holders of Depositary
Receipts
The deposit agreement expressly limits our obligations and the
obligations of the depositary. It also limits our liability and
the liability of the depositary as follows:
|
|
|
|
|
we and the depositary are only liable to the holders of
depositary receipts for negligence or willful misconduct;
|
|
|
|
we and the depositary have no obligation to become involved in
any legal or other proceeding related to the depositary receipts
or the deposit agreement on your behalf or on behalf of any
other party, unless you provide us with satisfactory
indemnity; and
|
|
|
|
we and the depositary may rely upon any written advice of
counsel or accountants and on any documents we believe in good
faith to be genuine and to have been signed or presented by the
proper party.
|
Resignation
and Removal of Depositary
The depositary may resign at any time by notifying us of its
election to do so. In addition, we may remove the depositary at
any time. Within 60 days after the delivery of the notice
of resignation or removal of the depositary, we will appoint a
successor depositary.
DESCRIPTION
OF OUR COMMON STOCK
The following briefly summarizes the provisions of our amended
and restated articles of incorporation and bylaws that would be
important to holders of common stock. The following description
may not be complete and is subject to, and qualified in its
entirety by reference to, the terms and provisions of our
amended and restated articles of incorporation and amended and
restated bylaws which are exhibits to the registration statement
which contains this prospectus.
Our
Common Stock
Our authorized capital stock includes 1,745,000,000 shares
of common stock. As of December 4, 2008, there were
585,006,811 shares of common stock outstanding, which were
held by 80,286 shareholders of record.
Each share of common stock is entitled to participate
pro
rata
in distributions upon liquidation, subject to the
rights of holders of preferred shares, and to one vote on all
matters submitted to a vote of shareholders, including the
election of directors. Holders of common stock have no
preemptive or similar equity preservation rights, and cumulative
voting of shares in the election of directors is prohibited.
The holders of common stock may receive cash dividends as
declared by our board of directors out of funds legally
available for that purpose, subject to the rights of any holders
of preferred shares. We are a holding company, and our primary
source for the payment of dividends is dividends from our
subsidiaries. Various state laws and regulations limit the
amount of dividends that may be paid to us by our insurance
subsidiaries. The declaration and payment of future dividends to
holders of our common stock will be at the discretion of our
board of directors and will depend upon many factors, including
our financial condition, earnings, capital requirements of our
operating subsidiaries, legal requirements, regulatory
constraints and other factors as the board of directors deems
relevant.
The outstanding shares of common stock are, and the shares of
common stock offered by the registration statement when issued
will be, fully paid and nonassessable.
Our common stock is listed on the New York Stock Exchange under
the symbol TRV.
Transfer
Agent
The transfer agent and registrar for our common stock is Wells
Fargo Bank, N.A.
23
Limitation
of Liability and Indemnification Matters
We are subject to Minnesota Statutes, Chapter 302A.
Minnesota Statutes, Section 302A.521, provides that a
corporation shall indemnify any person made or threatened to be
made a party to a proceeding by reason of the former or present
official capacity (as defined in Section 302A.521 of the
Minnesota Statutes) of that person against judgments, penalties,
fines (including, without limitation, excise taxes assessed
against such person with respect to an employee benefit plan),
settlements and reasonable expenses (including attorneys
fees and disbursements), incurred by such person in connection
with the proceeding, if, with respect to the acts or omissions
of that person complained of in the proceeding, that person:
|
|
|
|
|
has not been indemnified therefor by another organization or
employee benefit plan;
|
|
|
|
acted in good faith;
|
|
|
|
received no improper personal benefit and Section 302A.255
(with respect to director conflicts of interest), if applicable,
has been satisfied;
|
|
|
|
in the case of a criminal proceeding, had no reasonable cause to
believe the conduct was unlawful; and
|
|
|
|
reasonably believed that the conduct was in the best interests
of the corporation in the case of acts or omissions in that
persons official capacity for the corporation, or, in the
case of acts or omissions in that persons official
capacity for other affiliated organizations, reasonably believed
that the conduct was not opposed to the best interests of the
corporation.
|
Our bylaws provide that we will indemnify and make permitted
advances to a person made or threatened to be made a party to a
proceeding by reason of his former or present official capacity
against judgments, penalties, fines (including, without
limitation, excise taxes assessed against the person with
respect to an employee benefit plan), settlements and reasonable
expenses (including, without limitation, attorneys fees
and disbursements) incurred by that person in connection with
the proceeding in the manner and to the fullest extent permitted
or required by Section 302A.521.
We have directors and officers liability insurance
policies, with coverage of up to $250 million, subject to
various deductibles and exclusions from coverage.
DESCRIPTION
OF WARRANTS WE MAY OFFER
General
We may issue warrants to purchase senior debt securities,
subordinated debt securities, junior subordinated debt
securities, preferred stock, common stock or any combination of
these securities, and these warrants may be issued by us
independently or together with any underlying securities and may
be attached or separate from the underlying securities. We will
issue each series of warrants under a separate warrant agreement
to be entered into between us and a warrant agent. The warrant
agent will act solely as our agent in connection with the
warrants of such series and will not assume any obligation or
relationship of agency for or with holders or beneficial owners
of warrants.
The following outlines some of the general terms and provisions
of the warrants. Further terms of the warrants and the
applicable warrant agreement will be stated in the applicable
prospectus supplement. The following description and any
description of the warrants in a prospectus supplement may not
be complete and is subject to and qualified in its entirety by
reference to the terms and provisions of the warrant agreement,
a form of which will be filed as an exhibit to the registration
statement which contains this prospectus.
The applicable prospectus supplement will describe the terms of
any warrants that we may offer, including the following:
|
|
|
|
|
the title of the warrants;
|
|
|
|
the total number of warrants;
|
|
|
|
the price or prices at which the warrants will be issued;
|
|
|
|
the currency or currencies investors may use to pay for the
warrants;
|
|
|
|
the designation and terms of the underlying securities
purchasable upon exercise of the warrants;
|
24
|
|
|
|
|
the price at which and the currency or currencies, including
composite currencies, in which investors may purchase the
underlying securities purchasable upon exercise of the warrants;
|
|
|
|
|
|
the date on which the right to exercise the warrants will
commence and the date on which the right will expire;
|
|
|
|
|
|
whether the warrants will be issued in registered form or bearer
form;
|
|
|
|
information with respect to book-entry procedures, if any;
|
|
|
|
if applicable, the minimum or maximum amount of warrants which
may be exercised at any one time;
|
|
|
|
if applicable, the designation and terms of the underlying
securities with which the warrants are issued and the number of
warrants issued with each underlying security;
|
|
|
|
if applicable, the date on and after which the warrants and the
related underlying securities will be separately transferable;
|
|
|
|
if applicable, a discussion of material United States federal
income tax considerations;
|
|
|
|
the identity of the warrant agent;
|
|
|
|
the procedures and conditions relating to the exercise of the
warrants; and
|
|
|
|
any other terms of the warrants, including terms, procedures and
limitations relating to the exchange and exercise of the
warrants.
|
Warrant certificates may be exchanged for new warrant
certificates of different denominations, and warrants may be
exercised at the warrant agents corporate trust office or
any other office indicated in the applicable prospectus
supplement. Prior to the exercise of their warrants, holders of
warrants exercisable for debt securities will not have any of
the rights of holders of the debt securities purchasable upon
such exercise and will not be entitled to payments of principal
(or premium, if any) or interest, if any, on the debt securities
purchasable upon such exercise. Prior to the exercise of their
warrants, holders of warrants exercisable for shares of
preferred stock or common stock will not have any rights of
holders of the preferred stock or common stock purchasable upon
such exercise and will not be entitled to dividend payments, if
any, or voting rights of the preferred stock or common stock
purchasable upon such exercise.
Exercise
of Warrants
A warrant will entitle the holder to purchase for cash an amount
of securities at an exercise price that will be stated in, or
that will be determinable as described in, the applicable
prospectus supplement. Warrants may be exercised at any time up
to the close of business on the expiration date set forth in the
applicable prospectus supplement. After the close of business on
the expiration date, unexercised warrants will become void.
Warrants may be exercised as set forth in the applicable
prospectus supplement. Upon receipt of payment and the warrant
certificate properly completed and duly executed at the
corporate trust office of the warrant agent or any other office
indicated in the prospectus supplement, we will, as soon as
practicable, forward the securities purchasable upon such
exercise. If less than all of the warrants represented by such
warrant certificate are exercised, a new warrant certificate
will be issued for the remaining warrants.
Enforceability
of Rights; Governing Law
The holders of warrants, without the consent of the warrant
agent, may, on their own behalf and for their own benefit,
enforce, and may institute and maintain any suit, action or
proceeding against us to enforce their rights to exercise and
receive the securities purchasable upon exercise of their
warrants. Unless otherwise stated in the prospectus supplement,
each issue of warrants and the applicable warrant agreement will
be governed by the laws of the State of New York.
25
DESCRIPTION
OF STOCK PURCHASE CONTRACTS WE MAY OFFER
We may issue stock purchase contracts, representing contracts
obligating holders to purchase from or sell to us, and
obligating us to purchase from or sell to the holders, a
specified number of shares of our common stock or preferred
stock, as applicable, at a future date or dates. The price per
share of common stock or preferred stock, as applicable, may be
fixed at the time the stock purchase contracts are issued or may
be determined by reference to a specific formula contained in
the stock purchase contracts. We may issue stock purchase
contracts in such amounts and in as many distinct series as we
wish.
The applicable prospectus supplement may contain, where
applicable, the following information about the stock purchase
contracts issued under it:
|
|
|
|
|
whether the stock purchase contracts obligate the holder to
purchase or sell, or both purchase and sell, our common stock or
preferred stock, as applicable, and the nature and amount of
each of those securities, or the method of determining those
amounts;
|
|
|
|
whether the stock purchase contracts are to be prepaid or not;
|
|
|
|
whether the stock purchase contracts are to be settled by
delivery, or by reference or linkage to the value, performance
or level of our common stock or preferred stock;
|
|
|
|
any acceleration, cancellation, termination or other provisions
relating to the settlement of the stock purchase
contracts; and
|
|
|
|
whether the stock purchase contracts will be issued in fully
registered or global form.
|
The applicable prospectus supplement will describe the terms of
any stock purchase contracts. The preceding description and any
description of stock purchase contracts in the applicable
prospectus supplement does not purport to be complete and is
subject to and is qualified in its entirety by reference to the
stock purchase contract agreement, a form of which will be filed
as an exhibit to the registration statement which contains this
prospectus, and, if applicable, collateral arrangements and
depository arrangements relating to such stock purchase
contracts.
DESCRIPTION
OF UNITS WE MAY OFFER
We may issue units comprised of one or more of the other
securities described in this prospectus in any combination. Each
unit will be issued so that the holder of the unit is also the
holder of each security included in the unit. Thus, the holder
of a unit will have the rights and obligations of a holder of
each included security. The unit agreement under which a unit is
issued may provide that the securities included in the unit may
not be held or transferred separately, at any time or at any
time before a specified date.
The applicable prospectus supplement may describe:
|
|
|
|
|
the designation and terms of the units and of the securities
comprising the units, including whether and under what
circumstances those securities may be held or transferred
separately;
|
|
|
|
any provisions for the issuance, payment, settlement, transfer
or exchange of the units or of the securities comprising the
units; and
|
|
|
|
whether the units will be issued in fully registered or global
form.
|
The applicable prospectus supplement will describe the terms of
any units. The preceding description and any description of
units in the applicable prospectus supplement does not purport
to be complete and is subject to and is qualified in its
entirety by reference to the unit agreement, a form of which
will be filed as an exhibit to the registration statement which
contains this prospectus, and, if applicable, collateral
arrangements and depositary arrangements relating to such units.
26
DESCRIPTION
OF PREFERRED SECURITIES THAT THE TRUSTS MAY OFFER
The following summary outlines the material terms and provisions
of the preferred securities that the Trusts may offer. The
particular terms of any preferred securities a Trust offers and
the extent, if any, to which these general terms and provisions
may or may not apply to the preferred securities will be
described in the applicable prospectus supplement.
Each of the Trusts will issue the preferred securities under a
declaration of trust which we will enter into at the time of any
offering of preferred securities by such Trust. The declarations
of trust for the Trusts are subject to and governed by the
Delaware law and the Trust Indenture Act of 1939, as
amended (the Trust Indenture Act), and BNY
Mellon Trust of Delaware will act as Delaware trustee and The
Bank of New York Mellon Trust Company, N.A. will act as
institutional trustee under the declarations of trusts for the
purposes of compliance with the provisions of the
Trust Indenture Act. The terms of the preferred securities
will be those contained in the applicable declaration of trust
and those made part of the declaration of trust by the
Trust Indenture Act and the Delaware Statutory
Trust Act. The following summary may not be complete and is
subject to, and qualified in its entirety by reference to, the
declarations of trust, a form of which is filed as an exhibit to
the registration statement which contains this prospectus, the
Trust Indenture Act and the Delaware Statutory
Trust Act.
Terms
Each declaration of trust will provide that the applicable Trust
may issue, from time to time, only one series of preferred
securities and one series of common securities. The preferred
securities will be offered to investors and the common
securities will be held by us. The terms of the preferred
securities, as a general matter, will mirror the terms of the
senior, subordinated or junior subordinated debt securities that
we will issue to a Trust in exchange for the proceeds of the
sales of the preferred and common securities, and because the
preferred securities represent undivided interests in the
related debt securities, any conversion feature applicable to
the preferred securities will mirror the terms of the
convertible debt securities or warrants, if any, that we will
have issued to such Trust. If we fail to make a payment on the
senior, subordinated or junior subordinated debt securities, the
Trust holding those debt securities will not have sufficient
funds to make related payments, including cash distributions, on
its preferred securities. If the related debt securities, and,
accordingly, the preferred securities are convertible into or
exchangeable for shares of our common stock or other securities,
in the event that we fail to perform under any convertible debt
securities or warrants we issue to a Trust, such Trust will be
unable to distribute to the holders any of our shares of common
stock or other securities to be distributed to the holders of
the preferred securities upon their conversion.
You should refer to the applicable prospectus supplement
relating to the preferred securities for specific terms of the
preferred securities, including, but not limited to:
|
|
|
|
|
the distinctive designation of the preferred securities and
common securities;
|
|
|
|
the total and per-security-liquidation amount of the preferred
securities;
|
|
|
|
the annual distribution rate, or method of determining the rate
at which the Trust issuing the securities will pay
distributions, on the preferred securities and the date or dates
from which distributions will accrue;
|
|
|
|
the date or dates on which the distributions will be payable and
any corresponding record dates;
|
|
|
|
the right, if any, to defer distributions on the preferred
securities upon extension of the interest payment period of the
related debt securities;
|
|
|
|
whether the preferred securities are to be issued in book-entry
form and represented by one or more global certificates and, if
so, the depositary for the global certificates and the specific
terms of the depositary arrangement;
|
27
|
|
|
|
|
the amount or amounts which will be paid out of the assets of
the Trust issuing the securities to the holders of preferred
securities upon voluntary or involuntary dissolution,
winding-up
or termination of the Trust;
|
|
|
|
any obligation of the Trust to purchase or redeem preferred
securities issued by it and the terms and conditions relating to
any redemption obligation;
|
|
|
|
any voting rights of the preferred securities;
|
|
|
|
any terms and conditions upon which the debt securities held by
the Trust issuing the preferred securities may be distributed to
holders of preferred securities;
|
|
|
|
if the related debt securities, and, accordingly, the preferred
securities may be converted into or exercised or exchanged for
our common stock or preferred stock or any other of our
securities, the terms on which conversion, exercise or exchange
is mandatory, at the option of the holder or at the option of
the Trust, the date on or the period during which conversion,
exercise or exchange may occur, the initial conversion, exercise
or exchange price or rate and the circumstances or manner in
which the amount of common stock or preferred stock or other
securities issuable upon conversion, exercise or exchange may be
adjusted;
|
|
|
|
any securities exchange on which the preferred securities will
be listed; and
|
|
|
|
any other relevant rights, preferences, privileges, limitations
or restrictions of the preferred securities not inconsistent
with the applicable declaration of trust or with applicable law.
|
We will guarantee the common and preferred securities to the
extent described below under Description of
Trust Guarantees. Our guarantee, when taken together
with our obligations under the related debt securities and the
related indenture and any warrants and related warrant
agreement, and our obligations under the declarations of trust,
would provide a full, irrevocable and unconditional guarantee of
amounts due on any common and preferred securities and the
distribution of any securities to which the holders would be
entitled upon conversion of the common and preferred securities,
if the related debt securities, and, accordingly, the common and
preferred securities are convertible into or exchangeable for
shares of our common stock or other securities. Certain United
States federal income tax considerations applicable to any
offering of preferred securities will be described in the
applicable prospectus supplement.
Liquidation
Distribution Upon Dissolution
Unless otherwise specified in an applicable prospectus
supplement, each declaration of trust states that the applicable
Trust will be dissolved:
|
|
|
|
|
on the expiration of the term of the Trust;
|
|
|
|
upon bankruptcy, dissolution or liquidation of us or the holder
of the common securities of the Trust;
|
|
|
|
upon our written direction to the institutional trustee to
dissolve the Trust and distribute the related debt securities
directly to the holders of the preferred securities and common
securities;
|
|
|
|
upon the redemption by the Trust of all of the preferred and
common securities in accordance with their terms; or
|
|
|
|
upon entry of a court order for the dissolution of the Trust.
|
Unless otherwise specified in an applicable prospectus
supplement, in the event of a dissolution as described above
other than in connection with redemption, after a Trust
satisfies all liabilities to its creditors as provided by
applicable law, each holder of the preferred or common
securities issued by the Trust will be entitled to receive:
|
|
|
|
|
distributions in an amount equal to the aggregate liquidation
amount of the preferred or common securities held by the holder,
plus accumulated and unpaid distributions to the date of
payment, unless in connection with such dissolution, the related
debt securities in an aggregate principal amount equal
|
28
|
|
|
|
|
to the aggregate liquidation amount of the preferred or common
securities held by the holder, plus accumulated and unpaid
distributions to the date of payment, have been distributed on a
pro rata basis to the holder in exchange for such preferred or
common securities; and
|
|
|
|
|
|
if we issued warrants to the Trust, a number of warrants equal
to the holders proportionate share to total number of
warrants held by the Trust.
|
If a Trust cannot pay the full amount due on its preferred and
common securities because it has insufficient assets available
for payment, then the amounts payable by the Trust on its
preferred and common securities will be paid on a
pro rata
basis. However, if an event of default under the indenture
has occurred and is continuing with respect to any series of
related debt securities, the total amounts due on the preferred
securities will be paid before any distribution on the common
securities.
Events of
Default
The following will be events of default under each declaration
of trust:
|
|
|
|
|
an event of default under the applicable debt indenture occurs
with respect to any related series of debt securities; or
|
|
|
|
any other event of default specified in the applicable
prospectus supplement occurs.
|
At any time after a declaration of acceleration has been made
with respect to a related series of debt securities and before a
judgment or decree for payment of the money due has been
obtained, the holders of a majority in liquidation amount of the
affected preferred securities may rescind any declaration of
acceleration with respect to the related debt securities and its
consequences:
|
|
|
|
|
if we have paid or deposited with the trustee funds sufficient
to pay all overdue principal of and premium and interest on the
related debt securities and other amounts due to the indenture
trustee and the institutional trustee; and
|
|
|
|
if all existing events of default with respect to the related
debt securities have been cured or waived except non-payment of
principal and interest on the related debt securities that has
become due solely because of the acceleration.
|
The holders of a majority in liquidation amount of the affected
preferred securities may waive any past default under the
indenture with respect to related debt securities, other than a
default in the payment of principal of, or any premium or
interest on, any related debt security or a default with respect
to a covenant or provision that cannot be amended or modified
without the consent of the holder of each affected outstanding
related debt security. In addition, the holders of at least a
majority in liquidation amount of the affected preferred
securities may waive any past default under the declarations of
trust, subject to certain qualifications provided in the
declaration of trust.
The holders of a majority in liquidation amount of the affected
preferred securities shall have the right to direct the time,
method and place of conducting any proceedings for any remedy
available to the institutional trustee or to direct the exercise
of any trust or power conferred on the institutional trustee
under the declarations of trust.
A holder of preferred securities may institute a legal
proceeding directly against us, without first instituting a
legal proceeding against the institutional trustee or anyone
else, for enforcement of payment to the holder of principal and
any premium or interest on the related series of debt securities
having a principal amount equal to the aggregate liquidation
amount of the preferred securities of the holder, if we fail to
pay principal and any premium or interest on the related series
of debt securities when payable.
We are required to furnish annually, to the institutional
trustee for the Trusts, officers certificates to the
effect that, to the best knowledge of the individuals providing
the certificates, we and the Trusts are not in default under the
applicable declaration of trust or, if there has been a default,
specifying the default and its status.
29
Consolidation,
Merger or Amalgamation of the Trusts
Each of the Trusts may not consolidate, amalgamate or merge with
or into, or be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to, any
entity, except as described below or as described in
Liquidation Distribution Upon
Dissolution. Each Trust may, with the consent of the
administrative trustees but without the consent of the holders
of the outstanding preferred securities or the other trustees of
the Trust, consolidate, amalgamate or merge with or into, or be
replaced by, or convey, transfer or lease its properties and
assets substantially as an entirety to, a trust organized under
the laws of any State if:
|
|
|
|
|
the successor entity either:
|
|
|
|
|
|
expressly assumes all of the obligations of the Trust relating
to its preferred and common securities; or
|
|
|
|
substitutes for the Trusts preferred securities other
securities having substantially the same terms as the preferred
securities, so long as the substituted successor securities rank
the same as the preferred securities for distributions and
payments upon liquidation, redemption and otherwise;
|
|
|
|
|
|
we appoint a trustee of the successor entity who has
substantially the same powers and duties as the institutional
trustee of the Trust;
|
|
|
|
the successor securities are listed or traded, or any
substituted successor securities will be listed upon notice of
issuance, on the same national securities exchange or other
organization on which the preferred securities are then listed
or traded, if any;
|
|
|
|
the merger, consolidation, amalgamation or replacement (the
merger event) does not cause the preferred
securities or any substituted successor securities to be
downgraded by any national rating agency;
|
|
|
|
the merger event does not adversely affect the rights,
preferences and privileges of the holders of the preferred or
common securities or any substituted successor securities in any
material respect;
|
|
|
|
the successor entity has a purpose substantially identical to
that of the Trust;
|
|
|
|
prior to the merger event, we shall provide to the Trust an
opinion of counsel from a nationally recognized law firm stating
that:
|
|
|
|
|
|
the merger event does not adversely affect the rights,
preferences and privileges of the holders of the Trusts
preferred or common securities in any material respect;
|
|
|
|
following the merger event, neither the Trust nor the successor
entity will be required to register as an investment company
under the Investment Company Act of 1940, as amended (the
Investment Company Act); and
|
|
|
|
following the merger event, the Trust or the successor entity
will continue to be classified as a grantor trust for United
States federal tax purposes; and
|
|
|
|
|
|
we own, or our permitted transferee owns, all of the common
securities of the successor entity and we guarantee or our
permitted transferee guarantees the obligations of the successor
entity under the substituted successor securities at least to
the extent provided under the applicable preferred securities
guarantee.
|
In addition, unless all of the holders of the preferred and
common securities approve otherwise, a Trust may not
consolidate, amalgamate or merge with or into, or be replaced
by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any other entity, or permit any
other entity to consolidate, amalgamate, merge with or into or
replace it if the transaction would cause the Trust or the
successor entity to be taxable as a corporation or classified
other than as a grantor trust for United States federal income
tax purposes.
30
Voting
Rights
Unless otherwise specified in the applicable prospectus
supplement, the holders of the preferred securities will have no
voting rights except as discussed below and under
Amendment to the Trust Agreements
and Description of Trust Guarantees
Modification of the Trust Guarantees; Assignment and
as otherwise required by law.
If any proposed amendment to a declaration of trust provides
for, or the trustee of the Trust otherwise proposes to effect:
|
|
|
|
|
any action that would adversely affect the powers, preferences
or special rights of the preferred securities in any material
respect, whether by way of amendment to the declaration of trust
or otherwise; or
|
|
|
|
the dissolution,
winding-up
or termination of the Trust other than pursuant to the terms of
the declaration of trust,
|
then the holders of the affected preferred securities as a class
will be entitled to vote on the amendment or proposal. In that
case, the amendment or proposal will be effective only if
approved by the holders of at least a majority in aggregate
liquidation amount of the affected preferred securities.
The holders of a majority in aggregate liquidation amount of the
preferred securities issued by a Trust have the right to direct
the time, method and place of conducting any proceeding for any
remedy available to the institutional trustee, or direct the
exercise of any trust or power conferred upon the institutional
trustee under the applicable declaration of trust, including the
right to direct the institutional trustee, as holder of the debt
securities and, if applicable, the warrants, to:
|
|
|
|
|
direct the time, method and place of conducting any proceeding
for any remedy available to the indenture trustee for any
related debt securities or execute any trust or power conferred
on the indenture trustee with respect to the related debt
securities;
|
|
|
|
if we issue warrants to the Trust, direct the time, method and
place of conducting any proceeding for any remedy available to
the institutional trustee as the registered holder of the
warrants;
|
|
|
|
waive certain past defaults under the indenture with respect to
any related debt securities, or the warrant agreement with
respect to any warrants;
|
|
|
|
cancel an acceleration of the maturity of the principal of any
related debt securities; or
|
|
|
|
consent to any amendment, modification or termination of the
indenture or any related debt securities or the warrant
agreement or warrants where consent is required.
|
In addition, before taking any of the foregoing actions, we will
provide to the institutional trustee an opinion of counsel
experienced in such matters to the effect that, as a result of
such actions, the trust will not be taxable as a corporation or
classified as other than a grantor trust for United States
federal income tax purposes.
The institutional trustee will notify all preferred securities
holders of a Trust of any notice of default received from the
indenture trustee with respect to the debt securities held by
the Trust.
Any required approval of the holders of preferred securities may
be given at a meeting of the holders of the preferred securities
convened for the purpose or pursuant to written consent. The
administrative trustees will cause a notice of any meeting at
which holders of securities are entitled to vote to be given to
each holder of record of the preferred securities at the
holders registered address at least 7 days and not
more than 60 days before the meeting.
No vote or consent of the holders of the preferred securities
will be required for a Trust to redeem and cancel its preferred
securities in accordance with its declaration of trust.
31
Notwithstanding that holders of the preferred securities are
entitled to vote or consent under any of the circumstances
described above, any of the preferred securities that are owned
by us, or any affiliate of ours will, for purposes of any vote
or consent, be treated as if they were not outstanding.
Amendment
to the Declarations of Trust
The declarations of trust may be amended from time to time by us
and the institutional trustee and the administrative trustees of
the Trust, without the consent of the holders of the preferred
securities, to:
|
|
|
|
|
cure any ambiguity or correct or supplement any provision which
may be defective or inconsistent with any other provision;
|
|
|
|
add to the covenants, restrictions or obligations of the
sponsor; or
|
|
|
|
modify, eliminate or add to any provisions to the extent
necessary to ensure that the Trust will not be taxable as a
corporation or classified as other than a grantor trust for
United States federal income tax purposes, to ensure that the
debt securities held by the Trust are treated as indebtedness
for United States federal income tax purposes or to ensure that
the Trust will not be required to register as an investment
company under the Investment Company Act;
|
provided, however, that, in each case, the amendment would not
adversely affect in any material respect the interests of the
holders of the preferred securities.
Other amendments to the declarations of trust may be made by us
and the trustees of the Trust upon approval of the holders of a
majority in aggregate liquidation amount of the outstanding
preferred securities of a Trust and receipt by the trustees of
an opinion of counsel to the effect that the amendment will not
cause the Trust to be taxable as a corporation or classified as
other than a grantor trust for United States federal income tax
purposes, affect the treatment of the debt securities held by
the Trust as indebtedness for United States federal income tax
purposes or affect the Trusts exemption from the
Investment Company Act.
Notwithstanding the foregoing, without the consent of each
affected holder of common or preferred securities of a Trust, a
declaration of trust may not be amended to:
|
|
|
|
|
change the amount or timing of any distribution on the common or
preferred securities of the Trust or otherwise adversely affect
the amount of any distribution required to be made in respect of
the securities as of a specified date;
|
|
|
|
change any of the conversion or redemption provisions; or
|
|
|
|
restrict the right of a holder of any securities to institute
suit for the enforcement of any payment on or after the
distribution date.
|
Removal
and Replacement of Trustees
Unless an event of default exists under the declaration of trust
or, if the preferred securities are convertible and there is a
separate warrant agreement, the warrant agreement, we may remove
the institutional trustee and the Delaware trustee at any time.
If an event of default exists, the institutional trustee and the
Delaware trustee may be removed only by the holders of a
majority in liquidation amount of the outstanding preferred
securities. In no event will the holders of the preferred
securities have the right to vote to appoint, remove or replace
the administrative trustees because these voting rights are
vested exclusively in us as the holder of all the Trusts
common securities. No resignation or removal of the
institutional trustee or the Delaware trustee and no appointment
of a successor trustee shall be effective until the acceptance
of appointment by the successor trustee in accordance with the
applicable declaration of trust.
Merger or
Consolidation of Trustees
Any entity into which the institutional trustee or the Delaware
trustee may be merged or converted or with which it may be
consolidated, or any entity resulting from any merger,
conversion or consolidation to which the trustee shall be a
party, or any entity succeeding to all or substantially all of
the corporate trust
32
business of the trustee, shall be the successor of the trustee
under the applicable declaration of trust; provided, however,
that the entity shall be otherwise qualified and eligible.
Information
Concerning the Institutional Trustee
For matters relating to compliance with the Trust Indenture
Act, the institutional trustee for the Trusts will have all of
the duties and responsibilities of an indenture trustee under
the Trust Indenture Act. Except if an event of default
exists under the declarations of trust, the institutional
trustee will undertake to perform only the duties specifically
set forth in declarations of trust. While such an event of
default exists, the institutional trustee must exercise the same
degree of care and skill as a prudent person would exercise or
use in the conduct of his or her own affairs. Subject to this
provision, the institutional trustee is not obligated to
exercise any of the powers vested in it by the applicable
declaration of trust at the request of any holder of preferred
securities, unless the institutional trustee is offered an
indemnity reasonably satisfactory to it against the costs,
expenses and liabilities that it might incur. But the holders of
preferred securities will not be required to offer indemnity if
the holders, by exercising their voting rights, direct the
institutional trustee to take any action that is provided for in
the declaration of trust following a declaration of an event of
default.
The Bank of New York Mellon Trust Company, N.A., which is
the institutional trustee for the Trusts, also serves as the
senior debt indenture trustee, the subordinated debt indenture
trustee, the junior subordinated debt indenture trustee and the
guarantee trustee under the trust guarantee described below. We
and certain of our affiliates maintain banking relationships
with The Bank of New York Mellon Trust Company, N.A. or its
affiliates, which are described above under Description of
Debt Securities We May Offer Our Relationship With
the Trustee.
Miscellaneous
The administrative trustees of the each of the Trusts are
authorized and directed to conduct the affairs of and to operate
the applicable Trust in such a way that:
|
|
|
|
|
the Trust will not be taxable as a corporation or classified as
other than a grantor trust for United States federal income tax
purposes;
|
|
|
|
the debt securities held by the Trust will be treated as
indebtedness of ours for United States federal income tax
purposes; and
|
|
|
|
the Trust will not be deemed to be an investment company
required to be registered under the Investment Company Act.
|
The administrative trustees are authorized to take any action,
so long as it is consistent with applicable law, the certificate
of trust or the applicable declaration of trust that the
administrative trustees determine to be necessary or desirable
for the above purposes, as long as it does not materially and
adversely affect the holders of the securities.
Registered holders of the preferred securities have no
preemptive or similar rights.
No Trust may, among other things, incur indebtedness.
Governing
Law
The declarations of trust and the preferred securities will be
governed by and construed in accordance with the laws of the
State of Delaware, without regard to the conflict of laws
provisions thereof.
33
DESCRIPTION
OF TRUST GUARANTEES
The following describes certain general terms and provisions of
the trust guarantees which we will execute and deliver for the
benefit of the holders from time to time of preferred securities
and the common securities issued by the Trusts. The trust
guarantees will be separately qualified as an indenture under
the Trust Indenture Act, and The Bank of New York Mellon
Trust Company, N.A. will act as indenture trustee under the
trust guarantees for the purposes of compliance with the
provisions of the Trust Indenture Act. The terms of the
trust guarantees will be those contained in the trust guarantees
and those made part of the trust guarantees by the
Trust Indenture Act. The following summary may not be
complete and is subject to and qualified in its entirety by
reference to the form of trust guarantees, which is filed as an
exhibit to the registration statement which contains this
prospectus, and the Trust Indenture Act. The trust
guarantees will be held by the guarantee trustee of each Trust
for the benefit of the holders of the preferred securities.
General
We will irrevocably and unconditionally agree to pay or make the
following payments or distributions with respect to common and
preferred securities, in full, to the holders of the common and
preferred securities, as and when they become due regardless of
any defense, right of set-off or counterclaim that a Trust may
have except for the defense of payment:
|
|
|
|
|
any accumulated and unpaid distributions which are required to
be paid on the common and preferred securities, to the extent
the Trust does not make such payments or distributions but has
sufficient funds available to do so;
|
|
|
|
the redemption price and all accumulated and unpaid
distributions to the date of redemption with respect to any
preferred securities called for redemption, to the extent the
Trust does not make such payments or distributions but has
sufficient funds available to do so; and
|
|
|
|
upon a voluntary or involuntary dissolution,
winding-up
or termination of the Trust (other than in connection with the
distribution of related debt securities to the holders of
preferred securities or the redemption of all of the preferred
securities), the lesser of:
|
|
|
|
|
|
the total liquidation amount and all accumulated and unpaid
distributions on the common and preferred securities to the date
of payment, to the extent the Trust does not make such payments
or distributions but has sufficient funds available to do
so; and
|
|
|
|
the amount of assets of the Trust remaining available for
distribution to holders of such common and preferred securities
in liquidation of the Trust.
|
Our obligation to make a payment under the trust guarantee may
be satisfied by our direct payment of the required amounts to
the holders of common and preferred securities to which the
trust guarantee relates or by causing a Trust to pay the amounts
to the holders. Payments under the trust guarantee will be made
on the common and preferred securities on a pro rata basis.
However, if an event of default under the applicable indenture
has occurred and is continuing with respect to any series of
related debt securities, the total amounts due on the preferred
securities will be paid before any payment on the common
securities.
Modification
of the Trust Guarantees; Assignment
Except with respect to any changes which do not adversely affect
the rights of holders of preferred securities in any material
respect (in which case no vote will be required), each trust
guarantee may be amended only with the prior approval of the
holders of not less than a majority in liquidation amount of the
outstanding common and preferred securities to which the trust
guarantee relates. The manner of obtaining the approval of
holders of the preferred securities will be described in an
accompanying prospectus supplement. All guarantees and
agreements contained in each trust guarantee will bind our
successors, assigns, receivers, trustees and representatives and
will be for the benefit of the holders of the outstanding common
and preferred securities to which each trust guarantee relates.
34
Termination
Each trust guarantee will terminate when any of the following
has occurred:
|
|
|
|
|
all common and preferred securities to which the trust guarantee
relates have been paid in full or redeemed in full by us, the
applicable Trust or both;
|
|
|
|
the debt securities held by the applicable Trust have been
distributed to the holders of the common and preferred
securities; or
|
|
|
|
the amounts payable in accordance with the applicable
declaration of trust upon liquidation of the Trust have been
paid in full.
|
Each trust guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of
common and preferred securities to which each trust guarantee
relates must restore payment of any amounts paid on the common
and preferred securities or under each trust guarantee.
Events of
Default
There will be an event of default under the trust guarantees if
we fail to perform any of our payment or other obligations under
the trust guarantees. However, other than with respect to a
default in payment of any guarantee payment, we must have
received notice of default and not have cured the default within
90 days after receipt of the notice. We, as guarantor, will
be required to file annually with the guarantee trustee a
certificate regarding our compliance with the applicable
conditions and covenants under each of our trust guarantees.
Each trust guarantee will constitute a guarantee of payment and
not of collection. The holders of a majority in liquidation
amount of the common and preferred securities to which a trust
guarantee relates have the right to direct the time, method and
place of conducting any proceeding for any remedy available to
the guarantee trustee in respect of such trust guarantee or to
direct the exercise of any trust or power conferred upon the
guarantee trustee under such trust guarantee. If the guarantee
trustee fails to enforce the applicable trust guarantee, any
holder of common or preferred securities to which the trust
guarantee relates may institute a legal proceeding directly
against us to enforce the holders rights under the trust
guarantee, without first instituting a legal proceeding against
the trust, the guarantee trustee or any one else. If we do not
make a guarantee payment, a holder of common or preferred
securities may directly institute a proceeding against us for
enforcement of the trust guarantee for such payment.
Status of
the Trust Guarantees
The applicable prospectus supplement relating to the preferred
securities will indicate whether the applicable trust guarantee
is our senior or subordinated obligation. If such trust
guarantee is our senior obligation, it will be our general
unsecured obligation and will rank equal to our other senior and
unsecured obligations.
Unless otherwise specified in the applicable prospectus
supplement, if such trust guarantee is our subordinated
obligation, it will be our general unsecured obligation and will
rank as follows:
|
|
|
|
|
subordinate and junior in right of payment to all of our senior
indebtedness, as defined in the subordinated debt indenture or
the junior subordinated debt indenture, as the case may be;
|
|
|
|
on parity with (i) our most senior preferred or preference
stock currently outstanding or issued in the future,
(ii) our guarantees currently outstanding or issued in the
future in respect of other preferred securities our affiliates
have issued or may issue and (iii) other issues of
subordinated debt securities; and
|
|
|
|
senior to our common stock.
|
35
The terms of the preferred securities provide that each holder
of preferred securities by acceptance of the preferred
securities agrees to any subordination provisions and other
terms of the applicable trust guarantee relating to applicable
subordination.
Information
Concerning the Guarantee Trustee
The guarantee trustee, except if we default under the trust
guarantee, will undertake to perform only such duties as are
specifically set forth in the applicable trust guarantee and, in
case a default with respect to such trust guarantee has
occurred, must exercise the same degree of care and skill as a
prudent person would exercise or use in the conduct of his or
her own affairs. Subject to this provision, the guarantee
trustee will not be obligated to exercise any of the powers
vested in it by the applicable trust guarantee at the request of
any holder of the common or preferred securities unless it is
offered reasonable indemnity against the costs, expenses and
liabilities that it may incur.
Governing
Law
Each trust guarantee will be governed by and construed in
accordance with the laws of the State of New York.
Effect of
Obligations Under the Debt Securities and the
Trust Guarantees
As long as we make payments of interest and any other payments
when they are due on the debt securities held by a Trust, those
payments will be sufficient to cover distributions and any other
payments due on the preferred securities issued by the Trust
because of the following factors:
|
|
|
|
|
the total principal amount of the debt securities held by the
Trust will be equal to the total stated liquidation amount of
the preferred securities and common securities issued by the
Trust;
|
|
|
|
the interest rate and the interest payment dates and other
payment dates on the debt securities held by the Trust will
match the distribution rate and distribution payment dates and
other payment dates for the preferred securities and common
securities issued by the Trust;
|
|
|
|
we will pay, as sponsor, and the Trust will not be obligated to
pay, directly or indirectly, all costs, expenses, debt, and
obligations of the Trust (other than obligations under the trust
securities); and
|
|
|
|
the applicable declaration of trust will further provide that
the Trust is not authorized to engage in any activity that is
not consistent with its limited purposes.
|
We will irrevocably guarantee payments of distributions and
other amounts due on the preferred securities to the extent the
Trust has funds available to pay such amounts as and to the
extent set forth herein. Taken together, our obligations under
the debt securities, the applicable debt indenture, the
applicable declaration of trust and the applicable trust
guarantee will provide a full, irrevocable and unconditional
guarantee of a Trusts payments of distributions and other
amounts due on the preferred securities. No single document
standing alone or operating in conjunction with fewer than all
of the other documents constitutes this trust guarantee. Only
the combined operation of these documents effectively provides a
full, irrevocable and unconditional guarantee of a Trusts
obligations under the preferred securities.
If and to the extent that we do not make the required payments
on the debt securities, a Trust will not have sufficient funds
to make its related payments, including distributions on the
preferred securities. Our trust guarantee will not cover any
payments when a Trust does not have sufficient funds available
to make those payments. Your remedy, as a holder of preferred
securities, is to institute a direct action against us.
36
MATERIAL
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
In the opinion of Simpson Thacher & Bartlett LLP, our
special United States tax counsel, the following discussion is a
summary of the material United States federal income tax
consequences of the ownership of the debt securities, preferred
securities and common and preferred stock as of the date hereof.
Except where noted, this summary deals only with debt
securities, preferred securities and common and preferred stock
that are held as capital assets, and does not represent a
detailed description of the United States federal income tax
consequences applicable to you if you are subject to special
treatment under the United States federal income tax laws,
including if you are:
|
|
|
|
|
a dealer in securities or currencies;
|
|
|
|
a financial institution;
|
|
|
|
a regulated investment company;
|
|
|
|
a real estate investment trust;
|
|
|
|
a tax-exempt organization;
|
|
|
|
an insurance company;
|
|
|
|
a person holding the debt securities, preferred securities,
common stock or preferred stock as part of a hedging,
integrated, conversion or constructive sale transaction or a
straddle;
|
|
|
|
a trader in securities that has elected the mark-to-market
method of accounting for your securities;
|
|
|
|
a person liable for alternative minimum tax;
|
|
|
|
a partnership or other pass-through entity for United States
federal income tax purposes;
|
|
|
|
a United States Holder (as defined below) whose
functional currency is not the U.S. dollar;
|
|
|
|
a controlled foreign corporation;
|
|
|
|
a passive foreign investment company; or
|
|
|
|
a United States expatriate.
|
This summary is based upon provisions of the Internal Revenue
Code of 1986, as amended (the Code), and
regulations, rulings and judicial decisions as of the date
hereof. Those authorities may be changed, perhaps retroactively,
so as to result in United States federal income tax consequences
different from those summarized below.
The discussion below assumes that all the debt securities issued
under this prospectus will be classified for United States
federal income tax purposes as our indebtedness and you should
note that in the event of an alternative characterization, the
tax consequences would differ from those discussed below.
Accordingly, if we intend to treat a debt security as other than
debt for United States federal income tax purposes, we will
disclose the relevant tax considerations in the applicable
prospectus supplement. We will summarize any special United
States federal tax considerations relevant to a particular issue
of the debt securities, preferred securities or common or
preferred stock in the applicable prospectus supplement. We will
also summarize material federal income tax consequences, if any,
applicable to any offering of warrants, stock purchase
contracts, units or depositary shares in the applicable
prospectus supplement.
For purposes of this summary, a United States Holder
means a beneficial owner of the debt securities, preferred
securities or common or preferred stock that is for United
States federal income tax purposes:
|
|
|
|
|
an individual citizen or resident of the United States;
|
|
|
|
a corporation (or any other entity treated as a corporation for
United States federal income tax purposes) created or organized
in or under the laws of the United States, any state thereof or
the District of Columbia;
|
37
|
|
|
|
|
an estate the income of which is subject to United States
federal income taxation regardless of its source; or
|
|
|
|
a trust if it (1) is subject to the primary supervision of
a court within the United States and one or more United States
persons have the authority to control all substantial decisions
of the trust or (2) has a valid election in effect under
applicable United States Treasury regulations to be treated as a
United States person.
|
A
Non-United
States Holder means a beneficial owner of the debt
securities, preferred securities or common or preferred stock
who is neither a United States Holder nor a partnership for
United States federal income tax purposes.
If a partnership holds the debt securities, preferred securities
or common or preferred stock, the tax treatment of a partner
will generally depend upon the status of the partner and the
activities of the partnership. If you are a partner of a
partnership holding the debt securities, preferred securities or
common or preferred stock, you should consult your tax advisors.
This summary does not represent a detailed description of the
United States federal income tax consequences to you in light of
your particular circumstances and does not address the effects
of any state, local or
non-United
States tax laws.
If you are considering the purchase of debt
securities, preferred securities or common or preferred stock,
you should consult your own tax advisors concerning the
particular United States federal income tax consequences to you,
as well as the consequences to you arising under the laws of any
other taxing jurisdiction.
Debt
Securities
Consequences
to United States Holders
The following is a summary of the material United States federal
income tax consequences that will apply to you if you are a
United States Holder of debt securities.
Payments
of Interest
Except as set forth below, interest on a debt security will
generally be taxable to you as ordinary income at the time it is
paid or accrued in accordance with your method of accounting for
tax purposes.
Original
Issue Discount
If you own debt securities issued with original issue discount
(OID), you will be subject to special tax accounting
rules, as described in greater detail below. In that case, you
should be aware that you generally must include OID in gross
income in advance of the receipt of cash attributable to that
income. However, you generally will not be required to include
separately in income cash payments received on the debt
securities, even if denominated as interest, to the extent those
payments do not constitute qualified stated
interest, as defined below. Notice will be given in the
applicable prospectus supplement when we determine that a
particular debt security will be an original issue discount debt
security.
Additional rules applicable to debt securities with OID that are
denominated in or determined by reference to a currency other
than the U.S. dollar are described under
Foreign Currency Debt Securities below.
A debt security with an issue price that is less
than the stated redemption price at maturity (the sum of all
payments to be made on the debt security other than
qualified stated interest) generally will be issued
with OID if that difference is at least 0.25% of the stated
redemption price at maturity multiplied by the number of
complete years to maturity. The issue price of each
debt security in a particular offering will be the first price
at which a substantial amount of that particular offering is
sold to the public. The term
38
qualified stated interest means stated interest that
is unconditionally payable in cash or in property, other than
debt instruments of the issuer, and meets all of the following
conditions:
|
|
|
|
|
it is payable at least once per year;
|
|
|
|
it is payable over the entire term of the debt security; and
|
|
|
|
|
|
it is payable at a single fixed rate or, subject to certain
conditions, based on one or more interest indices.
|
We will give you notice in the applicable prospectus supplement
when we determine that a particular debt security will bear
interest that is not qualified stated interest.
If you own a debt security issued with
de minimis
OID,
which is discount that is not OID because it is less than 0.25%
of the stated redemption price at maturity multiplied by the
number of complete years to maturity, you generally must include
the
de minimis
OID in income at the time principal
payments on the debt securities are made in proportion to the
amount paid. Any amount of
de minimis
OID that you have
included in income will be treated as capital gain.
Certain of the debt securities may contain provisions permitting
them to be redeemed prior to their stated maturity at our option
and/or
at
your option. Original issue discount debt securities containing
those features may be subject to rules that differ from the
general rules discussed herein. If you are considering the
purchase of original issue discount debt securities with those
features, you should carefully examine the applicable prospectus
supplement and should consult your own tax advisors with respect
to those features since the tax consequences to you with respect
to OID will depend, in part, on the particular terms and
features of the debt securities.
If you own original issue discount debt securities with a
maturity upon issuance of more than one year, you generally must
include OID in income in advance of the receipt of some or all
of the related cash payments using the constant yield
method described in the following paragraphs.
The amount of OID that you must include in income if you are the
initial United States Holder of an original issue discount debt
security is the sum of the daily portions of OID
with respect to the debt security for each day during the
taxable year or portion of the taxable year in which you held
that debt security (accrued OID). The daily portion
is determined by allocating to each day in any accrual
period a pro rata portion of the OID allocable to that
accrual period. The accrual period for an original
issue discount debt security may be of any length and may vary
in length over the term of the debt security, provided that each
accrual period is no longer than one year and each scheduled
payment of principal or interest occurs on the first day or the
final day of an accrual period. The amount of OID allocable to
any accrual period other than the final accrual period is an
amount equal to the excess, if any, of:
|
|
|
|
|
the debt securitys adjusted issue price at the
beginning of the accrual period multiplied by its yield to
maturity, determined on the basis of compounding at the close of
each accrual period and properly adjusted for the length of the
accrual period; over
|
|
|
|
the aggregate of all qualified stated interest allocable to the
accrual period.
|
OID allocable to a final accrual period is the difference
between the amount payable at maturity, other than a payment of
qualified stated interest, and the adjusted issue price at the
beginning of the final accrual period. Special rules will apply
for calculating OID for an initial short accrual period. The
adjusted issue price of a debt security at the
beginning of any accrual period is equal to its issue price
increased by the accrued OID for each prior accrual period,
determined without regard to the amortization of any acquisition
or bond premium, as described below, and reduced by any payments
previously made on the debt security other than a payment of
qualified stated interest. Under these rules, you will generally
have to include in income increasingly greater amounts of OID in
successive accrual periods. We are required to provide
information returns stating the amount of OID accrued on debt
securities held by persons of record other than corporations and
other exempt holders.
Debt instruments that provide for a variable rate of interest
(variable rate debt securities) are subject to
special OID rules. In the case of an original issue discount
debt security that is a variable rate debt security, both the
yield to maturity and qualified stated
interest will be determined solely for purposes of
39
calculating the accrual of OID as though the debt security will
bear interest in all periods at a fixed rate generally equal to
the rate that would be applicable to interest payments on the
debt security on its date of issue or, in the case of certain
variable rate debt securities, the rate that reflects the yield
to maturity that is reasonably expected for the debt security.
Additional rules may apply if either:
|
|
|
|
|
the interest on a variable rate debt security is based on more
than one interest index; or
|
|
|
|
the principal amount of the debt security is indexed in any
manner.
|
The discussion above generally does not address debt securities
providing for contingent payments. You should carefully examine
the applicable prospectus supplement regarding the United States
federal income tax consequences of the holding and disposition
of any debt securities providing for contingent payments.
You may elect to treat all interest on any debt security as OID
and calculate the amount includible in gross income under the
constant yield method described above. For purposes of this
election, interest includes stated interest, acquisition
discount, OID,
de minimis
OID, market discount,
de
minimis
market discount and unstated interest, as adjusted
by any amortizable bond premium or acquisition premium. You
should consult with your own tax advisors about this election.
Short-Term
Debt Securities
In the case of debt securities having a term of one year or
less, all payments, including all stated interest, will be
included in the stated redemption price at maturity and will not
be qualified stated interest. As a result, you will generally be
taxed on the discount instead of stated interest. The discount
will be equal to the excess of the stated redemption price at
maturity over the issue price of a short-term debt security,
unless you elect to compute this discount using tax basis
instead of issue price. In general, individuals and certain
other cash method United States Holders of short-term debt
securities are not required to include accrued discount in their
income currently unless they elect to do so, but may be required
to include stated interest in income as the income is received.
United States Holders that report income for United States
federal income tax purposes on the accrual method and certain
other United States Holders are required to accrue discount on
short-term debt securities (as ordinary income) on a
straight-line basis, unless an election is made to accrue the
discount according to a constant yield method based on daily
compounding. If you are not required, and do not elect, to
include discount in income currently, any gain you realize on
the sale, exchange or retirement of a short-term debt security
will generally be ordinary income to you to the extent of the
discount accrued by you through the date of sale, exchange or
retirement. In addition, if you do not elect to currently
include accrued discount in income you may be required to defer
deductions for a portion of your interest expense with respect
to any indebtedness attributable to the short-term debt
securities.
Market
Discount
If you purchase a debt security for an amount that is less than
its stated redemption price at maturity (or, in the case of an
original issue discount debt security, its adjusted issue
price), the amount of the difference will be treated as
market discount for United States federal income tax
purposes, unless that difference is less than a specified
de
minimis
amount. Under the market discount rules, you will be
required to treat any principal payment on, or any gain on the
sale, exchange, retirement or other disposition of, a debt
security as ordinary income to the extent of the market discount
that you have not previously included in income and are treated
as having accrued on the debt security at the time of its
payment or disposition.
In addition, you may be required to defer, until the maturity of
the debt security or its earlier disposition in a taxable
transaction, the deduction of all or a portion of the interest
expense on any indebtedness attributable to the debt security.
You may elect, on a debt
security-by-debt
security basis, to deduct the deferred interest expense in a tax
year prior to the year of disposition. You should consult your
own tax advisors before making this election.
Any market discount will be considered to accrue ratably during
the period from the date of acquisition to the maturity date of
the debt security, unless you elect to accrue on a constant
interest method. You may
40
elect to include market discount in income currently as it
accrues, on either a ratable or constant interest method, in
which case the rule described above regarding deferral of
interest deductions will not apply.
Acquisition
Premium, Amortizable Bond Premium
If you purchase an original issue discount debt security for an
amount that is greater than its adjusted issue price but equal
to or less than the sum of all amounts payable on the debt
security after the purchase date other than payments of
qualified stated interest, you will be considered to have
purchased that debt security at an acquisition
premium. Under the acquisition premium rules, the amount
of OID that you must include in gross income with respect to the
debt security for any taxable year will be reduced by the
portion of the acquisition premium properly allocable to that
year.
If you purchase a debt security (including an original issue
discount debt security) for an amount in excess of the sum of
all amounts payable on the debt security after the purchase date
other than qualified stated interest, you will be considered to
have purchased the debt security at a premium and,
if it is an original issue discount debt security, you will not
be required to include any OID in income. You generally may
elect to amortize the premium over the remaining term of the
debt security on a constant yield method as an offset to
interest when includible in income under your regular accounting
method. Special rules limit the amortization of premium in the
case of convertible debt instruments. If you do not elect to
amortize bond premium, that premium will decrease the gain or
increase the loss you would otherwise recognize on disposition
of the debt security.
Sale,
Exchange and Retirement of Debt Securities
Your tax basis in a debt security will, in general, be your cost
for that debt security, increased by OID, market discount or any
discount with respect to a short-term debt security that you
previously included in income, and reduced by any amortized
premium and any cash payments on the debt security other than
qualified stated interest. Upon the sale, exchange, retirement
or other disposition of a debt security, you will recognize gain
or loss equal to the difference between the amount you realize
upon the sale, exchange, retirement or other disposition (less
an amount equal to any accrued and unpaid qualified stated
interest, which will be taxable as interest income to the extent
not previously included in income) and the adjusted tax basis of
the debt security. Except as described above with respect to
certain short-term debt securities or with respect to market
discount, with respect to gain or loss attributable to changes
in exchange rates as discussed below with respect to foreign
currency debt securities, and with respect to contingent payment
debt instruments which this summary generally does not discuss,
that gain or loss will be capital gain or loss. Capital gains of
individuals derived in respect of capital assets held for more
than one year are eligible for reduced rates of taxation. The
deductibility of capital losses is subject to limitations.
Foreign
Currency Debt Securities
Payments of Interest.
If you receive interest
payments made in a foreign currency and you use the cash basis
method of accounting, you will be required to include in income
the U.S. dollar value of the amount received, determined by
translating the foreign currency received at the spot
rate for such foreign currency on the date such payment is
received regardless of whether the payment is in fact converted
into U.S. dollars. You will not recognize exchange gain or
loss with respect to the receipt of such payment.
If you use the accrual method of accounting, you may determine
the amount of income recognized with respect to such interest in
accordance with either of two methods. Under the first method,
you will be required to include in income for each taxable year
the U.S. dollar value of the interest that has accrued
during such year, determined by translating such interest at the
average rate of exchange for the period or periods during which
such interest accrued. Under the second method, you may elect to
translate interest income at the spot rate on:
|
|
|
|
|
the last day of the accrual period;
|
|
|
|
the last day of the taxable year if the accrual period straddles
your taxable year; or
|
|
|
|
the date the interest payment is received if such date is within
five days of the end of the accrual period.
|
41
Upon receipt of an interest payment on such debt security
(including, upon the sale of a debt security, the receipt of
proceeds which include amounts attributable to accrued interest
previously included in income), you will recognize ordinary gain
or loss in an amount equal to the difference between the
U.S. dollar value of such payment (determined by
translating the foreign currency received at the spot rate for
such foreign currency on the date such payment is received) and
the U.S. dollar value of the interest income you previously
included in income with respect to such payment.
Original Issue Discount.
OID on a debt
security that is also a foreign currency debt security will be
determined for any accrual period in the applicable foreign
currency and then translated into U.S. dollars, in the same
manner as interest income accrued by a holder on the accrual
basis, as described above. You will recognize exchange gain or
loss when OID is paid (including, upon the sale of a debt
security, the receipt of proceeds that include amounts
attributable to OID previously included in income) to the extent
of the difference between the U.S. dollar value of the
accrued OID (determined in the same manner as for accrued
interest) and the U.S. dollar value of such payment
(determined by translating the foreign currency received at the
spot rate for such foreign currency on the date such payment is
received). For these purposes, all receipts on a debt security
will be viewed:
|
|
|
|
|
first, as the receipt of any stated interest payments called for
under the terms of the debt security;
|
|
|
|
second, as receipts of previously accrued OID (to the extent
thereof), with payments considered made for the earliest accrual
periods first; and
|
|
|
|
third, as the receipt of principal.
|
Market Discount and Bond Premium.
The amount
of market discount on foreign currency debt securities
includible in income will generally be determined by translating
the market discount determined in the foreign currency into
U.S. dollars at the spot rate on the date the foreign
currency debt security is retired or otherwise disposed of. If
you have elected to accrue market discount currently, then the
amount which accrues is determined in the foreign currency and
then translated into U.S. dollars on the basis of the
average exchange rate in effect during such accrual period. You
will recognize exchange gain or loss with respect to market
discount which is accrued currently using the approach
applicable to the accrual of interest income as described above.
Bond premium on a foreign currency debt security will be
computed in the applicable foreign currency. If you have elected
to amortize the premium, the amortizable bond premium will
reduce interest income in the applicable foreign currency. At
the time bond premium is amortized, exchange gain or loss, which
is generally ordinary gain or loss, will be realized based on
the difference between spot rates at such time and the time of
acquisition of the foreign currency debt security.
If you elect not to amortize bond premium, you must translate
the bond premium computed in the foreign currency into
U.S. dollars at the spot rate on the maturity date and such
bond premium will constitute a capital loss which may be offset
or eliminated by exchange gain.
Sale, Exchange and Retirement of Foreign Currency Debt
Securities.
Upon the sale, exchange, retirement
or other taxable disposition of a foreign currency debt
security, you will recognize gain or loss equal to the
difference between the amount realized upon the sale, exchange,
retirement or other disposition (less an amount equal to any
accrued and unpaid qualified stated interest, which will be
treated as a payment of interest for United States federal
income tax purposes) and your adjusted tax basis in the foreign
currency debt security. Your initial tax basis in a foreign
currency debt security generally will be your U.S. dollar
cost. If you purchased a foreign currency debt security with
foreign currency, your cost generally will be the
U.S. dollar value of the foreign currency amount paid for
such foreign currency debt security determined at the time of
such purchase. If your foreign currency debt security is sold,
exchanged or retired for an amount denominated in foreign
currency, then your amount realized generally will be based on
the spot rate of the foreign currency on the date of sale,
exchange or retirement. If you are a cash method taxpayer and
the foreign currency debt securities are traded on an
established securities market, foreign currency paid or received
is translated into U.S. dollars at the spot rate on the
settlement date of the purchase or sale. An accrual method
taxpayer may elect the same treatment with respect to the
purchase and sale of foreign currency debt securities traded on
an established securities market, provided that the election is
applied consistently.
42
Subject to the foreign currency rules discussed below, such gain
or loss will be capital gain or loss and will be long-term
capital gain or loss if at the time of sale, exchange,
retirement or other disposition, the foreign currency debt
security has been held for more than one year. Capital gains of
individuals derived with respect to capital assets held for more
than one year are eligible for reduced rates of taxation. The
deductibility of capital losses is subject to limitations. Gain
or loss realized by you on the sale, exchange or retirement of a
foreign currency debt security would generally be treated as
U.S. source gain or loss.
A portion of your gain or loss with respect to the principal
amount of a foreign currency debt security may be treated as
exchange gain or loss. Exchange gain or loss will be treated as
ordinary income or loss and generally will be U.S. source
gain or loss. For these purposes, the principal amount of the
foreign currency debt security is your purchase price for the
foreign currency debt security calculated in the foreign
currency on the date of purchase, and the amount of exchange
gain or loss recognized is equal to the difference between
(i) the U.S. dollar value of the principal amount
determined on the date of the sale, exchange, retirement or
other disposition of the foreign currency debt security and
(ii) the U.S. dollar value of the principal amount
determined on the date you purchased the foreign currency debt
security. The amount of exchange gain or loss will be limited to
the amount of overall gain or loss realized on the disposition
of the foreign currency debt security.
Exchange Gain or Loss with Respect to Foreign
Currency.
Your tax basis in the foreign currency
received as interest on a foreign currency debt security will be
the U.S. dollar value thereof at the spot rate in effect on
the date the foreign currency is received. Your tax basis in
foreign currency received on the sale, exchange or retirement of
a foreign currency debt security will be equal to the
U.S. dollar value of the foreign currency, determined at
the time of the sale, exchange or retirement. As discussed
above, if the foreign currency debt securities are traded on an
established securities market, a cash basis United States Holder
(or, upon election, an accrual basis United States Holder) will
determine the U.S. dollar value of the foreign currency by
translating the foreign currency received at the spot rate of
exchange on the settlement date of the sale, exchange or
retirement. Accordingly, your basis in the foreign currency
received would be equal to the spot rate of exchange on the
settlement date.
Any gain or loss recognized by you on a sale, exchange or other
disposition of the foreign currency will be ordinary income or
loss and generally will be United States source gain or loss.
Reportable Transactions.
Treasury regulations
issued under the Code meant to require the reporting of certain
tax shelter transactions could be interpreted to cover
transactions generally not regarded as tax shelters, including
certain foreign currency transactions. Under the Treasury
regulations, certain transactions are required to be reported to
the Internal Revenue Service (IRS), including, in
certain circumstances, a sale, exchange, retirement or other
taxable disposition of a foreign currency debt security or
foreign currency received in respect of a foreign currency debt
security to the extent that such sale, exchange, retirement or
other taxable disposition results in a tax loss in excess of a
threshold amount. If you are considering the purchase of a
foreign currency debt security, you should consult with your own
tax advisors to determine the tax return obligations, if any,
with respect to an investment in the debt securities, including
any requirement to file IRS Form 8886 (Reportable
Transaction Disclosure Statement).
Consequences
to
Non-United
States Holders
The following is a summary of the material United States federal
income and estate tax consequences that will apply to you if you
are a
Non-United
States Holder of debt securities.
United
States Federal Withholding Tax
The 30% United States federal withholding tax will not apply to
any payment of interest on the debt securities (including OID)
under the portfolio interest rule, provided that:
|
|
|
|
|
interest paid on the debt securities is not effectively
connected with your conduct of a trade or business in the United
States;
|
|
|
|
you do not actually (or constructively) own 10% or more of the
total combined voting power of all classes of our voting stock
within the meaning of the Code and applicable United States
Treasury regulations;
|
43
|
|
|
|
|
you are not a controlled foreign corporation that is related to
us through stock ownership;
|
|
|
|
you are not a bank whose receipt of interest on the debt
securities is described in Section 881(c)(3)(A) of the Code;
|
|
|
|
the interest is not considered contingent interest under Section
871(h)(4)(A) of the Code and the United States Treasury
regulations thereunder; and
|
|
|
|
either (a) you provide your name and address on an IRS
Form W-8BEN
(or other applicable form), and certify, under penalties of
perjury, that you are not a United States person as defined
under the Code or (b) you hold your debt securities through
certain foreign intermediaries and satisfy the certification
requirements of applicable United States Treasury regulations.
Special certification rules apply to
Non-United
States Holders that are pass-through entities rather than
corporations or individuals.
|
If you cannot satisfy the requirements described above, payments
of interest, including OID, made to you will be subject to the
30% United States federal withholding tax, unless you provide us
with a properly executed:
|
|
|
|
|
IRS
Form W-8BEN
(or other applicable form) claiming an exemption from or
reduction in withholding under the benefit of an applicable
income tax treaty; or
|
|
|
|
IRS
Form W-8ECI
(or other applicable form) stating that interest paid on the
debt securities is not subject to withholding tax because it is
effectively connected with your conduct of a trade or business
in the United States (as discussed below under
United States Federal Income Tax).
|
The 30% United States federal withholding tax generally will not
apply to any payment of principal or gain that you realize on
the sale, exchange, retirement or other disposition of a debt
security.
United
States Federal Income Tax
If you are engaged in a trade or business in the United States
and interest, including OID, on the debt securities is
effectively connected with the conduct of that trade or business
(and, if required by an applicable income tax treaty, is
attributable to a United States permanent establishment), then
you will be subject to United States federal income tax on that
interest on a net income basis (although you will be exempt from
the 30% United States federal withholding tax, provided the
certification requirements discussed above in
United States Federal Withholding Tax
are satisfied) in the same manner as if you were a United States
person as defined under the Code. In addition, if you are a
foreign corporation, you may be subject to a branch profits tax
equal to 30% (or lower applicable income tax treaty rate) of
such interest, subject to adjustments.
Any gain realized on the disposition of a debt security
generally will not be subject to United States federal income
tax unless:
|
|
|
|
|
the gain is effectively connected with your conduct of a trade
or business in the United States (and, if required by an
applicable income tax treaty, is attributable to a United States
permanent establishment); or
|
|
|
|
you are an individual who is present in the United States for
183 days or more in the taxable year of that disposition,
and certain other conditions are met.
|
United
States Federal Estate Tax
Your estate will not be subject to United States federal estate
tax on debt securities beneficially owned by you at the time of
your death, provided that any payment to you on the debt
securities, including OID, would be eligible for exemption from
the 30% United States federal withholding tax under the
portfolio interest rule described above under
United States Federal Withholding Tax,
without regard to the statement requirement described in the
sixth bullet point of that section.
44
Information
Reporting and Backup Withholding
Consequences
to United States Holders
In general, information reporting requirements will apply to
certain payments of principal, interest (including OID) and
premium paid on debt securities and to the proceeds of sale of a
debt security paid to you (unless you are an exempt recipient
such as a corporation). A backup withholding tax may apply to
such payments if you fail to provide a taxpayer identification
number or a certification of exempt status, or if you fail to
report in full dividend and interest income.
Any amounts withheld under the backup withholding rules will be
allowed as a refund or a credit against your United States
federal income tax liability provided the required information
is furnished to the IRS.
Consequences
to
Non-United
States Holders
Generally, we must report to the IRS and to you the amount of
interest (including OID) on the debt securities paid to you and
the amount of tax, if any, withheld with respect to those
payments. Copies of the information returns reporting such
interest payments and any withholding may also be made available
to the tax authorities in the country in which you reside under
the provisions of an applicable income tax treaty.
In general, you will not be subject to backup withholding with
respect to payments on the debt securities that we make to you
provided that we do not have actual knowledge or reason to know
that you are a United States person as defined under the Code,
and we have received from you the statement described above in
the sixth bullet point under Debt
Securities Consequences to
Non-United
States Holders United States Federal Withholding
Tax.
In addition, no information reporting or backup withholding will
be required regarding the proceeds of the sale of a debt
security made within the United States or conducted through
certain United States-related financial intermediaries, if the
payor receives the statement described above and does not have
actual knowledge or reason to know that you are a United States
person as defined under the Code, or you otherwise establish an
exemption.
Any amounts withheld under the backup withholding rules will be
allowed as a refund or a credit against your United States
federal income tax liability provided the required information
is furnished to the IRS.
Preferred
Securities
Classification
of the Trust
We intend to take the position that each Trust will be
classified as a grantor trust for United States federal income
tax purposes and not as an association taxable as a corporation.
As a result, for United States federal income tax purposes, you
generally will be treated as owning an undivided beneficial
ownership interest in the related debt securities held by the
Trust. Thus, you will be required to include in your gross
income your pro rata share of the interest income or OID that is
paid or accrued on the related debt securities. See
Consequences to United States Holders Interest
Income and Original Issue Discount below.
Classification
of the Debt Securities
We intend to take the position that the debt securities will be
classified as our indebtedness for all United States tax
purposes. We, the Trust and you (by your acceptance of a
beneficial ownership interest in a preferred security) will
agree to treat the debt securities as indebtedness for all
United States tax purposes. The remainder of this discussion
assumes that the debt securities will be classified as our
indebtedness.
Consequences
to United States Holders
Interest
Income and Original Issue Discount
We anticipate that the debt securities will not be issued with
an issue price that is less than their stated redemption price
at maturity. In this case, subject to the discussion below, the
debt securities will not be
45
subject to the special OID rules, at least upon initial
issuance, so that you will generally be taxed on the stated
interest on the debt securities as ordinary income at the time
it is paid or accrued in accordance with your regular method of
tax accounting.
If, however, we exercise our right to defer payments of interest
on the debt securities, the debt securities will become OID
instruments at such time. In such case, you will be subject to
the special OID rules described below. Once the debt securities
become OID instruments, they will be taxed as OID instruments
for as long as they remain outstanding.
Under the OID economic accrual rules, the following occurs:
|
|
|
|
|
regardless of your method of accounting, you would accrue an
amount of interest income each year that approximates the stated
interest payments called for under the terms of the debt
securities using the constant-yield-to-maturity method of
accrual described in Section 1272 of the Code;
|
|
|
|
the actual cash payments of interest you receive on the debt
securities would not be reported separately as taxable income;
|
|
|
|
any amount of OID included in your gross income (whether or not
during a deferral period) with respect to the preferred
securities will increase your tax basis in such preferred
securities; and
|
|
|
|
the amount of distributions that you receive in respect of such
accrued OID will reduce your tax basis in such preferred
securities.
|
The Treasury regulations dealing with OID and the deferral of
interest payments have not yet been addressed in any rulings or
other interpretations by the IRS. It is possible that the IRS
could assert that the debt securities were issued initially with
OID merely because of our right to defer interest payments. If
the IRS were successful in this regard, you would be subject to
the special OID rules described above, regardless of whether we
exercise our option to defer payments of interest on such debt
securities.
Because the debt securities are treated as debt for tax
purposes, any income you recognize with respect to the preferred
securities will not be eligible for the corporate
dividends-received deduction or taxation for individuals at
long-term capital gain rates as qualified dividend income.
Distribution
of Debt Securities or Cash upon Liquidation of the
Trust
As described under the caption Description of Preferred
Securities That the Trusts May Offer Liquidation
Distribution Upon Dissolution in this prospectus, the debt
securities held by the Trust may be distributed to you in
exchange for your preferred securities if the Trust is dissolved
before the maturity of the debt securities. Under current law,
this type of distribution from a grantor trust would not be
taxable. Upon such a distribution, you will receive your pro
rata share of the debt securities previously held indirectly
through the Trust. Your holding period and aggregate tax basis
in the debt securities will equal the holding period and
aggregate tax basis that you had in your preferred securities
before the distribution.
We may also have the option to redeem the debt securities and
distribute the resulting cash in liquidation of the Trust. This
redemption would be taxable as described below in
Sales of Preferred Securities or Redemption of
Debt Securities.
If you receive debt securities in exchange for your preferred
securities, you would accrue interest in respect of the debt
securities received from the Trust in the manner described above
under Interest Income and Original Issue
Discount.
46
Sales of
Preferred Securities or Redemption of Debt Securities
If you sell your preferred securities or receive cash upon
redemption of the debt securities, you will recognize gain or
loss equal to the difference between:
|
|
|
|
|
your amount realized on the sale or redemption of the preferred
securities or debt securities (less an amount equal to any
accrued but unpaid qualified stated interest, which will be
taxable as such to the extent not previously included in
income); and
|
|
|
|
your adjusted tax basis in your preferred securities or debt
securities sold or redeemed.
|
Your gain or loss will be a capital gain or loss, provided that
you hold the preferred securities or debt securities as a
capital asset. The gain or loss will generally be a long-term
capital gain or loss if you have held your preferred securities
or debt securities for more than one year. Long-term capital
gains of individuals derived with respect to capital assets held
for more than one year are subject to reduced rates of taxation.
The deductibility of capital losses is subject to limitations.
Tax
Shelter Regulations
Under applicable Treasury regulations, taxpayers engaging in
certain transactions, including loss transactions above a
threshold, may be required to include tax shelter disclosure
information with their annual United States federal income
tax return. The IRS has provided an exception from this
disclosure requirement for losses arising from cash investments,
but this exception does not apply to investments in flow-through
entities. You should consult your own tax advisors about whether
the limitation applicable to flow-through entities would apply
to your investment in a Trust.
Consequences
to
Non-United
States Holders
The following discussion only applies to you if you are a
Non-United
States Holder. As discussed above, the preferred securities will
be treated by the parties as evidence of indirect undivided
beneficial ownership interests in the debt securities. See above
under Classification of the Trust in
this section.
United
States Federal Withholding Tax
Under the portfolio interest exception, the 30%
United States federal withholding tax will not apply to any
payment by us or any paying agent of interest (including OID) on
the preferred securities (or the debt securities), provided that:
|
|
|
|
|
interest paid on the preferred securities (or the debt
securities) is not effectively connected with your conduct of a
trade or business in the United States;
|
|
|
|
you do not actually (or constructively) own 10% or more of the
total combined voting power of all classes of our voting stock
within the meaning of the Code and applicable United States
Treasury regulations;
|
|
|
|
you are not a controlled foreign corporation that is related to
us through stock ownership;
|
|
|
|
you are not a bank whose receipt of interest on the preferred
securities (or the debt securities) is described in Section
881(c)(3)(A) of the Code; and
|
|
|
|
either (a) you provide your name and address on an IRS
Form W-8BEN
(or other applicable form), and certify, under penalties of
perjury, that you are not a United States person as defined
under the Code or (b) if you hold your preferred securities
(or debt securities) through certain foreign intermediaries, you
satisfy the certification requirements of applicable United
States Treasury regulations. Special certification rules apply
to certain
Non-United
States Holders that are pass-through entities rather than
corporations or individuals.
|
47
If you cannot satisfy the requirements described above, payments
of interest (including OID) made to you will be subject to the
30% United States federal withholding tax, unless you provide us
or our paying agent, as the case may be, with a properly executed
|
|
|
|
|
IRS
Form W-8BEN
(or other applicable form) claiming an exemption from or
reduction in withholding under the benefit of an applicable
income tax treaty; or
|
|
|
|
IRS
Form W-8ECI
(or other applicable form) stating that interest paid on the
preferred securities (or debt securities) is not subject to
withholding tax because it is effectively connected with your
conduct of a trade or business in the United States (as
discussed below under United States Federal
Income Tax).
|
The 30% United States federal withholding tax generally will not
apply to any payment of principal or gain that you realize on
the sale, exchange, retirement or other disposition of the
preferred securities (or debt securities).
United
States Federal Income Tax
If you are engaged in a trade or business in the United States
and interest on the preferred securities (or the debt
securities) is effectively connected with the conduct of that
trade or business (and, if required by an applicable income tax
treaty, is attributable to a United States permanent
establishment), then you will be subject to United States
federal income tax on that interest on a net income basis in the
same manner as if you were a United States person as defined
under the Code. However, you will not be subject to the
withholding described above, as long as you provide a properly
executed IRS
Form W-8ECI
as described above. In addition, if you are a foreign
corporation, you may be subject to a branch profits tax equal to
30% (or lower applicable income tax treaty rate) of your
earnings and profits for the taxable year, subject to
adjustments, that are effectively connected with the conduct by
you of a trade or business in the United States. For this
purpose, interest on preferred securities (or debt securities)
will be included in earnings and profits.
You will generally not be subject to United States federal
income tax on any gain you realize upon the disposition of a
preferred security (or a debt security) unless:
|
|
|
|
|
the gain is effectively connected with your conduct of a trade
or business in the United States (and, if required by an
applicable income tax treaty, is attributable to a United States
permanent establishment); or
|
|
|
|
you are an individual who is present in the United States for
183 days or more in the taxable year of that disposition,
and certain other conditions are met.
|
United
States Federal Estate Tax
Your estate will not be subject to United States federal estate
tax on the preferred securities (or the debt securities)
beneficially owned by you at the time of your death, provided
that any payment to you on the preferred securities (or the debt
securities), including OID, would be eligible for exemption from
the 30% United States federal withholding tax under the
portfolio interest exception described above under
United States Federal Withholding Tax,
without regard to the statement requirement described in the
fifth bullet point of that section.
Information
Reporting and Backup Withholding
Consequences
to United States Holders
In general, information reporting requirements will apply to
certain payments of principal, interest (including OID) and
premium paid on the preferred securities (or debt securities)
and to the proceeds of sale of preferred securities (or debt
securities) paid to you (unless you are an exempt recipient such
as a corporation). A backup withholding tax may apply to such
payments if you fail to provide a taxpayer identification
number, a certification of exempt status, or if you fail to
report in full dividend and interest income.
48
Any amounts withheld under the backup withholding rules will be
allowed as a refund or a credit against your United States
federal income tax liability provided the required information
is furnished to the IRS.
Consequences
to
Non-United
States Holders
Generally, we must report to the IRS and to you the amount of
interest (including OID) paid to you and the amount of tax, if
any, withheld with respect to those payments. Copies of the
information returns reporting such interest payments and any
withholding may also be made available to the tax authorities in
the country in which you reside under the provisions of an
applicable income tax treaty.
In general, you will not be subject to backup withholding with
respect to payments that we make to you provided that we do not
have actual knowledge or reason to know that you are a United
States person as defined under the Code, and you have provided
the statement described above in the fifth bullet point under
Preferred Securities Consequences
to
Non-United
States Holders United States Federal Withholding
Tax.
In addition, no information reporting or backup withholding will
be required regarding the proceeds of the sale of preferred
securities (or debt securities) made within the United States or
conducted through certain United States-related financial
intermediaries, if the payor receives the statement described
above and does not have actual knowledge or reason to know that
you are a United States person as defined under the Code, or you
otherwise establish an exemption.
Any amounts withheld under the backup withholding rules will be
allowed as a refund or a credit against your United States
federal income tax liability provided the required information
is furnished to the IRS.
Common
and Preferred Stock
Consequences
to United States Holders
The United States federal income tax consequences of the
purchase, ownership or disposition of our stock depend on a
number of factors including:
|
|
|
|
|
the terms of the stock;
|
|
|
|
any put or call option or redemption provisions with respect to
the stock;
|
|
|
|
any conversion or exchange feature with respect to the
stock; and
|
|
|
|
the price at which the stock is sold.
|
United States Holders should carefully examine the applicable
prospectus supplement regarding the material United States
federal income tax consequences, if any, of the holding and
disposition of our stock.
Consequences
to
Non-United
States Holders
The following is a summary of the material United States federal
income tax consequences that will apply to you if you are a
Non-United
States Holder of common or preferred stock.
Dividends
Dividends paid to you generally will be subject to withholding
of United States federal income tax at a 30% rate or such lower
rate as may be specified by an applicable income tax treaty.
However, dividends that are effectively connected with your
conduct of a trade or business within the United States (and, if
required by an applicable income tax treaty, are attributable to
a United States permanent establishment) are not subject to the
withholding tax, provided certain certification and disclosure
requirements are satisfied. Instead, such dividends are subject
to United States federal income tax on a net income basis in the
same manner as if you were a United States person as defined
under the Code. If you are a foreign corporation, any such
effectively connected dividends received by you may be subject
to an additional branch profits tax at a 30% rate or
such lower rate as may be specified by an applicable income tax
treaty.
49
A
Non-United
States Holder of our common or preferred stock who wishes to
claim the benefit of an applicable treaty rate and avoid backup
withholding, as discussed below, for dividends will be required
(a) to complete IRS
Form W-8BEN
(or other applicable form) and certify under penalties of
perjury that such holder is not a United States person as
defined under the Code and is eligible for treaty benefits or
(b) if our common stock is held through certain foreign
intermediaries, to satisfy the relevant certification
requirements of applicable United States Treasury regulations.
Special certification and other requirements apply to certain
Non-United
States Holders that are pass-through entities rather than
corporations or individuals.
If you are eligible for a reduced rate of United States
withholding tax pursuant to an income tax treaty you may obtain
a refund of any excess amounts withheld by filing an appropriate
claim for refund with the IRS.
Gain on
Disposition of Common Stock and Preferred Stock
Any gain realized on the disposition of our common or preferred
stock generally will not be subject to United States federal
income tax unless:
|
|
|
|
|
the gain is effectively connected with your conduct of a trade
or business in the United States (and, if required by an
applicable income tax treaty, is attributable to a United States
permanent establishment);
|
|
|
|
you are an individual who is present in the United States for
183 days or more in the taxable year of that disposition,
and certain other conditions are met; or
|
|
|
|
we are or have been a United States real property holding
corporation for United States federal income tax purposes.
|
If you are an individual
Non-United
States Holder described in the first bullet point immediately
above, you will be subject to tax on the net gain derived from
the sale under regular graduated United States federal income
tax rates. If you are an individual
Non-United
States Holder described in the second bullet point immediately
above, you will be subject to a flat 30% tax on the gain derived
from the sale, which may be offset by United States source
capital losses, even though you are not considered a resident of
the United States. If you are a
Non-United
States Holder that is a foreign corporation and you are
described in the first bullet point immediately above, you will
be subject to tax on your net gain in the same manner as if you
were a United States person as defined under the Code and, in
addition, you may be subject to the branch profits tax equal to
30% of your effectively connected earnings and profits or at
such lower rate as may be specified by an applicable income tax
treaty.
We believe we are not and do not anticipate becoming a
United States real property holding corporation for
United States federal income tax purposes.
Federal
Estate Tax
If you are an individual, common or preferred stock held by you
at the time of your death will be included in you gross estate
for United States federal estate tax purposes, unless an
applicable estate tax treaty provides otherwise.
Information
Reporting and Backup Withholding
We must report annually to the IRS and you the amount of
dividends paid to you and the tax withheld with respect to such
dividends, regardless of whether withholding was required.
Copies of the information returns reporting such dividends and
withholding may also be made available to the tax authorities in
the country in which you reside under the provisions of an
applicable income tax treaty.
You will be subject to backup withholding for dividends paid to
you unless you certify under penalties of perjury that you are a
Non-United
States Holder (and we do not have actual knowledge or reason to
know that you are a United States person as defined under the
Code), or you otherwise establish an exemption.
50
Information reporting and, depending on the circumstances,
backup withholding will apply to the proceeds of a sale of our
common or preferred stock within the United States or conducted
through certain United States-related financial intermediaries,
unless you certify under penalties of perjury that you are a
Non-United
States Holder (and the payor does not have actual knowledge or
reason to know that you are a United States person as defined
under the Code), or you otherwise establish an exemption.
Any amounts withheld under the backup withholding rules will be
allowed as a refund or a credit against your United States
federal income tax liability provided the required information
is furnished to the IRS.
Other
Securities
If you are considering the purchase of warrants, stock purchase
contracts, depositary shares or units, you should carefully
examine the applicable prospectus supplement regarding the
special United States federal income tax consequences, if any,
of the holding and disposition of such securities including any
tax considerations relating to the specific terms of such
securities.
ERISA
MATTERS
Unless otherwise indicated in the applicable prospectus
supplement, the offered securities may, subject to certain legal
restrictions, be held by (i) pension, profit sharing and
other employee benefit plans which are subject to Title I
of the Employee Retirement Security Act of 1974, as amended
(which we refer to as ERISA), (ii) plans,
accounts and other arrangements that are subject to
Section 4975 of the Code or provisions under federal,
state, local,
non-U.S. or
other laws or regulations that are similar to any of the
provisions of Title I of ERISA or Section 4975 of the
Code (which we refer to as Similar Laws) and
(iii) entities whose underlying assets are considered to
include plan assets of any such plans, accounts or
arrangements. A fiduciary of any such plan, account or
arrangement must determine that the purchase and holding of an
interest in the offered securities is consistent with its
fiduciary duties and will not constitute or result in a
non-exempt prohibited transaction under Section 406 of
ERISA or Section 4975 of the Code, or a violation under any
applicable Similar Laws.
VALIDITY
OF SECURITIES
Unless otherwise indicated in the applicable prospectus
supplement, certain matters of Delaware law relating to the
Trust and its preferred securities will be passed upon for the
Trust and us by Richards, Layton & Finger, P.A.,
Wilmington, Delaware. Unless otherwise indicated in the
applicable prospectus supplement, the validity of the securities
will be passed upon for us by Wendy C. Skjerven, Esq., our
Vice President, Associate Group General Counsel and Deputy
Corporate Secretary, and by Simpson Thacher & Bartlett
LLP, New York, New York.
EXPERTS
The consolidated financial statements and all related financial
statement schedules of The Travelers Companies, Inc. as of
December 31, 2007 and 2006, and for each of the years in
the three-year period ended December 31, 2007, and
managements assessment of the effectiveness of internal
control over financial reporting as of December 31, 2007
have been incorporated by reference in the registration
statement in reliance upon the reports of KPMG LLP, independent
registered public accounting firm, incorporated by reference
herein, and upon the authority of said firm as experts in
accounting and auditing.
51
PART II
INFORMATION
NOT REQUIRED IN PROSPECTUS
|
|
Item 14.
|
Other
Expenses of Issuance and Distribution
|
|
|
|
|
|
SEC registration fee
|
|
|
*
|
|
Accounting fees and expenses
|
|
|
*
|
|
Legal fees and expenses
|
|
|
*
|
|
Printing expenses
|
|
|
*
|
|
Trustee fees and expenses
|
|
|
*
|
|
Rating agency fees
|
|
|
*
|
|
Blue Sky fees and expenses
|
|
|
*
|
|
Miscellaneous
|
|
|
*
|
|
|
|
|
|
|
Total
|
|
|
*
|
|
|
|
|
|
|
|
|
|
*
|
|
All fees and expenses are calculated based on the number of
issuances and amount of securities offered and, accordingly,
cannot be estimated at this time.
|
|
|
Item 15.
|
Indemnification
of Directors and Officers
|
The Travelers Companies, Inc. (Travelers) is subject
to Minnesota Statutes, Chapter 302A. Minnesota Statutes,
Section 302A.521, provides that a corporation shall
indemnify any person made or threatened to be made a party to a
proceeding by reason of the former or present official capacity
(as defined in Section 302A.521) of such person against
judgments, penalties, fines (including, without limitation,
excise taxes assessed against such person with respect to an
employee benefit plan), settlements and reasonable expenses
(including attorneys fees and disbursements), incurred by
such person in connection with the proceeding, if, with respect
to the acts or omissions of such person complained of in the
proceeding, such person (1) has not been indemnified
therefor by another organization or employee benefit plan;
(2) acted in good faith; (3) received no improper
personal benefit and Section 302A.255 (with respect to
director conflicts of interest), if applicable, has been
satisfied; (4) in the case of a criminal proceeding, had no
reasonable cause to believe the conduct was unlawful; and
(5) reasonably believed that the conduct was in the best
interests of the corporation in the case of acts or omissions in
such persons official capacity for the corporation, or, in
the case of acts or omissions in such persons official
capacity for other affiliated organizations, reasonably believed
that the conduct was not opposed to the best interests of the
corporation.
The bylaws of Travelers provide that it will indemnify and make
permitted advances to a person made or threatened to be made a
party to a proceeding by reason of his former or present
official capacity against judgments, penalties, fines
(including, without limitation, excise taxes assessed against
the person with respect to an employee benefit plan),
settlements and reasonable expenses (including, without
limitation, attorneys fees and disbursements) incurred by
him in connection with the proceeding in the manner and to the
fullest extent permitted or required by Section 302A.521.
Travelers has directors and officers liability
insurance policies, with coverage of up to $250 million,
subject to various deductibles and exclusions from coverage.
Travelers, as depositor, has agreed in the declarations of trust
to (i) reimburse the trustees of the Trust for all
reasonable expenses (including reasonable fees and expenses of
counsel and other experts) and (ii) indemnify, defend and
hold harmless the trustees and any of the officers, directors,
employees and agents of the trustees (the Indemnified
Persons) from and against any and all losses, damages,
liabilities, claims, actions, suits, costs, expenses,
disbursements (including the reasonable fees and expenses of
counsel), taxes and penalties of any kind and nature whatsoever
(collectively, Expenses), to the extent that such
Expenses arise out of, or are imposed upon, or asserted at any
time against, such Indemnified Persons with respect to the
performance of the declarations of trust, the creation,
operation, administration or termination of a trust or the
II-1
transactions contemplated thereby; provided, however, that
Travelers shall not be required to indemnify any Indemnified
Person for any Expenses which are a result of the willful
misconduct, bad faith or negligence of such Indemnified Person.
|
|
|
|
|
|
1
|
.1
|
|
Form of Underwriting Agreement for senior debt securities,
subordinated debt securities, junior subordinated debt
securities and warrants.*
|
|
1
|
.2
|
|
Form of Underwriting Agreement for preferred stock and
depositary shares.*
|
|
1
|
.3
|
|
Form of Underwriting Agreement for common stock.*
|
|
1
|
.4
|
|
Form of Underwriting Agreement for convertible debt securities.*
|
|
1
|
.5
|
|
Form of Underwriting Agreement for preferred securities of
Travelers Capital Trust II, Travelers Capital
Trust III, Travelers Capital Trust IV and Travelers
Capital Trust V.*
|
|
1
|
.6
|
|
Form of Underwriting Agreement for stock purchase contracts.*
|
|
1
|
.7
|
|
Form of Underwriting Agreement for units.*
|
|
3
|
.1
|
|
Amended and Restated Articles of Incorporation (incorporated by
reference to Exhibit 3.1 to our Quarterly Report on
Form 10-Q
for the fiscal quarter ended June 30, 2007).
|
|
3
|
.2
|
|
Amended and Restated Bylaws (incorporated by reference to
Exhibit 3.2 to our Current Report on
Form 8-K
filed on August 11, 2008).
|
|
4
|
.1
|
|
Indenture for senior debt securities (incorporated by reference
to Exhibit 4.1 of our Current Report on
Form 8-K
filed March 13, 2002).
|
|
4
|
.2
|
|
Form of Indenture for subordinated debt securities.
|
|
4
|
.3
|
|
Form of Indenture for junior subordinated debt securities.(1)
|
|
4
|
.4
|
|
Form of Deposit Agreement.*
|
|
4
|
.5
|
|
Form of Depositary Receipt (included in Exhibit 4.4).
|
|
4
|
.6
|
|
Form of Senior Debt Security (included in Exhibit 4.1).
|
|
4
|
.7
|
|
Form of Subordinated Debt Security (included in
Exhibit 4.2).
|
|
4
|
.8
|
|
Form of Junior Subordinated Debt Security (included in
Exhibit 4.3).
|
|
4
|
.9
|
|
Form of Warrant Agreement, including the form of the Warrant
Certificate.*
|
|
4
|
.10
|
|
Form of Stock Purchase Contract Agreement, including the form of
the Security Certificate.*
|
|
4
|
.11
|
|
Form of Unit Agreement, including the form of the Unit
Certificate.*
|
|
4
|
.12
|
|
Form of Pledge Agreement.*
|
|
4
|
.13
|
|
Form of Specimen Certificate of Common Stock.(2)
|
|
4
|
.14
|
|
Form of Specimen Certificate of Preferred Stock and Form of
Certificate of Designations for Preferred Stock.*
|
|
4
|
.15
|
|
Certificate of Trust of Travelers Capital Trust II.(3)
|
|
4
|
.16
|
|
Certificate of Trust of Travelers Capital Trust III.(2)
|
|
4
|
.17
|
|
Certificate of Trust of Travelers Capital Trust IV.(2)
|
|
4
|
.18
|
|
Certificate of Trust of Travelers Capital Trust V.(2)
|
|
4
|
.19
|
|
Certificate of Amendment to Certificate of Trust of Travelers
Capital Trust II, dated as of June 28, 2004.(2)
|
|
4
|
.20
|
|
Certificate of Amendment to Certificate of Trust of Travelers
Capital Trust II, dated as of February 27, 2007.(1)
|
|
4
|
.21
|
|
Certificate of Amendment to Certificate of Trust of Travelers
Capital Trust III, dated as of February 27, 2007.(1)
|
|
4
|
.22
|
|
Certificate of Amendment to Certificate of Trust of Travelers
Capital Trust IV, dated as of February 27, 2007.(1)
|
|
4
|
.23
|
|
Certificate of Amendment to Certificate of Trust of Travelers
Capital Trust V, dated as of February 27, 2007.(1)
|
II-2
|
|
|
|
|
|
4
|
.24
|
|
Amended and Restated Declaration of Trust of Travelers Capital
Trust II.
|
|
4
|
.25
|
|
Amended and Restated Declaration of Trust of Travelers Capital
Trust III.
|
|
4
|
.26
|
|
Amended and Restated Declaration of Trust of Travelers Capital
Trust IV.
|
|
4
|
.27
|
|
Amended and Restated Declaration of Trust of Travelers Capital
Trust V.
|
|
4
|
.28
|
|
Form of Second Amended and Restated Declaration of Trust for
Travelers Capital Trust II, Travelers Capital
Trust III, Travelers Capital Trust IV and Travelers
Capital Trust V.
|
|
4
|
.29
|
|
Form of Preferred Security (included in Exhibit 4.28).
|
|
4
|
.30
|
|
Form of Common Security (included in Exhibit 4.28).
|
|
4
|
.31
|
|
Form of Preferred Securities Guarantee Agreement.
|
|
4
|
.32
|
|
Form of Common Securities Guarantee Agreement.
|
|
5
|
.1
|
|
Opinion of Wendy C. Skjerven, Esq.
|
|
5
|
.2
|
|
Opinion of Richards, Layton & Finger, P.A.
|
|
5
|
.3
|
|
Opinion of Simpson Thacher & Bartlett LLP.
|
|
12
|
|
|
Computation of ratios of earnings to fixed charges and of
earnings to combined fixed charges and preferred stock
dividends.(4)
|
|
23
|
.1
|
|
Consent of KPMG LLP.
|
|
23
|
.2
|
|
Consent of Wendy C. Skjerven, Esq. (included in
Exhibit 5.1).
|
|
23
|
.3
|
|
Consent of Richards, Layton & Finger, P.A. (included
in Exhibit 5.2).
|
|
23
|
.4
|
|
Consent of Simpson Thacher & Bartlett LLP (included in
Exhibit 5.3).
|
|
24
|
|
|
Powers of Attorney.
|
|
25
|
.1
|
|
Statement of Eligibility and Qualification of Trustee on
Form T -l under the Trust Indenture Act of 1939, as
amended, of The Bank of New York Mellon Trust Company, N.A.
to act as trustee under the Senior Debt Indenture for the Senior
Debt Securities.
|
|
25
|
.2
|
|
Statement of Eligibility and Qualification of Trustee on
Form T -l under the Trust Indenture Act of 1939, as
amended, of The Bank of New York Mellon Trust Company, N.A.
to act as trustee under the Subordinated Debt Indenture for the
Subordinated Debt Securities.
|
|
25
|
.3
|
|
Statement of Eligibility and Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of The
Bank of New York Mellon Trust Company, N.A. to act as
trustee under the Junior Subordinated Debt Indenture for the
Junior Subordinated Debt Securities.
|
|
25
|
.4
|
|
Statement of Eligibility and Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of The
Bank of New York Mellon Trust Company, N.A.to act as
trustee for the Preferred Securities of Travelers Capital
Trust II.
|
|
25
|
.5
|
|
Statement of Eligibility and Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of The
Bank of New York Mellon Trust Company, N.A. to act as
trustee for the Preferred Securities of Travelers Capital
Trust III.
|
|
25
|
.6
|
|
Statement of Eligibility and Qualification of Trustee on
Form T 1 under the Trust Indenture Act of 1939, as
amended, of The Bank of New York Mellon Trust Company, N.A.
to act as trustee for the Preferred Securities of Travelers
Capital Trust IV.
|
|
25
|
.7
|
|
Statement of Eligibility and Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of The
Bank of New York Mellon Trust Company, N.A. to act as
trustee for the Preferred Securities of Travelers Capital
Trust V.
|
|
25
|
.8
|
|
Statement of Eligibility and Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of The
Bank of New York Mellon Trust Company, N.A. to act as
trustee for the Preferred Securities Guarantee Agreement for the
benefit of the holders of the Preferred Securities of Travelers
Capital Trust II.
|
|
25
|
.9
|
|
Statement of Eligibility and Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of The
Bank of New York Mellon Trust Company, N.A. to act as
trustee for the Preferred Securities Guarantee Agreement for the
benefit of the holders of the Preferred Securities of Travelers
Capital Trust III.
|
II-3
|
|
|
|
|
|
25
|
.10
|
|
Statement of Eligibility and Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of The
Bank of New York Mellon Trust Company, N.A. to act as
trustee for the Preferred Securities Guarantee Agreement for the
benefit of the holders of the Preferred Securities of Travelers
Capital Trust IV.
|
|
25
|
.11
|
|
Statement of Eligibility and Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of The
Bank of New York Mellon Trust Company, N.A. to act as
trustee for the Preferred Securities Guarantee Agreement for the
benefit of the holders of the Preferred Securities of Travelers
Capital Trust V.
|
|
|
|
*
|
|
To be filed by amendment or as an exhibit to a document to be
incorporated by reference herein in connection with an offering
of the offered securities.
|
|
(1)
|
|
Incorporated by reference to the Post-Effective Amendment
No. 1 to the Registration Statement on
Form S-3
(Registration
No. 333-130323)
filed with the SEC on March 5, 2007.
|
|
(2)
|
|
Incorporated by reference to the Registration Statement on
Form S-3
(Registration
No. 333-130323)
filed with the SEC on December 14, 2005
|
|
(3)
|
|
Incorporated by reference to the Registration Statement on
Form S-3
(Registration Nos.
333-73848,
333-73848-01
and
333-44122)
filed with the SEC on November 21, 2001.
|
|
(4)
|
|
Incorporated by reference to Exhibit 12.1 to The Travelers
Companies, Inc. Annual Report on
Form 10-K
for the fiscal year ended December 31, 2007 and
Exhibit 12.1 to The Travelers Companies, Inc. Quarterly
Report on
Form 10-Q
for the period ended September 30, 2008.
|
|
|
|
Filed herewith.
|
(a) Each of the undersigned registrants hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the SEC pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering price
set forth in the Calculation of Registration Fee
table in the effective registration statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i), (a)(1)(ii) and
(a)(1)(iii) do not apply if the information required to be
included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the SEC
by the registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the registration statement, or
is contained in a form of prospectus filed pursuant to
Rule 424(b) that is part of the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
II-4
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(4) That, for the purpose of determining liability under
the Securities Act of 1933 to any purchaser:
(i) each prospectus filed by a registrant pursuant to Rule
424(b)(3) shall be deemed to be part of the registration
statement as of the date the filed prospectus was deemed part of
and included in the registration statement; and
(ii) each prospectus required to be filed pursuant to Rule
424(b)(2), (b)(5) or (b)(7) as part of a registration statement
in reliance on Rule 430B relating to an offering made
pursuant to Rule 415(a)(1)(i), (vii) or (x) for the
purpose of providing the information required by
Section 10(a) of the Securities Act of 1933 shall be deemed
to be part of and included in the registration statement as of
the earlier of the date such form of prospectus is first used
after effectiveness or the date of the first contract of sale of
securities in the offering described in the prospectus. As
provided in Rule 430B, for liability purposes of the issuer
and any person that is at that date an underwriter, such date
shall be deemed to be a new effective date of the registration
statement relating to the securities in the registration
statement to which the prospectus relates, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof. Provided, however, that no statement
made in a registration statement or prospectus that is part of
the registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement
or prospectus that is part of the registration statement will,
as to a purchaser with a time of contract of sale prior to such
effective date, supersede or modify any statement that was made
in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately
prior to such effective date.
(5) Each of the undersigned registrants hereby undertakes
that, for the purpose of determining liability of a registrant
under the Securities Act of 1933 to any purchaser in the initial
distribution of the securities, each undersigned registrant
undertakes that in a primary offering of securities of an
undersigned registrant pursuant to this registration statement,
regardless of the underwriting method used to sell the
securities to the purchaser, if the securities are offered or
sold to such purchaser by means of any of the following
communications, the undersigned registrant will be a seller to
the purchaser and will be considered to offer or sell such
securities to such purchaser:
(i) Any preliminary prospectus or prospectus of an
undersigned registrant relating to the offering required to be
filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering
prepared by or on behalf of an undersigned registrant or used or
referred to by an undersigned registrant;
(iii) The portion of any other free writing prospectus
relating to the offering containing material information about
an undersigned registrant or its securities provided by or on
behalf of an undersigned registrant; and
(iv) Any other communication that is an offer in the
offering made by an undersigned registrant to the purchaser.
(b) Each of the undersigned registrants hereby undertakes
that, for purposes of determining any liability under the
Securities Act of 1933, each filing of registrants annual
report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plans annual report pursuant to
Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) Each of the undersigned registrants hereby undertakes
to file an application for the purpose of determining the
eligibility of the trustee to act under subsection (a) of
Section 310 of the Trust Indenture Act
II-5
in accordance with the rules and regulations prescribed by the
Commission under Section 305(b)(2) of the
Trust Indenture Act.
(d) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of each registrant
pursuant to the provisions described under Item 15 above,
or otherwise, each registrant has been advised that in the
opinion of the SEC such indemnification is against public policy
as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by a registrant
of expenses incurred or paid by a director, officer or
controlling person of a registrant in the successful defense of
any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, that registrant will, unless in the opinion of
its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
II-6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on
Form S-3
and has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
City of St. Paul and State of Minnesota, on the 15th day of
December, 2008.
THE TRAVELERS COMPANIES, INC.
|
|
|
|
By:
|
/s/ Matthew
S. Furman
|
Name: Matthew S. Furman, Esq.
Title: Senior Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on
December 15, 2008, by the following persons in the
capacities indicated:
|
|
|
|
|
Signature
|
|
Title
|
|
|
|
|
/s/ Jay
S.
Fishman
(Jay
S. Fishman)
|
|
Chief Executive Officer and
Chairman of the Board of Directors
(Principal Executive Officer)
|
|
|
|
/s/ Jay
S.
Benet
(Jay
S. Benet)
|
|
Chief Financial Officer
(Principal Financial Officer)
|
|
|
|
/s/ Douglas
K.
Russell
(Douglas
K. Russell)
|
|
Senior Vice President, Corporate Controller and Treasurer
(Principal Accounting Officer)
|
|
|
|
*
(Alan
L. Beller)
|
|
Member of the Board of Directors
|
|
|
|
*
(John
H. Dasburg)
|
|
Member of the Board of Directors
|
|
|
|
*
(Janet
M. Dolan)
|
|
Member of the Board of Directors
|
|
|
|
*
(Kenneth
M. Duberstein)
|
|
Member of the Board of Directors
|
|
|
|
*
(Lawrence
G. Graev)
|
|
Member of the Board of Directors
|
|
|
|
*
(Patricia
L. Higgins)
|
|
Member of the Board of Directors
|
|
|
|
*
(Thomas
R. Hodgson)
|
|
Member of the Board of Directors
|
II-7
|
|
|
|
|
Signature
|
|
Title
|
|
|
|
|
*
(Cleve
L. Killingsworth)
|
|
Member of the Board of Directors
|
|
|
|
*
(Robert
I. Lipp)
|
|
Member of the Board of Directors
|
|
|
|
*
(Blythe
J. McGarvie)
|
|
Member of the Board of Directors
|
|
|
|
*
(Glen
D. Nelson, M.D.)
|
|
Member of the Board of Directors
|
|
|
|
*
(Laurie
J. Thomsen)
|
|
Member of the Board of Directors
|
|
|
|
*By
/s/ Matthew
S. Furman
|
|
|
Matthew S. Furman
Attorney-in-fact
|
|
|
II-8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on
Form S-3
and has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
City of St. Paul and State of Minnesota, on the 15th day of
December, 2008.
TRAVELERS CAPITAL TRUST II
|
|
|
|
By:
|
THE TRAVELERS COMPANIES, INC.,
|
as Sponsor
|
|
|
|
By:
|
/s/ Matthew
S. Furman
|
Name: Matthew S. Furman
|
|
|
|
Title:
|
Senior Vice President
|
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on
Form S-3
and has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
City of St. Paul and State of Minnesota, on the 15th day of
December, 2008.
TRAVELERS CAPITAL TRUST III
|
|
|
|
By:
|
THE TRAVELERS COMPANIES, INC.,
|
as Sponsor
|
|
|
|
By:
|
/s/ Matthew
S. Furman
|
Name: Matthew S. Furman
|
|
|
|
Title:
|
Senior Vice President
|
II-9
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on
Form S-3
and has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
City of St. Paul and State of Minnesota, on the 15th day of
December, 2008.
TRAVELERS CAPITAL TRUST IV
|
|
|
|
By:
|
THE TRAVELERS COMPANIES, INC.,
as Sponsor
|
|
|
|
|
By:
|
/s/ Matthew
S. Furman
|
Name: Matthew S. Furman
|
|
|
|
Title:
|
Senior Vice President
|
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on
Form S-3
and has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
City of St. Paul and State of Minnesota, on the 15th day of
December, 2008.
TRAVELERS CAPITAL TRUST V
|
|
|
|
By:
|
THE TRAVELERS COMPANIES, INC.,
|
as Sponsor
|
|
|
|
By:
|
/s/ Matthew
S. Furman
|
Name: Matthew S. Furman
|
|
|
|
Title:
|
Senior Vice President
|
II-10
EXHIBIT INDEX
|
|
|
|
|
|
1
|
.1
|
|
Form of Underwriting Agreement for senior debt securities,
subordinated debt securities, junior subordinated debt
securities and warrants.*
|
|
1
|
.2
|
|
Form of Underwriting Agreement for preferred stock and
depositary shares.*
|
|
1
|
.3
|
|
Form of Underwriting Agreement for common stock.*
|
|
1
|
.4
|
|
Form of Underwriting Agreement for convertible debt securities.*
|
|
1
|
.5
|
|
Form of Underwriting Agreement for preferred securities of
Travelers Capital Trust II, Travelers Capital
Trust III, Travelers Capital Trust IV and Travelers
Capital Trust V.*
|
|
1
|
.6
|
|
Form of Underwriting Agreement for stock purchase contracts.*
|
|
1
|
.7
|
|
Form of Underwriting Agreement for units.*
|
|
3
|
.1
|
|
Amended and Restated Articles of Incorporation (incorporated by
reference to Exhibit 3.1 to our Quarterly Report on
Form 10-Q
for the fiscal quarter ended June 30, 2007).
|
|
3
|
.2
|
|
Amended and Restated Bylaws (incorporated by reference to
Exhibit 3.2 to our Current Report on
Form 8-K
filed on August 11, 2008).
|
|
4
|
.1
|
|
Indenture for senior debt securities (incorporated by reference
to Exhibit 4.1 of our Current Report on
Form 8-K
filed March 13, 2002).
|
|
4
|
.2
|
|
Form of Indenture for subordinated debt securities.
|
|
4
|
.3
|
|
Form of Indenture for junior subordinated debt securities.(1)
|
|
4
|
.4
|
|
Form of Deposit Agreement.*
|
|
4
|
.5
|
|
Form of Depositary Receipt (included in Exhibit 4.4).
|
|
4
|
.6
|
|
Form of Senior Debt Security (included in Exhibit 4.1).
|
|
4
|
.7
|
|
Form of Subordinated Debt Security (included in
Exhibit 4.2).
|
|
4
|
.8
|
|
Form of Junior Subordinated Debt Security (included in
Exhibit 4.3).
|
|
4
|
.9
|
|
Form of Warrant Agreement, including the form of the Warrant
Certificate.*
|
|
4
|
.10
|
|
Form of Stock Purchase Contract Agreement, including the form of
the Security Certificate.*
|
|
4
|
.11
|
|
Form of Unit Agreement, including the form of the Unit
Certificate.*
|
|
4
|
.12
|
|
Form of Pledge Agreement.*
|
|
4
|
.13
|
|
Form of Specimen Certificate of Common Stock.(2)
|
|
4
|
.14
|
|
Form of Specimen Certificate of Preferred Stock and Form of
Certificate of Designations for Preferred Stock.*
|
|
4
|
.15
|
|
Certificate of Trust of Travelers Capital Trust II.(3)
|
|
4
|
.16
|
|
Certificate of Trust of Travelers Capital Trust III.(2)
|
|
4
|
.17
|
|
Certificate of Trust of Travelers Capital Trust IV.(2)
|
|
4
|
.18
|
|
Certificate of Trust of Travelers Capital Trust V.(2)
|
|
4
|
.19
|
|
Certificate of Amendment to Certificate of Trust of Travelers
Capital Trust II, dated as of June 28, 2004.(2)
|
|
4
|
.20
|
|
Certificate of Amendment to Certificate of Trust of Travelers
Capital Trust II, dated as of February 27, 2007.(1)
|
|
4
|
.21
|
|
Certificate of Amendment to Certificate of Trust of Travelers
Capital Trust III, dated as of February 27, 2007.(1)
|
|
4
|
.22
|
|
Certificate of Amendment to Certificate of Trust of Travelers
Capital Trust IV, dated as of February 27, 2007.(1)
|
|
4
|
.23
|
|
Certificate of Amendment to Certificate of Trust of Travelers
Capital Trust V, dated as of February 27, 2007.(1)
|
|
4
|
.24
|
|
Amended and Restated Declaration of Trust of Travelers Capital
Trust II.
|
|
4
|
.25
|
|
Amended and Restated Declaration of Trust of Travelers Capital
Trust III.
|
|
4
|
.26
|
|
Amended and Restated Declaration of Trust of Travelers Capital
Trust IV.
|
|
4
|
.27
|
|
Amended and Restated Declaration of Trust of Travelers Capital
Trust V.
|
|
|
|
|
|
|
4
|
.28
|
|
Form of Second Amended and Restated Declaration of Trust for
Travelers Capital Trust II, Travelers Capital
Trust III, Travelers Capital Trust IV and Travelers
Capital Trust V.
|
|
4
|
.29
|
|
Form of Preferred Security (included in Exhibit 4.28).
|
|
4
|
.30
|
|
Form of Common Security (included in Exhibit 4.28).
|
|
4
|
.31
|
|
Form of Preferred Securities Guarantee Agreement.
|
|
4
|
.32
|
|
Form of Common Securities Guarantee Agreement.
|
|
5
|
.1
|
|
Opinion of Wendy C. Skjerven, Esq.
|
|
5
|
.2
|
|
Opinion of Richards, Layton & Finger, P.A.
|
|
5
|
.3
|
|
Opinion of Simpson Thacher & Bartlett LLP.
|
|
12
|
|
|
Computation of ratios of earnings to fixed charges and of
earnings to combined fixed charges and preferred stock
dividends.(4)
|
|
23
|
.1
|
|
Consent of KPMG LLP.
|
|
23
|
.2
|
|
Consent of Wendy C. Skjerven, Esq. (included in
Exhibit 5.1).
|
|
23
|
.3
|
|
Consent of Richards, Layton & Finger, P.A. (included
in Exhibit 5.2).
|
|
23
|
.4
|
|
Consent of Simpson Thacher & Bartlett LLP (included in
Exhibit 5.3).
|
|
24
|
|
|
Powers of Attorney.
|
|
25
|
.1
|
|
Statement of Eligibility and Qualification of Trustee on
Form T -l under the Trust Indenture Act of 1939, as
amended, of The Bank of New York Mellon Trust Company, N.A.
to act as trustee under the Senior Debt Indenture for the Senior
Debt Securities.
|
|
25
|
.2
|
|
Statement of Eligibility and Qualification of Trustee on
Form T -l under the Trust Indenture Act of 1939, as
amended, of The Bank of New York Mellon Trust Company, N.A.
to act as trustee under the Subordinated Debt Indenture for the
Subordinated Debt Securities.
|
|
25
|
.3
|
|
Statement of Eligibility and Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of The
Bank of New York Mellon Trust Company, N.A. to act as
trustee under the Junior Subordinated Debt Indenture for the
Junior Subordinated Debt Securities.
|
|
25
|
.4
|
|
Statement of Eligibility and Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of The
Bank of New York Mellon Trust Company, N.A.to act as
trustee for the Preferred Securities of Travelers Capital
Trust II.
|
|
25
|
.5
|
|
Statement of Eligibility and Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of The
Bank of New York Mellon Trust Company, N.A. to act as
trustee for the Preferred Securities of Travelers Capital
Trust III.
|
|
25
|
.6
|
|
Statement of Eligibility and Qualification of Trustee on
Form T 1 under the Trust Indenture Act of 1939, as
amended, of The Bank of New York Mellon Trust Company, N.A.
to act as trustee for the Preferred Securities of Travelers
Capital Trust IV.
|
|
25
|
.7
|
|
Statement of Eligibility and Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of The
Bank of New York Mellon Trust Company, N.A. to act as
trustee for the Preferred Securities of Travelers Capital
Trust V.
|
|
25
|
.8
|
|
Statement of Eligibility and Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of The
Bank of New York Mellon Trust Company, N.A. to act as
trustee for the Preferred Securities Guarantee Agreement for the
benefit of the holders of the Preferred Securities of Travelers
Capital Trust II.
|
|
25
|
.9
|
|
Statement of Eligibility and Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of The
Bank of New York Mellon Trust Company, N.A. to act as
trustee for the Preferred Securities Guarantee Agreement for the
benefit of the holders of the Preferred Securities of Travelers
Capital Trust III.
|
|
25
|
.10
|
|
Statement of Eligibility and Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of The
Bank of New York Mellon Trust Company, N.A. to act as
trustee for the Preferred Securities Guarantee Agreement for the
benefit of the holders of the Preferred Securities of Travelers
Capital Trust IV.
|
|
25
|
.11
|
|
Statement of Eligibility and Qualification of Trustee on
Form T-1
under the Trust Indenture Act of 1939, as amended, of The
Bank of New York Mellon Trust Company, N.A. to act as
trustee for the Preferred Securities Guarantee Agreement for the
benefit of the holders of the Preferred Securities of Travelers
Capital Trust V.
|
|
|
|
*
|
|
To be filed by amendment or as an exhibit to a document to be
incorporated by reference herein in connection with an offering
of the offered securities.
|
|
(1)
|
|
Incorporated by reference to the Post-Effective Amendment
No. 1 to the Registration Statement on
Form S-3
(Registration
No. 333-130323)
filed with the SEC on March 5, 2007.
|
|
(2)
|
|
Incorporated by reference to the Registration Statement on
Form S-3
(Registration
No. 333-130323)
filed with the SEC on December 14, 2005
|
|
(3)
|
|
Incorporated by reference to the Registration Statement on
Form S-3
(Registration Nos.
333-73848,
333-73848-01
and
333-44122)
filed with the SEC on November 21, 2001.
|
|
(4)
|
|
Incorporated by reference to Exhibit 12.1 to The Travelers
Companies, Inc. Annual Report on
Form 10-K
for the fiscal year ended December 31, 2007 and
Exhibit 12.1 to The Travelers Companies, Inc. Quarterly
Report on
Form 10-Q
for the period ended September 30, 2008.
|
|
|
|
Filed herewith.
|
Exhibit 4.2
THE TRAVELERS COMPANIES, INC.
TO
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
Trustee
INDENTURE
Dated as of [ ]
SUBORDINATED DEBT SECURITIES
The Travelers Companies, Inc.
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture, dated as of [ ]
|
|
|
|
|
Trust Indenture
|
|
|
|
|
Act Section
|
|
|
|
Indenture Section
|
ss.310(a)
|
(1
|
)
|
|
609
|
(a)
|
(2
|
)
|
|
609
|
(a)
|
(3
|
)
|
|
Not Applicable
|
(a)
|
(4
|
)
|
|
Not Applicable
|
(a)
|
(5
|
)
|
|
Not Applicable
|
(b)
|
|
|
|
608
|
|
|
|
|
610
|
ss.311(a)
|
|
|
|
613(a)
|
(b)
|
|
|
|
Not Applicable
|
ss.312(a)
|
|
|
|
701
|
|
|
|
|
702(a)
|
(b)
|
|
|
|
702(b)
|
(c)
|
|
|
|
702(c)
|
ss.313(a)
|
|
|
|
703(a)
|
(b)
|
|
|
|
703(a)
|
(c)
|
|
|
|
703(a)
|
(d)
|
|
|
|
703(b)
|
ss.314(a)
|
|
|
|
704
|
(b)
|
|
|
|
Not Applicable
|
(c)
|
(1
|
)
|
|
102
|
(c)
|
(2
|
)
|
|
102
|
(c)
|
(3
|
)
|
|
Not Applicable
|
(d)
|
|
|
|
Not Applicable
|
(e)
|
|
|
|
102
|
ss.315(a)
|
|
|
|
601(a)
|
(b)
|
|
|
|
602
|
(c)
|
|
|
|
601(b)
|
(d)
|
|
|
|
601(a), 601(c)
|
(e)
|
|
|
|
514
|
ss.316(a)
|
(1
|
)
|
|
512, 513
|
(a)
|
(2
|
)
|
|
Not Applicable
|
(b)
|
|
|
|
508
|
ss.317(a)
|
(1
|
)
|
|
503
|
(a)
|
(2
|
)
|
|
504
|
(b)
|
|
|
|
1003
|
ss.318(a)
|
|
|
|
107
|
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the
Indenture.
i
TABLE OF CONTENTS
|
|
|
|
|
|
|
|
|
|
|
Page
|
|
|
|
|
|
RECITALS OF THE COMPANY
|
|
|
1
|
|
|
|
|
|
ARTICLE ONE
|
|
|
|
|
|
|
|
|
|
Definitions and Other Provisions
of General Application
|
|
|
|
|
|
|
|
|
|
Section 101. Definitions
|
|
|
1
|
|
|
|
|
|
Section 102. Compliance Certificates and Opinions
|
|
|
9
|
|
|
|
|
|
Section 103. Form of Documents Delivered to Trustee
|
|
|
9
|
|
|
|
|
|
Section 104. Acts of Holders
|
|
|
10
|
|
|
|
|
|
Section 105. Notices, Etc., to Trustee and Company
|
|
|
10
|
|
|
|
|
|
Section 106. Notice to Holders; Waiver
|
|
|
11
|
|
|
|
|
|
Section 107. Conflict with Trust Indenture Act
|
|
|
11
|
|
|
|
|
|
Section 108. Effect of Headings and Table of Contents
|
|
|
11
|
|
|
|
|
|
Section 109. Successors and Assigns
|
|
|
11
|
|
|
|
|
|
Section 110. Separability Clause
|
|
|
11
|
|
|
|
|
|
Section 111. Benefits of Indenture
|
|
|
11
|
|
|
|
|
|
Section 112. Governing Law
|
|
|
12
|
|
|
|
|
|
Section 113. Legal Holidays
|
|
|
12
|
|
|
|
|
|
Section 114. Waiver of Jury Trial
|
|
|
12
|
|
|
|
|
|
Section 115. Force Majeure
|
|
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE TWO
|
|
|
|
|
|
|
|
|
|
Security Forms
|
|
|
|
|
|
|
|
|
|
Section 201. Forms Generally
|
|
|
12
|
|
|
|
|
|
Section 202. Form of Face of Security
|
|
|
13
|
|
|
|
|
|
Section 203. Form of Reverse of Security
|
|
|
14
|
|
|
|
|
|
Section 204. Form of Legend for Global Securities
|
|
|
17
|
|
|
|
|
|
Section 205. Form of Trustees Certificate of Authentication
|
|
|
17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE THREE
|
|
|
|
|
|
|
|
|
|
The Securities
|
|
|
|
|
|
|
|
|
|
Section 301. Amount Unlimited; Issuable in Series
|
|
|
17
|
|
|
|
|
|
Section 302. Denominations
|
|
|
20
|
|
|
|
|
|
Section 303. Execution, Authentication, Delivery and Dating
|
|
|
20
|
|
|
|
|
|
Section 304. Temporary Securities
|
|
|
21
|
|
|
|
|
|
Section 305. Registration, Registration of Transfer and Exchange
|
|
|
22
|
|
|
|
|
|
Section 306. Mutilated, Destroyed, Lost and Stolen Securities
|
|
|
23
|
|
|
|
|
|
Section 307. Payment of Interest; Interest Rights Preserved
|
|
|
24
|
|
|
|
|
|
ii
|
|
|
|
|
|
|
|
|
|
|
Page
|
|
|
|
|
|
Section 308. Persons Deemed Owners
|
|
|
25
|
|
|
|
|
|
Section 309. Cancellation
|
|
|
25
|
|
|
|
|
|
Section 310. Computation of Interest
|
|
|
25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE FOUR
|
|
|
|
|
|
|
|
|
|
Satisfaction and Discharge
|
|
|
|
|
|
|
|
|
|
Section 401. Satisfaction and Discharge of Indenture
|
|
|
25
|
|
|
|
|
|
Section 402. Application of Trust Money
|
|
|
26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
30
|
|
|
|
|
|
Section 504. Trustee May File Proofs of Claim
|
|
|
30
|
|
|
|
|
|
Section 505. Trustee May Enforce Claims Without Possession of Securities
|
|
|
31
|
|
|
|
|
|
Section 506. Application of Money Collected
|
|
|
31
|
|
|
|
|
|
Section 507. Limitation on Suits
|
|
|
32
|
|
|
|
|
|
Section 508. Unconditional Right of Holders to Receive Principal, Premium and Interest
|
|
|
32
|
|
|
|
|
|
Section 509. Restoration of Rights and Remedies
|
|
|
32
|
|
|
|
|
|
Section 510. Rights and Remedies Cumulative
|
|
|
33
|
|
|
|
|
|
Section 511. Delay or Omission Not Waiver
|
|
|
33
|
|
|
|
|
|
Section 512. Control by Holders
|
|
|
33
|
|
|
|
|
|
Section 513. Waiver of Past Defaults
|
|
|
34
|
|
|
|
|
|
Section 514. Undertaking for Costs
|
|
|
34
|
|
|
|
|
|
Section 515. Waiver of Stay or Extension Laws
|
|
|
35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE SIX
|
|
|
|
|
|
|
|
|
|
The Trustee
|
|
|
|
|
|
|
|
|
|
Section 601. Certain Duties and Responsibilities
|
|
|
35
|
|
|
|
|
|
Section 602. Notice of Defaults
|
|
|
36
|
|
|
|
|
|
Section 603. Certain Rights of Trustee
|
|
|
36
|
|
|
|
|
|
Section 604. Not Responsible for Recitals or Issuance of Securities
|
|
|
38
|
|
|
|
|
|
Section 605. May Hold Securities
|
|
|
38
|
|
|
|
|
|
Section 606. Money Held in Trust
|
|
|
38
|
|
|
|
|
|
Section 607. Compensation and Reimbursement
|
|
|
38
|
|
|
|
|
|
Section 608. Disqualification; Conflicting Interests
|
|
|
39
|
|
|
|
|
|
Section 609. Corporate Trustee Required; Eligibility
|
|
|
39
|
|
|
|
|
|
Section 610. Resignation and Removal; Appointment of Successor
|
|
|
40
|
|
|
|
|
|
Section 611. Acceptance of Appointment by Successor
|
|
|
41
|
|
|
|
|
|
Section 612. Merger, Conversion, Consolidation or Succession to Business
|
|
|
42
|
|
|
|
|
|
iii
|
|
|
|
|
|
|
|
|
|
|
Page
|
|
|
|
|
|
Section 613. Preferential Collection of Claims Against Company
|
|
|
42
|
|
|
|
|
|
Section 614. Appointment of Authenticating Agent
|
|
|
42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE SEVEN
|
|
|
|
|
|
|
|
|
|
Holders Lists and Reports by Trustee and Company
|
|
|
|
|
|
|
|
|
|
Section 701. Company to Furnish Trustee Names and Addresses of Holders
|
|
|
44
|
|
|
|
|
|
Section 702. Preservation of Information; Communications to Holders
|
|
|
44
|
|
|
|
|
|
Section 703. Reports by Trustee
|
|
|
45
|
|
|
|
|
|
Section 704. Reports by Company
|
|
|
46
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE EIGHT
|
|
|
|
|
|
|
|
|
|
Consolidation, Merger, Conveyance, Transfer or Lease
|
|
|
|
|
|
|
|
|
|
Section 801. Company May Consolidate, Etc., Only on Certain Terms
|
|
|
46
|
|
|
|
|
|
Section 802. Successor Person Substituted
|
|
|
47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE NINE
|
|
|
|
|
|
|
|
|
|
Supplemental Indentures
|
|
|
|
|
|
|
|
|
|
Section 901. Supplemental Indentures Without Consent of Holders
|
|
|
48
|
|
|
|
|
|
Section 902. Supplemental Indentures With Consent of Holders
|
|
|
49
|
|
|
|
|
|
Section 903. Execution of Supplemental Indentures
|
|
|
50
|
|
|
|
|
|
Section 904. Effect of Supplemental Indentures
|
|
|
50
|
|
|
|
|
|
Section 905. Conformity With Trust Indenture Act
|
|
|
50
|
|
|
|
|
|
Section 906. Reference in Securities to Supplemental Indentures
|
|
|
50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE TEN
|
|
|
|
|
|
|
|
|
|
Covenants
|
|
|
|
|
|
|
|
|
|
Section 1001. Payment of Principal, Premium and Interest
|
|
|
51
|
|
|
|
|
|
Section 1002. Maintenance of Office or Agency
|
|
|
51
|
|
|
|
|
|
Section 1003. Money for Securities Payments to Be Held in Trust
|
|
|
51
|
|
|
|
|
|
Section 1004. Corporate Existence
|
|
|
52
|
|
|
|
|
|
Section 1005. Statement by Officers as to Default
|
|
|
53
|
|
|
|
|
|
Section 1006. Waiver of Certain Covenants
|
|
|
53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE ELEVEN
|
|
|
|
|
|
|
|
|
|
Subordination of Securities
|
|
|
|
|
|
|
|
|
|
Section 1101. Securities Subordinate to Senior Indebtedness
|
|
|
53
|
|
|
|
|
|
Section 1102. Payment Over of Proceeds Upon Dissolution, Etc.
|
|
|
54
|
|
|
|
|
|
Section 1103. No Payment When Senior Indebtedness in Default
|
|
|
55
|
|
|
|
|
|
iv
|
|
|
|
|
|
|
|
|
|
|
Page
|
|
|
|
|
|
Section 1104. Payment Permitted If No Default
|
|
|
56
|
|
|
|
|
|
Section 1105. Subrogation to Rights of Holders of Senior Indebtedness
|
|
|
56
|
|
|
|
|
|
Section 1106. Provisions Solely to Define Relative Rights
|
|
|
57
|
|
|
|
|
|
Section 1107. Trustee to Effectuate Subordination
|
|
|
57
|
|
|
|
|
|
Section 1108. No Waiver of Subordination Provisions
|
|
|
58
|
|
|
|
|
|
Section 1109. Notice to Trustee
|
|
|
58
|
|
|
|
|
|
Section 1110. Reliance on Judicial Order or Certificate of Liquidating Agent
|
|
|
59
|
|
|
|
|
|
Section 1111. Trustee Not Fiduciary for Holders of Senior Indebtedness
|
|
|
59
|
|
|
|
|
|
Section 1112. Rights of Trustee as Holder of Senior Indebtedness; Preservation of
Trustees Rights
|
|
|
59
|
|
|
|
|
|
Section 1113. Article Applicable to Paying Agents
|
|
|
60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE TWELVE
|
|
|
|
|
|
|
|
|
|
Redemption of Securities
|
|
|
|
|
|
|
|
|
|
Section 1201. Applicability of Article
|
|
|
60
|
|
|
|
|
|
Section 1202. Election to Redeem; Notice to Trustee
|
|
|
60
|
|
|
|
|
|
Section 1203. Selection by Trustee of Securities to Be Redeemed
|
|
|
60
|
|
|
|
|
|
Section 1204. Notice of Redemption
|
|
|
61
|
|
|
|
|
|
Section 1205. Deposit of Redemption Price
|
|
|
61
|
|
|
|
|
|
Section 1206. Securities Payable on Redemption Date
|
|
|
61
|
|
|
|
|
|
Section 1207. Securities Redeemed in Part
|
|
|
62
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE THIRTEEN
|
|
|
|
|
|
|
|
|
|
Sinking Funds
|
|
|
|
|
|
|
|
|
|
Section 1301. Applicability of Article
|
|
|
62
|
|
|
|
|
|
Section 1302. Satisfaction of Sinking Fund Payments with Securities
|
|
|
62
|
|
|
|
|
|
Section 1303. Redemption of Securities for Sinking Fund
|
|
|
63
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE FOURTEEN
|
|
|
|
|
|
|
|
|
|
Defeasance and Covenant Defeasance
|
|
|
|
|
|
|
|
|
|
Section 1401. Applicability of Article; Companys Option to Effect
Defeasance or Covenant Defeasance
|
|
|
63
|
|
|
|
|
|
Section 1402. Defeasance and Discharge
|
|
|
63
|
|
|
|
|
|
Section 1403. Covenant Defeasance
|
|
|
64
|
|
|
|
|
|
Section 1404. Conditions to Defeasance or Covenant Defeasance
|
|
|
64
|
|
|
|
|
|
Section 1405. Deposited Money and U.S. Government Obligations to Be
Held in Trust; Other Miscellaneous Provisions
|
|
|
67
|
|
|
|
|
|
Section 1406. Reinstatement
|
|
|
67
|
|
|
|
|
|
v
INDENTURE, dated as of [ ], between The Travelers Companies, Inc., a corporation duly
organized and existing under the laws of the State of Minnesota (herein called the Company),
having its principal office at 385 Washington Street, St. Paul, Minnesota 55102, and The Bank of
New York Mellon Trust Company, N.A., a national banking association, duly organized and existing
under the laws of the United States of America, 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 and subordinated 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 covenanted and 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; and
(4) 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.
Certain terms, used principally in Article Six, are defined in that Article.
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.
applicants has the meaning specified in Section 702.
Authenticating Agent means any Authenticating Agent appointed pursuant to Section 614 to
authenticate Securities.
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 Corporate Secretary or an
Assistant Corporate 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 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 to close.
Capital Lease Obligation of any Person means the obligation to pay rent or make other
payments under a lease of (or other Indebtedness arrangements conveying the right to use) real or
personal property of such Person which is required to be classified and accounted for as a capital
lease or a liability on the balance sheet of such Person in accordance with generally accepted
accounting principles. The Stated Maturity of such obligation shall be the date of the last payment
of rent or any other amount due under such lease prior to the first date upon which such lease may
be terminated by the lessee without payment of a penalty.
Commission means the Securities and Exchange Commission, as 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 corporation shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter Company shall mean such successor corporation.
Company Request or Company Order means a written request or order signed in the name of
the Company by its Chairman of the Board, its President or a Vice President, and by its
2
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to
the Trustee.
Corporate Trust Office means the corporate trust office of the Trustee, at which this
Indenture is principally administered. At the date hereof, such office is located at 222 Berkeley
Street, 2
nd
Floor, Boston, Massachusetts 02116-3748, Attention: Corporate Trust
Services.
corporation includes corporations, associations, companies and business trusts.
covenant defeasance has the meaning specified in Section 1403.
default has the meaning specified in Section 602.
Defaulted Interest has the meaning specified in Section 307.
defeasance has the meaning specified in Section 1402.
Depository means, with respect to the Securities of any series issuable or issued in whole
or in part in the form of one or more Global Securities, the clearing agency registered under the
Exchange Act specified for that purpose as contemplated by Section 301.
Event of Default has the meaning specified in Section 501.
Exchange Act means the Securities Exchange Act of 1934 as it may be amended and any
successor act thereto.
Global Security means a security bearing the legend specified in Section 204 evidencing all
or part of a series of Securities, authenticated and delivered to the Depository for such series or
its nominee, and registered in the name of such Depository or nominee.
Guarantee by any Person means any obligation, contingent or otherwise, of such Person
guaranteeing any Indebtedness of any other Person (the primary obligor) in any manner, whether
directly or indirectly, and including, without limitation, any obligation of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or to
purchase (or to advance or supply funds for the purchase of) any security for the payment of such
Indebtedness, (ii) to purchase property, securities or services for the purpose of assuring the
holder of such Indebtedness of the payment of such Indebtedness or (iii) to maintain working
capital, equity capital or other financial statement condition or liquidity of the primary obligor
so as to enable the primary obligor to pay such Indebtedness (and Guaranteed, Guaranteeing and
Guarantor shall have meanings correlative to the foregoing); provided, however, that the
Guarantee by any Person shall not include endorsements by such Person for collection or deposit, in
either case, in the ordinary course of business.
Holder means a Person in whose name a Security is registered in the Security Register.
Incur means, with respect to any Indebtedness or other obligation of any Person, to create,
issue, incur (by conversion, exchange or otherwise), assume, Guarantee or otherwise become liable
in respect of such Indebtedness or other obligation or the recording, as required
3
pursuant to generally accepted accounting principles or otherwise, of any such Indebtedness or
other obligation as a liability on the balance sheet of such Person (and Incurrence, Incurred,
Incurrable and Incurring shall have meanings correlative to the foregoing); provided, however,
that a change in generally accepted accounting principles that results in an obligation of such
Person that exists at such time becoming Indebtedness shall not be deemed an Incurrence of such
Indebtedness.
Indebtedness means (without duplication), with respect to any Person, whether recourse is to
all or a portion of the assets of such Person, (i) all Indebtedness described in clauses
(i)-(viii) of the definition of Senior Indebtedness (all references to the Company in such
definition being deemed to refer to such Person) and (ii) the maximum fixed redemption or
repurchase price of redeemable interests of such Person at the time of determination.
Indenture means this instrument as originally executed or 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 and shall 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.
Junior Subordinated Payment has the meaning specified in Section 1102.
mandatory sinking fund payment has the meaning specified in Section 1301.
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 has the meaning specified in Section 501.
Officers Certificate means a certificate signed by the Chairman of the Board, 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 1006 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.
optional sinking fund payment has the meaning specified in Section 1301.
4
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:
(i) Securities theretofore cancelled by the Trustee or delivered to the Trustee for
cancellation;
(ii) 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; and
(iii) 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
protected 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 any request, demand, authorization, direction, notice, consent or
waiver hereunder, (i) the principal amount of an Original Issue Discount Security that shall be
deemed to be Outstanding shall be the amount of the principal thereof that would be due and payable
as of the date of such determination upon acceleration of the Maturity thereof pursuant to
Section 502, (ii) the principal amount of a Security denominated in a foreign currency or
currencies shall be the U.S. dollar equivalent, determined on the date of original issuance of such
Security, of the principal amount (or, in the case of an Original Issue Discount Security, the U.S.
dollar equivalent on the date of original issuance of such Security of the amount determined as
provided in (i) above) of such Security, and (iii) 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 or
waiver, only Securities which 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 pledgees 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.
Paying Agent means any Person authorized by the Company to pay the principal of (and
premium, if any) or interest on any Securities on behalf of the Company.
Payment Blockage Period has the meaning specified in Section 1103.
5
Person means any individual, corporation, partnership, joint venture, association,
joint-stock company, trust, limited liability company, 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 premium, if any) 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.
Preferred Securities means undivided preferred beneficial interests in a Travelers Capital
Trust.
Proceeding has the meaning specified in Section 1102.
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 officer of the Trustee
with direct responsibility for the administration of this Indenture and also means, with respect to
a particular corporate trust matter, any other officer of the Trustee to whom such matter is
referred because of his 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 Payment has the meaning specified in Section 1102.
Security Register and Security Registrar have the respective meanings specified in
Section 305.
Senior Indebtedness means the principal of, premium, if any, interest on and any other
payment due pursuant to any of the following, whether Incurred on or prior to the date hereof or
hereafter Incurred:
(i) all obligations of the Company for money borrowed (other than obligations pursuant
to the Indenture, the Securities, the Junior Subordinated Indenture,
6
dated as of March 12, 2007, between Travelers and the Trustee and any Securities issued
pursuant to such Indenture;
(ii) all obligations of the Company evidenced by notes, debentures, bonds or other
similar instruments, including obligations Incurred in connection with the acquisition of
property, assets or businesses;
(iii) all Capital Lease Obligations of the Company;
(iv) all reimbursement obligations of the Company with respect to letters of credit,
bankers acceptances or similar facilities issued for the account of the Company;
(v) all obligations of the Company issued or assumed as the deferred purchase price of
property or services, including all obligations under master lease transactions pursuant to
which the Company or any of its subsidiaries have agreed to be treated as owner of the
subject property for federal income tax purposes (but excluding trade accounts payable or
accrued liabilities arising in the ordinary course of business);
(vi) all payment obligations of the Company under interest rate swap or similar
agreements or foreign currency hedge, exchange or similar agreements at the time of
determination, including any such obligations Incurred by the Company solely to act as a
hedge against increases in interest rates that may occur under the terms of other
outstanding variable or floating rate Indebtedness of the Company;
(vii) all obligations of the type referred to in clauses (i) through (vi) above of
another Person and all dividends of another Person the payment of which, in either case, the
Company has assumed or Guaranteed or for which the Company is responsible or liable,
directly or indirectly, jointly or severally, as obligor, Guarantor or otherwise;
(viii) all compensation and reimbursement obligations of the Company pursuant to
Section 607; and
(ix) all amendments, modifications, renewals, extensions, refinancings, replacements
and refundings by the Company of any such Indebtedness referred to in clauses (i) through
(viii) above (and of any such amended, modified, renewed, extended, refinanced, refunded or
replaced Indebtedness);
subject to, if provided in the supplemental indenture under which a series of Securities is issued
or in the form of Security for such series, any modifications to this definition of Senior
Indebtedness, including additional obligations that the Company may determine to include within
this definition and obligations that may be excluded from this definition, pursuant to Section 301
hereof; and provided, however, that the following shall not constitute Senior Indebtedness: (A) any
Indebtedness owed to a Person when such Person is a Subsidiary or employee of the Company, (B)
Indebtedness Incurred for the purchase of goods, materials or property, or for services obtained in
the ordinary course of business, or (C) any Indebtedness which by the terms of the instrument
creating or evidencing the same expressly provides that it is not superior in right of payment to
the Securities or (D) any Indebtedness to the extent Incurred in violation of this Indenture.
7
For purposes of this definition, Indebtedness includes any obligation to pay principal,
premium (if any), interest, penalties, reimbursement or indemnity amounts, fees and expenses
(including interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company whether or not a claim for post-petition interest is allowed
in such proceeding). Any Senior Indebtedness shall continue to be Senior Indebtedness and entitled
to the benefits of the subordination provisions of Article Eleven irrespective of any amendment,
modification or waiver of any term of such Senior Indebtedness.
Senior Nonmonetary Default has the meaning specified in Section 1103.
Senior Payment Default has the meaning specified in Section 1103.
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
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.
Travelers Capital Trust, means one or more statutory trusts, partnerships or limited
liability companies created by the Company for the purpose of issuing undivided beneficial
interests therein in connection with the purchase of Securities under this Indenture.
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.
Trust Indenture Act means the Trust Indenture Act of 1939, as amended, as in force at the
date as of which this instrument was executed, except as provided in Section 905; provided,
however, that in the event the Trust Indenture Act of 1939 is further amended after such date,
Trust Indenture Act means, to the extent required by such amendment, the Trust Indenture Act of
1939 as amended.
U.S. Government Obligations has the meaning specified in Section 1404.
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.
8
Section 102. Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Indenture, 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 an Officers Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been complied with and an
Opinion of Counsel stating that in the opinion of such counsel such action is authorized or
permitted by this Indenture and that all such conditions precedent, if any, have been complied
with, except that in the case of any such application or request as to which the furnishing of such
documents is specifically required by any provision of this Indenture relating to such particular
application or request, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or covenant provided
for in this Indenture 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, he has made such
examination or investigation as is necessary to enable him to express an informed opinion as
to whether or not such covenant or condition has been complied with; and
(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 any 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.
9
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.
(a) Any request, demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given 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 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.
(b) 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.
(c) The ownership of Securities shall be proved by the Security Register.
(d) 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.
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, Attention: Corporate Trust Services, 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
10
office specified in the first paragraph of this instrument 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 address as it appears in
the Security Register, not later than the latest date, and not earlier than the earliest date,
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 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 another provision hereof which is
required to be included in this Indenture by any of the provisions of the Trust Indenture Act, such
required provision shall control.
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, the holders of Senior
11
Indebtedness 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
laws 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) 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 that no interest shall accrue
with respect to such payment for the period from and after such Interest Payment Date, Redemption
Date or Stated Maturity, as the case may be.
Section 114. Waiver of Jury Trial.
EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS INDENTURE, THE SECURITIES OR THE TRANSACTION CONTEMPLATED HEREBY.
Section 115. Force Majeure.
In no event shall the Trustee be responsible or liable for any failure or delay in the
performance of its obligations hereunder arising out of or caused by, directly or indirectly,
forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts
of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of
God, and interruptions, loss or malfunctions of utilities, communications or computer (software and
hardware) services; it being understood that the Trustee shall use reasonable efforts which are
consistent with accepted practices in the banking industry to resume performance as soon as
practicable under the circumstances.
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
12
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 Depository
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.
The Trustees certificates of authentication shall be in substantially the form set forth in
this Article.
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.]
The Travelers Companies, Inc.
The Travelers Companies, Inc., a corporation duly organized and existing under the laws of the
State of Minnesota (herein called the Company, which term includes any successor corporation
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 terms established pursuant to Section 301 of the
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. [Any such interest on overdue principal or premium which is not paid on demand
shall bear interest at the rate of
% per annum (to the extent that the payment of
such interest on interest shall be legally enforceable), from the date of such demand until the
amount so demanded is paid or made available for payment. Interest on any overdue interest 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
, 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
13
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 under its
corporate seal.
|
|
|
|
|
|
|
Dated:
|
|
|
|
|
|
|
|
|
THE TRAVELERS COMPANIES, INC.
|
|
|
|
|
|
|
|
|
|
|
|
By
|
|
|
|
|
|
|
|
|
|
Attest:
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 Mellon Trust Company, N.A., 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
, limited in aggregate principal amount to $
].
[If applicable, insert The Securities of this series are subject to redemption upon not more
than 60 or 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 [on or after
, 20 ], as a whole or in part, at the
election of the Company, at the following Redemption Prices [insert terms established pursuant to
Section 301 of the Indenture].
14
[Notwithstanding the foregoing, the Company may not, prior to
, redeem any
Securities of this series as contemplated by [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.]
[The sinking fund for this series provides for the redemption on
in each
year beginning with the year
and ending with the year
of [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 [mandatory] sinking fund payments may be credited against
subsequent [mandatory] sinking fund payments otherwise required to be made in the inverse order
in which they become due.]
In the event of redemption of this Security in part only, a new Security or Securities of this
series and of a like tenor for the unredeemed portion hereof will be issued in the name of the
Holder hereof upon the cancellation hereof.
The Indebtedness evidenced by this Security is, to the extent provided in the Indenture,
subordinate and subject in right of payment to the prior payment in full of all Senior
Indebtedness, and this Security is issued subject to the provisions of the Indenture with respect
thereto. Each Holder of this Security, by accepting the same, (a) agrees to and shall be bound by
such provisions, (b) authorizes and directs the Trustee on his or her behalf to take such actions
as may be necessary or appropriate to effectuate the subordination so provided and (c) appoints the
Trustee his or her attorney-in-fact for any and all such purposes. Each Holder hereof, by his or
her acceptance hereof, waives all notice of the acceptance of the subordination provisions
contained herein and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter created, incurred, assumed or Guaranteed, and waives reliance by each such
Holder upon said provisions.
[If the Security is not an Original Issue Discount Security, 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.]
[If the Security is an Original Issue Discount Security, 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 overdue interest (in each case to the extent that
the payment of such interest shall be legally enforceable), all of the Companys 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 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 therein.]
15
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 majority of the Holders of the 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.
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 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.
16
Section 204. Form of Legend for Global Securities.
Any 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 Depository 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 Depository or a nominee thereof, except in the limited circumstances described in the
Indenture.
Section 205. Form of Trustees Certificate of Authentication.
The Trustees 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.
|
|
|
|
|
|
|
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
as Trustee
|
|
|
|
|
|
|
|
By
|
|
|
|
|
|
|
|
|
|
|
|
Authorized Signatory
|
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,
17
or in lieu of, other Securities of the series pursuant to Section 304, 305, 306, 906 or
1207 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 the Securities of the series is
payable;
(5) the rate or rates at which the Securities of the series shall bear interest, if
any, the date or dates from which such interest shall accrue, the Interest Payment Dates on
which such interest shall be payable and the Regular Record Date for the interest payable on
any Interest Payment Date;
(6) the place or places where the principal of (and premium, if any) and interest on
Securities of the series shall be payable;
(7) any provisions relating to the deferral of interest payments on the Securities of
the series at the option of the Company or otherwise, including the duration of any such
deferral or extension period and the maximum period during which interest payments may be
deferred or extended;
(8) the period or periods within which, the price or prices at which, and the terms and
conditions upon which, Securities of the series may be redeemed, in whole or in part, at the
option of the Company;
(9) the obligation, if any, of the Company to redeem or purchase Securities of the
series pursuant to any sinking fund or analogous provisions or at the option of a Holder
thereof and the period or periods within which, the price or prices at which and the terms
and conditions upon which, Securities of the series shall be redeemed or purchased, in whole
or in part, pursuant to such obligation;
(10) any modifications, including additions to or exclusions from, the definition of
Senior Indebtedness or Events of Default applicable to the Securities of any series;
(11) any provisions necessary to permit or facilitate the issuance, payment or
conversion of any Securities of the series that may be converted into securities or other
property other than Securities of the same series (including shares of the Companys common
or preferred stock or other Securities of the Company) and of like tenor, whether in
addition to, or in lieu of, any payment of principal or other amount and whether at the
option of the Company or otherwise;
(12) if other than denominations of $1,000 and any integral multiple thereof, the
denominations in which Securities of the series shall be issuable;
18
(13) the currency or currencies, including composite currencies, in which payment of
the principal of and any premium and interest on the Securities of the series shall be
payable if other than the currency of the United States of America;
(14) 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, composite currencies or currency units other than that or those in which such
Securities are stated to be payable, the currency, currencies, composite currency, composite
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);
(15) if the amount of payments of principal of and any premium or interest on the
Securities of the series may be determined with reference to an index, a formula or any
other method, the manner in which such amounts shall be determined;
(16) whether the Securities of the series shall be issued in whole or in part in the
form of one or more Global Securities and, in such case, the Depository with respect to such
Global Security or Securities and the circumstances under which any such Global Security may
be exchanged for Securities registered in the name of, and any transfer of such Global
Security may be registered in the name of, a Person other than such Depository or its
nominee, if other than as set forth in Section 305;
(17) if other than the principal amount thereof, the portion of the principal amount of
Securities of the series which shall be payable upon declaration of acceleration of the
Maturity thereof pursuant to Section 502:
(18) the application, if any, of Sections 1302 or 1303 to the Securities of any series;
(19) any proposed listing on any national or foreign securities exchange of the
Securities of the series; and
(20) any other terms of the series (which terms shall not be inconsistent with the
provisions of this Indenture), including any terms necessary, customary or desirable to
facilitate the issuance of Preferred Securities by a Travelers Capital Trust.
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 in the Officers Certificate or in any such indenture
supplemental hereto.
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.
19
The Securities shall be subordinated in right of payment to Senior Indebtedness as provided in
Article Eleven.
Section 302. Denominations.
The Securities of each series shall be issuable in registered form without coupons in such
denominations as shall be specified as contemplated by Section 301. In the absence of any such
provisions 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 of the Board, its
President or one of its Vice Presidents. The signature of any of these officers on the Securities
may be manual or facsimile.
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 in 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,
(a) 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;
(b) 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
(c) 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 the enforcement of 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
20
the Trustees 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, 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
time of authentication of each Security of such series if such documents are delivered at or prior
to the time of 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
upon any Security shall be conclusive evidence, and the only evidence, that such Security has been
duly authenticated and delivered hereunder and is entitled to the benefits of this Indenture.
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 together with a written statement (which
need not comply with Section 102 and need not be accompanied by an Opinion of Counsel) stating that
such Security has never been issued and sold by the Company, 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 a like
principal amount of definitive Securities of the same series and of a like tenor of authorized
denominations. 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.
21
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 any series at the office or
agency 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 a like aggregate principal
amount and tenor.
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 a like aggregate principal amount and tenor,
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 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 or 1207 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer of or exchange
Securities of any series during a period beginning at the opening of business 15 days before the
day of the mailing of a notice of redemption of Securities of that series selected for redemption
under Section 1203 and ending at the close of business on the day of such mailing, or (ii) 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.
Notwithstanding the foregoing, no Global Security shall be registered for transfer or
exchange, or authenticated or delivered, pursuant to this Section 305 or Sections 304, 306, 906 or
1207 in the name of a Person other than the Depository for such Security or its nominee until
22
(i) the Depository with respect to a Global Security notifies the Company that it is unwilling
or unable to continue as Depository for such Global Security or the Depository ceases to be a
clearing agency registered under the Exchange Act, (ii) the Company executes and delivers to the
Trustee a Company Order that such Global Security shall be so transferable and exchangeable or
(iii) there shall have occurred and be continuing an Event of Default with respect to the
Securities of such series. Upon the occurrence in respect of any Global Security of any series of
any one or more of the conditions specified in clauses (i), (ii) or (iii) of the preceding sentence
or such other conditions as may be specified as contemplated by Section 301 for such series, such
Global Security may be registered for transfer or exchange for Securities registered in the names
of, or authenticated and delivered to, such Persons as the Depository with respect to such series
shall direct.
Except as provided in the preceding paragraph, any Security authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, any Global Security, whether
pursuant to this Section, Section 304, 306, 906 or 1207 or otherwise, shall also be a Global
Security and bear the legend specified in Section 205.
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 thereof or 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 protected
purchaser, the Company shall execute and upon its request 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 destroyed,
lost or stolen Security shall constitute an original additional contractual obligation of the
Company, whether or not the 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.
23
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.
Unless 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 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 mailed, first-class postage prepaid, to
each Holder of Securities of such series at his address as it appears in the Security
Register, 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
24
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.
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
premium, if any) and (subject to Section 307) 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 normal procedures unless otherwise directed by a Company Order.
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.
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
25
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 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 an amount sufficient to
pay and discharge the entire Indebtedness on such Securities not theretofore delivered to
the Trustee for cancellation, for principal (and premium, if any) 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, the obligations of the Trustee to any Authenticating
Agent under Section 614 and, if money shall have been deposited with the 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 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
26
determine, to the Persons entitled thereto, of the principal (and premium, if any) 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
occasioned by the provisions of Article Eleven, or 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 premium, if any, on) any Security of
that series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when and as due by the terms of
a Security of that series; 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 a series of Securities other than that
series), and continuance of such default or breach for a period of 90 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
applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or
(B) a decree or order adjudging the Company a 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 90 consecutive days;
or
27
(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 a 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 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.
Upon receipt by the Trustee of any written notice of an Event of Default pursuant to this
Section 501 (a Notice of Default) with respect to Securities of a series all or part of which is
represented by a Global Security, a record date shall be established for determining Holders of
Outstanding Securities of such series entitled to join in such Notice of Default, which record date
shall be at the close of business on the day the Trustee receives such Notice of Default. The
Holders on such record date, or their duly designated proxies, and only such Persons, shall be
entitled to join in such Notice of Default, whether or not such Holders remain Holders after such
record date; provided, however, that unless Holders of at least 25% in principal amount of the
Outstanding Securities of such series, or their proxies, shall have joined in such Notice of
Default prior to the date which is the ninetieth day after such record date, such Notice of Default
shall automatically and without further action by any Holder be canceled and of no further effect.
Nothing in this paragraph shall prevent a Holder, or a proxy of a Holder, from giving, (i) after
expiration of such 90-day period, a new Notice of Default identical to a Notice of Default which
has been canceled pursuant to the proviso to the preceding sentence or (ii) during any such 90-day
period, an additional notice of default with respect to any new or different fact or circumstance
permitting the giving of a Notice of Default with respect to Securities of such series, in either
of which events a new record date shall be established pursuant to the provisions of this
Section 501.
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 and 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 (or,
if any of the Securities of that series are Original Issue Discount Securities, such portion of the
principal amount of such Securities as may be specified in the terms thereof) of all of the
Securities of that series 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.
28
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,
(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 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 and interest 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.
Upon receipt by the Trustee of written notice declaring such an acceleration, or rescission
and annulment thereof, with respect to Securities of a series all or part of which is represented
by a Global Security, a record date shall be established for determining Holders of Outstanding
Securities of such series entitled to join in such notice, which record date shall be at the close
of business on the day the Trustee receives such notice. The Holders on such record date, or their
duly designated proxies, and only such Persons, shall be entitled to join in such notice, whether
or not such Holders remain Holders after such record date; provided, however, that unless such
declaration of acceleration, or rescission and annulment, as the case may be, shall have become
effective by virtue of the requisite percentage having joined in such notice prior to the day which
is the ninetieth day after such record date, such notice of declaration of acceleration, or
rescission and annulment, as the case may be, shall automatically and without further action by any
Holder be canceled and of no further effect. Nothing in this paragraph shall prevent a Holder, or a
proxy of a Holder, of Securities of any series from giving, (i) after expiration of such 90-day
period, a new written notice of declaration of acceleration, or rescission and annulment thereof,
as the case may be, that is identical to a written notice which has been canceled pursuant to the
proviso to the preceding sentence or (ii) during any such 90-day period an additional written
notice of declaration of acceleration with respect to any other Event of Default with respect to
Securities
29
of such series, or an additional written notice of rescission or annulment of any declaration
of acceleration with respect to any other Event of Default with respect to Securities of such
series, in either of which events a new record date shall be established pursuant to the provisions
of this Section 502.
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,
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 premium, if
any) and interest and, to the extent that payment of such interest shall be legally enforceable,
interest on any overdue principal (and premium, if any) 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 the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own
name and as trustee of an express trust, may institute a judicial proceeding for the collection of
the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of the property of the
Company or any other obligor upon such Securities, wherever situated.
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 the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the
Company or any other obligor upon the Securities or the property of the Company or of such other
obligor or their creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or otherwise and irrespective
of whether the Trustee shall have made any demand on the Company for the payment of overdue
principal or interest) shall be entitled and empowered, by intervention in such proceeding or
otherwise,
30
(i) to file and prove a claim for the whole amount of principal (and premium, if any)
and interest owing and unpaid in respect of the Securities and to file such other papers or
documents as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel) and of the Holders allowed in such judicial
proceeding, and
(ii) 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.
Nothing herein contained 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.
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 premium, if any) 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, including the
reasonable fees and expenses of its counsel; and
SECOND: Subject to Article Eleven, to the payment of the amounts then due and unpaid
for principal of (and premium, if any) 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 premium, if any) and interest, respectively.
31
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
(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 90 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 90-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
premium, if any) and (subject to Section 307) interest on such Security on the Stated Maturity or
Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date) 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.
32
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
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.
Upon receipt by the Trustee of any written notice directing the time, method or place of
conducting any such proceeding or exercising any such trust or power, with respect to Securities of
a series all or part of which is represented by a Global Security, a record date shall be
established for determining Holders of Outstanding Securities of such series entitled to join in
such notice, which record date shall be at the close of business on the day the Trustee receives
such notice. The Holders on such record date, or their duly designated proxies, and only such
Persons, shall be entitled to join in such notice, whether or not such Holders remain Holders after
such record date; provided, however, that unless the Holders of a majority in principal amount of
the Outstanding Securities of such series shall have joined in such notice prior to the day which
is the ninetieth day after such record date, such notice shall automatically and without further
action by any Holder be cancelled and of no further effect. Nothing in this paragraph shall prevent
a Holder, or a proxy of a Holder, from giving, (i) after expiration of such 90-day period, a new
notice identical to a notice which has been cancelled pursuant to the proviso to the preceding
sentence or (ii) during any such 90-day period, a new direction contrary to or different
33
from such direction, in either of which events a new record date shall be established pursuant
to the provisions of this Section 512.
Section 513. Waiver of Past Defaults.
Subject to Section 502, the Holders of a majority in principal amount of the Outstanding
Securities of any series may, by notice to the Trustee, waive an existing or past default with
respect to the Securities of such series and its consequences, except a default
(1) in the payment of principal of (or premium, if any) or interest on any Security of
such series, or in the deposit of any sinking fund payment when and as due,
(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, or
(3) in respect of an existing or past default described in clause (4), (5) or (6) of
Section 501, which may be waived by the Holders of a majority in principal amount of all
Outstanding Securities voting together as a single class.
The Company may, but shall not be obligated to, fix a record date for the purpose of
determining the Persons entitled to waive any past default hereunder. If a record date is fixed,
the Holders on such record date, or their duly designated proxies, and only such Persons, shall be
entitled to waive any default hereunder, whether or not such Holders remain Holders after such
record date; provided, however, that unless such majority in principal amount shall have waived
such default prior to the date which is the ninetieth day after such record date, any such waiver
previously given shall automatically and without further action by any Holder be cancelled and of
no further effect.
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.
All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof
shall be deemed to have agreed, that any court may in its discretion require, 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, the filing by any party litigant in such suit
of an undertaking to pay the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to any suit instituted by the Company,
to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders,
holding in the aggregate more than 10% in principal amount of the Outstanding Securities of any
series, or to any suit instituted by any Holder for the enforcement of the payment of the principal
of (or premium, if any) or interest on any Security on or after the Stated Maturity or Maturities
expressed in such Security (or, in the case of redemption, on or after the Redemption Date).
34
Section 515. Waiver of 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
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.
(a) Except during the continuance of an Event of Default known to the Trustee,
(1) the Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the Trustee shall be under
a duty to examine the same to determine whether or not they conform to the requirements of
this Indenture.
(b) In case an Event of Default known to the Trustee has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the
same degree of care and skill in their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the Trustee from liability
for its own negligent action, its own negligent failure to act, or its own willful misconduct,
except that
(1) this Subsection shall not be construed to limit the effect of Subsection (a) of
this Section;
(2) the Trustee shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
35
(3) the Trustee shall not be liable with respect to any action taken or omitted to be
taken by it in good faith in accordance with the direction of the Holders of a majority in
principal amount of the Outstanding Securities of any series, determined as provided in
Section 512, relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture with respect to the Securities of such series; and
(4) 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.
(d) Whether or not therein expressly so provided, every provision of this Indenture or any
supplemental 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 and Section 603.
Section 602. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder known to the Trustee with respect
to the Securities of any series, the Trustee shall transmit by mail to all Holders of Securities of
such series, as their names and addresses appear in the Security Register, notice of such default
hereunder known to the Trustee, unless such default shall have been cured or waived; provided,
however, that, except in the case of a default in the payment of the principal of (or premium, if
any) or interest on any Security of such series or in the payment of any sinking fund installment
with respect to Securities of such series, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee or a trust committee of
directors or Responsible Officers of the Trustee in good faith determine that the withholding of
such notice is in the interest of the Holders of Securities of such series; and provided, further,
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:
(a) the Trustee may conclusively rely and shall be fully 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;
(b) any request or direction of the Company mentioned herein shall be sufficiently
evidenced by a Company Request or Company Order or as otherwise
36
expressly provided herein and any resolution of the Board of Directors may be
sufficiently evidenced by a Board Resolution;
(c) 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;
(d) the Trustee may consult with counsel of its own choosing and the 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;
(e) 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 reasonable security or
indemnity against the costs, expenses and liabilities which might be Incurred by it in
compliance with such request or direction;
(f) 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;
(g) 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;
(h) the Trustee shall not be liable for any action taken, suffered, or omitted to be
taken by it in good faith and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture;
(i) the Trustee shall not be charged with knowledge of any default or Event of Default
with respect to the Securities unless either (1) a Responsible Officer shall have actual
knowledge of such default or Event of Default or (2) written notice of such default or Event
of Default shall have been given to the Trustee at the Corporate Trust Office by the Company
or by any Holder of the Securities;
(j) the grant to the Trustee of any permissive right or power hereunder or in any
supplemental indenture shall not be construed to ignore a duty to act; and
37
(k) in no event shall the Trustee be responsible or liable for special, indirect, or
consequential loss or damage or any kind whatsoever (including, but not limited to, loss of
profit) irrespective of whether the Trustee has been advised of the likelihood of such loss
or damage and regardless of the form of action.
Section 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustees certificates of
authentication, shall be taken as the statements of the Company, and the Trustee or any
Authenticating Agent 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 or any Authenticating Agent shall not be accountable for the use or application by the
Company of Securities or the proceeds thereof.
Section 605. May Hold Securities.
The Trustee, any Authenticating Agent, 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, Authenticating Agent, 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 reasonable compensation 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 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 compensation and the expenses and disbursements of its counsel), including
the costs and expenses of defending itself against any claim or
38
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 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, reorganization, or
other similar law.
To secure the Companys payment obligations in this Section 607, the Trustee shall have a lien
prior to the Securities on all money or property held or collected by the Trustee, in its capacity
as Trustee, except money or property held in trust to pay principal of, premium, if any, and
interest on particular Securities.
The provisions of this Section 607 shall survive the resignation or removal of the Trustee and
the termination of this Indenture.
The Trustee shall be entitled to exercise or enforce its rights to payment under this Section
607 whether or not an Event of Default may exist.
Section 608. Disqualification; Conflicting Interests.
The Trustee for the Securities of any series issued hereunder shall be subject to the
provisions of Section 310(b) of the Trust Indenture Act during the period of time provided for
therein. In determining whether the Trustee has a conflicting interest as defined in
Section 310(b) of the Trust Indenture Act with respect to the Securities of any series, there shall
be excluded this Indenture with respect to Securities of any particular series of Securities other
than that series.
Nothing herein shall prevent the Trustee from filing with the Securities and Exchange
Commission the application referred to in the second to last paragraph of Section 3(b) of the Trust
Indenture Act.
Section 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a corporation organized and
doing business under the laws of the United States of America, any State thereof or the District of
Columbia, authorized under such laws to exercise corporate trust powers and subject to supervision
or examination by federal, state, territorial or District of Columbia authority, having a combined
capital and surplus of at least $50,000,000. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of said supervising or examining authority,
then for the purposes of this Section, the combined capital and surplus of such corporation 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 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.
39
Section 610. Resignation and Removal; Appointment of Successor.
(a) 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.
(b) 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 may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the Securities of such
series.
(c) 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.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608(a) 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
(2) the Trustee shall cease to be eligible under Section 609 and shall fail to resign
after written request thereof or by the Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged a 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, (i) the Company by a Board Resolution may remove the Trustee with respect
to all Securities, or (ii) 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.
(e) 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
40
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.
(f) 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 by mailing written notice of such event by first-class mail, postage
prepaid, to all Holders of Securities of such series as their names and addresses appear in the
Security Register. 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.
(a) 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
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.
(b) 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
41
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.
(c) 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 paragraph (a) and (b) of this Section, as the case
may be.
(d) 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 or consolidation to such authenticating Trustee may
adopt 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.
The Trustee shall comply with Section 311(a) of the Trust Indenture Act with respect to each
series of Securities for which it is Trustee.
Section 614. Appointment of Authenticating Agent.
At any time when any of the Securities remain Outstanding the Company may appoint an
Authenticating Agent or Agents with respect to one or more series of Securities which shall be
authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon
exchange, registration of transfer or partial redemption thereof or pursuant to Section 306, and
Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid
and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the Trustee or the
Trustees certificate of authentication, such reference shall be deemed to include authentication
and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of
authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating
Agent shall at all times be a corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, authorized
42
under such laws to act as Authenticating Agent, having a combined capital and surplus of not
less than $50,000,000 and subject to supervision or examination by Federal or State authority. If
such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to
the requirements of said supervising or examining authority, then for the purposes of this Section,
the combined capital and surplus of such Authenticating Agent 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 an Authenticating Agent shall cease to be eligible in accordance with the provisions of this
Section, such Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section.
Any corporation into which an Authenticating Agent may be merged or converted or with which it
may be consolidated, or any corporation resulting from any merger, conversion or consolidation to
which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate
agency or corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible under this Section,
without the execution or filing of any paper or any further act on the part of the Trustee or the
Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee
and to the Company. The Company may at any time terminate the agency of an Authenticating Agent by
giving written notice thereof to such Authenticating Agent and to the Trustee. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time such Authenticating
Agent shall cease to be eligible in accordance with the provisions of this Section, the Company may
appoint a successor Authenticating Agent and shall mail written notice of such appointment by
first-class mail, postage prepaid, to all Holders of Securities of the series with respect to which
such Authenticating Agent will serve, as their names and addresses appear in the Security Register.
Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested
with all the rights, powers and duties of its predecessor hereunder, with like effect as if
originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to time reasonable
compensation for its services under this Section.
If an appointment with respect to one or more series is made pursuant to this Section, the
Securities of such series may have endorsed thereon, in addition to the Trustees certificate of
authentication, an alternate certificate of authentication in the following form:
43
This is one of the Securities of the series designated therein referred to in the
within-mentioned Indenture.
|
|
|
|
|
|
|
|
|
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
|
|
|
|
|
|
|
as Trustee
|
|
|
|
|
|
|
|
|
|
|
|
By
|
|
As Authenticating Agent
|
|
|
|
|
|
|
|
|
|
|
|
By
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Authorized Signatory
|
|
|
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
(a) semi-annually, not later than June 30 and December 31 in each year, a list, in such
form as the Trustee may reasonably require, of the names and addresses of the Holders as of
the preceding June 15 or December 15, as the case may be, and
(b) 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; provided that the Company shall not be obligated to provide such a list of
Holders at any time that such list would not differ from the last such list provided by the Company
to the Trustee under this Section 701.
Section 702. Preservation of Information; Communications to Holders.
(a) 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.
(b) If three or more Holders (herein referred to as applicants) apply in writing to
the Trustee, and furnish the Trustee reasonable proof that each such applicant
44
has owned a Security for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to communicate with the
other Holders with respect to their rights under this Indenture or under the Securities and
is accompanied by a copy of the form of proxy or other communication which such applicants
propose to transmit, then the Trustee shall, within five Business Days after the receipt of
such application, at its election, either
(i) afford such applicants access to the information preserved at the time by the
Trustee in accordance with Section 702(a), or
(ii) inform such applicants as to the approximate number of Holders whose names and
addresses appear in the information preserved at the time by the Trustee in accordance with
Section 702(a), and as to the approximate cost of mailing to such Holders the form of proxy
or other communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to such information, the
Trustee shall, upon the written request of such applicants, mail to each Holder whose name and
address appear in the information preserved at the time by the Trustee in accordance with
Section 702(a) a copy of the form of proxy or other communication which is specified in such
request, with reasonable promptness after a tender to the Trustee of the material to be mailed and
of payment, or provision for the payment, of the reasonable expenses of mailing, unless within five
days after such tender the Trustee shall mail to such applicants and file with the Commission,
together with a copy of the material to be mailed, a written statement to the effect that, in the
opinion of the Trustee, such mailing would be contrary to the best interest of the Holders or would
be in violation of applicable law. Such written statement shall specify the basis of such opinion.
If the Commission, after opportunity for a hearing upon the objections specified in the written
statement so filed, shall enter an order refusing to sustain any of such objections or if, after
the entry of an order sustaining one or more of such objections, the Commission shall find, after
notice and opportunity for hearing, that all the objections so sustained have been met and shall
enter an order so declaring, the Trustee shall mail copies of such material to all such Holders
with reasonable promptness after the entry of such order and the renewal of such tender; otherwise
the Trustee shall be relieved of any obligation or duty to such applicants respecting their
application.
(c) 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 the disclosure of any such information as to the
names and addresses of the Holders in accordance with Section 702(b), regardless of the
source from which such information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
Section 702(b).
Section 703. Reports by Trustee.
(a) Within 60 days of each May 15, beginning with the May 15 immediately following the date of
this Indenture, the Trustee shall transmit to Holders such reports
45
concerning the Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act in the manner provided pursuant thereto.
(b) A copy of each such report shall, at time of such transmission to Holders, be filed by the
Trustee with each stock exchange upon which the Securities are listed, with the Commission and with
the Company. The Company will notify the Trustee when the Securities are listed on any stock
exchange.
Section 704. Reports by Company.
The Company shall:
(1) file with the Trustee, within 15 days after the Company is required to file the
same with the Commission, copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Company may be required to file
with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the
Company is not required to file information, documents or reports pursuant to either of said
Sections, then it shall file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may be required pursuant
to Section 13 of the Exchange Act in respect of a security listed and registered on a
national securities exchange as may be prescribed from time to time in such rules and
regulations;
(2) file with the Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such additional information, documents and
reports with respect to compliance by the Company with the conditions and covenants of this
Indenture as may be required from time to time by such rules and regulations; and
(3) transmit by mail to all Holders, as their names and addresses appear in the
Security Register, within 30 days after the filing thereof with the Trustee, such summaries
of any information, documents and reports required to be filed by the Company pursuant to
paragraphs (1) and (2) of this Section as may be required by rules and regulations
prescribed from time to time by the Commission.
The filing of such reports with the Trustee shall not impose upon the Trustee an obligation to
review, and notwithstanding any term hereof to the contrary shall not be construed to charge the
Trustee with notice or knowledge of, the contents of such reports. Such filings shall be solely
for the convenience of the Holders, in order to make such reports accessible to the Holders.
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
Section 801. Company May Consolidate, Etc., Only on Certain Terms.
46
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, and the Company shall
not permit any Person to consolidate with or merge into the Company or convey, transfer or lease
its properties and assets substantially as an entirety to the Company, 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 organized
and 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 premium, if any) and interest on all the
Securities and the performance 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 and treating any indebtedness
which becomes an obligation of the Company or a Subsidiary as a result of such transaction
as having been incurred by the Company or such Subsidiary at the time of 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;
(3) if, as a result of any such consolidation or merger or such conveyance, transfer or
lease, properties or assets of the Company would become subject to a mortgage, pledge, lien,
security interest or other encumbrance which would not be permitted by this Indenture, the
Company or such successor corporation or Person, as the case may be, shall take such steps
as shall be necessary effectively to secure the Securities equally and ratably with (or
prior to) all indebtedness secured thereby; and
(4) 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 Person Substituted.
Upon any consolidation by the Company with or merger by 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.
47
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 or modify the covenants of the Company 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 (and if such Events of Default are to be
for the benefit of less than all series of Securities, stating that such Events of Default
are being included solely for the benefit of such series) or modify any existing Events of
Default in a manner that is not adverse to Holders of Securities or such series, as the case
may be; 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, registerable
or not registerable as to principal, and with or without interest coupons, or to permit or
facility the issuance of Securities in uncertificated form; or
(5) to change or eliminate any of the provisions of this Indenture, provided that any
such change or elimination shall become effective only when there is no Security Outstanding
of any series created prior to the execution of such supplemental indenture which is
entitled to the benefit of such provision; or
(6) to establish the form or terms of Securities of any series as permitted by Sections
201 and 301; or
(7) 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(b); or
(8) to add to or change any of the provisions of this Indenture with respect to any
Securities that by their terms may be converted into securities or other property other
48
than Securities of the same series and of like tenor, in order to permit or facilitate
the issuance, payment or conversion of such Securities; or
(9) to qualify or maintain qualification of this Indenture under the Trust Indenture
Act; or
(10) to cure any ambiguity, to correct or supplement any provision herein which may be
defective or inconsistent with any other provision herein or in any supplemental indenture,
or to make any other provisions with respect to matters or questions arising under this
Indenture, provided such action shall not adversely affect the interests of the Holders of
Securities of any series in any material respect; or
(11) to make any changes to the Indenture in order to conform the Indenture to the
final prospectus supplement provided to investors in connection with the offering of any
series of Securities.
Section 902. Supplemental Indentures With Consent of Holders.
With the consent of the Holders of a majority in principal amount of the Outstanding
Securities affected by such supplemental indenture voting together as a single class, 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 that 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 the
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
(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
49
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(b) 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.
The Company may, but shall not be obligated to, fix a record date for the purpose of
determining the Persons entitled to consent to any indenture supplemental hereto. If a record date
is fixed, the Holders on such record date, or their duly designated proxies, and only such Persons,
shall be entitled to consent to such supplemental indenture, whether or not such Holders remain
Holders after such record date; provided, however, that unless such consent shall have become
effective by virtue of the requisite percentage having been obtained prior to the date which is the
ninetieth day after such record date, any such consent previously given shall, automatically and
without further action by any Holder, be cancelled and of no further effect.
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.
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, in addition to the documents required by Section 102, 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 Trustees 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 as then in effect.
Section 906. Reference in Securities to Supplemental Indentures.
50
Securities 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 premium, if any) 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 (and premium, if any) 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 premium, if any) or
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.
51
Whenever the Company shall have one or more Paying Agents for any series of Securities, it
will, on or before each due date of the principal of (and premium, if any) or interest on any
Securities of that series, deposit with a Paying Agent a sum sufficient to pay the principal (and
premium, if any) or interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, 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) hold all sums held by it for the payment of the principal of (and premium, if any)
or interest on Securities of that series in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed of as herein
provided;
(2) give the Trustee notice of any default by the Company (or any other obligor upon
the Securities of that series) in the making of any payment of principal (and premium, if
any) or interest on the Securities of that series; and
(3) at any time during the continuance of any such default, upon the written request of
the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.
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 (and premium, if any) or interest on any Security of any
series and remaining unclaimed for one year after such principal (and premium, if any) 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.
Section 1004. Corporate 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 and all licenses and permits
material to the normal conduct of its business; provided, however, that the Company shall not be
required to preserve any such right or franchise if the Board of Directors shall determine that the
52
preservation thereof is no longer desirable in the conduct of the business of the Company and
that the loss thereof is not disadvantageous in any material respect to the Holders.
Section 1005. 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 Sections 1001 to 1006, inclusive, and if the
Company shall be in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.
Section 1006. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any term, provision or
condition set forth in Sections 1002 to 1005, inclusive, if before the time for such compliance the
Holders of a majority in principal amount of the Outstanding Securities shall, by Act of such
Holders, waive compliance in such instance with such term, provision or condition. In the event
that there shall be included in this Indenture any covenant, other than a covenant to pay
principal, premium (if any) and interest, solely for the benefit of one or more, but less than all,
series of Securities, then, unless otherwise expressly provided with respect to such covenant, the
Company may similarly omit in any particular instance to comply with any term, provision or
condition of such covenant if before the time of such compliance the holders of a majority in
principal amount of all Outstanding Securities entitled to the benefit of such covenant, by Act of
such Holders, acting together as a single class, waive compliance in such instance with such term,
provision or condition. No such waiver contemplated by this Section 1006 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.
The Company may, but shall not be obligated to, fix a record date for the purpose of
determining the Persons entitled to waive any such term, provision or condition. If a record date
is fixed, the Holders on such record date, or their duly designated proxies, and only such Persons,
shall be entitled to waive any such term, provision or condition hereunder, whether or not such
Holders remain Holders after such record date; provided, however, that unless the Holders of at
least a majority in principal amount of (i) the Outstanding Securities or (ii) the Outstanding
Securities of such series, as the case may be, shall have waived such term, provision or condition
prior to the date which is 90 days after such record date, any such waiver previously given shall
automatically and without further action by any Holder be cancelled and of no further effect.
ARTICLE ELEVEN
Subordination of Securities
Section 1101. Securities Subordinate to Senior Indebtedness.
The Company covenants and agrees, and each Holder of a Security, by his acceptance thereof,
likewise covenants and agrees, that, to the extent and in the manner hereinafter set forth
53
in this Article (subject to Article Four), the payment of the principal of and interest on
each and all of the Securities are hereby expressly made subordinate and subject in right of
payment to the prior payment in full in cash of all Senior Indebtedness.
This Article Eleven shall constitute a continuing offer to all persons who become holders of,
or continue to hold, Senior Indebtedness, and such provisions are made for the benefit of the
holders of Senior Indebtedness and such holders are made obligees hereunder and any one or more of
them may enforce such provisions. Holders of Senior Indebtedness need not prove reliance on the
subordination provisions hereof.
Section 1102. Payment Over of Proceeds Upon Dissolution, Etc.
Upon any payment or distribution of assets of the Company to creditors upon (a) any insolvency
or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar
case or proceeding in connection therewith, relative to the Company or to its assets, or (b) any
liquidation, dissolution or other winding up of the Company, whether voluntary or involuntary and
whether or not involving insolvency or bankruptcy, or (c) any assignment for the benefit of
creditors or any other marshalling of assets or liabilities of the Company, then and in any such
event specified in (a), (b) or (c) above (each such event, if any, herein sometimes referred to as
a Proceeding);
(1) the holders of Senior Indebtedness shall be entitled to receive payment in full in
cash of all amounts due on or to become due on or in respect of all Senior Indebtedness,
before the Holders of the Securities are entitled to receive any payment or distribution of
any kind or character whether in cash, property or securities (including any payment or
distribution which may be payable or deliverable to Holders of the Securities made in
respect of any other Indebtedness of the Company subordinated to the payment of the
Securities, such payment or distribution being hereinafter referred to as a Junior
Subordinated Payment), on account of the principal of or interest on the Securities or on
account of any purchase, redemption or other acquisition of Securities by the Company, any
Subsidiary of the Company, the Trustee or any Paying Agent (all such payments,
distributions, purchases, redemptions and acquisitions, whether or not in connection with a
Proceeding, herein referred to, individually and collectively, as a Securities Payment);
and
(2) any payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, by set-off or otherwise, to which the Holders of
the Securities or the Trustee would be entitled but for the provisions of this
Article (including, without limitation, any Junior Subordinated Payment) shall be paid by
the liquidating trustee or agent or other Person making such payment or distribution,
whether a trustee in bankruptcy, a receiver or liquidating trustee or otherwise, directly to
the holders of Senior Indebtedness or their representative or representatives or to the
trustee or trustees under any indenture under which any instruments evidencing any of such
Senior Indebtedness may have been issued, ratably according to the aggregate amounts
remaining unpaid on account of the Senior Indebtedness held or represented by each, to the
extent necessary to make payment in full in cash of all Senior Indebtedness
54
remaining unpaid, after giving effect to any concurrent payment to the holders of such
Senior Indebtedness.
In the event that, notwithstanding the foregoing provisions of this Section, the Trustee or
the Holder of any Security shall have received in connection with any Proceeding any Securities
Payment before all Senior Indebtedness is paid in full or payment thereof provided for in cash,
then and in such event such Securities Payment shall be paid over or delivered forthwith to the
trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other Person
making payment or distribution of assets of the Company for application to the payment of all
Senior Indebtedness remaining unpaid, to the extent necessary to pay all Senior Indebtedness in
full in cash after giving effect to any concurrent payment to or for the holders of Senior
Indebtedness.
For purposes of this Article only, the words any payment or distribution of any kind or
character, whether in cash, property or securities shall not be deemed to include a payment or
distribution of stock or securities of the Company provided for by a plan of reorganization or
readjustment authorized by an order or decree of a court of competent jurisdiction in a
reorganization proceeding under any applicable bankruptcy law or of any other corporation provided
for by such plan of reorganization or readjustment which stock or securities are subordinated in
right of payment to all then outstanding Senior Indebtedness to substantially the same extent, or
to a greater extent than, the Securities are so subordinated as provided in this Article. The
consolidation of the Company with, or the merger of the Company into, another Person or the
liquidation or dissolution of the Company following the conveyance or transfer of all or
substantially all of its properties and assets as an entirety to another Person upon the terms and
conditions set forth in Article Eight shall not be deemed a Proceeding for the purposes of this
Section if the Person formed by such consolidation or into which the Company is merged or the
Person which acquires by conveyance or transfer such properties and assets as an entirety, as the
case may be, shall, as a part of such consolidation, merger, conveyance or transfer, comply with
the conditions set forth in Article Eight.
Section 1103. No Payment When Senior Indebtedness in Default.
In the event that any Senior Payment Default (as defined below) shall have occurred, then no
Securities Payment shall be made, nor shall any property of the Company or any Subsidiary of the
Company be applied to the purchase, acquisition, retirement or redemption of the Securities, unless
and until such Senior Payment Default shall have been cured or waived in writing or shall have
ceased to exist or all amounts then due and payable in respect of such Senior Indebtedness
(including amounts that have become and remain due by acceleration) shall have been paid in full in
cash. Senior Payment Default means any default in the payment of principal of (or premium, if
any) or interest on any Senior Indebtedness when due, whether at the Stated Maturity of any such
payment or by declaration of acceleration, call for redemption, mandatory payment or prepayment or
otherwise.
In the event that any Senior Nonmonetary Default (as defined below) shall have occurred and be
continuing, then, upon the receipt by the Company and the Trustee of written notice of such Senior
Nonmonetary Default from the holder of such Senior Indebtedness (or the agent, trustee or
representative thereof), no Securities Payment shall be made, nor shall any property of
55
the Company or any Subsidiary of the Company be applied to the purchase, acquisition,
retirement or redemption of the Securities, during the period (the Payment Blockage Period)
commencing on the date of such receipt of such written notice and ending (subject to any blockage
of payments that may then or thereafter be in effect as the result of any Senior Payment Default)
on the earlier of (i) the date on which the Senior Indebtedness to which such Senior Nonmonetary
Default relates is discharged or such Senior Nonmonetary Default shall have been cured or waived in
writing or shall have ceased to exist and any acceleration of Senior Indebtedness to which such
Senior Nonmonetary Default relates shall have been rescinded or annulled or (ii) the 179th day
after the date of such receipt of such written notice. No more than one Payment Blockage Period may
be commenced with respect to the Securities during any period of 360 consecutive days and there
shall be a period of at least 181 consecutive days in each period of 360 consecutive days when no
Payment Blockage Period is in effect. Following the commencement of any Payment Blockage Period,
the holders of any Senior Indebtedness will be precluded from commencing a subsequent Payment
Blockage Period until the conditions set forth in the preceding sentence are satisfied. For all
purposes of this paragraph, no Senior Nonmonetary Default that existed or was continuing on the
date of commencement of any Payment Blockage Period with respect to the Senior Indebtedness
initiating such Payment Blockage Period shall be, or be made, the basis for the commencement of a
subsequent Payment Blockage Period by holders of Senior Indebtedness or their representatives
unless such Senior Nonmonetary Default shall have been cured for a period of not less than 90
consecutive days. Senior Nonmonetary Default means the occurrence or existence and continuance of
any default (other than a Senior Payment Default) or any event which, after notice or lapse of time
(or both), would become an Event of Default (other than a Senior Payment Default), under the terms
of any instrument or agreement pursuant to which any Senior Indebtedness is outstanding, permitting
(after notice or lapse of time or both) one or more holders of such Senior Indebtedness (or a
trustee or agent on behalf of the holders thereof) to declare such Senior Indebtedness due and
payable prior to the date on which it would otherwise become due and payable.
In the event that, notwithstanding the foregoing, the Company shall make any payment to the
Trustee or the Holder of any Security prohibited by the foregoing provisions of this Section, and
if such fact shall, at or prior to the time of such payment, have been made known to the Trustee
or, as the case may be, such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Company.
The provisions of this Section shall not apply to any Securities Payment with respect to which
Section 1102 hereof would be applicable.
Section 1104. Payment Permitted If No Default.
Nothing contained in this Article or elsewhere in this Indenture or in any of the Securities
shall prevent the Company, at any time except during the pendency of any Proceeding referred to in
Section 1102 hereof or under the conditions described in Section 1103 hereof, from making
Securities Payments.
Section 1105. Subrogation to Rights of Holders of Senior Indebtedness.
56
Subject to the payment in full in cash of all Senior Indebtedness, the Holders of the
Securities shall be subrogated (equally and ratably with the holders of all Indebtedness of the
Company which by its express terms is subordinated to Indebtedness of the Company to substantially
the same extent as the Securities are subordinated and is entitled to like rights of subrogation)
to the rights of the holders of such Senior Indebtedness to receive payments and distributions of
cash, property and securities applicable to the Senior Indebtedness until the principal of and
interest on the Securities shall be paid in full. For purposes of such subrogation, no payments or
distributions to the holders of the Senior Indebtedness of any cash, property or securities to
which the Holders of the Securities or the Trustee would be entitled except for the provisions of
this Article, and no payments over pursuant to the provisions of this Article to the holders of
Senior Indebtedness by Holders of the Securities or the Trustee, shall, as among the Company, its
creditors other than holders of Senior Indebtedness and the Holders of the Securities, be deemed to
be a payment or distribution by the Company to or on account of the Senior Indebtedness.
Section 1106. Provisions Solely to Define Relative Rights.
The provisions of this Article are and are intended solely for the purpose of defining the
relative rights of the Holders on the one hand and the holders of Senior Indebtedness on the other
hand. Nothing contained in this Article or elsewhere in this Indenture or in the Securities is
intended to or shall (a) impair, as among the Company, its creditors other than holders of Senior
Indebtedness and the Holders of the Securities, the obligation of the Company, which is absolute
and unconditional (and which, subject to the rights under this Article of the holders of Senior
Indebtedness, is intended to rank equally with all other general obligations of the Company), to
pay to the Holders of the Securities the principal of and interest on the Securities as and when
the same shall become due and payable in accordance with their terms; or (b) affect the relative
rights against the Company of the Holders of the Securities and creditors of the Company other than
the holders of Senior Indebtedness; or (c) prevent the Trustee or the Holder of any Security from
exercising all remedies otherwise permitted by applicable law upon default under this Indenture,
subject to the rights, if any, under this Article of the holders of Senior Indebtedness to receive
cash, property and securities otherwise payable or deliverable to the Trustee or such Holder.
Section 1107. Trustee to Effectuate Subordination.
Each Holder of a Security by his acceptance thereof authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to effectuate the subordination
provided in this Article and appoints the Trustee his attorney-in-fact for any and all such
purposes, including, in the event of any dissolution, winding-up, liquidation or reorganization of
the Company whether in bankruptcy, insolvency, receivership proceedings, or otherwise, the timely
filing of a claim for the unpaid balance of the Indebtedness of the Company owing to such Holder in
the form required in such proceedings and the causing of such claim to be approved. If the Trustee
does not file a proper claim at least 30 days before the expiration of the time to file such claim,
then the holders of the Senior Indebtedness and their agents, trustees or other representatives are
authorized to do so (but shall in no event be liable for any failure to do so) for and on behalf of
the Holders of the Securities.
57
Section 1108. No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Indebtedness to enforce subordination
as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of the Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph, the holders of Senior
Indebtedness may, at any time and from time to time, without the consent of or notice to the
Trustee or the Holders of the Securities, without incurring responsibility to the Holders of the
Securities and without impairing or releasing the subordination provided in this Article or the
obligations hereunder of the Holders of the Securities to the holders of Senior Indebtedness, do
any one or more of the following: (i) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, Senior Indebtedness, or otherwise amend or supplement in any
manner Senior Indebtedness or any instrument evidencing the same or any agreement under which
Senior Indebtedness is outstanding; (ii) permit the Company to borrow, repay and then reborrow any
or all of the Senior Indebtedness; (iii) sell, exchange, release or otherwise deal with any
property pledged, mortgaged or otherwise securing Senior Indebtedness; (iv) release any Person
liable in any manner for the collection of Senior Indebtedness; (v) exercise or refrain from
exercising any rights against the Company and any other Person; and (vi) apply any sums received by
them to Senior Indebtedness.
Section 1109. Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any fact known to the Company
which would prohibit the making of any payment to or by the Trustee in respect of the Securities.
Notwithstanding the provisions of this Article or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless and until a
Responsible Officer of the Trustee shall have received written notice thereof from the Company, any
holder of Senior Indebtedness or from any trustee, fiduciary or agent therefor; and, prior to the
receipt of any such written notice, the Trustee, subject to the provisions of Section 601 hereof,
shall be entitled in all respects to assume that no such facts exist; provided, however, that if
the Trustee shall not have received the notice provided for in this Section at least three Business
Days prior to the date upon which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of or interest on any Security), then,
anything herein contained to the contrary notwithstanding, but without limiting the rights and
remedies of the holders of Senior Indebtedness or any trustee, fiduciary or agent therefor, the
Trustee shall have full power and authority to receive such money and to apply the same to the
purpose for which such money was received and shall not be affected by any notice to the contrary
which may be received by it within two Business Days prior to such date. Any notice required or
permitted to be given to the Trustee by a holder of Senior Indebtedness or by any agent, trustee or
representative thereof shall be in writing and shall be sufficient for every purpose hereunder if
in writing and either (i) sent via facsimile to the Trustee, the receipt of which shall be
confirmed via telephone, or (ii) mailed, first class postage
58
prepaid, or sent by overnight carrier, to the Trustee addressed to its Corporate Trust Office
or to any other address furnished in writing to such holder of Senior Indebtedness for such purpose
by the Trustee.
Subject to the provisions of Section 601 hereof, the Trustee shall be entitled to rely on the
delivery to it of a written notice by a Person representing himself to be a holder of Senior
Indebtedness (or a trustee, fiduciary or agent therefor to establish that such notice has been
given by a holder of Senior Indebtedness or a trustee, fiduciary or agent therefor). In the event
that the Trustee determines in good faith that further evidence is required with respect to the
right of any Person as a holder of Senior Indebtedness to participate in any payment or
distribution pursuant to this Article, the Trustee may request such Person to furnish evidence to
the reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness held by such
Person, the extent to which such Person is entitled to participate in such payment or distribution
and any other facts pertinent to the rights of such Person under this Article, and if such evidence
is not furnished, the Trustee may defer any payment to such Person pending judicial determination
as to the right of such Person to receive such payment.
Notwithstanding anything else contained herein, no notice, request or other communication to
or with the Trustee shall be deemed given unless received by a Responsible Officer at the Corporate
Trust Office.
Section 1110. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the Company referred to in this Article, the
Trustee, subject to the provisions of Section 601 hereof, and the Holders of the Securities shall
be entitled to rely upon any order or decree entered by any court of competent jurisdiction in
which such Proceeding is pending, or a certificate of the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Trustee or to the Holders of Securities, for the
purpose of ascertaining the Persons entitled to participate in such payment or distribution, the
holders of the Senior Indebtedness and other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article, provided that the foregoing shall apply only if such court has been
apprised of the provisions of this Article.
Section 1111. Trustee Not Fiduciary for Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness and shall not be liable to any such holders if it shall in good faith mistakenly pay
over or distribute to Holders of Securities or to the Company or to any other Person cash, property
or securities to which any holders of Senior Indebtedness shall be entitled by virtue of this
Article or otherwise.
Section 1112. Rights of Trustee as Holder of Senior Indebtedness; Preservation of Trustees Rights.
The Trustee in its individual capacity shall be entitled to all the rights set forth in this
Article with respect to any Senior Indebtedness which may at any time be held by it, to the same
59
extent as any other holder of Senior Indebtedness, and nothing in this Indenture shall deprive
the Trustee of any of its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to, the Trustee under or
pursuant to Section 607 hereof.
Section 1113. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have been appointed by the
Company and be then acting hereunder, the term Trustee as used in this Article shall in such case
(unless the context otherwise requires) be construed as extending to and including such Paying
Agent within its meaning as fully for all intents and purposes as if such Paying Agent were named
in this Article in addition to or in place of the Trustee; provided, however, that Section 1111
hereof shall not apply to the Company or any Affiliate of the Company if it or such Affiliate acts
as Paying Agent.
ARTICLE TWELVE
Redemption of Securities
Section 1201. 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 Securities of any series) in accordance with this Article.
Section 1202. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced by a Board Resolution.
In case of any redemption at the election of the Company of less than all the Securities of any
series, 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 and of the principal amount of Securities of such series 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 1203. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be redeemed, 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 and which may provide for the selection for
redemption of portions (equal to the minimum authorized denomination for Securities of that series
or any integral multiple thereof) of the principal amount of Securities of such series of a
denomination larger than the minimum authorized denomination for Securities of that series.
60
The Trustee shall promptly notify the Company in writing of the Securities selected for
redemption and, in the case of any Securities selected for partial redemption, the principal amount
thereof to be redeemed.
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 1204. 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 are to be redeemed, the
identification (and, in the case of partial redemption, the principal amounts) of the
particular Securities 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 such Securities are to be surrendered for payment of the
Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of the Company shall be
given by the Company or, at the Companys request, by the Trustee in the name and at the expense of
the Company.
Section 1205. Deposit of Redemption Price.
On or prior to 10:00 a.m., New York City time, on 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)
accrued interest on, all the Securities which are to be redeemed on that date.
Section 1206. Securities Payable on Redemption Date.
61
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 with accrued interest to the Redemption Date; provided, however, that
installments of interest whose Stated Maturity is on or prior to the Redemption Date shall 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 Regular 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 premium, if any) shall, until paid, bear interest from the
Redemption Date at the rate prescribed therefor in the Security.
Section 1207. 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.
ARTICLE THIRTEEN
Sinking Funds
Section 1301. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for the retirement of
Securities of a series except as otherwise specified as contemplated by Section 301 for Securities
of such series.
The minimum amount of any sinking fund payment provided for by the terms of Securities of any
series 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 Securities of any series is herein referred to as
an optional sinking fund payment. If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided in Section 1302.
Each sinking fund payment shall be applied to the redemption of Securities of any series as
provided for by the terms of Securities of such series.
Section 1302. 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
62
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 the Securities of such series required to be made pursuant to the terms of such
Securities as provided for by the terms of such series; provided that such Securities have not been
previously so credited. Such Securities shall be received and credited for such purpose by the
Trustee at the Redemption Price specified in such Securities for redemption through operation of
the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.
Section 1303. Redemption of Securities for Sinking Fund.
Not less than 90 days prior to each sinking fund payment date for any series of Securities,
the Company will deliver to the Trustee an Officers Certificate specifying the amount of the next
ensuing sinking fund payment for that series pursuant to the terms of that series, 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 of that series pursuant to Section 1302
and will also deliver to the Trustee any Securities to be so delivered. Not less than 60 days
before 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 1203 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 1204. Such notice having been duly given, the redemption of such Securities
shall be made upon the terms and in the manner stated in Sections 1206 and 1207.
ARTICLE FOURTEEN
Defeasance and Covenant Defeasance
Section 1401. Applicability of Article; Companys Option to Effect Defeasance or Covenant
Defeasance.
If pursuant to Section 301 provision is made for either or both of (a) defeasance of the
Securities of a series under Section 1402 or (b) covenant defeasance of the Securities of a series
under Section 1403, then the provisions of such Section or Sections, as the case may be, together
with the other provisions of this Article Fourteen, shall be applicable to the Securities of such
series, and the Company may at its option by Board Resolution, at any time, with respect to the
Securities of such series, elect to have either Section 1402 (if applicable) or Section 1403 (if
applicable) be applied to the Outstanding Securities of such series upon compliance with the
conditions set forth below in this Article Fourteen.
Section 1402. Defeasance and Discharge.
Upon the Companys exercise of the above option applicable to this Section, the Company shall
be deemed to have been discharged from its obligations with respect to the Outstanding Securities
of such series, and the provisions of Article Eleven shall cease to be effective, on and after the
date the conditions precedent set forth below are satisfied (hereinafter, defeasance). For this
purpose, such defeasance means that the Company shall be deemed to
63
have paid and discharged the entire indebtedness represented by the Outstanding Securities of
such series 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), except for the following which shall
survive until otherwise terminated or discharged hereunder: (A) the rights of Holders of
Outstanding Securities of such series to receive, solely from the trust fund described in
Section 1404 as more fully set forth in such Section, payments of the principal of (and premium, if
any) and interest on such Securities when such payments are due, (B) the Companys obligations with
respect to such Securities under Sections 304, 305, 306, 1002 and 1003 and such obligations as
shall be ancillary thereto, (C) the rights, powers, trusts, duties, immunities and other provisions
in respect of the Trustee hereunder and (D) this Article Fourteen. Subject to compliance with this
Article Fourteen, the Company may exercise its option under this Section 1402 notwithstanding the
prior exercise of its option under Section 1403 with respect to the Securities of such series.
Following a defeasance, payment of the Securities of such series may not be accelerated because of
an Event of Default.
Section 1403. Covenant Defeasance.
Upon the Companys exercise of the above option applicable to this Section, the Company shall
be released from its obligations under (i) the occurrence of an event specified in
Section 501(4) shall not be deemed an Event of Default,(ii) the provisions of Article Eleven shall
cease to be effective and (iii) any other section, clause or provision applicable to such
Securities that are determined pursuant to Section 301 to be subject to this provision with respect
to the Outstanding Securities of such series on and after the date the conditions precedent set
forth below are satisfied (hereinafter, covenant defeasance). For this purpose, such covenant
defeasance means that, with respect to the Outstanding Securities of such series, 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 Section, Clause or Article whether directly or indirectly by reason of any
reference elsewhere herein to any such Section, Clause or Article or by reason of any reference in
any such Section, Clause or Article to any other provision herein or in any other document, but the
remainder of this Indenture and such Securities shall be unaffected thereby. Following a covenant
defeasance, payment of the Securities of such series may not be accelerated because of or by
reference to the Sections specified above in this Section 1403.
Section 1404. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions precedent to application of either Section 1402 or
Section 1403 to the Outstanding Securities of such series:
(1) the Company shall irrevocably have deposited or caused to be deposited with the
Trustee (or another trustee satisfying the requirements of Section 609 who shall agree to
comply with the provisions of this Article Fourteen 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 benefit 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
64
an amount, or (C) a combination thereof, sufficient, without reinvestment, 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 other qualifying trustee) to pay and discharge, (i) the
principal of (and premium, if any) and interest on the Outstanding Securities of such series
to Maturity or redemption, as the case may be, and (ii) any mandatory sinking fund payments
or analogous payments applicable to the Outstanding Securities of such series on the due
dates thereof. Before such a deposit the Company may make arrangements satisfactory to the
Trustee for the redemption of Securities at a future date or dates in accordance with
Article Eleven, which shall be given effect in applying the foregoing. For this purpose,
U.S. Government Obligations means securities that are (x) direct obligations of the United
States of America for the payment of which its full faith and credit is pledged or (y)
obligations 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, are not callable or redeemable at the option of the issuer thereof, and shall
also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act of 1933, as amended) as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any such U.S. Government
Obligation held by such custodian for the account of the holder of such depository receipt,
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 depository receipt from any amount
received by the custodian in respect of the U.S. Government Obligation or the specific
payment of principal of or interest on the U.S. Government Obligation evidenced by such
depository receipt.
(2) No Event of Default or event which with notice or lapse of time or both would
become an Event of Default with respect to the Securities of such series shall have occurred
and be continuing (A) on the date of such deposit or (B) insofar as subsections 501(5) and
(6) are concerned, at any time during the period ending on the 121st day after the date of
such deposit or, if longer, ending on the day following the expiration of the longest
preference period applicable to the Company in respect of such deposit (it being understood
that the condition in this clause (B) is a condition subsequent and shall not be deemed
satisfied until the expiration of such period).
(3) Such defeasance or covenant defeasance shall not (A) cause the Trustee for the
Securities of such series to have a conflicting interest as defined in Section 608 or for
purposes of the Trust Indenture Act with respect to any securities of the Company or
(B) result in the trust arising from such deposit to constitute, unless it is qualified as,
a regulated investment company under the Investment Company Act of 1940, as amended.
(4) Such defeasance or covenant defeasance shall not result in a breach or violation
of, or constitute a default under, this Indenture or any other agreement or instrument to
which the Company is a party or by which it is bound.
(5) In the case of an election under Section 1402, the Company shall have delivered to
the Trustee an Opinion of Counsel stating that (x) the Company has received
65
from, or there has been published by, the Internal Revenue Service a ruling, or (y)
since the date of this Indenture there has been a change in the applicable Federal income
tax law, in either case to the effect that, and based thereon such opinion shall confirm
that, the Holders of the Outstanding Securities of such series will not recognize income,
gain or loss for Federal income tax purposes as a result of such defeasance and will be
subject to Federal income tax on the same amounts, in the same manner and at the same time
as would have been the case if such defeasance had not occurred.
(6) In the case of an election under Section 1403, the Company shall have delivered to
the Trustee an Opinion of Counsel to the effect that the Holders of the Outstanding
Securities of such series will not recognize income, gain or loss for Federal income tax
purposes as a result of such covenant defeasance and will be subject to Federal income tax
on the same amounts, in the same manner and at the same times as would have been the case if
such covenant defeasance had not occurred.
(7) Such defeasance or covenant defeasance shall be effected in compliance with any
additional terms, conditions or limitations which may be imposed on the Company in
connection therewith pursuant to Section 301.
(8) No event or condition shall exist that, pursuant to the provisions of
Article Eleven, would prevent the Company from making payments of the principal of (and any
premium) or interest on the Securities of such series on the date of such deposit or 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).
(9) The Company shall have delivered to the Trustee an Opinion of Counsel substantially
to the effect that (i) the trust funds deposited pursuant to this Section will not be
subject to any rights of holders of Senior Indebtedness, including those arising under
Article Eleven, and (ii) after the 90th day following the deposit, the trust funds will not
be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar
laws affecting creditors rights generally, except that if a court were to rule under any
such law in any case or proceeding that the trust funds remained property of the Company, no
opinion is given as to the effect of such laws on the trust funds except the following:
(A) assuming such trust funds remained in the possession of the trustee with whom such funds
were deposited prior to such court ruling to the extent not paid to Holders of such
Securities, such trustee would hold, for the benefit of such Holders, a valid and perfected
security interest in such trust funds that is not avoidable in bankruptcy or otherwise,
(B) such Holders would be entitled to receive adequate protection of their interests in such
trust funds if such trust funds were used and (C) no property, rights in property or other
interests granted to such trustee for the Trustee or such Holders in exchange for or with
respect to any such funds would be subject to any prior rights of holders of Senior
Indebtedness, including those arising under Article Eleven.
(10) The Company shall have delivered to the Trustee an Officers Certificate and an
Opinion of Counsel, each stating that all conditions precedent provided for relating to
either the defeasance under Section 1402 or the covenant defeasance under Section 1403 (as
the case may be) have been complied with.
66
Section 1405. Deposited Money and U.S. Government Obligations to Be Held in Trust; Other
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 collectively, for purposes of this Section 1405, the Trustee) pursuant to Section 1404
in respect of the Outstanding Securities of such series 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 Paying Agent (but not 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 premium, if any) and interest, but such money need
not be segregated from other funds except to the extent required by law. Money and U.S. Government
Obligations (including the proceeds thereof) so held in trust shall not be subject to the
provisions of Article Eleven, provided that the applicable conditions of Section 1404 have been
satisfied.
The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against the money or U.S. Government Obligations deposited pursuant to Section 1404
or the principal and interest received in respect thereof.
Anything herein 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 1404 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 an equivalent
defeasance or covenant defeasance.
Section 1406. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in accordance with
Section 1402 or 1403 by reason of any order or judgment or any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the Companys obligations
under the Securities of such series shall be revived and reinstated as though no deposit had
occurred pursuant to this Article Fourteen until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 1402 or 1403; provided, however, that
if the Company makes any payment of principal of (and premium, if any) any such Security following
the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders
of such Securities to receive such payment from the money held by the Trustee or the Paying Agent.
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.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, all as
of the day and year first above written.
67
|
|
|
|
|
|
|
|
|
THE TRAVELERS COMPANIES, INC.
|
|
|
|
|
|
|
|
|
|
|
|
By
|
|
Name:
|
|
|
|
|
|
|
Title:
|
|
|
|
|
|
|
|
|
|
|
|
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as
Trustee
|
|
|
|
|
|
|
|
|
|
|
|
By
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name:
|
|
|
|
|
|
|
Title:
|
|
|
68
|
|
|
|
|
|
|
STATE OF
|
|
|
)
|
|
|
|
MINNESOTA
|
|
|
|
|
|
|
|
|
|
)
|
|
|
ss.:
|
COUNTY OF
|
|
|
)
|
|
|
|
RAMSEY
On the
th day of
, 200[
], before me personally came
[
], to me known, who, being by me duly sworn, did depose and say that he is a
[
] of The Travelers Companies, Inc., one of the corporations described in and
which executed the foregoing instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board
of Directors of said corporation, and that he signed his name thereto by like authority.
[NOTARIAL SEAL]
Notary Public
69
|
|
|
|
|
|
|
STATE OF NEW
|
|
|
)
|
|
|
|
YORK
|
|
|
)
|
|
|
ss.:
|
|
COUNTY OF NEW
|
|
|
)
|
|
|
|
YORK
On the
th day of
, 200[
], before me personally came
[
], to me known, who, being by me duly sworn, did depose and say that she is a
[ ] of The Bank of New York Mellon Trust Company, N.A., one of the corporations
described in and which executed the foregoing instrument; that she knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation, and that she signed her name
thereto by like authority.
[NOTARIAL SEAL]
Notary Public
70
Exhibit 4.28
SECOND AMENDED AND RESTATED DECLARATION OF TRUST
TRAVELERS CAPITAL TRUST [II] [III] [IV] [V]
DATED AS OF
, 200_
CROSS-REFERENCE TABLE*
|
|
|
Section of Trust Indenture
|
|
Section of
|
Act of 1939, as amended
|
|
Declaration
|
310(a)
|
|
5.3
|
310(b)
|
|
5.3(c);5.3(d)
|
311(a)
|
|
2.2(b)
|
311(b)
|
|
2.2(b)
|
312(a)
|
|
2.2(a)
|
312(b)
|
|
2.2(b)
|
313
|
|
2.3
|
314(a)
|
|
2.4; 3.6(i)
|
314(c)
|
|
2.5
|
315(a)
|
|
3.9
|
315(b)
|
|
2.7(a)
|
315(c)
|
|
3.9(a)
|
315(d)
|
|
3.9(b)
|
316(a)
|
|
2.6
|
316(b)
|
|
12.1(h)
|
317(a)
|
|
3.8(e)
|
317(b)
|
|
3.8(h);7.3
|
318
|
|
2.1
|
|
|
|
*
|
|
This Cross-Reference Table does not constitute part of this Declaration and shall not affect the
interpretation of any of its terms or provisions.
|
Table of Contents
|
|
|
|
|
|
|
Page
|
ARTICLE I INTERPRETATION AND DEFINITIONS
|
|
|
1
|
|
SECTION 1.1 Definitions
|
|
|
1
|
|
|
|
|
|
|
ARTICLE II TRUST INDENTURE ACT
|
|
|
7
|
|
SECTION 2.1 Trust Indenture Act: Application
|
|
|
7
|
|
SECTION 2.2 Lists of Holders of Securities
|
|
|
7
|
|
SECTION 2.3 Reports by the Institutional Trustee
|
|
|
8
|
|
SECTION 2.4 Periodic Reports to Institutional Trustee
|
|
|
8
|
|
SECTION 2.5 Evidence of Compliance With Conditions Precedent
|
|
|
8
|
|
SECTION 2.6 Events of Default: Waiver
|
|
|
8
|
|
SECTION 2.7 Events of Default: Notice
|
|
|
10
|
|
|
|
|
|
|
ARTICLE III ORGANIZATION
|
|
|
10
|
|
SECTION 3.1 Name
|
|
|
10
|
|
SECTION 3.2 Office
|
|
|
10
|
|
SECTION 3.3 Declaration
|
|
|
11
|
|
SECTION 3.4 Authority
|
|
|
11
|
|
SECTION 3.5 Title to Property of the Trust
|
|
|
11
|
|
SECTION 3.6 Powers and Duties of the Regular Trustees
|
|
|
11
|
|
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees
|
|
|
14
|
|
SECTION 3.8 Powers and Duties of the Institutional Trustee
|
|
|
15
|
|
SECTION 3.9 Certain Duties and Responsibilities of the Institutional Trustee
|
|
|
17
|
|
SECTION 3.10 Certain Rights of the Institutional Trustee
|
|
|
18
|
|
SECTION 3.11 Delaware Trustee
|
|
|
20
|
|
SECTION 3.12 Execution of Documents
|
|
|
20
|
|
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities
|
|
|
21
|
|
SECTION 3.14 Duration of Trust
|
|
|
21
|
|
SECTION 3.15 Mergers
|
|
|
21
|
|
|
|
|
|
|
ARTICLE IV SPONSOR
|
|
|
23
|
|
SECTION 4.1 Sponsors Purchase of Common Securities
|
|
|
23
|
|
SECTION 4.2 Responsibilities of the Sponsor
|
|
|
23
|
|
SECTION 4.3 Guarantee of Payment of Trust Obligations
|
|
|
24
|
|
|
|
|
|
|
ARTICLE V TRUSTEES
|
|
|
24
|
|
SECTION 5.1 Number of Trustees
|
|
|
24
|
|
SECTION 5.2 Delaware Trustee
|
|
|
25
|
|
SECTION 5.3 Institutional Trustee: Eligibility
|
|
|
25
|
|
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee Generally.
|
|
|
26
|
|
SECTION 5.5 Initial Trustees: Additional Powers of Regular Trustees
|
|
|
26
|
|
SECTION 5.6 Appointment, Removal and Resignation of Trustees
|
|
|
26
|
|
SECTION 5.7 Vacancies Among Trustees
|
|
|
28
|
|
SECTION 5.8 Effect of Vacancies
|
|
|
28
|
|
i
|
|
|
|
|
|
|
Page
|
SECTION 5.9 Meetings
|
|
|
28
|
|
SECTION 5.10 Delegation of Power
|
|
|
29
|
|
SECTION 5.11 Merger, Conversion, Consolidation or Succession to Business
|
|
|
29
|
|
SECTION 5.12 Status of Trustees
|
|
|
29
|
|
|
|
|
|
|
ARTICLE VI DISTRIBUTIONS
|
|
|
29
|
|
SECTION 6.1 Distributions
|
|
|
29
|
|
|
|
|
|
|
ARTICLE VII ISSUANCE OF SECURITIES
|
|
|
30
|
|
SECTION 7.1 General Provisions Regarding Securities
|
|
|
30
|
|
SECTION 7.2 Registrar and Paying Agent
|
|
|
31
|
|
SECTION 7.3 Paying Agent to Hold Money in Trust
|
|
|
31
|
|
|
|
|
|
|
ARTICLE VIII DISSOLUTION OF TRUST
|
|
|
31
|
|
SECTION 8.1 Dissolution of Trust.
|
|
|
31
|
|
|
|
|
|
|
ARTICLE IX TRANSFER OF INTERESTS
|
|
|
32
|
|
SECTION 9.1 Transfer of Securities
|
|
|
32
|
|
SECTION 9.2 Transfer of Certificates
|
|
|
33
|
|
SECTION 9.3 Deemed Security Holders
|
|
|
33
|
|
SECTION 9.4 Book Entry Interests
|
|
|
33
|
|
SECTION 9.5 Notices to Clearing Agency
|
|
|
34
|
|
SECTION 9.6 Appointment of Successor Clearing Agency
|
|
|
34
|
|
SECTION 9.7 Definitive Preferred Security Certificates
|
|
|
34
|
|
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates
|
|
|
35
|
|
|
|
|
|
|
ARTICLE X LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
|
|
|
36
|
|
SECTION 10.1 Liability
|
|
|
36
|
|
SECTION 10.2 Exculpation
|
|
|
36
|
|
SECTION 10.3 Fiduciary Duty
|
|
|
37
|
|
SECTION 10.4 Indemnification
|
|
|
37
|
|
SECTION 10.5 Outside Businesses
|
|
|
40
|
|
|
|
|
|
|
ARTICLE XI ACCOUNTING
|
|
|
41
|
|
SECTION 11.1 Fiscal Year
|
|
|
41
|
|
SECTION 11.2 Certain Accounting Matters
|
|
|
41
|
|
SECTION 11.3 Banking
|
|
|
41
|
|
SECTION 11.4 Withholding
|
|
|
42
|
|
|
|
|
|
|
ARTICLE XII AMENDMENTS AND MEETINGS
|
|
|
42
|
|
SECTION 12.1 Amendments
|
|
|
42
|
|
SECTION 12.2 Meetings of the Holders of Securities: Action by Written Consent
|
|
|
44
|
|
|
|
|
|
|
ARTICLE XIII REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND DELAWARE TRUSTEE
|
|
|
45
|
|
SECTION 13.1 Representations and Warranties of Institutional Trustee
|
|
|
45
|
|
SECTION 13.2 Representations and Warranties of Delaware Trustee
|
|
|
46
|
|
|
|
|
|
|
|
|
Page
|
|
|
|
|
|
ARTICLE XIV MISCELLANEOUS
|
|
|
47
|
|
SECTION 14.1 Notices
|
|
|
47
|
|
SECTION 14.2 Governing Law
|
|
|
48
|
|
SECTION 14.3 Intention of the Parties
|
|
|
48
|
|
SECTION 14.4 Headings
|
|
|
48
|
|
SECTION 14.5 Successors and Assigns
|
|
|
48
|
|
SECTION 14.6 Partial Enforceability
|
|
|
48
|
|
SECTION 14.7 Counterparts
|
|
|
48
|
|
SECOND AMENDED AND RESTATED DECLARATION OF TRUST (Declaration) dated and effective as of
[___, 200___], by the Trustees (as defined herein), the Sponsor (as defined herein) and by the
holders, from time to time, of undivided beneficial interests in the assets of the Trust to be
issued pursuant to this Declaration;
WHEREAS, certain of the Trustees and the Sponsor established Travelers Capital Trust [II]
[III] [IV] [V] (the Trust), a trust under the Statutory Trust Act (as defined herein), pursuant
to a Declaration of Trust dated as of [
] (the Original Declaration), and a Certificate
of Trust filed with the Secretary of State of the State of Delaware on [
], for the sole
purpose of issuing and selling certain securities representing undivided beneficial interests in
the assets of the Trust and investing the proceeds thereof in certain Debentures (as defined
herein) of the Debenture Issuer (as defined herein);
WHEREAS, all of the Trustees and the Sponsor, by this Declaration, amend and restate each and
every term and provision of the Original Declaration.
NOW, THEREFORE, it being the intention of the parties hereto to continue the Trust as a
statutory trust under the Statutory Trust Act and that this Declaration constitute the governing
instrument of such statutory trust, the Trustees declare that all assets contributed to the Trust
will be held in trust for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued hereunder, subject to
the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1
Definitions
.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in the preamble above have the
respective meanings assigned to them in this Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning throughout;
(c) all references to the Declaration or this Declaration are to this Declaration as
modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles, Sections, Annexes and Exhibits are to
Articles and Sections of, and Annexes and Exhibits to, this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when used in this
Declaration unless otherwise defined in this Declaration or unless the context otherwise requires;
and
(f) a reference to the singular includes the plural and vice versa.
1
2
Affiliate has the same meaning as given to that term in Rule 405 under the Securities Act,
or any successor provision thereto and as may be amended from time to time.
Authorized Officer of a Person means any vice president, senior vice president, president,
chief executive officer, treasurer, controller or other individual executing a document or
otherwise acting by virtue of authority vested in such individual by such Person in an instrument
expressly designating such individual as an Authorized Officer and referencing this Declaration.
Beneficiary has the meaning specified in Section 4.3(a).
Book Entry Interest means a beneficial interest in a Global Certificate, ownership and
transfers of which shall be maintained and made through book entries by a Clearing Agency as
described in Section 9.4.
Business Day means any day other than a day on which banking institutions in the City of New
York, New York are authorized or required by any applicable law or executive order to close.
Certificate means a Common Security Certificate or a Preferred Security Certificate.
Clearing Agency means an organization registered as a Clearing Agency pursuant to Section
17A of the Exchange Act that is acting as depositary for the Preferred Securities and in whose name
or in the name of a nominee of that organization shall be registered a Global Certificate and which
shall undertake to effect book entry transfers and pledges of the Preferred Securities.
Clearing Agency Participant means a broker, dealer, bank, other financial institution or
other Person for whom from time to time the Clearing Agency effects book entry transfers and
pledges of securities deposited with the Clearing Agency.
Closing Date means the Closing Date as defined in the Underwriting Agreement, which date is
also the date of execution and delivery of this Declaration.
Code means the Internal Revenue Code of 1986, as amended from time to time, or any successor
legislation.
Commission means the Securities and Exchange Commission.
Common Security has the meaning specified in Section 7.1.
Common Security Certificate means a definitive certificate in fully registered form
representing a Common Security substantially in the form of Exhibit A-2.
Company Indemnified Person means (a) any Regular Trustee; (b) any Affiliate of any Regular
Trustee; (c) any officers, directors, shareholders, members, partners, employees,
3
representatives or agents of any Regular Trustee; or (d) any officer, employee or agent of the
Trust or its Affiliates.
Corporate Trust Office means the office of the Institutional Trustee at which the corporate
trust business of the Institutional Trustee shall, at any particular time, be principally
administered, which office at the date of execution of this Declaration is located at The Bank of
New York Mellon Global, Corporate Trust, Corporate Finance, 222 Berkeley Street, Boston, MA 02116.
Covered Person means: (a) any officer, director, shareholder, partner, member,
representative, employee or agent of (i) the Trust or (ii) the Trusts Affiliates; and (b) any
Holder of Securities.
Debenture Issuer means the Sponsor, in its capacity as issuer of the Debentures under the
Indenture.
Debenture Trustee means The Bank of New York Mellon Trust Company, N.A., as trustee under
the Indenture until a successor is appointed thereunder, and thereafter means such successor
trustee.
Debentures means the [ ]% [Senior] [Subordinated] [Junior Subordinated] Debentures due [ ],
to be issued by the Debenture Issuer pursuant to the Indenture to be held by the Institutional
Trustee.
Definitive Preferred Security Certificates has the meaning set forth in Section 9.4.
Delaware Trustee has the meaning set forth in Section 5.2.
Distribution has the meaning set forth in Section 6.1.
DTC means The Depository Trust Company, the initial Clearing Agency.
Event of Default in respect of the Securities means an Event of Default (as defined in the
Indenture) has occurred and is continuing in respect of the Debentures.
Exchange Act means the Securities Exchange Act of 1934, as amended from time to time, or any
successor legislation.
Fiduciary Indemnified Person has the meaning set forth in Section 10.4(b).
Fiscal Year has the meaning set forth in Section 11.1.
Global Certificate has the meaning set forth in Section 9.4.
Holder means a Person in whose name a Certificate representing a Security is registered,
such Person being a beneficial owner within the meaning of the Statutory Trust Act.
4
Indemnified Person means a Company Indemnified Person or a Fiduciary Indemnified Person.
Indenture means the [Senior] [Subordinated] [Junior Subordinated] Debt Indenture dated as of
[ , 200 ], between the Debenture Issuer and the Debenture Trustee, as amended or
supplemented from time to time, pursuant to which the Debentures are to be issued.
Institutional Trustee means the Trustee meeting the eligibility requirements set forth in
Section 5.3.
Institutional Trustee Account has the meaning set forth in Section 3.8(c).
Investment Company means an investment company as defined in the Investment Company Act.
Investment Company Act means the Investment Company Act of 1940, as amended, or any
successor legislation.
Investment Company Event has the meaning set forth in Annex I hereto.
Legal Action has the meaning set forth in Section 3.6(g).
List of Holders has the meaning set forth in Section 2.2(a).
Majority in liquidation amount of the Securities means, except to the extent otherwise
provided in the terms of the Preferred Securities or by the Trust Indenture Act, Holder(s) of
outstanding Securities voting together as a single class or, as the context may require, Holders of
outstanding Preferred Securities or Holders of outstanding Common Securities voting separately as a
class, who are the record owners of an aggregate liquidation amount representing more than 50% of
the aggregate liquidation amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date upon which the voting
percentages are determined) of all outstanding Securities of the relevant class.
Obligations has the meaning set forth in Section 4.3(a).
Officers Certificate means, with respect to any Person, a certificate signed by two
Authorized Officers of such Person. Any Officers Certificate delivered with respect to compliance
with a condition or covenant provided for in this Declaration shall include:
(A) a statement that each officer signing the Officers Certificate has read the
covenant or condition and the definitions relating thereto;
(B) a brief statement of the nature and scope of the examination or investigation
undertaken by each officer in rendering the Officers Certificate;
(C) a statement that each such officer has made such examination or investigation as,
in such officers opinion, is necessary to enable such officer to express
5
an informed opinion as to whether or not such covenant or condition has been complied
with; and
(D) a statement as to whether, in the opinion of each such officer, such condition or
covenant has been complied with.
Paying Agent has the meaning specified in Section 3.8(h).
Payment Amount has the meaning specified in Section 6.1.
Person means a legal person, including any individual, corporation, estate, partnership,
joint venture, association, joint stock company, limited liability company, trust, unincorporated
association, or government or any agency or political subdivision thereof, or any other entity of
whatever nature.
Preferred Securities Guarantee means the guarantee agreement dated as of [
, 200_],
between the Sponsor and the Trustee named therein relating to the Preferred Securities.
Preferred Security has the meaning specified in Section 7.1.
Preferred Security Beneficial Owner means, with respect to a Book Entry Interest, a Person
who is the beneficial owner of such Book Entry Interest, as reflected on the books of the Clearing
Agency, or on the books of a Person maintaining an account with such Clearing Agency (directly as a
Clearing Agency Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
Preferred Security Certificate means a certificate representing a Preferred Security
substantially in the form of Exhibit A-1.
Quorum means a majority of the Regular Trustees or, if there are only two Regular Trustees,
both of them.
Registrar has the meaning set forth in Section 7.2.
Regular Trustee has the meaning specified in Section 5.1.
Related Party means, with respect to the Sponsor, any direct or indirect wholly owned
subsidiary of the Sponsor or any other Person that owns, directly or indirectly, 100% of the
outstanding voting securities of the Sponsor.
Responsible Officer means, with respect to the Institutional Trustee, any officer of the
Institutional Trustee with direct responsibility for the administration of this Second Amended and
Restated Declaration of Trust and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officers knowledge of and
familiarity with the particular subject.
Rule 3a-5 means Rule 3a-5 under the Investment Company Act.
6
Rule 3a-7 means Rule 3a-7 under the Investment Company Act.
Securities means the Common Securities and the Preferred Securities.
Securities Act means the Securities Act of 1933, as amended from time to time, or any
successor legislation.
Special Event has the meaning set forth in Annex I hereto.
Sponsor means The Travelers Companies, Inc., or any successor entity in a merger,
consolidation or amalgamation, in its capacity as sponsor of the Trust.
Statutory Trust Act means Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code Sections
3801 et seq., as it may be amended from time to time, or any successor legislation.
Successor Delaware Trustee has the meaning set forth in Section 5.6(b)(i).
Successor Entity has the meaning set forth in Section 3.15(b).
Successor Institutional Trustee has the meaning set forth in Section 5.6(b)(ii).
Successor Securities has the meaning set forth in Section 3.15(b).
Super Majority has the meaning set forth in Section 2.6(a)(ii).
Tax Event has the meaning set forth in Annex I hereto.
[10% in liquidation amount of the Securities means, except as provided in the terms of the
Preferred Securities or by the Trust Indenture Act, Holder(s) of outstanding Securities voting
together as a single class or, as the context may require, Holders of outstanding Preferred
Securities or Holders of outstanding Common Securities voting separately as a class, who are the
record owners of an aggregate liquidation amount representing 10% or more of the aggregate
liquidation amount (including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.]
Travelers means The Travelers Companies, Inc., a Minnesota corporation.
Treasury Regulations means the income tax regulations, including temporary and proposed
regulations, promulgated under the Code by the United States Treasury, as such regulations may be
amended from time to time (including corresponding provisions of succeeding regulations).
Trustee or Trustees means each Person who has signed this Declaration as a trustee, so
long as such Person shall continue in office in accordance with the terms hereof, and all other
Persons who may from time to time be duly appointed, qualified and serving as Trustees
7
in accordance with the provisions hereof, and references herein to a Trustee or the Trustees
shall refer to such Person or Persons solely in their capacity as trustees hereunder.
Trust Indenture Act means the Trust Indenture Act of 1939, as amended from time to time, or
any successor legislation.
Underwriting Agreement means the Underwriting Agreement for the offering and sale of
Preferred Securities substantially in the form appearing as exhibit 1.5 to the registration
statement on Form S-3 of Travelers and the Trust relating to the Preferred Securities and the
related Preferred Securities Guarantee.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1
Trust Indenture Act: Application
.
(a) This Declaration is subject to the provisions of the Trust Indenture Act that are required
to be part of this Declaration and shall, to the extent applicable, be governed by such provisions.
(b) The Institutional Trustee shall be the only Trustee that is a Trustee for the purposes of
the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration limits, qualifies or conflicts
with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control.
(d) The application of the Trust Indenture Act to this Declaration shall not affect the nature
of the Securities as equity securities representing undivided beneficial interests in the assets of
the Trust.
SECTION 2.2
Lists of Holders of Securities
.
(a) Each of the Sponsor and the Regular Trustees on behalf of the Trust shall provide the
Institutional Trustee (i) within 14 days after each record date for payment of Distributions, a
list, in such form as the Institutional Trustee may reasonably require, of the names and addresses
of the Holders of the Securities (List of Holders) as of such record date, and (ii) at any other
time, within 30 days of receipt by the Trust of a written request therefor, a List of Holders as of
a date no more than 14 days before such List of Holders is given to the Institutional Trustee;
provided, that neither the Sponsor nor the Regular Trustees on behalf of the Trust shall be
obligated to provide such List of Holders at any time the List of Holders does not differ from the
most recent List of Holders given to the Institutional Trustee by the Sponsor and the Regular
Trustees on behalf of the Trust. The Institutional Trustee shall preserve, in as current a form as
is reasonably practicable, all information contained in Lists of Holders given to it or which it
receives in the capacity as Paying Agent (if acting in such capacity) provided that the
Institutional Trustee may destroy any List of Holders previously given to it on receipt of a new
List of Holders. Unless supplemented, amended or restated pursuant to this Section 2.2(a), the
8
Institutional Trustee shall be entitled to rely exclusively on the last List of Holders
provided to it by the Sponsor or any Regular Trustee.
(b) The Institutional Trustee shall comply with its obligations under Sections 311(a), 311(b)
and 312(b) of the Trust Indenture Act.
SECTION 2.3
Reports by the Institutional Trustee
.
Within 60 days after May 15 of each year, the Institutional Trustee shall provide to the
Holders of the Preferred Securities such reports as are required by Section 313 of the Trust
Indenture Act, if any, in the form and in the manner provided by such Section 313. The
Institutional Trustee shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
SECTION 2.4
Periodic Reports to Institutional Trustee
.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall provide to the
Institutional Trustee such documents, reports and information as required by Sections 314 (if any)
and the compliance certificate required by Section 314 of the Trust Indenture Act in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.
SECTION 2.5
Evidence of Compliance With Conditions Precedent
.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall provide to the
Institutional Trustee such evidence of compliance with any conditions precedent, if any, provided
for in this Declaration that relate to any of the matters set forth in Sections 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers Certificate.
SECTION 2.6
Events of Default: Waiver
.
(a) The Holders of a Majority in liquidation amount of Preferred Securities may, by vote, on
behalf of the Holders of all of the Preferred Securities, waive any past Event of Default in
respect of the Preferred Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default under the Declaration
shall also not be waivable; or
(ii) is waivable only with the consent of Holders of more than a majority in principal
amount of the Debentures (a Super Majority) affected thereby, only the Holders of at least
the proportion in aggregate liquidation amount of the Preferred Securities that the relevant
Super Majority represents of the aggregate principal amount of the Debentures outstanding
may waive such Event of Default in respect of the Preferred Securities under the
Declaration.
The foregoing provisions of this Section 2.6(a) shall be in lieu of Section 316(a)(1)(B) of
the Trust Indenture Act and such Section 316(a)(l)(B) of the Trust Indenture Act
9
is hereby expressly excluded from this Declaration and the Securities, as permitted by the
Trust Indenture Act. Upon such waiver, any such default shall cease to exist, and any Event of
Default with respect to the Preferred Securities arising therefrom shall be deemed to have been
cured, for every purpose of this Declaration, but no such waiver shall extend to any subsequent or
other default or an Event of Default with respect to the Preferred Securities or impair any right
consequent thereon. Any waiver by the Holders of the Preferred Securities of an Event of Default
with respect to the Preferred Securities shall also be deemed to constitute a waiver by the Holders
of the Common Securities of any such Event of Default with respect to the Common Securities for all
purposes of this Declaration without any further act, vote, or consent of the Holders of the Common
Securities.
(b) The Holders of a Majority in liquidation amount of the Common Securities may, by vote, on
behalf of the Holders of all of the Common Securities, waive any past Event of Default with respect
to the Common Securities and its consequences, provided that, if the underlying Event of Default
under the Indenture:
(i) is not waivable under the Indenture, except where the Holders of the Common
Securities are deemed to have waived such Event of Default under the Declaration as provided
in this Section 2.6(b), the Event of Default under the Declaration shall also not be
waivable; or
(ii) is waivable only with the consent of a Super Majority, except where the Holders of
the Common Securities are deemed to have waived such Event of Default under the Declaration
as provided in this Section 2.6(b), only the Holders of at least the proportion in aggregate
liquidation amount of the Common Securities that the relevant Super Majority represents of
the aggregate principal amount of the Debentures outstanding may waive such Event of Default
in respect of the Common Securities under the Declaration; provided further, each Holder of
Common Securities will be deemed to have waived any such Event of Default and all Events of
Default with respect to the Common Securities and its consequences until all Events of
Default with respect to the Preferred Securities have been cured, waived or otherwise
eliminated, and until such Events of Default with respect to the Preferred Securities have
been cured, waived or otherwise eliminated, the Institutional Trustee will be deemed to be
acting solely on behalf of the Holders of the Preferred Securities and only the Holders of
the Preferred Securities will have the right to direct the Institutional Trustee in
accordance with the terms of the Securities. The foregoing provisions of this Section 2.6(b)
shall be in lieu of Sections 316(a)(1)(A) and 316(a)(l)(B) of the Trust Indenture Act and
such sections are hereby expressly excluded from this Declaration and the Securities, as
permitted by the Trust Indenture Act. Subject to the foregoing provisions of this Section
2.6(b), upon the waiver of an Event of Default by the Holders of a Majority in liquidation
amount of the Common Securities, any such default shall cease to exist and any Event of
Default with respect to the Common Securities arising therefrom shall be deemed to have been
cured for every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or Event of Default with respect to the Common Securities or
impair any right consequent thereon.
10
(c) A waiver of an Event of Default under the Indenture by the Institutional Trustee, at the
direction of the Holders of the Preferred Securities, constitutes a waiver of the corresponding
Event of Default under this Declaration. The foregoing provisions of this Section 2.6(c) shall be
in lieu of Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such Sections
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby expressly excluded from this
Declaration and the Securities, as permitted by the Trust Indenture Act.
SECTION 2.7
Events of Default: Notice
.
(a) The Institutional Trustee shall, within 90 days after the Institutional Trustee has
knowledge of the occurrence of an Event of Default, transmit by mail, first class postage prepaid,
to the Holders of the Securities (i) notices of all defaults with respect to the Securities
actually known to a Responsible Officer of the Institutional Trustee, unless such Event of Default
has been cured before the giving of such notice and (ii) any notice of default received from the
Indenture Trustee with respect to the Debentures, which notice from the Institutional Trustee to
the Holders shall state that an Event of Default under the Indenture also constitutes an Event of
Default with respect to the Securities; provided that, except for a default in the payment of
principal of (or premium, if any) or interest on any of the Debentures or in the payment of any
sinking fund installment established for the Debentures, the Institutional Trustee shall be
protected in withholding such notice if and so long as a Responsible Officer of the Institutional
Trustee in good faith determines that the withholding of such notice is in the interests of the
Holders of the Securities.
(b) The Institutional Trustee shall not be deemed to have knowledge of any default except:
(i) a default under Sections 501(1) and 501(2) of the Indenture; or
(ii) any default as to which the Institutional Trustee shall have received written
notice or of which a Responsible Officer of the Institutional Trustee charged with the
administration of this Declaration shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1
Name
.
The Trust is named Travelers Capital Trust [II] [III] [IV] [V] as such name may be modified
from time to time by the Regular Trustees following written notice to the Holders of Securities.
The Trusts activities may be conducted under the name of the Trust or any other name deemed
advisable by the Regular Trustees.
SECTION 3.2
Office
.
The address of the principal office of the Trust is c/o The Travelers Companies, Inc., 385
Washington Street, St. Paul, Minnesota 55102. On ten Business Days written notice to the
Institutional Trustee, the Delaware Trustee and the Holders of Securities, the Regular Trustees may
designate another principal office.
11
SECTION 3.3
Declaration
.
(a) The exclusive purposes and functions of the Trust are (i) to issue and sell Securities and
use the proceeds from such sale to acquire the Debentures, (ii) to maintain the status of the Trust
as a grantor trust for United States federal income tax purposes, and (iii) except as otherwise
limited herein, to engage in only those other activities necessary, advisable or incidental
thereto. The Trust shall not borrow money, issue debt or reinvest proceeds derived from
investments, pledge any of its assets, or otherwise undertake (or permit to be undertaken) any
activity that would cause the Trust not to be classified for United States federal income tax
purposes as a grantor trust.
(b) The Trust will be classified as a grantor trust for United States federal income tax
purposes under Subpart E of Subchapter J of the Code, pursuant to which the Holders of the
Preferred Securities and the Common Securities will be the owners of the Trust for United States
federal income tax purposes, and such Holders will include directly in their gross income the
income, gain, deduction or loss of the Trust as if the Trust did not exist. By the acceptance of
this Trust, neither the Trustees, the Sponsor nor the owners of the Preferred Securities or Common
Securities will take any position for United States federal income tax purposes which is contrary
to the classification of the Trust as a grantor trust.
SECTION 3.4
Authority
.
Subject to the limitations provided in this Declaration and to the specific duties of the
Institutional Trustee, the Regular Trustees shall have exclusive and complete authority to carry
out the purposes of the Trust. An action taken by the Regular Trustees in accordance with their
powers shall constitute the act of and serve to bind the Trust and an action taken by the
Institutional Trustee on behalf of the Trust in accordance with its powers shall constitute the act
of and serve to bind the Trust. In dealing with the Trustees acting on behalf of the Trust, no
Person shall be required to inquire into the authority of the Trustees to bind the Trust. Persons
dealing with the Trust are entitled to rely conclusively on the power and authority of the Trustees
as set forth in this Declaration.
SECTION 3.5
Title to Property of the Trust
.
Except as provided in Section 3.8 with respect to the Debentures and the Institutional Trustee
Account or as otherwise expressly provided in this Declaration, legal title to all assets of the
Trust shall be vested in the Trust. The Holders shall not have legal title to any part of the
assets of the Trust, but shall have an undivided beneficial interest in the assets of the Trust.
SECTION 3.6
Powers and Duties of the Regular Trustees
.
The Regular Trustees shall have the exclusive power, duty and authority to cause the Trust to
engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common Securities in accordance with
this Declaration; provided, however, that the Trust may issue no more than one series of Preferred
Securities and no more than one series of Common Securities, and, provided
12
further, that there shall be no beneficial interests in the Trust other than the Securities,
and the issuance of Securities shall be limited to a simultaneous issuance of both Preferred
Securities and Common Securities on the Closing Date;
(b) in connection with the issue and sale of the Preferred Securities, at the direction of the
Sponsor, to:
(i) assist in the preparation of a prospectus in preliminary and final form prepared by
the Sponsor in relation to the offering and sale of Preferred Securities and to assist in
the preparation of and filing with the Commission on behalf of the Trust a registration
statement on Form S-3 or on another appropriate form (including, if appropriate, a
registration statement under Rule 462(b) of the Securities Act), including any pre-effective
or post-effective amendments thereto, relating to the registration under the Securities Act
of the Preferred Securities;
(ii) execute and file any documents prepared by the Sponsor, or take any acts
determined by the Sponsor to be necessary, in order to qualify or register all or part of
the Preferred Securities in any State in which the Sponsor has determined to qualify or
register such Preferred Securities for sale;
(iii) assist in the filing of an application, prepared by the Sponsor, to the New York
Stock Exchange, Inc., any other national stock exchange or the Nasdaq National Market for
listing upon notice of issuance of any Preferred Securities;
(iv) assist in the filing with the Commission on behalf of the Trust a registration
statement on Form 8-A, prepared by the Sponsor, including any pre-effective or
post-effective amendments thereto, relating to the registration of the Preferred Securities
under Section 12(b) of the Exchange Act;
(v) assist in the preparation of the Underwriting Agreement providing for the sale and
Distribution of the Preferred Securities; and
(vi) execute and deliver letters, documents, or instruments with the Clearing Agency
relating to the Preferred Securities;
(c) to acquire the Debentures with the proceeds of the sale of the Preferred Securities and
the Common Securities; provided, however, that the Regular Trustees shall cause legal title to the
Debentures to be held of record in the name of the Institutional Trustee for the benefit of the
Holders of the Preferred Securities and the Holders of Common Securities;
(d) to give the Sponsor and the Institutional Trustee prompt written notice of the occurrence
of a Special Event;
(e) to establish a record date with respect to all actions to be taken hereunder that require
a record date be established, including and with respect to, for the purposes of Section 316(c) of
the Trust Indenture Act, Distributions, voting rights, redemptions and exchanges, and to issue
relevant notices to the Holders of Preferred Securities and Holders of Common Securities as to such
actions and applicable record dates;
13
(f) to take all actions and perform such duties as may be required of the Regular Trustees
pursuant to the terms of the Securities or this Declaration;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to legal action, or
otherwise adjust claims or demands of or against the Trust (Legal Action), unless pursuant to
Section 3.8(e), the Institutional Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be designated as officers with
titles) and managers, contractors, advisors, and consultants and pay reasonable compensation for
such services;
(i) to give the certificate required by Section 314(a)(4) of the Trust Indenture Act to the
Institutional Trustee, which certificate may be executed by any Regular Trustee;
(j) to incur expenses that are necessary or incidental to carry out any of the purposes of the
Trust;
(k) to act as, or appoint another Person to act as, registrar and transfer agent for the
Securities;
(l) to give prompt written notice to the Holders of the Securities of any notice received from
the Debenture Issuer of its election to defer payments of interest on the Debentures by extending
the interest payment period under the Indenture;
(m) to take all action that may be necessary or appropriate for the preservation and the
continuation of the Trusts valid existence, rights, franchises and privileges as a statutory trust
under the laws of the State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Preferred Securities or to enable
the Trust to effect the purposes for which the Trust was created;
(n) to take any action, not inconsistent with this Declaration or with applicable law, that
the Regular Trustees determine in their discretion to be necessary or desirable in carrying out the
activities of the Trust as set out in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment Company required to be
registered as such under the Investment Company Act;
(ii) causing the Trust to be classified for United States federal income tax purposes
as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that the Debentures will be
treated as indebtedness of the Debenture Issuer for United States federal income tax
purposes, provided that such action does not adversely affect the interests of Holders;
as long as it does not materially and adversely affect the Holders of the Securities;
14
(o) to the extent provided in this Declaration, terminating, dissolving and liquidating the
Trust and preparing, executing and filing the certificate of cancellation with the Secretary of
State of the State of Delaware;
(p) to take all action necessary to cause all applicable tax returns and tax information
reports that are required to be filed with respect to the Trust to be duly prepared and filed by
the Regular Trustees, on behalf of the Trust; and
(q) to execute all documents or instruments, perform all duties and powers, and do all things
for and on behalf of the Trust in all matters necessary or incidental to the foregoing.
The Regular Trustees must exercise the powers set forth in this Section 3.6 in a manner that
is consistent with the purposes and functions of the Trust set out in Section 3.3, and the Regular
Trustees shall not take any action that is inconsistent with the purposes and functions of the
Trust set forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of the powers or the
authority of the Institutional Trustee set forth in Section 3.8.
Any expenses incurred by the Regular Trustees pursuant to this Section 3.6 shall be reimbursed
by the Debenture Issuer.
SECTION 3.7
Prohibition of Actions by the Trust and the Trustees
.
(a) The Trust shall not, and the Trustees (including the Institutional Trustee) shall not,
engage in any activity other than as required or authorized by this Declaration. In particular, the
Trust shall not and no Trustee (including the Institutional Trustee) shall cause the Trust to:
(i) invest any proceeds received by the Trust from holding the Debentures, but shall
promptly distribute all such proceeds to Holders of Securities pursuant to the terms of this
Declaration and of the Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans represented by the
Debentures;
(v) possess any power or otherwise act in such a way as to vary the Trust assets or the
terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial ownership of, or beneficial
interest in, the Trust other than the Securities;
15
(vii) other than as provided in this Declaration or Annex I, (A) direct the time,
method and place of exercising any trust or power conferred upon the Debenture Trustee with
respect to the Debentures, (B) waive any past default that is waivable under the Indenture,
or (C) exercise any right to rescind or annul any declaration that the principal of all the
Debentures shall be due and payable;
(viii) consent to any amendment, modification or termination of the Indenture or the
Debentures where such consent shall be required unless the Trust shall have received an
opinion of counsel to the effect that such amendment, modification or termination will not
cause more than an insubstantial risk that the Trust will not be classified as a grantor
trust for United States federal income tax purposes; or
(ix) take any action inconsistent with the status of the Trust as a grantor trust for
United States federal income tax purposes.
SECTION 3.8
Powers and Duties of the Institutional Trustee
.
(a) The legal title to the Debentures shall be owned by and held of record in the name of the
Institutional Trustee in trust for the benefit of the Holders of the Securities. The right, title
and interest of the Institutional Trustee to the Debentures shall vest automatically in each Person
who may hereafter be appointed as Institutional Trustee in accordance with Section 5.6. Such
vesting and cessation of title shall be effective whether or not conveyancing documents with regard
to the Debentures have been executed and delivered.
(b) The Institutional Trustee shall not transfer its right, title and interest in the
Debentures to the Regular Trustees or to the Delaware Trustee (if the Institutional Trustee does
not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust account (the
Institutional Trustee Account) in the name of and under the exclusive control of the
Institutional Trustee on behalf of the Holders of the Securities and, upon the receipt of
payments of funds made in respect of the Debentures held by the Institutional Trustee,
deposit such funds into the Institutional Trustee Account and make payments to the Holders
of the Preferred Securities and Holders of the Common Securities from the Institutional
Trustee Account in accordance with Section 6.1. Funds in the Institutional Trustee Account
shall be held uninvested until disbursed in accordance with this Declaration. The
Institutional Trustee Account shall be an account that is maintained with a banking
institution the rating on whose long-term unsecured indebtedness assigned by a nationally
recognized statistical rating organization, as that term is defined for purposes of Rule
436(g)(2) under the Securities Act, is at least equal to the rating assigned to the
Preferred Securities by a nationally recognized statistical rating organization, unless the
Preferred Securities are not rated, in which case the banking institutions long-term
unsecured indebtedness shall be rated at least investment grade by such an organization;
(ii) engage in such ministerial activities as shall be specified in written
instructions from the Regular Trustees or the Sponsor to effect the redemption of the
16
Preferred Securities and the Common Securities to the extent the Debentures are
redeemed or mature; and
(iii) upon written notice of Distribution issued by the Regular Trustees in accordance
with the terms of the Securities, engage in such ministerial activities as shall be
specified in written instructions from the Regular Trustees or the Sponsor to effect the
Distribution of the Debentures to Holders of Securities upon the occurrence of certain
Special Events or other specified circumstances pursuant to the terms of the Securities.
(d) The Institutional Trustee shall take all actions and perform such duties as may be
specifically required of the Institutional Trustee pursuant to the terms of the Securities or this
Declaration.
(e) Subject to Section 2.6, the Institutional Trustee shall take any Legal Action which arises
out of or in connection with an Event of Default of which a Responsible Officer of the
Institutional Trustee has actual knowledge or the Institutional Trustees duties and obligations
under this Declaration or the Trust Indenture Act.
(f) The Institutional Trustee shall not resign as a Trustee unless either:
(i) the Trust has been completely liquidated and the proceeds of the liquidation
distributed to the Holders of Securities pursuant to the terms of the Securities; or
(ii) a Successor Institutional Trustee has been appointed and has accepted that
appointment in accordance with Section 5.6.
(g) The Institutional Trustee shall have the legal power to exercise all of the rights, powers
and privileges of a Holder of Debentures under the Indenture and, if an Event of Default actually
known to a Responsible Officer of the Institutional Trustee occurs and is continuing, the
Institutional Trustee shall, for the benefit of Holders of the Securities, enforce its rights as
Holder of the Debentures subject to the rights of the Holders pursuant to the terms of such
Securities, this Declaration, the Statutory Trust Act and the Trust Indenture Act.
(h) The Institutional Trustee may authorize one or more Persons (each, a Paying Agent) to
pay Distributions, redemption payments or liquidation payments on behalf of the Trust with respect
to all Securities and any such Paying Agent shall comply with Section 317(b) of the Trust Indenture
Act. Any Paying Agent may be removed by the Institutional Trustee at any time and a successor
Paying Agent or additional Paying Agents may be appointed at any time by the Institutional Trustee.
(i) Subject to this Section 3.8, the Institutional Trustee shall have none of the duties,
liabilities, powers or the authority of the Regular Trustees set forth in Section 3.6.
The Institutional Trustee shall be authorized to undertake any actions set forth in Section
317(a) of the Trust Indenture Act.
17
The Institutional Trustee must exercise the powers set forth in this Section 3.8 in a manner
that is consistent with the purposes and functions of the Trust set out in Section 3.3, and the
Institutional Trustee shall not take any action that is inconsistent with the purposes and
functions of the Trust set out in Section 3.3.
SECTION 3.9
Certain Duties and Responsibilities of the Institutional Trustee
.
(a) The Institutional Trustee, before the occurrence of any Event of Default and after the
curing of all Events of Default that may have occurred, shall undertake to perform only such duties
as are specifically set forth in this Declaration and no implied covenants shall be read into this
Declaration against the Institutional Trustee. In case an Event of Default has occurred (that has
not been cured or waived pursuant to Section 2.6) of which a Responsible Officer of the
Institutional Trustee has actual knowledge, the Institutional Trustee shall exercise such of the
rights and powers vested in it by this Declaration, and use the same degree of care and skill in
the exercise of such rights and powers, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve the Institutional Trustee
from liability for its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the curing or waiving of
all such Events of Default that may have occurred:
(A) the duties and obligations of the Institutional Trustee shall be determined
solely by the express provisions of this Declaration and the Institutional Trustee
shall not be liable except for the performance of such duties and obligations as are
specifically set forth in this Declaration, and no implied covenants or obligations
shall be read into this Declaration against the Institutional Trustee; and
(B) in the absence of bad faith on the part of the Institutional Trustee, the
Institutional Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any certificates or opinions
furnished to the Institutional Trustee and substantially conforming to the
requirements of this Declaration; but in the case of any such certificates or
opinions that by any provision hereof are specifically required to be furnished to
the Institutional Trustee, the Institutional Trustee shall be under a duty to
examine the same to determine whether or not they substantially conform to the
requirements of this Declaration;
(ii) the Institutional Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer of the Institutional Trustee, unless it shall be proved
that the Institutional Trustee was negligent in ascertaining the pertinent facts;
(iii) the Institutional Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the Holders of
not less than a Majority in liquidation amount of the Securities relating to the time,
18
method and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the Institutional
Trustee under this Declaration;
(iv) no provision of this Declaration shall require the Institutional Trustee to expend
or risk its own funds or otherwise incur personal financial liability in the performance of
any of its duties or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration or indemnity reasonably
satisfactory to the Institutional Trustee against such risk or liability is not reasonably
assured to it;
(v) the Institutional Trustees sole duty with respect to the custody, safe keeping and
physical preservation of the Debentures and the Institutional Trustee Account shall be to
deal with such property in a similar manner as the Institutional Trustee deals with similar
property for its own account, subject to the protections and limitations on liability
afforded to the Institutional Trustee under this Declaration and the Trust Indenture Act;
(vi) the Institutional Trustee shall have no duty or liability for or with respect to
the value, genuineness, existence or sufficiency of the Debentures or the payment of any
taxes or assessments levied thereon or in connection therewith;
(vii) the Institutional Trustee shall not be liable for any interest on any money
received by it except as it may otherwise agree in writing with the Sponsor. Money held by
the Institutional Trustee need not be segregated from other funds held by it except in
relation to the Institutional Trustee Account maintained by the Institutional Trustee
pursuant to Section 3.8(c)(i) to the extent required by law; and
(viii) the Institutional Trustee shall not be responsible for monitoring the compliance
by the Regular Trustees or the Sponsor with their respective duties under this Declaration,
nor shall the Institutional Trustee be liable for any act, omission, default or misconduct
of the Regular Trustees or the Sponsor.
SECTION 3.10
Certain Rights of the Institutional Trustee
.
(a) Subject to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely and shall be fully 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, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular Trustees contemplated by this
Declaration shall be sufficiently evidenced by an Officers Certificate;
19
(iii) whenever in the administration of this Declaration, the Institutional Trustee
shall deem it desirable that a matter be proved or established before taking, suffering or
omitting any action hereunder, the Institutional Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers Certificate which, upon receipt of such request, shall
be promptly delivered by the Sponsor or the Regular Trustees;
(iv) the Institutional Trustee shall have no duty to see to any recording, filing or
registration of any instrument (including any financing or continuation statement or any
filing under tax or securities laws) or any rerecording, refiling or registration thereof;
(v) the Institutional Trustee may consult with counsel or other experts and the advice
or opinion of such counsel and experts with respect to legal matters or advice within the
scope of such experts area of expertise 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 accordance with such advice or opinion, such counsel may be counsel to the Sponsor or
any of its Affiliates, and may include any of its employees. The Institutional Trustee shall
have the right at any time to seek instructions concerning the administration of this
Declaration from any court of competent jurisdiction;
(vi) the Institutional Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Declaration at the request or direction of any Holder,
unless such Holder shall have provided to the Institutional Trustee security and indemnity,
reasonably satisfactory to the Institutional Trustee, against the costs, expenses (including
attorneys fees and expenses and the expenses of the Institutional Trustees agents,
nominees or custodians) and liabilities that might be incurred by it in complying with such
request or direction, including such reasonable advances as may be requested by the
Institutional Trustee provided, that, nothing contained in this Section 3.10(a)(vi) shall be
taken to relieve the Institutional Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by this Declaration;
(vii) the Institutional 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 Institutional Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents, custodians, nominees
or attorneys and the Institutional 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;
(ix) any action taken by the Institutional Trustee or its agents hereunder shall bind
the Trust and the Holders of the Securities, and the signature of the Institutional Trustee
or its agents alone shall be sufficient and effective to perform any such action and no
third party shall be required to inquire as to the authority of the Institutional Trustee to
20
so act or as to its compliance with any of the terms and provisions of this
Declaration, both of which shall be conclusively evidenced by the Institutional Trustees or
its agents taking such action;
(x) whenever in the administration of this Declaration the Institutional Trustee shall
deem it desirable to receive instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Institutional Trustee (i) may request instructions
from the Holders of the Securities which instructions may only be given by the Holders of
the same proportion in liquidation amount of the Securities as would be entitled to direct
the Institutional Trustee under the terms of the Securities in respect of such remedy, right
or action, (ii) may refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be protected in conclusively relying
on or acting in or accordance with such instructions; and
(xi) except as otherwise expressly provided by this Declaration, the Institutional
Trustee shall not be under any obligation to take any action that is discretionary under the
provisions of this Declaration.
(b) No provision of this Declaration shall be deemed to impose any duty or obligation on the
Institutional Trustee to perform any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it, in any jurisdiction in which it shall be illegal, or in which the
Institutional Trustee shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Institutional Trustee shall be construed to be a
duty.
SECTION 3.11
Delaware Trustee
.
Notwithstanding any other provision of this Declaration other than Section 5.2, the Delaware
Trustee shall not be entitled to exercise any powers, nor shall the Delaware Trustee have any of
the duties and responsibilities of the Regular Trustees or the Institutional Trustee described in
this Declaration. Except as set forth in Section 5.2, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of Section 3807 of the Statutory Trust
Act. In performing such limited role, the Delaware Trustee shall have all of the rights and
protections afforded to the Institutional Trustee under Section 3.9(b)(i) (except that (i) the
Delaware Trustees standard of care shall be gross negligence, and (ii) such rights and protections
shall pertain to the Delaware Trustee without regard to the occurrence of any Event of Default) and
Section 3.10 of this Declaration.
SECTION 3.12
Execution of Documents
.
Unless otherwise determined by the Regular Trustees, and except as otherwise required by the
Statutory Trust Act, a majority of or, if there are only two, any Regular Trustee or, if there is
only one, such Regular Trustee is authorized to execute on behalf of the Trust any documents that
the Regular Trustees have the power and authority to execute pursuant to Section 3.6.
21
SECTION 3.13
Not Responsible for Recitals or Issuance of Securities
.
The recitals contained in this Declaration and the Securities shall be taken as the statements
of the Sponsor, and the Trustees do not assume any responsibility for their correctness. The
Trustees make no representations as to the value or condition of the property of the Trust or any
part thereof. The Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14
Duration of Trust
.
The Trust, unless dissolved pursuant to the provisions of Article VIII hereof, shall dissolve
on the date that is [___] years after the Closing Date.
SECTION 3.15
Mergers
.
(a) The Trust may not consolidate, amalgamate, merge with or into, or be replaced by, or
convey, transfer or lease its properties and assets substantially as an entirety to any corporation
or other body, except as described in Section 3.15(b) and (c) or in Annex I.
(b) The Trust may, with the consent of the Regular Trustees or, if there are more than two, a
majority of the Regular Trustees and without the consent of the Holders of the Securities, the
Delaware Trustee or the Institutional Trustee, and subject to the terms of Section 3.15(c),
consolidate, amalgamate, merge with or into, or be replaced by a trust organized as such under the
laws of any State; provided that:
(i) such successor entity (the Successor Entity) either:
(A) expressly assumes all of the obligations of the Trust under the Securities;
or
(B) substitutes for the Securities other securities having substantially the
same terms as the Preferred Securities (the Successor Securities) so long as the
Successor Securities rank the same as the Preferred Securities rank with respect to
Distributions and payments upon liquidation, redemption and otherwise;
(ii) the Debenture Issuer expressly acknowledges a trustee of the Successor Entity that
possesses the same powers and duties as the Institutional Trustee as the Holder of the
Debentures;
(iii) the Preferred Securities or any Successor Securities are listed, or any Successor
Securities will be listed upon notification of issuance, on any national securities
exchange, or with any other organization on which the Preferred Securities are then listed
or quoted;
(iv) such merger, consolidation, amalgamation or replacement does not cause the
Preferred Securities (including any Successor Securities) to be downgraded by any nationally
recognized statistical rating organization;
22
(v) such merger, consolidation, amalgamation or replacement does not adversely affect
the rights, preferences and privileges of the Holders of the Securities (including any
Successor Securities) in any material respect (other than with respect to any dilution of
such Holders interests in the Successor Entity as a result of such merger, consolidation,
amalgamation or replacement);
(vi) such Successor Entity has a purpose substantially identical to that of the Trust;
(vii) prior to such merger, consolidation, amalgamation or replacement, the Trust has
received an opinion of a nationally recognized independent counsel to the Trust experienced
in such matters to the effect that:
(A) such merger, consolidation, amalgamation or replacement does not adversely
affect the rights, preferences and privileges of the Holders of the Securities
(including any Successor Securities) in any material respect (other than with
respect to any dilution of the Holders interest in the Successor Entity);
(B) following such merger, consolidation, amalgamation or replacement, neither
the Trust nor the Successor Entity will be required to register as an Investment
Company;
(C) following such merger, consolidation, amalgamation or replacement, the
Trust (or the Successor Entity) will continue to be classified as a grantor trust
for United States federal income tax purposes;
(viii) the Sponsor guarantees the obligations of such Successor Entity under the
Successor Securities at least to the extent provided by the Preferred Securities Guarantee,
and
(ix) the Sponsor, or, subject to Section 9.1(c), a Related Party, continues to hold the
Common Securities so long as any Preferred Securities or Successor Securities remain
outstanding.
(c) Notwithstanding Section 3.15(b), the Trust shall not, without the consent of Holders of
100% in liquidation amount of the Securities, consolidate, amalgamate, merge with or into, or be
replaced by any other entity or permit any other entity to consolidate, amalgamate, merge with or
into, or replace it, if in the opinion of a nationally recognized independent tax counsel
experienced in such matters, such consolidation, amalgamation, merger or replacement would cause
the Trust or Successor Entity to be classified as other than a grantor trust for United States
federal income tax purposes.
23
ARTICLE IV
SPONSOR
SECTION 4.1
Sponsors Purchase of Common Securities
.
On the Closing Date, the Sponsor will purchase all of the Common Securities issued by the
Trust at the same time as the Preferred Securities are sold.
SECTION 4.2
Responsibilities of the Sponsor
.
In connection with the issue and sale of the Preferred Securities, the Sponsor is hereby
appointed an agent of the Trust pursuant to Section 3806(b)(7) of the Statutory Trust Act and in
such capacity shall have the exclusive right and responsibility to engage in the following
activities:
(a) to prepare a prospectus relating to the offering of Preferred Securities by the Trust and
to prepare for filing by the Trust with the Commission, and execute on behalf of the Trust, a
registration statement on Form S-3 or on another appropriate form (including, if appropriate, a
registration statement under Rule 462(b) of the Securities Act) and any pre-effective or
post-effective amendments thereto, relating to the registration under the Securities Act of the
Preferred Securities;
(b) to determine the States in which to take appropriate action to qualify or register for
sale of all or part of the Preferred Securities and to do any and all such acts, other than actions
which must be taken by the Trust, and advise the Trust of actions it must take, and prepare for
execution and filing any documents to be executed and filed by the Trust, as the Sponsor deems
necessary or advisable in order to comply with the applicable laws of any such States;
(c) to prepare for filing by the Trust, and execute on behalf of the Trust, an application to
the New York Stock Exchange, any other national stock exchange or the Nasdaq National Market for
listing upon notice of issuance of any Preferred Securities;
(d) to prepare for filing by the Trust with the Commission, and execute on behalf of the
Trust, a registration statement on Form 8-A, including any pre-effective or post-effective
amendments thereto, relating to the registration of the Preferred Securities under Section 12(b) or
12(g) of the Exchange Act, including any amendments thereto;
(e) to negotiate the terms of, and execute on behalf of the Trust, the Underwriting Agreement
providing for the sale of the Preferred Securities; and
(f) to execute and deliver letters, documents or instruments on behalf of the Trust with any
Clearing Agency.
The Sponsor must exercise the powers set forth in this Section 4.2 in a manner that is
consistent with the purposes and functions of the Trust set out in Section 3.3, and the Sponsor
shall not take any action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
24
Subject to this Section 4.2, the Sponsor shall have none of the powers or the authority of the
Institutional Trustee set forth in Section 3.8.
SECTION 4.3
Guarantee of Payment of Trust Obligations
.
(a) Subject to the terms and conditions of this Section 4.3, the Debenture Issuer hereby
irrevocably and unconditionally guarantees to each Person to whom the Trust is now or hereafter
becomes indebted or liable (the Beneficiaries) the full payment, when and as due, of any and all
costs, expenses or liabilities of the Trust (other than obligations of the Trust to make payments
to Holders of a Security of the Trust pursuant to the terms thereof) (Obligations) to such
Beneficiaries.
(b) The agreement of the Debenture Issuer in Section 4.3(a) is intended to be for the benefit
of, and to be enforceable by, all such Beneficiaries, whether or not such Beneficiaries have
received notice hereof.
(c) The agreement of the Debenture Issuer set forth in Section 4.3(a) shall terminate and be
of no further force and effect upon the later of (a) the date on which full payment has been made
of all amounts payable to all Holders of all the Preferred Securities (whether upon redemption,
liquidation, exchange or otherwise) and (b) the date on which there are no Beneficiaries remaining;
provided, however, that such agreement shall continue to be effective or shall be reinstated, as
the case may be, if at any time any Holder of Preferred Securities or any Beneficiary must restore
payment of any sums paid under the Preferred Securities, under any Obligation, under the Preferred
Securities Guarantee or under this Declaration for any reason whatsoever. Such agreement is
continuing, irrevocable, unconditional and absolute.
ARTICLE V
TRUSTEES
SECTION 5.1
Number of Trustees
.
The number of Trustees initially shall be [four (4)], and:
(a) at any time before the issuance of any Securities, the Sponsor may, by written instrument,
increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of Trustees may be increased or decreased
by vote of the Holders of a majority in liquidation amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities, provided, however, that, the number of
Trustees shall in no event be less than two (2); provided further that (i) if required by the
Statutory Trust Act, there shall be at least one Delaware Trustee; (ii) there shall be at least one
Trustee who is an employee or officer of, or is affiliated with the Sponsor (a Regular Trustee);
and (iii) for so long as this Declaration is required to qualify as an indenture under the Trust
Indenture Act, there shall be one Institutional Trustee, who may also serve as Delaware Trustee if
it meets the applicable requirements.
25
SECTION 5.2
Delaware Trustee
.
If required by the Statutory Trust Act, one Trustee (the Delaware Trustee) shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place of business in the State
of Delaware, and otherwise meets the requirements of applicable law, provided that, if the
Institutional Trustee has its principal place of business in the State of Delaware and otherwise
meets the requirements of applicable law, then the Institutional Trustee shall also be the Delaware
Trustee and Section 3.11 shall have no application.
SECTION 5.3
Institutional Trustee: Eligibility
.
(a) There shall at all times be one Trustee that shall act as Institutional Trustee which
shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation organized and doing business under the laws of the United States
of America or any State or territory thereof or of the District of Columbia, or a
corporation or Person permitted by the Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least 50 million U.S. dollars ($50,000,000), and
subject to supervision or examination by Federal, State, territorial or District of Columbia
authority. If such corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority referred to above, then
for the purposes of this Section 5.3(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published; and
(iii) if the Trust is excluded from the definition of an Investment Company solely by
means of Rule 3a-7 and to the extent Rule 3a-7 requires a trustee having certain
qualifications to hold title to the eligible assets of the Trust, the Institutional
Trustee shall possess those qualifications.
(b) If at any time the Institutional Trustee shall cease to be eligible to so act under
Section 5.3(a), the Institutional Trustee shall immediately resign in the manner and with the
effect set forth in Section 5.6(c).
(c) If the Institutional Trustee has or shall acquire any conflicting interest within the
meaning of Section 310(b) of the Trust Indenture Act, the Institutional Trustee and the Holders of
the Common Securities (as if such Holders were the obligor referred to in Section 310(b) of the
Trust Indenture Act) shall in all respects comply with the provisions of Section 310(b) of the
Trust Indenture Act.
26
(d) The Preferred Securities Guarantee shall be deemed to be specifically described in this
Declaration for purposes of clause (i) of the first provision contained in Section 310(b) of the
Trust Indenture Act.
(e) The initial Institutional Trustee shall be as set forth in Section 5.5 hereof.
SECTION 5.4
Qualifications of Regular Trustees and Delaware Trustee Generally
.
Each Regular Trustee and the Delaware Trustee (unless the Institutional Trustee also acts as
Delaware Trustee) shall be either a natural person who is at least 21 years of age or a legal
entity that shall have the power and authority to act as a trustee hereunder and shall be
represented in such capacity by one or more Authorized Officers.
SECTION 5.5
Initial Trustees: Additional Powers of Regular Trustees
.
(a) The initial Regular Trustees shall be:
Jay S. Benet and Matthew S. Furman [in each case] c/o The Travelers Companies, Inc., 385
Washington Street, St. Paul, Minnesota 55102
The initial Delaware Trustee shall be:
BNY Mellon Trust of Delaware, 100 White Clay Center, Route
273, P.O. Box 6995, Newark, Delaware 19714
The initial Institutional Trustee shall be:
The Bank of New York Mellon Trust Company, N.A. c/o The Bank of New York Mellon Global
Corporate Trust, Corporate Finance, 222 Berkeley Street, Boston, MA 02116
(b) Except as expressly set forth in this Declaration and except if a meeting of the Regular
Trustees is called with respect to any matter over which the Regular Trustees have power to act,
any power of the Regular Trustees may be exercised by, or with the consent of, any one such Regular
Trustee.
SECTION 5.6
Appointment, Removal and Resignation of Trustees
.
(a) Subject to Section 5.6(b), Trustees may be appointed or removed without cause at any time:
(i) until the issuance of any Securities, by written instrument executed by the
Sponsor;
(ii) after the issuance of any Securities, by vote of the Holders of a Majority in
liquidation amount of the Common Securities voting as a class at a meeting of the Holders of
the Common Securities or acting by unanimous written consent; and
27
(iii) if an Event of Default shall have occurred and be continuing after the issuance
of any Preferred Securities, the Institutional Trustee and the Delaware Trustee may only be
removed and appointed by the vote of Holders of a Majority in liquidation amount of the
Preferred Securities voting as a class.
(b) (i) The Trustee that acts as Institutional Trustee shall not be removed in accordance
with Section 5.6(a) until a successor Trustee possessing the qualifications to act as Institutional
Trustee under Section 5.3 (a Successor Institutional Trustee) has been appointed and has accepted
such appointment by written instrument executed by such Successor Institutional Trustee and
delivered to the Regular Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed in accordance with
Section 5.6(a) until a successor Trustee possessing the qualifications to act as Delaware
Trustee under Sections 5.2 and 5.4 (a Successor Delaware Trustee) has been appointed and
has accepted such appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his successor shall have been
appointed or until his death, removal or resignation. Any Trustee may resign from office (without
need for prior or subsequent accounting) by an instrument in writing signed by the Trustee and
delivered to the Sponsor and the Trust, which resignation shall take effect upon such delivery or
upon such later date as is specified therein; provided, however, that:
(i) No such resignation of the Trustee that acts as the Institutional Trustee shall be
effective:
(A) until a Successor Institutional Trustee has been appointed and has accepted
such appointment by instrument executed by such Successor Institutional Trustee and
delivered to the Trust, the Sponsor and the resigning Institutional Trustee; or
(B) until the assets of the Trust have been completely liquidated and the
proceeds thereof distributed to the Holders of the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware Trustee shall be
effective until a Successor Delaware Trustee has been appointed and has accepted such
appointment by instrument executed by such Successor Delaware Trustee and delivered to the
Trust, the Sponsor and the resigning Delaware Trustee whereupon the resigning Trustee shall
be released and discharged of the trusts and other duties imposed on such Trustee in
connection herewith.
(d) The Holders of the Common Securities shall use their best efforts to promptly appoint a
Successor Delaware Trustee or Successor Institutional Trustee as the case may be if the
Institutional Trustee or the Delaware Trustee delivers an instrument of resignation in accordance
with this Section 5.6.
(e) If no Successor Institutional Trustee or Successor Delaware Trustee shall have been
appointed and accepted appointment as provided in this Section 5.6 within 60 days
28
after delivery to the Sponsor and the Trust of an instrument of resignation, the resigning
Institutional Trustee or Delaware Trustee, as applicable, may petition any court of competent
jurisdiction for appointment of a Successor Institutional Trustee or Successor Delaware Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may deem proper and
prescribe, appoint a Successor Institutional Trustee or Successor Delaware Trustee, as the case may
be.
(f) No Institutional Trustee or Delaware Trustee shall be liable for the acts or omissions to
act of any Successor Institutional Trustee or Successor Delaware Trustee, as the case may be.
SECTION 5.7
Vacancies Among Trustees
.
If a Trustee ceases to hold office for any reason and the number of Trustees is not reduced
pursuant to Section 5.1, or if the number of Trustees is increased pursuant to Section 5.1, a
vacancy shall occur. A resolution certifying the existence of such vacancy by the Regular Trustees
or, if there are more than two, a majority of the Regular Trustees shall be conclusive evidence of
the existence of such vacancy. The vacancy shall be filled with a Trustee appointed in accordance
with Section 5.6.
SECTION 5.8
Effect of Vacancies
.
The death, resignation, retirement, removal, bankruptcy, dissolution, liquidation,
incompetence or incapacity to perform the duties of a Trustee shall not operate to annul, dissolve
or terminate the Trust or terminate this Declaration. Whenever a vacancy in the number of Regular
Trustees shall occur, until such vacancy is filled by the appointment of a Regular Trustee in
accordance with Section 5.6, the Regular Trustees in office, regardless of their number, shall have
all the powers granted to the Regular Trustees and shall discharge all the duties imposed upon the
Regular Trustees by this Declaration.
SECTION 5.9
Meetings
.
If there is more than one Regular Trustee, meetings of the Regular Trustees shall be held from
time to time upon the call of any Regular Trustee. Regular meetings of the Regular Trustees may be
held at a time and place fixed by resolution of the Regular Trustees. Notice of any in-person
meetings of the Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48 hours before such
meeting. Notice of any telephonic meetings of the Regular Trustees or any committee thereof shall
be hand delivered or otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 24 hours before a meeting. Notices shall contain a brief statement
of the time, place and anticipated purposes of the meeting. The presence (whether in person or by
telephone) of a Regular Trustee at a meeting shall constitute a waiver of notice of such meeting
except where a Regular Trustee attends a meeting for the express purpose of objecting to the
transaction of any activity on the ground that the meeting has not been lawfully called or
convened. Unless provided otherwise in this Declaration, any action of the Regular Trustees may be
taken at a meeting by vote of a majority of the Regular Trustees present (whether in person or by
telephone) and eligible to vote with respect to
29
such matter, provided that a Quorum is present, or without a meeting by the unanimous written
consent of the Regular Trustees. In the event there is only one Regular Trustee, any and all action
of such Regular Trustee shall be evidenced by a written consent of such Regular Trustee.
SECTION 5.10
Delegation of Power
.
(a) Any Regular Trustee may, by power of attorney consistent with applicable law, delegate to
any other natural person over the age of 21 his or her power for the purpose of executing any
documents contemplated in Section 3.6, including making any governmental filing; and
(b) the Regular Trustees shall have power to delegate from time to time to such of their
number or to officers of the Trust the doing of such things and the execution of such instruments
either in the name of the Trust or the names of the Regular Trustees or otherwise as the Regular
Trustees may deem expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
SECTION 5.11
Merger, Conversion, Consolidation or Succession to Business
.
Any corporation into which the Institutional Trustee or the Delaware Trustee, as the case may
be, may be merged or converted or with which either may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Institutional Trustee or the
Delaware Trustee, as the case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Institutional Trustee or the Delaware
Trustee, as the case may be, shall be the Successor Institutional Trustee or the Successor Delaware
Trustee, as the case may be, hereunder, provided such corporation shall be otherwise qualified and
eligible under this Article V, without the execution or filing of any paper or any further act on
the part of any of the parties hereto.
SECTION 5.12
Status of Trustees
.
Each Trustee shall be a United States person within the meaning of Section 7701(a)(30) of
the Code and at all times at least one of the Trustees shall be (i) a bank, as defined in Section
581 of the Code or (ii) a United States government-owned agency or United States
government-sponsored enterprise.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1
Distributions
.
Holders shall receive Distributions (as defined herein) in accordance with the applicable
terms of the relevant Holders Securities. Distributions shall be made on the Preferred Securities
and the Common Securities in accordance with the preferences set forth in their respective terms.
If and to the extent that the Debenture Issuer makes a payment of interest (including Additional
Interest (as defined in the Indenture)), premium or principal, or both, on the Debentures held by
the Institutional Trustee (the amount of any such payment being a
30
Payment Amount), the Institutional Trustee shall and is directed to make a distribution (a
Distribution) of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1
General Provisions Regarding Securities
.
(a) The Trust shall issue one class of preferred securities representing undivided beneficial
interests in the assets of the Trust having such terms as are set forth in Annex I (the Preferred
Securities) and one class of common securities representing undivided beneficial interests in the
assets of the Trust having such terms as are set forth in Annex I (the Common Securities). The
Trust shall issue no securities or other interests in the assets of the Trust other than the
Preferred Securities and the Common Securities.
(b) The Certificates shall be signed on behalf of the Trust by a Regular Trustee. Such
signature shall be the manual or facsimile signature of any present or any future Regular Trustee.
In case any Regular Trustee of the Trust who shall have signed any of the Securities shall cease to
be such Regular Trustee before the Certificates so signed shall be delivered by the Trust, such
Certificates nevertheless may be delivered as though the Person who signed such Certificates had
not ceased to be such Regular Trustee; and any Certificate may be signed on behalf of the Trust by
such Persons who, at the actual date of execution of such Security, shall be the Regular Trustees
of the Trust, although at the date of the execution and delivery of the Declaration any such Person
was not such a Regular Trustee. Certificates shall be printed, lithographed or engraved or may be
produced in any other manner as is reasonably acceptable to the Regular Trustees, as evidenced by
their execution thereof, and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements as the Regular Trustees may deem appropriate, or as
may be required to comply with any law or with any rule or regulation of any stock exchange on
which Securities may be listed, or to conform to usage.
(c) The Preferred Security Certificates shall not be valid until authenticated by the manual
signature of an authorized officer of the Institutional Trustee, the signature of whom shall be
conclusive evidence that the Preferred Security Certificates have been authenticated under this
Declaration. Upon a written order of the Trust signed by one Regular Trustee, the Institutional
Trustee shall authenticate the Preferred Security Certificates for original issue. The
Institutional Trustee may appoint an authenticating agent acceptable to the Trust to authenticate
the Preferred Security Certificates. An authenticating agent may authenticate the Preferred
Security Certificates whenever the Institutional Trustee may do so. Each reference to
authentication by the Institutional Trustee includes authentication by such agent. An
authenticating agent has the same rights as the Institutional Trustee to deal with the Sponsor or
an Affiliate thereof.
(d) The consideration received by the Trust for the issuance of the Securities shall
constitute a contribution to the capital of the Trust and shall not constitute a loan to the Trust.
31
(e) Upon issuance of the Securities as provided in this Declaration, the Securities so issued
shall be deemed to be validly issued, fully paid and non-assessable; subject to Section 10.1 with
respect to the Common Securities.
(f) Every Person, by virtue of having become a Holder or a Preferred Security Beneficial Owner
in accordance with the terms of this Declaration, shall be deemed to have expressly assented and
agreed to the terms of, and shall be bound by, this Declaration.
SECTION 7.2
Registrar and Paying Agent
.
The Trust shall maintain in New York, New York (i) an office or agency where Preferred
Securities may be presented for registration of transfer or for exchange (Registrar), and (ii) an
office or agency where Preferred Securities may be presented for payment. The Registrar shall keep
a register of the Preferred Securities and of their transfer and exchange. The Trust may appoint
the Registrar and the Paying Agent and may appoint one or more co-registrars and one or more
additional paying agents in such other locations as it shall determine. The term Paying Agent
includes any additional paying agent. The Trust may change any Paying Agent, Registrar or
co-registrar without prior notice to any Holder. The Trust shall notify the Institutional Trustee
of the name and address of any agent not a party to this Declaration. If the Trust fails to appoint
or maintain another entity as Registrar or Paying Agent, the Institutional Trustee shall act as
such. The Trust or any of its Affiliates may act as Paying Agent or Registrar. The Trust shall act
as Paying Agent, Registrar and co-registrar for the Common Securities.
The Trust initially appoints the Institutional Trustee as Registrar and Paying Agent for the
Preferred Securities.
SECTION 7.3
Paying Agent to Hold Money in Trust
.
The Trust shall require each Paying Agent other than the Institutional Trustee to agree in
writing that the Paying Agent will hold in trust for the benefit of Holders or the Institutional
Trustee all money held by the Paying Agent for the payment of principal or Distributions on
Securities, and will notify the Institutional Trustee if there are insufficient funds. While any
such insufficiency continues, the Institutional Trustee may require a Paying Agent to pay all money
held by it to the Institutional Trustee. The Trust at any time may require a Paying Agent to pay
all money held by it to the Institutional Trustee and to account for any money disbursed by it.
Upon payment to the Institutional Trustee, the Paying Agent (if other than the Trust or an
Affiliate of the Trust) shall have no further liability for the money. If the Trust or the Sponsor
or an Affiliate of the Trust or the Sponsor acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the Holders all money held by it as Paying Agent.
ARTICLE VIII
DISSOLUTION OF TRUST
SECTION 8.1
Dissolution of Trust.
(a) The Trust shall dissolve:
32
(i) upon the bankruptcy of any Holder of the Common Securities or the Sponsor;
(ii) upon the filing of a certificate of dissolution or its equivalent with respect to
any Holder of the Common Securities or the Sponsor; or the revocation of the Holder of the
Common Securities or the Sponsors charter and the expiration of 90 days after the date of
revocation without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of any Holder of the Common
Securities, the Sponsor or the Trust;
(iv) when all of the Securities shall have been called for redemption and the amounts
necessary for redemption thereof shall have been paid to the Holders in accordance with the
terms of the Securities;
(v) at the election of the Sponsor (which is wholly within its sole discretion);
provided that the Trust shall have been dissolved in accordance with the terms of the
Securities and all of the Debentures endorsed thereon shall have been distributed to the
Holders of Securities in exchange for all of the Securities; or
(vi) before the issuance of any Securities, with the consent of all of the Regular
Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event referred to in Section 8.1(a)
or upon the expiration of the term of the Trust set forth in Section 3.14 and the winding up of the
affairs of the Trust, the Trustees shall file a certificate of cancellation with the Secretary of
State of the State of Delaware.
(c) The provisions of Section 3.9(b) and Article X shall survive the termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1
Transfer of Securities
.
(a) Securities may only be transferred, in whole or in part, in accordance with the terms and
conditions set forth in this Declaration and in the terms of the Securities. Any transfer or
purported transfer of any Security not made in accordance with this Declaration shall be null and
void.
(b) Subject to this Article IX, Preferred Securities shall be freely transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party may only transfer Common
Securities to the Sponsor or a Related Party of the Sponsor; provided that, any such transfer is
subject to the condition precedent that the transferor obtain the written opinion of a nationally
recognized independent counsel experienced in such matters that such transfer would not cause more
than an insubstantial risk that:
33
(i) the Trust would not continue to be classified for United States federal income tax
purposes as a grantor trust; or
(ii) the Trust would be an Investment Company or the transferee would become an
Investment Company.
SECTION 9.2
Transfer of Certificates
.
The Registrar shall provide for the registration of Certificates representing Preferred
Securities and of transfers of such Certificates, which will be effected without charge but only
upon payment (with such indemnity as the Registrar may require) in respect of any tax or other
government charges that may be imposed in relation to it. Upon surrender for registration of
transfer of any Certificate representing Preferred Securities, the Registrar shall cause one or
more new Certificates to be issued in the name of the designated transferee or transferees. Every
such Certificate surrendered for registration of transfer shall be accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by the Holder or such
Holders attorney duly authorized in writing. Each such Certificate surrendered for registration of
transfer shall be canceled by the Registrar.
The Regular Trustees shall provide for the registration of Certificates representing Common
Securities and of transfers of such Certificates, which will be effected without charge but only
upon payment (with such indemnity as the Regular Trustees may require) in respect of any tax or
other government charges that may be imposed in relation to it. Upon surrender for registration of
transfer of any such Certificate, the Regular Trustees shall cause one or more new Certificates to
be issued in the name of the designated transferee or transferees. Every Certificate representing a
Common Security surrendered for registration of transfer shall be accompanied by a written
instrument of transfer in form satisfactory to the Regular Trustees duly executed by the Holder or
such Holders attorney duly authorized in writing. Each such Certificate surrendered for
registration of transfer shall be canceled by the Regular Trustees.
A transferee of a Certificate shall be entitled to the rights and subject to the obligations
of a Holder hereunder upon the receipt by such transferee of a Certificate. By acceptance of a
Certificate, each transferee shall be deemed to have agreed to be bound by this Declaration.
SECTION 9.3
Deemed Security Holders
.
The Trustees may treat the Person in whose name any Certificate shall be registered on the
books and records of the Trust as the sole Holder of such Certificate and of the Securities
represented by such Certificate for purposes of receiving Distributions and for all other purposes
whatsoever and, accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such Certificate on the part of
any Person, whether or not the Trust shall have actual or other notice thereof.
SECTION 9.4
Book Entry Interests
.
Unless otherwise specified in the terms of the Preferred Securities, the Preferred Security
Certificates, on original issuance, will be issued in the form of one or more, fully
34
registered, global Preferred Security Certificates (each a Global Certificate), to be
delivered to DTC, the initial Clearing Agency, or its custodian, by, or on behalf of, the Trust.
Such Global Certificates shall initially be registered on the books and records of the Trust in the
name of Cede & Co., the nominee of DTC, and no Preferred Security Beneficial Owner will receive a
definitive Preferred Security Certificate representing such Preferred Security Beneficial Owners
interests in such Global Certificates, except as provided in Section 9.7. Unless and until
definitive, fully registered Preferred Security Certificates (the Definitive Preferred Security
Certificates) have been issued to the Preferred Security Beneficial Owners pursuant to Section
9.7:
(a) the provisions of this Section 9.4 shall be in full force and effect;
(b) the Trust and the Trustees shall be entitled to deal with the Clearing Agency for all
purposes of this Declaration (including the payment of Distributions on the Global Certificates and
receiving approvals, votes or consents hereunder) as the Holder of the Preferred Securities and the
sole Holder of the Global Certificates and shall have no obligation to the Preferred Security
Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict with any other provisions
of this Declaration, the provisions of this Section 9.4 shall control; and
(d) the rights of the Preferred Security Beneficial Owners shall be exercised only through the
Clearing Agency and shall be limited to those established by law and agreements between such
Preferred Security Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants and receive and transmit payments of Distributions on the Global Certificates to such
Clearing Agency Participants. DTC will make book entry transfers among the Clearing Agency
Participants.
SECTION 9.5
Notices to Clearing Agency
.
Whenever a notice or other communication to the Holders of Preferred Security is required
under this Declaration, unless and until Definitive Preferred Security Certificates shall have been
issued to the Preferred Security Beneficial Owners pursuant to Section 9.7, the Trustees shall give
all such notices and communications specified herein to be given to the Preferred Security Holders
to the Clearing Agency, and shall have no notice obligations to the Preferred Security Beneficial
Owners.
SECTION 9.6
Appointment of Successor Clearing Agency
.
If any Clearing Agency elects to discontinue its services as securities depositary with
respect to the Preferred Securities, the Regular Trustees may, in their sole discretion, appoint a
successor Clearing Agency with respect to such Preferred Securities.
SECTION 9.7
Definitive Preferred Security Certificates
.
If:
35
(a) a Clearing Agency elects to discontinue its services as securities depositary with respect
to the Preferred Securities and a successor Clearing Agency is not appointed within 90 days after
such discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor to terminate the book entry
system through the Clearing Agency with respect to the Preferred Securities, then:
(i) Definitive Preferred Security Certificates shall be prepared by the Regular
Trustees on behalf of the Trust with respect to such Preferred Securities; and
(ii) upon surrender of the Global Certificates by the Clearing Agency, accompanied by
registration instructions, the Regular Trustees shall cause Definitive Certificates to be
executed, and the Institutional Trustee shall cause such Definitive Securities to be
authenticated and delivered, to Preferred Security Beneficial Owners in accordance with the
instructions of the Clearing Agency. Neither the Trustees nor the Trust shall be liable for
any delay in delivery of such instructions and each of them may conclusively rely on, and
shall be protected in relying on, said instructions of the Clearing Agency. The Definitive
Preferred Security Certificates shall be printed, lithographed or engraved or may be
produced in any other manner as is reasonably acceptable to the Regular Trustees, as
evidenced by their execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the Regular Trustees may
deem appropriate, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock exchange on
which Preferred Securities may be listed, or to conform to usage.
SECTION 9.8
Mutilated, Destroyed, Lost or Stolen Certificates
.
If:
(a) any mutilated Certificates should be surrendered to the Regular Trustees, or if the
Regular Trustees shall receive evidence to their satisfaction of the destruction, loss or theft of
any Certificate; and
(b) there shall be delivered to the Regular Trustees such security or indemnity as may be
required by them to keep each of the Trustees harmless then, in the absence of notice that such
Certificate shall have been acquired by a Protected Purchaser (as such term is used in section
8-405(a)(1) of the UCC as in effect in the State of Delaware (1994 Rev)), any Regular Trustee on
behalf of the Trust shall execute, and, in the case of any Preferred Security, cause the
Institutional Trustee to authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like denomination. In
connection with the issuance of any new Certificate under this Section 9.8, the Regular Trustees
may require the payment of a sum sufficient to cover any tax or other governmental charge that may
be imposed in connection therewith. Any duplicate Certificate issued pursuant to this Section 9.8
shall constitute conclusive evidence of an ownership interest in the relevant Securities, as if
originally issued, whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
36
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES,
TRUSTEES OR OTHERS
SECTION 10.1
Liability
.
(a) Except as expressly set forth in this Declaration, the Preferred Securities Guarantee and
the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital contributions (or
any return thereon) of the Holders of the Securities which shall be made solely from assets
of the Trust; and
(ii) required to pay to the Trust or to any Holder of Securities any deficit upon
dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of the debts and obligations
of the Trust (other than with respect to the Securities) to the extent not satisfied out of the
Trusts assets.
(c) Pursuant to Section 3803(a) of the Statutory Trust Act, the Holders of the Preferred
Securities shall be entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law of the State of
Delaware.
SECTION 10.2
Exculpation
.
(a) No Indemnified Person shall be liable, responsible or accountable in damages or otherwise
to the Trust or any Covered Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith on behalf of the Trust and
in a manner such Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that an Indemnified
Person shall be liable for any such loss, damage or claim incurred by reason of such Indemnified
Persons gross negligence or willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good faith upon the records
of the Trust and upon such information, opinions, reports or statements presented to the Trust by
any Person as to matters the Indemnified Person reasonably believes are within such other Persons
professional or expert competence and who has been selected with reasonable care by or on behalf of
the Trust, including information, opinions, reports or statements as to the value and amount of the
assets, liabilities, profits, losses, or any other facts pertinent to the existence and amount of
assets from which Distributions to Holders of Securities might properly be paid.
37
SECTION 10.3
Fiduciary Duty
.
(a) To the extent that, at law or in equity, an Indemnified Person has duties (including
fiduciary duties) and liabilities relating thereto to the Trust or to any other Covered Person, an
Indemnified Person acting under this Declaration shall not be liable to the Trust or to any other
Covered Person for its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of an Indemnified
Person otherwise existing at law or in equity (other than the duties imposed on the Institutional
Trustee under the Trust Indenture Act), are agreed by the parties hereto to replace such other
duties and liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any Covered Person and any
Indemnified Person; or
(ii) whenever this Declaration or any other agreement contemplated herein or therein
provides that an Indemnified Person shall act in a manner that is, or provides terms that
are, fair and reasonable to the Trust or any Holder of Securities, the Indemnified Person
shall resolve such conflict of interest, take such action or provide such terms, considering
in each case the relative interest of each party (including its own interest) to such
conflict, agreement, transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, and any applicable generally
accepted accounting practices or principles. In the absence of bad faith by the Indemnified
Person, the resolution, action or term so made, taken or provided by the Indemnified Person
shall not constitute a breach of this Declaration or any other agreement contemplated herein
or of any duty or obligation of the Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted or required to make a
decision:
(i) in its discretion or under a grant of similar authority, the Indemnified Person
shall be entitled to consider such interests and factors as it desires, including its own
interests, and shall have no duty or obligation to give any consideration to any interest of
or factors affecting the Trust or any other Person; or
(ii) in its good faith or under another express standard, the Indemnified Person
shall act under such express standard and shall not be subject to any other or different
standard imposed by this Declaration or by applicable law.
SECTION 10.4
Indemnification
.
(a) (i) The Debenture Issuer shall indemnify, to the full extent permitted by law, any
Company Indemnified Person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the Trust) by reason of
the fact that he is or was a Company Indemnified Person against expenses (including attorneys
38
fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him
in connection with such action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Trust, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that
the Company Indemnified Person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Trust, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent permitted by law, any
Company Indemnified Person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the Trust to procure a
judgment in its favor by reason of the fact that he is or was a Company Indemnified Person
against expenses (including attorneys fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best interests of the
Trust and except that no such indemnification shall be made in respect of any claim, issue
or matter as to which such Company Indemnified Person shall have been adjudged to be liable
to the Trust unless and only to the extent that the Court of Chancery of Delaware or the
court in which such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses which such Court of
Chancery or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be successful on the merits
or otherwise (including dismissal of an action without prejudice or the settlement of an
action without admission of liability) in defense of any action, suit or proceeding referred
to in paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any claim, issue or
matter therein, he shall be indemnified, to the full extent permitted by law, against
expenses (including attorneys fees) actually and reasonably incurred by him in connection
therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this Section 10.4(a) (unless
ordered by a court) shall be made by the Debenture Issuer only as authorized in the specific
case upon a determination that indemnification of the Company Indemnified Person is proper
in the circumstances because he has met the applicable standard of conduct set forth in
paragraphs (i) and (ii). Such determination shall be made (1) by the Regular Trustees by a
majority vote of a Quorum consisting of such Regular Trustees who were not parties to such
action, suit or proceeding, (2) if such a Quorum is not obtainable, or, even if obtainable,
if a Quorum of disinterested Regular Trustees so directs, by independent legal counsel in a
written opinion, or (3) by the Common Security Holder of the Trust.
(v) Expenses (including attorneys fees) incurred by a Company Indemnified Person in
defending a civil, criminal, administrative or investigative action, suit or proceeding
referred to in paragraphs (i) and (ii) of this Section 10.4(a) shall be paid by
39
the Debenture Issuer in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such Company Indemnified Person
to repay such amount if it shall ultimately be determined that he is not entitled to be
indemnified by the Debenture Issuer as authorized in this Section 10.4(a). Notwithstanding
the foregoing, no advance shall be made by the Debenture Issuer if a determination is
reasonably and promptly made (i) by the Regular Trustees by a majority vote of a Quorum of
disinterested Regular Trustees, (ii) if such a Quorum is not obtainable, or, even if
obtainable, if a Quorum of disinterested Regular Trustees so directs, by independent legal
counsel in a written opinion or (iii) the Common Security Holder of the Trust, that, based
upon the facts known to the Regular Trustees, counsel or the Common Security Holder at the
time such determination is made, such Company Indemnified Person acted in bad faith or in a
manner that such Person did not believe to be in or not opposed to the best interests of the
Trust, or, with respect to any criminal proceeding, that such Company Indemnified Person
believed or had reasonable cause to believe his conduct was unlawful. In no event shall any
advance be made in instances where the Regular Trustees, independent legal counsel or Common
Security Holder reasonably determine that such Person deliberately breached his duty to the
Trust or its Common or Preferred Security Holders.
(vi) The indemnification and advancement of expenses provided by, or granted pursuant
to, the other paragraphs of this Section 10.4(a) shall not be deemed exclusive of any other
rights to which those seeking indemnification and advancement of expenses may be entitled
under any agreement, vote of stockholders or disinterested directors of the Debenture Issuer
or Preferred Security Holders of the Trust or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office. All rights to
indemnification under this Section 10.4(a) shall be deemed to be provided by a contract
between the Debenture Issuer and each Company Indemnified Person who serves in such capacity
at any time while this Section 10.4(a) is in effect. Any repeal or modification of this
Section 10.4(a) shall not affect any rights or obligations then existing.
(vii) The Debenture Issuer may purchase and maintain insurance on behalf of any Person
who is or was a Company Indemnified Person against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such, whether or not
the Debenture Issuer would have the power to indemnify him against such liability under the
provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to the Trust shall include,
in addition to the resulting or surviving entity, any constituent entity (including any
constituent of a constituent) absorbed in a consolidation or merger, so that any Person who
is or was a director, trustee, officer or employee of such constituent entity, or is or was
serving at the request of such constituent entity as a director, trustee, officer, employee
or agent of another entity, shall stand in the same position under the provisions of this
Section 10.4(a) with respect to the resulting or surviving entity as he would have with
respect to such constituent entity if its separate existence had continued.
40
(ix) The indemnification and advancement of expenses provided by, or granted pursuant
to, this Section 10.4(a) shall, unless otherwise provided when authorized or ratified,
continue as to a Person who has ceased to be a Company Indemnified Person and shall inure to
the benefit of the heirs, executors and administrators of such a Person.
(b) The Sponsor agrees to indemnify (i) the Institutional Trustee, (ii) the Delaware Trustee,
(iii) any Affiliate of the Institutional Trustee and the Delaware Trustee, and (iv) any officers,
directors, shareholders, members, partners, employees, representatives, custodians, nominees or
agents of the Institutional Trustee and the Delaware Trustee (each of the Persons in (i) through
(iv) being referred to as a Fiduciary Indemnified Person) for, and to hold each Fiduciary
Indemnified Person 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 or the
trust or trusts hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against or investigating any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder. The obligation to indemnify
as set forth in this Section 10.4(b) shall survive the resignation or removal of the Institutional
Trustee or the Delaware Trustee, the satisfaction and discharge of this Declaration and the
termination of the Trust.
(c) The Sponsor agrees to pay the Institutional Trustee and the Delaware Trustee, from time to
time, such compensation for all services rendered by the Institutional Trustee and the Delaware
Trustee hereunder as may be mutually agreed upon in writing by the Sponsor and the Institutional
Trustee or the Delaware Trustee, as the case may be, and except as otherwise expressly provided
herein, to reimburse the Institutional Trustee and the Delaware Trustee upon its or their request
for all reasonable expenses (including counsel fees and expenses), disbursements and advances
incurred or made by the Institutional Trustee or the Delaware Trustee, as the case may be, in
accordance with the provisions of this Declaration, except any such expense, disbursement or
advance as may be attributable to its or their negligence or bad faith.
SECTION 10.5
Outside Businesses
.
Any Covered Person, the Sponsor, the Delaware Trustee and the Institutional Trustee (subject
to Section 5.3(c)) may engage in or possess an interest in other business ventures of any nature or
description, independently or with others, similar or dissimilar to the business of the Trust, and
the Trust and the Holders of Securities shall have no rights by virtue of this Declaration in and
to such independent ventures or the income or profits derived therefrom, and the pursuit of any
such venture, even if competitive with the business of the Trust, shall not be deemed wrongful or
improper. No Covered Person, the Sponsor, the Delaware Trustee, or the Institutional Trustee shall
be obligated to present any particular investment or other opportunity to the Trust even if such
opportunity is of a character that, if presented to the Trust, could be taken by the Trust, and any
Covered Person, the Sponsor, the Delaware Trustee and the Institutional Trustee shall have the
right to take for its own account (individually or as a partner or fiduciary) or to recommend to
others any such particular investment or other opportunity. Any Covered Person, the Delaware
Trustee and the Institutional Trustee may engage or be interested in any financial or other
transaction with the Sponsor or any Affiliate of the Sponsor, or may act
41
as depositary for, trustee or agent for, or act on any committee or body of holders of,
securities or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1
Fiscal Year
.
The fiscal year (Fiscal Year) of the Trust shall be the calendar year, or such other year as
is required by the Code.
SECTION 11.2
Certain Accounting Matters
.
(a) At all times during the existence of the Trust, the Regular Trustees shall keep, or cause
to be kept, full books of account, records and supporting documents, which shall reflect in
reasonable detail, each transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with generally accepted accounting principles of the
United States, consistently applied. The Trust shall use the accrual method of accounting for
United States federal income tax purposes.
(b) The Regular Trustees shall cause to be prepared and delivered to each of the Holders of
Securities, within 90 days after the end of each Fiscal Year of the Trust, annual financial
statements of the Trust, including a balance sheet of the Trust as of the end of such Fiscal Year,
and the related statements of income or loss.
(c) The Regular Trustees shall cause to be duly prepared and delivered to each of the Holders
of Securities, any annual United States federal income tax information statement, required by the
Code, containing such information with regard to the Securities held by each Holder as is required
by the Code and the Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Regular Trustees shall endeavor to deliver all such statements
within 30 days after the end of each Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed with the appropriate taxing
authority, an annual United States federal income tax return, on a Form 1041 or such other form
required by United States federal income tax law, and any other annual income tax returns required
to be filed by the Regular Trustees on behalf of the Trust with any state or local taxing
authority.
SECTION 11.3
Banking
.
The Trust shall maintain one or more bank accounts in the name and for the sole benefit of the
Trust; provided, however, that all payments of funds in respect of the Debentures held by the
Institutional Trustee shall be made directly to the Institutional Trustee Account and no other
funds of the Trust shall be deposited in the Institutional Trustee Account. The sole signatories
for such accounts shall be designated by the Regular Trustees; provided, however, that the
Institutional Trustee shall designate the signatories for the Institutional Trustee Account.
42
SECTION 11.4
Withholding
.
The Regular Trustees shall, and shall cause the Trust to, comply with all withholding
requirements under United States federal, state and local law. The Trust shall request, and the
Holders shall provide to the Trust, such forms or certificates as are necessary to establish an
exemption from withholding with respect to each Holder, and any representations and forms as shall
reasonably be requested by the Trust to assist it in determining the extent of, and in fulfilling,
its withholding obligations. The Regular Trustees shall file required forms with applicable
jurisdictions and, unless an exemption from withholding is properly established by a Holder, shall
remit amounts withheld with respect to the Holder to applicable jurisdictions. To the extent that
the Trust is required to withhold and pay over any amounts to any authority with respect to
Distributions or allocations to any Holder, the amount withheld shall be deemed to be a
Distribution in the amount of the withholding to the Holder. In the event of any claimed over
withholding, Holders shall be limited to an action against the applicable jurisdiction. If the
amount required to be withheld was not withheld from actual Distributions made, the Trust may
reduce subsequent Distributions by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1
Amendments
.
(a) Except as otherwise provided in this Declaration or by any applicable terms of the
Securities, this Declaration may only be amended by a written instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two Regular Trustees a majority of
the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties, obligations or immunities of
the Institutional Trustee, the Institutional Trustee; and
(iii) if the amendment affects the rights, powers, duties, obligations or immunities of
the Delaware Trustee, the Delaware Trustee;
(b) no amendment shall be made, and any such purported amendment shall be void and
ineffective:
(i) unless, in the case of any proposed amendment, the Institutional Trustee shall have
first received an Officers Certificate from each of the Trust and the Sponsor that such
amendment is permitted by, and conforms to, the terms of this Declaration (including the
terms of the Securities);
(ii) unless, in the case of any proposed amendment which affects the rights, powers,
duties, obligations or immunities of the Institutional Trustee, the Institutional Trustee
shall have first received:
43
(A) an Officers Certificate from each of the Trust and the Sponsor that such
amendment is permitted by, and conforms to, the terms of this Declaration (including
the terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the Sponsor or the Trust) that
such amendment is permitted by, and conforms to, the terms of this Declaration
(including the terms of the Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the trust to fail to continue to be classified for purposes of United
States federal income taxation as a grantor trust;
(B) reduce or otherwise adversely affect the powers of the Institutional
Trustee in contravention of the Trust Indenture Act; or
(C) cause the Trust to be deemed to be an Investment Company required to be
registered under the Investment Company Act;
(c) at such time after the Trust has issued any Securities that remain outstanding, any
amendment that would adversely affect the rights, privileges or preferences of any Holder of
Securities may be effected only with such additional requirements as may be set forth in the terms
of such Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be amended without the consent of all of
the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the Holders of a Majority in
liquidation amount of the Common Securities and;
(f) the rights of the Holders of the Common Securities under Article V to increase or decrease
the number of, and appoint and remove Trustees shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities; and
(g) subject to Section 12.1(c), this Declaration may be amended without the consent of the
Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that may be defective or
inconsistent with any other provision of this Declaration;
(iii) add to the covenants, restrictions or obligations of the Sponsor;
(iv) to conform to any change in Rule 3a-5 or written change in interpretation or
application of Rule 3a-5 by any legislative body, court, government agency or
44
regulatory authority which amendment does not have a material adverse effect on the
right, preferences or privileges of the Holders; and
(v) to modify, eliminate and add to any provision of the Declaration to such extent as
may be reasonably necessary to effectuate any of the foregoing or to otherwise comply with
applicable law.
(h) In addition to and notwithstanding any other provision in this Declaration, without the
consent of each affected Holder (such consent being obtained in accordance with this Declaration),
this Declaration may not be amended to (i) change the amount or timing of any Distribution on the
Securities or otherwise adversely affect the amount of any Distribution required to be made in
respect of the Securities as of a specified date; (ii) change any of the conversion or redemption
provisions; or (iii) restrict the right of a Holder to institute suit for the enforcement of any
such payment on or after such date.
SECTION 12.2
Meetings of the Holders of Securities: Action by Written Consent
.
(a) Meetings of the Holders of any class of Securities may be called at any time by the
Regular Trustees (or as provided in the terms of the Securities) to consider and act on any matter
on which Holders of such class of Securities are entitled to act under the terms of this
Declaration, the terms of the Securities or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading. The Regular Trustees shall call a meeting of the
Holders of such class if directed to do so by the Holders of Securities representing at least 25%
in liquidation amount of such class of Securities. Such direction shall be given by delivering to
the Regular Trustees one or more calls in a writing stating that the signing Holders of Securities
wish to call a meeting and indicating the general or specific purpose for which the meeting is to
be called. Any Holders of Securities calling a meeting shall specify in writing the Security
Certificates held by the Holders of Securities exercising the right to call a meeting and only
those Securities specified shall be counted for purposes of determining whether the required
percentage set forth in the second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the Securities, the following
provisions shall apply to meetings of Holders of Securities:
(i) notice of any such meeting shall be given to all the Holders of Securities having a
right to vote thereat at least 7 days but not more than 60 days before the date of such
meeting. Whenever a vote, consent or approval of the Holders of Securities is permitted or
required under this Declaration or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading, such vote, consent or approval may be given
at a meeting of the Holders of Securities. Any action that may be taken at a meeting of the
Holders of Securities may be taken without a meeting if a consent in writing setting forth
the action so taken is signed by the Holders of Securities owning not less than the minimum
amount of Securities in liquidation amount that would be necessary to authorize or take such
action at a meeting at which all Holders of Securities having a right to vote thereon were
present and voting. Prompt notice of the taking of action without a meeting shall be given
to the Holders of Securities entitled to vote who
45
have not consented in writing. The Regular Trustees may specify that any written ballot
submitted to the Security Holder for the purpose of taking any action without a meeting
shall be returned to the Trust within the time specified by the Regular Trustees;
(ii) each Holder of a Security may authorize any Person to act for it by proxy on all
matters in which a Holder of Securities is entitled to participate, including waiving notice
of any meeting, or voting or participating at a meeting. No proxy shall be valid after the
expiration of 11 months from the date thereof unless otherwise provided in the proxy. Every
proxy shall be revocable at the pleasure of the Holder of Securities executing it. Except as
otherwise provided herein, all matters relating to the giving, voting or validity of proxies
shall be governed by the General Corporation Law of the State of Delaware relating to
proxies, and judicial interpretations thereunder, as if the Trust were a Delaware
corporation and the Holders of the Securities were stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Securities shall be conducted by the Regular
Trustees or by such other Person that the Regular Trustees may designate; and
(iv) unless the Statutory Trust Act, this Declaration, the terms of the Securities, the
Trust Indenture Act or the listing rules of any stock exchange or market on which the
Preferred Securities are then listed or traded, otherwise provides, the Regular Trustees, in
their sole discretion, shall establish all other provisions relating to meetings of Holders
of Securities, including notice of the time, place or purpose of any meeting at which any
matter is to be voted on by any Holders of Securities, waiver of any such notice, action by
consent without a meeting, the establishment of a record date, Quorum requirements, voting
in person or by proxy or any other matter with respect to the exercise of any such right to
vote.
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1
Representations and Warranties of Institutional Trustee
.
The Trustee that acts as initial Institutional Trustee represents and warrants to the Trust
and to the Sponsor at the date of this Declaration, and each Successor Institutional Trustee
represents and warrants to the Trust and the Sponsor at the time of the Successor Institutional
Trustees acceptance of its appointment as Institutional Trustee that:
(a) the Institutional Trustee is a New York banking corporation with trust powers, duly
organized, validly existing and in good standing under the laws of the State of New York, with
trust power and authority to execute and deliver, and to carry out and perform its obligations
under the terms of, the Declaration;
(b) the execution, delivery and performance by the Institutional Trustee of the Declaration
has been duly authorized by all necessary corporate action on the part of the Institutional
Trustee. The Declaration has been duly executed and delivered by the Institutional Trustee, and it
constitutes a legal, valid and binding obligation of the Institutional Trustee,
46
enforceable against it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws affecting creditors rights
generally and to general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity or at law);
(c) the execution, delivery and performance of the Declaration by the Institutional Trustee
does not conflict with or constitute a breach of the Articles of Incorporation or by-laws of the
Institutional Trustee; and
(d) no consent, approval or authorization of, or registration with or notice to, any State or
Federal banking authority governing the banking or trust powers of the Institutional Trustee is
required for the execution, delivery or performance by the Institutional Trustee, of the
Declaration.
SECTION 13.2
Representations and Warranties of Delaware Trustee
.
The Trustee that acts as initial Delaware Trustee represents and warrants to the Trust and to
the Sponsor at the date of this Declaration, and each Successor Delaware Trustee represents and
warrants to the Trust and the Sponsor at the time of the Successor Delaware Trustees acceptance of
its appointment as Delaware Trustee that:
(a) The Delaware Trustee is a national banking association with trust powers, duly organized,
validly existing and in good standing under the laws of the State of Delaware, with trust power and
authority to execute and deliver, and to carry out and perform its obligations under the terms of,
the Declaration.
(b) The Delaware Trustee has been authorized to perform its obligations under the Certificate
of Trust and the Declaration. The Declaration under Delaware law constitutes a legal, valid and
binding obligation of the Delaware Trustee, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, reorganization, moratorium, insolvency, and other similar laws
affecting creditors rights generally and to general principles of equity and the discretion of the
court (regardless of whether the enforcement of such remedies is considered in a proceeding in
equity or at law).
(c) No consent, approval or authorization of, or registration with or notice to, any State or
Federal banking authority governing the banking or trust powers of the Institutional Trustee is
required for the execution, delivery or performance by the Delaware Trustee of the Declaration.
(d) The Delaware Trustee has its principal place of business in the State of Delaware.
47
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1
Notices
.
All notices provided for in this Declaration shall be in writing, duly signed by the party
giving such notice, and shall be delivered, telecopied or mailed by registered or certified mail,
as follows:
(a) if given to the Trust, in care of the Regular Trustees at the Trusts mailing address set
forth below (or such other address as the Trust may give notice of to the Institutional Trustee,
the Delaware Trustee and the Holders of the Securities):
Travelers Capital Trust [II] [III] [IV] [V]
c/o The Travelers Companies, Inc.
385 Washington Street
St. Paul, Minnesota 55102
Attention: Matthew S. Furman
With a copy to: Treasurer
(b) if given to the Delaware Trustee, at the mailing address set forth below (or such other
address as Delaware Trustee may give notice of to the Holders of the Securities):
BNY
Mellon Trust of Delaware
100 White Clay Center, Route 273 P.O. Box 6995
Newark, Delaware 19714
(c) if given to the Institutional Trustee, at its Corporate Trust Office (or such other
address as the Institutional Trustee may give notice of to the Holders of the Securities):
The Bank of New York Mellon Trust Company, N.A.
c/o The Bank of New York Mellon
Global Corporate Trust
Corporate Finance
222 Berkeley Street
Boston, MA 02216
(d) if given to the Holder of the Common Securities, at the mailing address of the Sponsor set
forth below (or such other address as the Holder of the Common Securities may give notice of to the
Trust):
The Travelers Companies, Inc.
385 Washington Street
St. Paul, Minnesota 55102
Attention: Matthew S. Furman
With a copy to: Treasurer
48
(e) if given to any other Holder, at the address set forth on the books and records of the
Trust.
All such notices shall be deemed to have been given when received in person, telecopied with
receipt confirmed, or mailed by first class mail, postage prepaid except that if a notice or other
document is refused delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered on the date of such
refusal or inability to deliver.
SECTION 14.2
Governing Law
.
This Declaration and the rights of the parties hereunder shall be governed by and interpreted
in accordance with the laws of the State of Delaware and all rights and remedies shall be governed
by such laws without regard to principles of conflict of laws.
SECTION 14.3
Intention of the Parties
.
It is the intention of the parties hereto that the Trust be classified for United States
federal income tax purposes as a grantor trust. The provisions of this Declaration shall be
interpreted to further this intention of the parties.
SECTION 14.4
Headings
.
Headings contained in this Declaration are inserted for convenience of reference only and do
not affect the interpretation of this Declaration or any provision hereof
SECTION 14.5
Successors and Assigns
.
Whenever in this Declaration any of the parties hereto is named or referred to, the successors
and assigns of such party shall be deemed to be included, and all covenants and agreements in this
Declaration by the Sponsor and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 14.6
Partial Enforceability
.
If any provision of this Declaration, or the application of such provision to any Person or
circumstance, shall be held invalid, the remainder of this Declaration, or the application of such
provision to Persons or circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.7
Counterparts
.
This Declaration may contain more than one counterpart of the signature page and this
Declaration may be executed by the affixing of the signature of each of the parties hereto to one
of such counterpart signature pages. All of such counterpart signature pages shall be read as
though one, and they shall have the same force and effect as though all of the signers had signed a
single signature page.
49
IN WITNESS WHEREOF, the undersigned has caused these presents to be executed as of the day and
year first above written.
|
|
|
|
|
|
|
|
|
[ ], as Regular Trustee
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
[ ], as Regular Trustee
|
|
|
|
|
|
|
|
|
|
|
|
BNY Mellon Trust of Delaware, as Delaware Trustee
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
Name:
|
|
[ ]
|
|
|
|
|
Title:
|
|
[ ]
|
|
|
|
|
|
|
|
|
|
|
|
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as
Institutional
Trustee
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name:
|
|
[ ]
|
|
|
|
|
Title:
|
|
[ ]
|
|
|
50
|
|
|
|
|
|
|
|
|
THE TRAVELERS COMPANIES, INC., as
Sponsor and
Debenture Issuer
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Matthew S. Furman
|
|
|
|
|
Title:
|
|
Senior Vice President
|
|
|
51
ANNEX I
TERMS OF
[ ]% TRUST PREFERRED SECURITIES
[ ]% TRUST COMMON SECURITIES
Pursuant to Section 7.1 of the Second Amended and Restated Declaration of Trust, dated as of
[
, 200_] (as amended from time to time, the Declaration), the designation, rights,
privileges, restrictions, preferences and other terms and provisions of the Preferred Securities
and the Common Securities are set out below (each capitalized term used but not defined herein has
the meaning set forth in the Declaration or, if not defined in such Declaration, as defined in the
Prospectus referred to below):
1. Designation and Number.
(a) Preferred Securities. [
(
)] Preferred Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust of [
] dollars [($
)] and a liquidation amount with respect to the assets of the Trust of [$ ] per preferred
security, are hereby designated for the purposes of identification only as [ ]% Trust Preferred
Securities (the Preferred Securities). The Preferred Security Certificates evidencing the
Preferred Securities shall be substantially in the form of Exhibit A-1 to the Declaration, with
such changes and additions thereto or deletions therefrom as may be required by ordinary usage,
custom or practice or to conform to the rules of any stock exchange on which the Preferred
Securities are listed.
(b) Common Securities. [
(
)] Common Securities of the Trust with an aggregate
liquidation amount with respect to the assets of the Trust of [
] dollars [($
)] and a
liquidation amount with respect to the assets of the Trust of [$ ] per common security, are hereby
designated for the purposes of identification only as [ ]% Trust Common Securities (the Common
Securities). The Common Security Certificates evidencing the Common Securities shall be
substantially in the form of Exhibit A-2 to the Declaration, with such changes and additions
thereto or deletions therefrom as may be required by ordinary usage, custom or practice.
2. Distributions.
(a) Distributions payable on each Security will be fixed at a rate per annum of [ ]% (the
Coupon Rate) of the stated liquidation amount of [$ ] per Security, such rate being the rate of
interest payable on the Debentures to be held by the Institutional Trustee. Distributions in
arrears beyond the first date such Distributions are payable (or would be payable if not for any
Extension Period (as defined below) or default by the Debenture Issuer on the Debentures) will bear
interest thereon at the Coupon Rate compounded quarterly (to the extent permitted by applicable
law) from the relevant payment date for such Distributions. The term Distributions as used herein
includes such cash distributions and any such interest payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of the Debentures held
by the Institutional Trustee and to the extent the Institutional
52
Trustee has funds available therefor. The amount of Distributions payable for any period will
be computed for any full quarterly Distribution period on the basis of a 360-day year consisting of
twelve 30-day months. Distributions payable for any period shorter than a full quarterly
Distribution period for which Distributions are computed will be computed on the basis of a 30-day
month and, for periods of less than one month, the actual number of days elapsed during such month.
(b) Distributions on the Securities will be cumulative, will accrue from and including [
, 200_], and will be payable quarterly in arrears, on [
], [
],
[
] and [
] of each year, commencing on [
,
200_]. When, as and if available for payment, Distributions will be made by the Institutional
Trustee, except as otherwise described below. The Debenture Issuer has the right under the
Indenture to defer payments of interest on the Debentures by extending each interest payment period
from time to time on the Debentures for a period not exceeding 20 consecutive quarterly periods
(each an Extension Period), during which Extension Period no interest shall be due and payable on
the Debentures, provided that no Extension Period may extend beyond the date of maturity or
prepayment of the Debentures. As a consequence of the Debenture Issuers extension of the interest
payment period, Distributions will also be deferred. Despite such deferral, quarterly Distributions
will continue to accrue with interest thereon (to the extent permitted by applicable law) at the
Coupon Rate compounded quarterly (to the extent permitted by applicable law) from the relevant
payment date for such Distribution during any such Extension Period. In the event that the
Debenture Issuer exercises its right to extend the interest payment period, then (a) the Debenture
Issuer shall not declare or pay any dividend on, make any distributions with respect to, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of its capital stock or make
any guarantee payment with respect thereto (other than (i) repurchases, redemptions or other
acquisitions of shares of capital stock of Travelers in connection with any employment contract,
benefit plan or other similar arrangement with or for the benefit of employees, officers, directors
or consultants, (ii) repurchases, redemptions or other acquisitions of shares of capital stock of
Travelers or such subsidiary as a result of an exchange or conversion of any class or series of
capital stock of Travelers for any other class or series of the capital stock of Travelers or such
subsidiarys, (iii) the purchase of fractional interests in shares of capital stock of Travelers
pursuant to the conversion or exchange provisions of such capital stock or the security being
converted or exchanged, or (iv) distributions of rights under any shareholders rights plan adopted
by Travelers or such subsidiary) and (b) the Debenture Issuer shall not make any payment of
interest on or principal of (or premium, if any, on), or repay, repurchase or redeem, any debt
securities issued by the Debenture Issuer or its subsidiaries that rank pari passu with or junior
to the Debentures. The foregoing, however, will not apply to any stock dividends paid by Travelers
where the dividend stock is the same stock as that on which the dividend is being paid. Prior to
the termination of any such Extension Period, the Debenture Issuer may further extend such
Extension Period; provided that such Extension Period, together with all such previous and further
extensions thereof, may not exceed 20 quarterly periods; provided, further, that no Extension
Period may extend beyond the maturity of the Debentures. Payments of accrued Distributions will be
payable to Holders as they appear on the books and records of the Trust on the first record date
after the end of the Extension Period. Upon the termination of any Extension Period and the payment
of all amounts then due, the Debenture Issuer may commence a new Extension Period, subject to the
above requirements. The Regular Trustees will give notice to
53
each Holder of any Extension Period upon their receipt of notice thereof from the Debenture
Issuer.
(c) Distributions on the Securities will be payable to the Holders thereof as they appear on
the books and records of the Trust at the close of business on the relevant record dates. While the
Preferred Securities remain in book-entry only form, the relevant record dates shall be one
Business Day prior to the relevant payment dates which payment dates shall correspond to the
interest payment dates on the Debentures. Subject to any applicable laws and regulations and the
provisions of the Declaration, each such payment in respect of the Preferred Securities will be
made as described under the heading Book-Entry Issuance in the Prospectus, dated [
, 200
] (the Prospectus), of the Trust included in the Registration Statement on
Form S-3 of the Sponsor and the Trust. The relevant record dates for the Common Securities shall be
the same record date as for the Preferred Securities. If the Preferred Securities shall not
continue to remain in book-entry only form, the relevant record dates for the Preferred Securities
shall conform to the rules of any securities exchange on which the securities are listed and, if
none, shall be selected by the Regular Trustees, which dates shall be at least 14 days but no more
than 60 days before the relevant payment dates, which payment dates shall correspond to the
interest payment dates on the Debentures. Distributions payable on any Securities that are not
punctually paid on any Distribution payment date, as a result of the Debenture Issuer having failed
to make a payment under the Debentures (other than while an Extension Period shall be continuing),
will cease to be payable to the Person in whose name such Securities are registered on the relevant
record date, and such defaulted Distribution will instead be payable to the Person in whose name
such Securities are registered on the special record date or other specified date determined in
accordance with the Indenture. If any date on which Distributions are payable on the Securities is
not a Business Day, then payment of the Distribution payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment in respect of any
such delay) except that, if such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each case with the same force and
effect as if made on such Distribution payment date.
(d) In the event that there is any money or other property held by or for the Trust that is
not accounted for hereunder, such property shall be distributed Pro Rata (as defined herein) among
the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary liquidation, dissolution or winding-up of the
Trust, the Holders of the Securities on the date of the liquidation, dissolution or winding-up, as
the case may be, will be entitled to receive out of the assets of the Trust available for
distribution to Holders of Securities after satisfaction of liabilities of creditors, distributions
in cash or other immediately available funds in an amount equal to the aggregate of the stated
liquidation amount of [$ ] per Security plus accrued and unpaid Distributions thereon to the date
of payment (such amount being the Liquidation Distribution), unless, in connection with such
liquidation, dissolution, or winding-up, Debentures in an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate equal to the Coupon Rate, and bearing
accrued and unpaid interest in an amount equal to the accrued and unpaid Distributions
54
on, such Securities outstanding at such time, have been distributed on a Pro Rata basis to the
Holders of the Securities in exchange for such Securities.
If, upon any such liquidation, dissolution, or winding-up the Liquidation Distribution can be
paid only in part because the Trust has insufficient assets available to pay in full the aggregate
Liquidation Distribution, then the amounts payable directly by the Trust on the Securities shall be
paid on a Pro Rata basis, as such term is defined in Section 8 below.
4. Redemption and Distribution.
(a) Upon the repayment of the Debentures in whole or in part, whether at maturity or upon
redemption (either at the option of the Debenture Issuer or pursuant to a Special Event, as
described below), the proceeds from such repayment or payment shall be simultaneously applied to
redeem Securities having an aggregate liquidation amount equal to the aggregate principal amount of
the Debentures so repaid or redeemed at a redemption price equal to the proceeds from such
repayment or redemption of the Debentures (the Redemption Price). Holders shall be given not less
than 30 nor more than 60 days notice of such redemption.
(b) If fewer than all the outstanding Securities are to be so redeemed, the Securities will be
redeemed Pro Rata and the Preferred Securities to be redeemed will be as described in Section
4(h)(ii) below.
(c) The Debenture Issuer shall have the right, at any time, to dissolve the Trust and, after
satisfaction of creditors, cause Debentures held by the Institutional Trustee, having an aggregate
principal amount equal to the aggregate stated liquidation amount of, with an interest rate
identical to the Coupon Rate, and with accrued and unpaid interest equal to accrued and unpaid
Distributions on, the Securities outstanding at such time, to be distributed to the Holders of the
Securities in liquidation of such Holders interests in the Trust on a Pro Rata basis.
(d) The Debenture Issuer shall have the right (subject to the conditions set forth in the
Indenture) to elect to prepay the Debentures, in whole or in part, at any time on or after [
, 200
], and, simultaneous with such prepayment, to cause a Like Amount (as
defined below) of the Debentures to be redeemed by the Trust at the Optional Redemption Price on a
Pro Rata basis.
Like Amount means, with respect to a redemption of the Securities, Securities having a
stated liquidation amount equal to the principal amount of Debentures to be paid in accordance with
their terms.
Optional Redemption Price means an amount equal to 100% of the stated liquidation amount of
the Securities to be redeemed by the Trust plus accumulated and unpaid Distributions thereon, if
any to the date of such redemption.
(e) The Debenture Issuer shall have the right, upon not less than 30 nor more than 60 days
notice, to redeem the Debentures, in whole but not in part, for cash within 90 days following the
occurrence of a Tax Event or an Investment Company Event (each as defined below, and each a
Special Event), and, following such redemption, Securities with an
55
aggregate liquidation amount equal to the aggregate principal amount of the Debentures so
redeemed shall be redeemed by the Trust at the Redemption Price on a Pro Rata basis.
Tax Event means that the Regular Trustees shall have received an opinion of a nationally
recognized independent tax counsel experienced in such matters (a Tax Event Opinion) to the
effect that, as a result of (a) any amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or (b) as a result of any official
administrative pronouncement or judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or which pronouncement or decision is announced
on or after the date of the original issuance of the Securities there is more than an insubstantial
risk that (i) the Trust is, or will be within 90 days of the date of such opinion, subject to
United States federal income tax with respect to income accrued or received on the Debentures, (ii)
the Trust is, or, within 90 days of the date of such opinion, will be subject to more than a de
minimis amount of other taxes, duties or other governmental charges, or (iii) interest payable to
the Trust on the Debentures is not or will not, within 90 days of the date of such opinion, be
deductible, in whole or in part, by the Debenture Issuer for United States federal income tax
purposes.
Investment Company Event means that the Regular Trustees shall have received an opinion of a
nationally recognized independent counsel experienced in practice under the Investment Company Act
(an Investment Company Event Opinion) to the effect that, as a result of (a) an amendment to or a
change (including any announced prospective change) in law or regulation of the United States or
any rules, guidelines or policies of any applicable regulatory authority for the Debenture Issuer,
or (b) as a result of any official administrative pronouncement or judicial decision interpreting
or applying such laws or regulations, which amendment or change is effective or which pronouncement
or decision is announced on or after the date of the original issuance of the Securities, there is
a more than an insubstantial risk that the Trust is or will be considered, within 90 days of the
date of such opinion, an Investment Company which is required to be registered under the Investment
Company Act.
On and from the date fixed by the Regular Trustees for any distribution of Debentures and
dissolution of the Trust: (i) the Securities will no longer be deemed to be outstanding, (ii) DTC
or its nominee (or any successor Clearing Agency or its nominee), as the record Holder of the
Preferred Securities, will receive a registered global certificate or certificates representing the
Debentures to be delivered upon such distribution and (iii) any certificates representing
Securities, except for certificates representing Preferred Securities held by DTC or its nominee
(or any successor Clearing Agency or its nominee), will be deemed to represent beneficial interests
in the Debentures having an aggregate principal amount equal to the aggregate stated liquidation
amount of, with an interest rate identical to the Coupon Rate of, and accrued and unpaid interest
equal to accrued and unpaid Distributions on such Securities until such certificates are presented
to the Debenture Issuer or its agent for transfer or reissue.
(f) The Trust may not redeem fewer than all the outstanding Securities unless all accrued and
unpaid Distributions have been paid on all Securities for all quarterly Distribution periods
terminating on or before the date of redemption.
56
(g) If the Debentures are distributed to Holders of the Securities, pursuant to the terms of
the Indenture, the Debenture Issuer will use its best efforts to have the Debentures listed on the
New York Stock Exchange or on such other exchange as the Preferred Securities were listed
immediately prior to the distribution of the Debentures.
(h) Redemption or Distribution procedures will be as follows:
(i) Notice of any redemption of, or notice of distribution of Debentures in exchange
for the Securities (a Redemption/Distribution Notice) will be given by the Trust by mail
to each Holder of Securities to be redeemed or exchanged not fewer than 30 nor more than 60
days before the date fixed for redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for redemption of the Debentures. For purposes of the
calculation of the date of redemption or exchange and the dates on which notices are given
pursuant to this Section 4(h)(i), a Redemption/ Distribution Notice shall be deemed to be
given on the day such notice is first mailed by first-class mail, postage prepaid, to
Holders of Securities. Each Redemption/Distribution Notice shall be addressed to the Holders
of Securities at the address of each such Holder appearing in the books and records of the
Trust. No defect in the Redemption/ Distribution Notice or in the mailing of either thereof
with respect to any Holder shall affect the validity of the redemption or exchange
proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Securities are to be redeemed,
the Securities to be redeemed shall be redeemed Pro Rata from each Holder of Preferred
Securities, it being understood that, in respect of Preferred Securities registered in the
name of and held of record by DTC or its nominee (or any successor Clearing Agency or its
nominee) or any nominee, the distribution of the proceeds of such redemption will be made to
each Clearing Agency Participant (or Person on whose behalf such nominee holds such
securities) in accordance with the procedures applied by such agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives a Redemption/Distribution
Notice, which notice may only be issued if the Debentures are redeemed as set out in this
Section 4 (which notice will be irrevocable), then (A) while the Preferred Securities are in
book-entry only form, with respect to the Preferred Securities, by 12:00 noon, New York City
time, on the redemption date, provided, that the Debenture Issuer has paid the Institutional
Trustee a sufficient amount of cash in connection with the related redemption or maturity of
the Debentures, the Institutional Trustee will deposit irrevocably with DTC or its nominee
(or successor Clearing Agency or its nominee) funds sufficient to pay the applicable
Redemption Price with respect to the Preferred Securities and will give DTC (or any
successor Clearing Agency) irrevocable instructions and authority to pay the Redemption
Price to the Preferred Security Beneficial Owners, and (B) with respect to Preferred
Securities issued in definitive form and Common Securities, provided that the Debenture
Issuer has paid the Institutional Trustee a sufficient amount of cash in connection with the
related redemption or maturity of the Debentures, the Institutional Trustee will pay the
relevant Redemption Price to the Holders of such Securities by check mailed to the address
of the
57
relevant Holder appearing on the books and records of the Trust on the redemption date.
If a Redemption/Distribution Notice shall have been given and funds deposited as required,
if applicable, then immediately prior to the close of business on the date of such deposit,
or on the redemption date, as applicable, Distributions will cease to accrue on the
Securities so called for redemption and all rights of Holders of such Securities so called
for redemption will cease, except the right of the Holders of such Securities to receive the
Redemption Price, but without interest on such Redemption Price. Neither the Regular
Trustees nor the Trust shall be required to register or cause to be registered the transfer
of any Securities that have been so called for redemption. If any date fixed for redemption
of Securities is not a Business Day, then payment of the Redemption Price payable on such
date will be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such Business Day
falls in the next calendar year, such payment will be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such date fixed for
redemption. If payment of the Redemption Price in respect of any Securities is improperly
withheld or refused and not paid either by the Institutional Trustee or by the Sponsor as
guarantor pursuant to the Preferred Securities Guarantee, Distributions on such Securities
will continue to accrue from the original redemption date to the actual date of payment, in
which case the actual payment date will be considered the date fixed for redemption for
purposes of calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the Regular Trustees on behalf of
the Trust to (A) in respect of the Preferred Securities, DTC or its nominee (or any
successor Clearing Agency or its nominee) if the Global Certificates have been issued or, if
Definitive Preferred Security Certificates have been issued, to the Holder thereof, and (B)
in respect of the Common Securities to the Holder thereof.
(v) Subject to the foregoing and applicable law (including, without limitation, United
States federal securities laws), the Debenture Issuer or its Affiliates may at any time and
from time to time purchase outstanding Preferred Securities by tender, in the open market or
by private agreement.
5. Voting Rights Preferred Securities.
(a) Except as provided under Sections 5(b) and 7 and as otherwise required by law and the
Declaration, the Holders of the Preferred Securities will have no voting rights.
(b) Subject to the requirements set forth in this paragraph, the Holders of a Majority in
aggregate liquidation amount of the Preferred Securities, voting separately as a class, may direct
the time, method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or direct the exercise of any trust or power conferred upon the
Institutional Trustee under the Declaration, including the right to direct the Institutional
Trustee, as holder of the Debentures, to (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or exercise any trust or power
conferred on the Debenture Trustee with respect to the Debentures, (ii) waive any past Event of
Default that is waivable under the Indenture, (iii) exercise any right to rescind or annul a
declaration that the principal of all the Debentures shall be due and payable or (iv) consent to
any
58
amendment, modification or termination of the Indenture or the Debentures where such consent
shall be required, provided, however, that, where a consent or action under the Indenture would
require the consent or act of the Holders of greater than a majority in principal amount of
Debentures affected thereby (a Super Majority), the Institutional Trustee may only give such
consent or take such action at the written direction of the Holders of at least the proportion in
liquidation amount of the Preferred Securities which the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding. The Institutional Trustee shall not
revoke any action previously authorized or approved by a vote of the Holders of the Preferred
Securities. Except with respect to directing the time, method and place of conducting a proceeding
for a remedy available to the Institutional Trustee, the Institutional Trustee, as holder of the
Debentures, shall not take any of the actions described in clauses (i), (ii), (iii) or (iv) above
unless the Institutional Trustee has obtained, at the expense of the Holder of Common Securities,
an opinion of a nationally recognized independent tax counsel experienced in such matters to the
effect that as a result of such action, the Trust will not fail to be classified as a grantor trust
for United States federal income tax purposes. If the Institutional Trustee fails to enforce its
rights under the Declaration, (other than by reason of the failure to obtain the opinion set forth
in the previous sentence) any Holder of Preferred Securities may, to the fullest extent permitted
by law, directly institute a legal proceeding against the Debenture Issuer to enforce the
Institutional Trustees rights under the Debentures without first instituting a legal proceeding
against the Institutional Trustee or any other Person. If a Declaration Event of Default has
occurred and is continuing and such event is attributable to the failure of the Debenture Issuer to
pay interest or principal on the Debentures on the date such interest or principal is otherwise
payable (or in the case of redemption, on the redemption date), then a Holder of Preferred
Securities may also directly institute a proceeding for enforcement of payment to such Holder (a
Direct Action) of the principal of or interest on the Debentures having a principal amount equal
to the aggregate liquidation amount of the Preferred Securities of such Holder on or after the
respective due date specified in the Debentures without first (i) directing the Institutional
Trustee to enforce the terms of the Debentures or (ii) instituting a legal proceeding directly
against the Debenture Issuer to enforce the Institutional Trustees rights under the Debentures.
Except as provided in the preceding sentence, the Holders of Preferred Securities will not be able
to exercise directly any other remedy available to the Holders of the Debentures. In connection
with such Direct Action, Travelers will be subrogated to the rights of such Holder of Preferred
Securities under the Declaration to the extent of any payment made by Travelers to such Holder of
Preferred Securities in such Direct Action.
(c) Any required approval or direction of Holders of Preferred Securities may be given at a
separate meeting of Holders of Preferred Securities convened for such purpose, at a meeting of all
of the Holders of Securities in the Trust or pursuant to written consent. The Regular Trustees or,
at their election, the Institutional Trustee, will cause a notice of any meeting at which Holders
of Preferred Securities are entitled to vote to be mailed to each Holder of record of Preferred
Securities. Each such notice will include a statement setting forth (i) the date of such meeting or
the date by which such action is to be taken, (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote or of such matter upon which
written consent is sought and (iii) instructions for the delivery of proxies or consents.
59
No vote or consent of the Holders of the Preferred Securities will be required for the Trust
to redeem and cancel Preferred Securities or to distribute the Debentures in accordance with the
Declaration and the terms of the Securities.
Notwithstanding that Holders of Preferred Securities are entitled to vote or consent under any
of the circumstances described above, any of the Preferred Securities that are owned by the Sponsor
or any Affiliate of the Sponsor shall not be entitled to vote or consent and shall, for purposes of
such vote or consent, be treated as if they were not outstanding.
6. Voting Rights Common Securities.
(a) Except as provided under Sections 6(b), (c) and 7 as otherwise required by law and the
Declaration, the Holders of the Common Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance with Article V of the
Declaration, to vote to appoint, remove or replace any Trustee or to increase or decrease the
number of Trustees.
Subject to Section 2.6 of the Declaration and only after the Event of Default with respect to
the Preferred Securities has been cured, waived, or otherwise eliminated and subject to the
requirements of the second to last sentence of this paragraph, the Holders of a Majority in
aggregate liquidation amount of the Common Securities, voting separately as a class, may direct the
time, method, and place of conducting any proceeding for any remedy available to the Institutional
Trustee, or direct the exercise of any trust or power conferred upon the Institutional Trustee
under the Declaration, including (i) directing the time, method, place of conducting any proceeding
for any remedy available to the Debenture Trustee, or exercising any trust or power conferred on
the Debenture Trustee with respect to the Debentures, (ii) waiving any past default and its
consequences that is waivable under the Indenture, or (iii) exercising any right to rescind or
annul a declaration that the principal of all the Debentures shall be due and payable, provided
that, where a consent or action under the Indenture would require the consent or act of Super
Majority, the Institutional Trustee may only give such consent or take such action at the written
direction of the Holders of at least the proportion in liquidation amount of the Common Securities
which the relevant Super Majority represents of the aggregate principal amount of the Debentures
outstanding. Pursuant to this Section 6(c), the Institutional Trustee shall not revoke any action
previously authorized or approved by a vote of the Holders of the Preferred Securities. Other than
with respect to directing the time, method and place of conducting any proceeding for any remedy
available to the Institutional Trustee or the Debenture Trustee as set forth above, the
Institutional Trustee shall not take any action in accordance with the directions of the Holders of
the Common Securities under this paragraph unless the Institutional Trustee has obtained, at the
expense of the Holder of Common Securities, an opinion of tax counsel to the effect that for the
purposes of United States federal income tax the Trust will not be classified as other than a
grantor trust on account of such action. If the Institutional Trustee fails to enforce its rights
under the Declaration, any Holder of Common Securities may institute a legal proceeding directly
against any Person to enforce the Institutional Trustees rights under the Declaration without
first instituting a legal proceeding against the Institutional Trustee or any other Person.
60
Any approval or direction of Holders of Common Securities may be given at a separate meeting
of Holders of Common Securities convened for such purpose, at a meeting of all of the Holders of
Securities in the Trust or pursuant to written consent. The Regular Trustees will cause a notice of
any meeting at which Holders of Common Securities are entitled to vote to be mailed to each Holder
of record of Common Securities. Each such notice will include a statement setting forth (i) the
date of such meeting, (ii) a description of any resolution proposed for adoption at such meeting on
which such Holders are entitled to vote and (iii) instructions for the delivery of proxies.
No vote or consent of the Holders of the Common Securities will be required for the Trust to
redeem and cancel Common Securities or to distribute the Debentures in accordance with the
Declaration and the terms of the Securities.
7. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1 of the Declaration, if any proposed
amendment to the Declaration provides for, or the Regular Trustees otherwise propose to effect, (i)
any action that would adversely affect in any material respect the powers, preferences or special
rights of the Securities, whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described in Section 8.1 of the
Declaration, then the Holders of outstanding Securities as a class, will be entitled to vote on
such amendment or proposal (but not on any other amendment or proposal) and such amendment or
proposal shall not be effective except with the approval of the Holders of at least a Majority in
liquidation amount of the Securities, voting together as a single class; provided, however, if any
amendment or proposal referred to in clause (i) above would adversely affect only the Preferred
Securities or only the Common Securities, then only the affected class will be entitled to vote on
such amendment or proposal and such amendment or proposal shall not be effective except with the
approval of a Majority in liquidation amount of such class of Securities.
(b) In the event the consent of the Institutional Trustee as the holder of the Debentures is
required under the Indenture with respect to any amendment, modification or termination on the
Indenture or the Debentures, the Institutional Trustee shall request the written direction of the
Holders of the Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by a Majority in
liquidation amount of the Securities voting together as a single class; provided, however, that
where a consent under the Indenture would require the consent of a Super Majority, the
Institutional Trustee may only give such consent at the direction of the Holders of at least the
proportion in liquidation amount of the Securities which the relevant Super Majority represents of
the aggregate principal amount of the Debentures outstanding; provided, further, that the
Institutional Trustee shall not take any action in accordance with the directions of the Holders of
the Securities under this Section 7(b) unless the Institutional Trustee has obtained, at the
expense of the Holder of Common Securities, an opinion of tax counsel to the effect that for the
purposes of United States federal income tax the Trust will not be classified as other than a
grantor trust on account of such action.
61
8. Pro Rata.
A reference in these terms of the Securities to any payment, distribution or treatment as
being Pro Rata shall mean pro rata to each Holder of Securities according to the aggregate
liquidation amount of the Securities held by the relevant Holder in relation to the aggregate
liquidation amount of all Securities outstanding unless, in relation to a payment, an Event of
Default under the Declaration has occurred and is continuing, in which case any funds available to
make such payment shall be paid first to each Holder of the Preferred Securities Pro Rata according
to the aggregate liquidation amount of Preferred Securities held by the relevant Holder relative to
the aggregate liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to each Holder of
Common Securities Pro Rata according to the aggregate liquidation amount of Common Securities held
by the relevant Holder relative to the aggregate liquidation amount of all Common Securities
outstanding.
9. Ranking.
The Preferred Securities rank pari passu and payment thereon shall be made Pro Rata with the
Common Securities except that, where an Event of Default occurs and is continuing under the
Indenture in respect of the Debentures held by the Institutional Trustee, the rights of Holders of
the Common Securities to payment in respect of Distributions and payments upon liquidation,
redemption and otherwise are subordinated to the rights to payment of the Holders of the Preferred
Securities.
10. Listing.
The Regular Trustees shall use their reasonable best efforts to cause the Preferred Securities
to be listed on the New York Stock Exchange, Inc.
11. Acceptance of Securities Guarantee and Indenture.
Each Holder of Preferred Securities and Common Securities, by the acceptance thereof, agrees
to the provisions of the Preferred Securities Guarantee, including the subordination provisions
therein and to the provisions of the Indenture.
12. No Preemptive Rights.
The Holders of the Securities shall have no preemptive or similar rights to subscribe for any
additional securities.
13. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of any one or more of the Declaration, the Preferred
Securities Guarantee and the Indenture to a Holder without charge on written request to the Sponsor
at its principal place of business.
62
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT THIS PREFERRED SECURITY IS A
GLOBAL CERTIFICATE WITHIN THE MEANING OF THE DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED
IN THE NAME OF THE DEPOSITORY TRUST COMPANY (THE DEPOSITARY) OR A NOMINEE OF THE DEPOSITARY. THIS
PREFERRED SECURITY IS EXCHANGEABLE FOR PREFERRED SECURITIES REGISTERED IN THE NAME OF A PERSON
OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
DECLARATION AND NO TRANSFER OF THIS PREFERRED SECURITY (OTHER THAN A TRANSFER OF THIS PREFERRED
SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN
LIMITED CIRCUMSTANCES.
UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE TRUST OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY PREFERRED SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE
& CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.]
|
|
|
Number of Preferred Securities
|
|
|
|
|
|
Certificate Evidencing Preferred Securities of
TRAVELERS CAPITAL TRUST [II] [III] [IV] [V]
[ ]% Trust Preferred Securities (Liquidation Amount [$] per Preferred Security)
TRAVELERS CAPITAL TRUST [II] [III] [IV] [V], a statutory trust created under the laws of the
State of Delaware (the Trust), hereby certifies that Cede & Co. (the Holder) is the registered
owner of [
] preferred securities of the Trust representing
preferred undivided beneficial interests in the assets of the Trust designated the [_]% Trust
Preferred Securities (the Preferred Securities). The Preferred Securities are transferable on the
books and records of the Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer. The designation,
63
rights, privileges, restrictions, preferences and other terms and provisions of the Preferred
Securities are set forth in, and this certificate and the Preferred Securities represented hereby
are issued and shall in all respects be subject to, the provisions of the Second Amended and
Restated Declaration of Trust of the Trust dated as of [
, 200
] as the
same may be amended from time to time (the Declaration), including the designation of the terms
of the Preferred Securities as set forth in Annex I thereto. Capitalized terms used herein but not
defined shall have the meaning given them in the Declaration. The Holder is entitled to the
benefits of the Preferred Securities Guarantee to the extent provided therein. The Sponsor will
provide a copy of the Declaration, the Preferred Securities Guarantee and the Indenture to a Holder
without charge upon written request to the Sponsor at its principal place of business.
The Holder of this certificate, by accepting this certificate, is deemed to have (i) agreed to
the terms of the Indenture and the Debentures[, including that the Debentures are subordinate and
junior in right of payment to all Senior Indebtedness (as defined in the Indenture)][, including
that the Debentures are the general unsecured obligations of Travelers and will rank equal to
Travelers other senior and unsecured obligations] and (ii) agreed to the terms of the Preferred
Securities Guarantee[, including that the Preferred Securities Guarantee is (A) subordinate and
junior in right of payment to all Senior Indebtedness (as defined in the Indenture) of Travelers,
(B) pari passu with the most senior preferred or preference stock now or hereafter issued by
Travelers and with any guarantee now or hereafter issued by Travelers with respect to preferred or
preference stock or preferred trust security of Travelers Affiliates and (C) senior to Travelers
common stock][, including that the Preferred Securities Guarantee is the general unsecured
obligation of Travelers and will rank equal to Travelers other senior and unsecured obligations].
Upon receipt of this certificate, the Holder is bound by the Declaration and is entitled to
the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal income tax purposes, the
Debentures as indebtedness and the Preferred Securities as evidence of indirect beneficial
ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this [
] day of [
, 200
].
|
|
|
|
|
|
|
|
|
TRAVELERS CAPITAL TRUST [II]
[III] [IV] [V]
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
Title:
|
|
[ ]
Regular Trustee
|
|
|
64
INSTITUTIONAL TRUSTEES CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the within-mentioned Declaration.
65
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at a rate per annum of [ ]%
(the Coupon Rate) of the stated liquidation amount of [$ ] per Preferred Security, such rate
being the rate of interest payable on the Debentures to be held by the Institutional Trustee.
Distributions in arrears will bear interest thereon at the Coupon Rate compounded quarterly (to the
extent permitted by applicable law). The term Distributions as used herein includes such cash
distributions and any such interest payable unless otherwise stated. A Distribution is payable only
to the extent that payments are made in respect of the Debentures held by the Institutional Trustee
and to the extent the Institutional Trustee has funds available therefor. The amount of
Distributions payable for any period will be computed for any full quarterly Distribution period on
the basis of a 360-day year consisting of twelve 30-day months. Distributions payable for any
period of less than a full quarterly period will be computed on the basis of a 30-day month and,
for periods of less than one month, the actual number of elapsed days per 30-day month.
Distributions on the Preferred Securities will be cumulative, will accrue from the date of
original issuance and will be payable quarterly in arrears, on the following dates, which dates
correspond to the interest payment dates on the Debentures: [
], [
],
[
] and [
] of each year, commencing on [
,
200
], except as otherwise described below. The Debenture Issuer has the right under the
Indenture to defer payments of interest by extending the interest payment period from time to time
on the Debentures for a period not exceeding 20 quarterly periods (each an Extension Period) and,
as a consequence of such deferral, Distributions will also be deferred. Despite such deferral,
quarterly Distributions will continue to accrue with interest thereon (to the extent permitted by
applicable law) at the Coupon Rate compounded quarterly during any such Extension Period. Prior to
the termination of any such Extension Period, the Debenture Issuer may further extend such
Extension Period; provided that such Extension Period together with all such previous and further
extensions thereof may not exceed 20 quarterly periods or extend beyond the maturity (whether at
the stated maturity or by declaration of acceleration, call for redemption or otherwise) of the
Debentures under the Indenture. Payments of accrued Distributions will be payable to Holders as
they appear on the books and records of the Trust on the first record date after the end of the
Extension Period. Upon the termination of any Extension Period and the payment of all amounts then
due, the Debenture Issuer may commence a new Extension Period, subject to the above requirements.
The Preferred Securities shall be redeemable as provided in the Declaration.
66
ASSIGNMENT
|
|
|
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred Security
Certificate to:
|
|
|
|
(Insert assignees social security or tax identification number)
(Insert address and zip code of assignee) and irrevocably appoints agent to transfer this Preferred
Security Certificate on the books of the Trust. The agent may substitute another to act for him or
her.
(Sign exactly as your name appears on the other side of this Preferred Security Certificate)
67
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
TRANSFER OF THIS CERTIFICATE IS SUBJECT TO THE CONDITIONS SET FORTH IN THE DECLARATION
REFERRED TO BELOW
|
|
|
Number of Common Securities
|
|
|
|
|
|
Certificate Evidencing Common Securities of
TRAVELERS CAPITAL TRUST [II] [III] [IV] [V]
[ ]% Trust Common Securities (Liquidation Amount [$ ] per Common Security)
TRAVELERS CAPITAL TRUST [II] [III] [IV] [V], a statutory trust created under the laws of the
State of Delaware (the Trust), hereby certifies that The Travelers Companies, Inc., a Minnesota
corporation, (the Holder) is the registered owner of [ ] common securities of the Trust
representing undivided beneficial interests in the assets of the Trust designated the [ ]% Trust
Common Securities (the Common Securities). The Common Securities are transferable on the books
and records of the Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer and satisfaction of the other conditions
set forth in the Declaration (as defined below), including, without limitation, Section 9.1
thereof. The designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities represented hereby are issued and shall in all respects be
subject to the provisions of the Second Amended and Restated Declaration of Trust of the Trust
dated as of [
, 200_], as the same may be amended from time to time (the Declaration),
including the designation of the terms of the Common Securities as set forth in Annex I thereto.
Capitalized terms used herein but not defined shall have the meaning given them in the Declaration.
The Sponsor will provide a copy of the Declaration and the Indenture to a Holder without charge
upon written request to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the Declaration and is entitled to
the benefits thereunder.
The Holder of this certificate, by accepting this certificate, is deemed to have agreed to the
terms of the Indenture and the Debentures, including that the Debentures are subordinate and junior
in right of payment to all Senior Indebtedness (as defined in the Indenture) as and to the extent
provided in the Indenture.
By acceptance, the Holder agrees to treat, for United States federal income tax purposes, the
Debentures as indebtedness and the Common Securities as evidence of indirect beneficial ownership
in the Debentures.
68
IN WITNESS WHEREOF, the Trust has executed this certificate this [
] day of
[
, 200
].
|
|
|
|
|
|
|
|
|
TRAVELERS CAPITAL TRUST
[II] [III] [IV] [V]
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
[ ]
|
|
|
|
|
|
|
Title: Regular Trustee
|
|
|
69
ASSIGNMENT
|
|
|
FOR VALUE
Certificate to:
|
RECEIVED,
|
the undersigned assigns and transfers this Common Security
|
|
|
|
(Insert assignees social security or tax identification number)
(Insert address and zip code of assignee) and irrevocably appoints agent to transfer this Common
Security Certificate on the books of the Trust. The agent may substitute another to act for him or
her.
(Sign exactly as your name appears on the other side of this Common Security Certificate)
Exhibit 4.31
PREFERRED SECURITIES GUARANTEE AGREEMENT
TRAVELERS CAPITAL TRUST [II] [III] [IV] [V]
DATED AS OF
, 200_
Table of Contents
|
|
|
|
|
|
|
Page
|
ARTICLE I
|
DEFINITIONS AND INTERPRETATION
|
|
|
|
|
|
SECTION 1.1 Definitions and Interpretation
|
|
|
1
|
|
|
|
|
|
|
ARTICLE II
|
TRUST INDENTURE ACT
|
|
|
|
|
|
SECTION 2.1 Trust Indenture Act; Application
|
|
|
4
|
|
SECTION 2.2 Lists of Holders of Securities
|
|
|
4
|
|
SECTION 2.3 Reports by the Preferred Guarantee Trustee
|
|
|
5
|
|
SECTION 2.4 Periodic Reports to the Preferred Guarantee Trustee
|
|
|
5
|
|
SECTION 2.5 Evidence of Compliance with Conditions Precedent
|
|
|
5
|
|
SECTION 2.6 Events of Default; Waiver
|
|
|
5
|
|
SECTION 2.7 Events of Default; Notice
|
|
|
5
|
|
SECTION 2.8 Conflicting Interests
|
|
|
6
|
|
|
|
|
|
|
ARTICLE III
|
POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE
|
|
|
|
|
|
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee
|
|
|
6
|
|
SECTION 3.2 Certain Rights of the Preferred Guarantee Trustee
|
|
|
7
|
|
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee
|
|
|
9
|
|
|
|
|
|
|
ARTICLE IV
|
PREFERRED GUARANTEE TRUSTEE
|
|
|
|
|
|
SECTION 4.1 Preferred Guarantee Trustee; Eligibility
|
|
|
10
|
|
SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee Trustees
|
|
|
10
|
|
|
|
|
|
|
ARTICLE V
|
GUARANTEE
|
|
|
|
|
|
SECTION 5.1 Guarantee
|
|
|
11
|
|
SECTION 5.2 Waiver of Notice and Demand
|
|
|
11
|
|
SECTION 5.3 Obligations Not Affected
|
|
|
11
|
|
SECTION 5.4 Rights of Holders
|
|
|
12
|
|
SECTION 5.5 Guarantee of Payment
|
|
|
13
|
|
SECTION
5.6 Subrogation
|
|
|
13
|
|
SECTION 5.7 Independent Obligations
|
|
|
13
|
|
i
|
|
|
|
|
|
|
Page
|
ARTICLE VI
|
LIMITATION OF TRANSACTIONS; SUBORDINATION
|
|
|
|
|
|
SECTION 6.1 Limitation of Transactions
|
|
|
13
|
|
SECTION 6.2 Ranking
|
|
|
14
|
|
|
|
|
|
|
ARTICLE VII
|
TERMINATION
|
|
|
|
|
|
SECTION 7.1 Termination
|
|
|
14
|
|
|
|
|
|
|
ARTICLE VIII
|
INDEMNIFICATION
|
|
|
|
|
|
SECTION 8.1 Exculpation
|
|
|
15
|
|
SECTION 8.2 Indemnification
|
|
|
15
|
|
|
|
|
|
|
ARTICLE IX
|
MISCELLANEOUS
|
|
|
|
|
|
SECTION 9.1 Successors and Assigns
|
|
|
16
|
|
SECTION 9.2 Amendments
|
|
|
16
|
|
SECTION 9.3 Notices
|
|
|
16
|
|
SECTION 9.4 Benefit
|
|
|
17
|
|
SECTION 9.5 Governing Law
|
|
|
17
|
|
ii
CROSS-REFERENCE TABLE*
|
|
|
|
|
Section of
|
|
Section of
|
Trust Indenture Act
|
|
Guarantee of
|
1939, as amended
|
|
Agreement
|
310(a)
|
|
|
4.1
|
(a)
|
310(b
|
|
|
4.1(c), 2.8
|
|
310(c)
|
|
Inapplicable
|
311(a)
|
|
|
2.2
|
(b)
|
311(b)
|
|
|
2.2
|
(b)
|
311(c)
|
|
Inapplicable
|
312(a)
|
|
|
2.2
|
(a)
|
312(b)
|
|
|
2.2
|
(b)
|
313
|
|
|
2.3
|
|
314(a)
|
|
|
2.4
|
|
314(b)
|
|
Inapplicable
|
314(c)
|
|
|
2.5
|
|
314(d)
|
|
Inapplicable
|
314(e)
|
|
|
1.1, 2.5, 3.2
|
|
314(f)
|
|
|
2.1, 3.2
|
|
315(a)
|
|
|
3.1
|
(d)
|
315(b)
|
|
|
2.7
|
|
315(c)
|
|
|
3.1
|
|
315(d)
|
|
|
3.1
|
(d)
|
316(a)
|
|
|
1.1, 2.6, 5.4
|
|
316(b)
|
|
|
5.3
|
|
316(c)
|
|
|
8.2
|
|
317(a)
|
|
Inapplicable
|
317(b)
|
|
Inapplicable
|
318(a)
|
|
|
2.1
|
(b)
|
318(b)
|
|
|
2.1
|
|
318(c)
|
|
|
2.1
|
(a)
|
|
|
|
*
|
|
This Cross-Reference Table does not constitute part of this Guarantee Agreement and shall not
affect the interpretation of any of its terms or provisions.
|
iii
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (this Preferred Securities Guarantee), dated as of [
, 200
], is executed and delivered by The Travelers Companies, Inc., a Minnesota
corporation (the Guarantor), and The Bank of New York Mellon Trust Company, N.A., as trustee (the
Preferred Guarantee Trustee), for the benefit of the Holders (as defined herein) from time to
time of the Preferred Securities (as defined herein) of Travelers Capital Trust [II] [III] [IV]
[V], a Delaware statutory trust (the Issuer).
WHEREAS, pursuant to a Second Amended and Restated Declaration of Trust (the Declaration),
dated as of
[
,
200
], among the trustees of the Issuer named therein, the
Guarantor, as sponsor, and the holders from time to time of undivided beneficial interests in the
assets of the Issuer, the Issuer is issuing on the date hereof $[
] aggregate
liquidation preference of its [ ]% Preferred Securities (stated liquidation amount [$ ] per
preferred security) (the Preferred Securities) representing preferred undivided beneficial
interests in the assets of the Issuer and having the terms set forth in the Declaration;
WHEREAS, as incentive for the Holders to purchase the Preferred Securities, the Guarantor
desires irrevocably and unconditionally to agree, to the extent set forth in this Preferred
Securities Guarantee, to pay to the Holders the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of Preferred Securities, which
purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor executes and
delivers this Preferred Securities Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1
Definitions and Interpretation.
In this Preferred Securities Guarantee, unless the context otherwise requires:
(a) Capitalized terms used in this Preferred Securities Guarantee but not defined in
the preamble above have the respective meanings assigned to them in this Section 1.1;
(b) a term defined anywhere in this Preferred Securities Guarantee has the same meaning
throughout;
(c) all references to the Preferred Securities Guarantee or this Preferred
Securities Guarantee are to this Preferred Securities Guarantee as modified, supplemented
or amended from time to time;
(d) all references in this Preferred Securities Guarantee to Articles and Sections are
to Articles and Sections of this Preferred Securities Guarantee, unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when used in this
Preferred Securities Guarantee, unless otherwise defined in this Preferred Securities
Guarantee or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
Authorized Officer of a Person means any Person that is authorized to bind such Person.
Affiliate has the same meaning as given to that term in Rule 405 of the Securities Act of
1933, as amended, or any successor rule thereunder.
Covered Person means any Holder or beneficial owner of Preferred Securities.
Debentures means the series of [senior debt securities of the Guarantor designated the [ ]%
Senior Notes due [ ]][subordinated debt securities of the Guarantor designated the [ ]%
Subordinated Debentures, due [ ]][junior subordinated debt securities of the Guarantor designated
the [ ]% Junior Subordinated Debentures, due [ ]] held by the Institutional Trustee (as defined in
the Declaration) of the Issuer.
Event of Default means a default by the Guarantor on any of its payment or other obligations
under this Preferred Securities Guarantee; provided, however, that, except with respect to a
default in payment of any Guarantee Payments, the Guarantor shall have received notice of default
and shall not have cured such default within 90 days after receipt of such notice.
Guarantee Payments means the following payments or distributions, without duplication, with
respect to the Preferred Securities, to the extent not paid or made by the Issuer: (i) any accrued
and unpaid Distributions (as defined in Annex I to the Declaration) that are required to be paid on
the Preferred Securities, to the extent the Issuer has funds available therefor, (ii) the
redemption price of [$ ] per Preferred Security, plus all accrued and unpaid Distributions to the
date of redemption (the Redemption Price), to the extent the Issuer has funds available therefor,
with respect to any Preferred Securities called for redemption by the Issuer and (iii) upon a
voluntary or involuntary dissolution, winding-up or termination of the Issuer (other than in
connection with the distribution of Debentures to the Holders in exchange for Preferred Securities
as provided in the Declaration or the redemption of all of the Preferred Securities upon the
maturity or redemption of all of the Debentures as provided in the Declaration) the lesser of (a)
the aggregate of the liquidation amount of [$ ] per Preferred Security and all accrued and unpaid
Distributions on the Preferred Securities to the date of payment, or (b) the amount of assets of
the Issuer remaining for distribution to Holders in liquidation of the Issuer (in either case, the
Liquidation Distribution).
Holder shall mean any holder, as registered on the books and records of the Issuer, of any
Preferred Securities; provided, however, that, in determining whether the holders of the
2
requisite percentage of Preferred Securities have given any request, notice, consent or waiver
hereunder, Holder shall not include the Guarantor or any Affiliate of the Guarantor.
Indemnified Person means the Preferred Guarantee Trustee, any Affiliate of the Preferred
Guarantee Trustee, or any officers, directors, shareholders, members, partners, employees,
representatives, nominees, custodians or agents of the Preferred Guarantee Trustee.
Indenture means the Subordinated Debt Indenture dated as of [
, 200
], among the Guarantor and The Bank of New York Mellon Trust
Company, N.A., as trustee, and any indenture
supplemental thereto pursuant to which the Debentures are to be issued to the Institutional Trustee
of the Issuer.
Institutional Trustee has the meaning specified in the Declaration.
Issuer has the meaning provided in the preamble.
Majority in liquidation amount of the Preferred Securities means, except as provided by the
Trust Indenture Act, a vote by Holder(s), voting separately as a class, holding Preferred
Securities representing more than 50% of the aggregate liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of all Preferred
Securities.
Officers Certificate means, with respect to any Person, a certificate signed by two
Authorized Officers of such Person. Any Officers Certificate delivered with respect to compliance
with a condition or covenant provided for in this Preferred Securities Guarantee shall include:
(i) a statement that each officer signing the Officers Certificate has read the
covenant or condition and the definitions relating thereto;
(ii) a brief statement of the nature and scope of the examination or investigation
undertaken by each officer in rendering the Officers Certificate;
(iii) a statement that each such officer has made such examination or investigation as,
in such officers opinion, is necessary to enable such officer to express an informed
opinion as to whether or not such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such officer, such condition or
covenant has been complied with.
Person means a legal person, including any individual, corporation, estate, partnership,
joint venture, association, joint stock company, limited liability company, trust, unincorporated
association, or government or any agency or political subdivision thereof, or any other entity of
whatever nature.
Preferred Guarantee Trustee means The Bank of New York Mellon Trust
Company, N.A., until a Successor Preferred
Guarantee Trustee has been appointed and has accepted such appointment pursuant to
3
the terms of this Preferred Securities Guarantee and thereafter means each such Successor
Preferred Guarantee Trustee.
Responsible Officer means, with respect to the Preferred Guarantee Trustee, any officer of
the Preferred Guarantee Trustee with direct responsibility for the administration of this Preferred
Securities Guarantee and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officers knowledge of and familiarity with
the particular subject.
Successor Preferred Guarantee Trustee means a successor Preferred Guarantee Trustee
possessing the qualifications to act as Preferred Guarantee Trustee under Section 4.1.
Trust Indenture Act means the Trust Indenture Act of 1939, as amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1
Trust Indenture Act; Application
.
(a) This Preferred Securities Guarantee is subject to the provisions of the Trust Indenture
Act that are required to be part of this Preferred Securities Guarantee and shall, to the extent
applicable, be governed by such provisions; and
(b) if and to the extent that any provision of this Preferred Securities Guarantee limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust
Indenture Act, such imposed duties shall control.
SECTION 2.2
Lists of Holders of Securities
.
(a) The Guarantor shall, or shall cause the Institutional Trustee to, provide the Preferred
Guarantee Trustee with a list of the names and addresses of the Holders (i) on a date not later
than the record date for any payment or other distribution to the Holders hereunder or under the
Declaration, and (ii) at such other times as the Preferred Guarantee Trustee may request in
writing, within 30 days after the receipt by the Guarantor of any such request, as of a date no
more than 14 days before such list of Holders is given to the Preferred Guarantee Trustee; provided
that the Guarantor shall not be obligated to provide such a list of holders at any time that such
list would not differ from the last such list provided by the Guarantor to the Preferred Guarantee
Trustee under this Section 2.2(a).
The Preferred Guarantee Trustee may destroy any list of Holders previously given to it on
receipt of a new list of Holders. Unless supplemented, amended or restated pursuant to this Section
2.2(a), the Preferred Guarantee Trustee shall be entitled to rely exclusively on the last list of
Holders provided to it by the Guarantor or any Institutional Trustee.
(b) The Preferred Guarantee Trustee shall comply with its obligations under Sections 311(a),
311(b) and 312(b) of the Trust Indenture Act.
4
SECTION 2.3
Reports by the Preferred Guarantee Trustee
.
Within 60 days after May 15 of each year, the Preferred Guarantee Trustee shall provide to the
Holders such reports as are required by Section 313 of the Trust Indenture Act, if any, in the form
and in the manner provided by Section 313 of the Trust Indenture Act. The Preferred Guarantee
Trustee shall also comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4
Periodic Reports to the Preferred Guarantee Trustee
.
The Guarantor shall provide to the Preferred Guarantee Trustee, the Securities and Exchange
Commission and the Holders such documents, reports and information as required by Section 314 of
the Trust Indenture Act (if any) and the compliance certificate required by Section 314 of the
Trust Indenture Act in the form, in the manner and at the times required by Section 314 of the
Trust Indenture Act.
SECTION 2.5
Evidence of Compliance with Conditions Precedent
.
The Guarantor shall provide to the Preferred Guarantee Trustee such evidence of compliance
with any conditions precedent, if any, provided for in this Preferred Securities Guarantee that
relate to any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section 314(c)(1) may be
given in the form of an Officers Certificate.
SECTION 2.6
Events of Default; Waiver
.
The Holders of a Majority in liquidation amount of Preferred Securities may, by vote, on
behalf of the Holders of all of the Preferred Securities, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose of this Preferred
Securities Guarantee, but no such waiver shall extend to any subsequent or other default or Event
of Default or impair any right consequent thereon.
SECTION 2.7
Events of Default; Notice
.
(a) The Preferred Guarantee Trustee shall, within 90 days after the occurrence of an Event of
Default, transmit by mail, first class postage prepaid, to the Holders, notices of all Events of
Default actually known to a Responsible Officer of the Preferred Guarantee Trustee, unless such
Events of Default have been cured before the giving of such notice; provided, that, the Preferred
Guarantee Trustee shall be protected in withholding such notice if and so long as a Responsible
Officer of the Preferred Guarantee Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders.
(b) The Preferred Guarantee Trustee shall not be deemed to have knowledge of any Event of
Default unless the Preferred Guarantee Trustee shall have received written notice, or of which a
Responsible Officer of the Preferred Guarantee Trustee charged with the administration of the
Declaration shall have obtained actual knowledge.
5
SECTION 2.8
Conflicting Interests
.
The Declaration shall be deemed to be specifically described in this Preferred Securities
Guarantee for the purposes of clause (i) of the first proviso contained in Section 310(b) of the
Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE
SECTION 3.1
Powers and Duties of the Preferred Guarantee Trustee
.
(a) This Preferred Securities Guarantee shall be held by the Preferred Guarantee Trustee for
the benefit of the Holders, and the Preferred Guarantee Trustee shall not transfer its right, title
and interest in this Preferred Securities Guarantee to any Person except a Holder exercising his or
her rights pursuant to Section 5.4(b) or to a Successor Preferred Guarantee Trustee on acceptance
by such Successor Preferred Guarantee Trustee of its appointment to act as Successor Preferred
Guarantee Trustee. The right, title and interest of the Preferred Guarantee Trustee shall
automatically vest in any Successor Preferred Guarantee Trustee, and such vesting and cessation of
title shall be effective whether or not conveyancing documents have been executed and delivered
pursuant to the appointment of such Successor Preferred Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer of the Preferred Guarantee
Trustee has occurred and is continuing, the Preferred Guarantee Trustee shall enforce this
Preferred Securities Guarantee for the benefit of the Holders of the Preferred Securities.
(c) The Preferred Guarantee Trustee, before the occurrence of any Event of Default and after
the curing of all Events of Default that may have occurred, shall undertake to perform only such
duties as are specifically set forth in this Preferred Securities Guarantee, and no implied
covenants shall be read into this Preferred Securities Guarantee against the Preferred Guarantee
Trustee. In case an Event of Default has occurred (that has not been cured or waived pursuant to
Section 2.6) and is actually known to a Responsible Officer of the Preferred Guarantee Trustee, the
Preferred Guarantee Trustee shall exercise such of the rights and powers vested in it by this
Preferred Securities Guarantee, and use the same degree of care and skill in its exercise thereof,
as a prudent Person would exercise or use under the circumstances in the conduct of his or her own
affairs.
(d) No provision of this Preferred Securities Guarantee shall be construed to relieve the
Preferred Guarantee Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the curing or waiving of
all such Events of Default that may have occurred:
(A) the duties and obligations of the Preferred Guarantee Trustee shall be
determined solely by the express provisions of this Preferred Securities Guarantee,
and the Preferred Guarantee Trustee shall not be liable except for the
6
performance of such duties and obligations as are specifically set forth in
this Preferred Securities Guarantee, and no implied covenants or obligations shall
be read into this Preferred Securities Guarantee against the Preferred Guarantee
Trustee; and
(B) in the absence of bad faith on the part of the Preferred Guarantee Trustee,
the Preferred Guarantee Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Preferred Guarantee Trustee and
substantially conforming to the requirements of this Preferred Securities Guarantee;
but in the case of any such certificates or opinions that by any provision hereof
are specifically required to be furnished to the Preferred Guarantee Trustee, the
Preferred Guarantee Trustee shall be under a duty to examine the same to determine
whether or not they substantially conform to the requirements of this Preferred
Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer of the Preferred Guarantee Trustee, unless it shall
be proved that the Preferred Guarantee Trustee was negligent in ascertaining the pertinent
facts upon which such judgment was made;
(iii) the Preferred Guarantee Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the direction of the
Holders of not less than a Majority in liquidation amount of the Preferred Securities
relating to the time, method and place of conducting any proceeding for any remedy available
to the Preferred Guarantee Trustee, or exercising any trust or power conferred upon the
Preferred Guarantee Trustee under this Preferred Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall require the Preferred
Guarantee Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of its rights or
powers, if the Preferred Guarantee Trustee shall have reasonable grounds for believing that
the repayment of such funds or liability is not reasonably assured to it under the terms of
this Preferred Securities Guarantee or indemnity, reasonably satisfactory to the Preferred
Guarantee Trustee, against such risk or liability is not reasonably assured to it.
SECTION 3.2
Certain Rights of the Preferred Guarantee Trustee
.
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee Trustee may conclusively rely, and shall be fully 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, sent or presented by the proper party or parties.
7
(ii) Any direction or act of the Guarantor contemplated by this Preferred Securities
Guarantee shall be sufficiently evidenced by an Officers Certificate.
(iii) Whenever, in the administration of this Preferred Securities Guarantee, the
Preferred Guarantee Trustee shall deem it desirable that a matter be proved or established
before taking, suffering or omitting any action hereunder, the Preferred Guarantee Trustee
(unless other evidence is herein specifically prescribed) may, in the absence of bad faith
on its part, request and conclusively rely upon an Officers Certificate which, upon receipt
of such request, shall be promptly delivered by the Guarantor.
(iv) The Preferred Guarantee Trustee shall have no duty to see to any recording, filing
or registration of any instrument (or any rerecording, refilling or re-registration
thereof).
(v) The Preferred Guarantee Trustee may consult with counsel, and the written advice or
opinion of such counsel with respect to legal matters 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 accordance with such advice or opinion. Such counsel may be
counsel to the Guarantor or any of its Affiliates and may include any of its employees. The
Preferred Guarantee Trustee shall have the right at any time to seek instructions concerning
the administration of this Preferred Securities Guarantee from any court of competent
jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Preferred Securities Guarantee at the request or
direction of any Holder, unless such Holder shall have provided to the Preferred Guarantee
Trustee such security and indemnity, reasonably satisfactory to the Preferred Guarantee
Trustee, against the costs, expenses (including attorneys fees and expenses and the
expenses of the Preferred Guarantee Trustees agents, nominees or custodians) and
liabilities that might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the Preferred Guarantee Trustee;
provided that, nothing contained in this Section 3.2(a)(vi) shall be taken to relieve the
Preferred Guarantee Trustee, upon the occurrence of an Event of Default, of its obligation
to exercise the rights and powers vested in it by this Preferred Securities Guarantee.
(vii) The Preferred Guarantee 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 Preferred Guarantee Trustee, in its
discretion, may make such further inquiry or investigation into such facts or matters as it
may see fit.
(viii) The Preferred Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through agents, nominees,
custodians or attorneys, and the Preferred Guarantee Trustee shall not be
8
responsible for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
(ix) Any action taken by the Preferred Guarantee Trustee or its agents hereunder shall
bind the Holders of the Preferred Securities, and the signature of the Preferred Guarantee
Trustee or its agents alone shall be sufficient and effective to perform any such action. No
third party shall be required to inquire as to the authority of the Preferred Guarantee
Trustee to so act or as to its compliance with any of the terms and provisions of this
Preferred Securities Guarantee, both of which shall be conclusively evidenced by the
Preferred Guarantee Trustees or its agents taking such action.
(x) Whenever in the administration of this Preferred Securities Guarantee the Preferred
Guarantee Trustee shall deem it desirable to receive instructions with respect to enforcing
any remedy or right or taking any other action hereunder, the Preferred Guarantee Trustee
(i) may request instructions from the Holders of a Majority in liquidation amount of the
Preferred Securities, (ii) may refrain from enforcing such remedy or right or taking such
other action until such instructions are received, and (iii) shall be protected in
conclusively relying on or acting in accordance with such instructions.
(b) No provision of this Preferred Securities Guarantee shall be deemed to impose any duty or
obligation on the Preferred Guarantee Trustee to perform any act or acts or exercise any right,
power, duty or obligation conferred or imposed on it in any jurisdiction in which it shall be
illegal, or in which the Preferred Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to exercise any such right,
power, duty or obligation. No permissive power or authority available to the Preferred Guarantee
Trustee shall be construed to be a duty.
(c) The Preferred Guarantee Trustee shall not be charged with knowledge of any Event of
Default with respect to the Preferred Securities unless (1) a Responsible Officer of the Preferred
Guarantee Trustee shall have actual knowledge of such Event of Default or (2) written notice of
such Event of Default shall have been given to the Preferred Guarantee Trustee by the Guarantor or
by any Holder.
SECTION 3.3
Not Responsible for Recitals or Issuance of Guarantee
.
The recitals contained in this Guarantee shall be taken as the statements of the Guarantor,
and the Preferred Guarantee Trustee does not assume any responsibility for their correctness. The
Preferred Guarantee Trustee makes no representation as to the validity or sufficiency of this
Preferred Securities Guarantee.
9
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1
Preferred Guarantee Trustee; Eligibility
.
(a) There shall at all times be a Preferred Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of the United States
of America or any State or Territory thereof or of the District of Columbia, or a
corporation or Person permitted by the Securities and Exchange Commission to act as an
institutional trustee under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least 50 million U.S.
dollars ($50,000,000), and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this Section 4.1(a)(ii),
the combined capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so published.
(b) If at any time the Preferred Guarantee Trustee shall cease to be eligible to so act under
Section 4.1(a), the Preferred Guarantee Trustee shall immediately resign in the manner and with the
effect set out in Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any conflicting interest within
the meaning of Section 310(b) of the Trust Indenture Act, the Preferred Guarantee Trustee and
Guarantor shall in all respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2
Appointment, Removal and Resignation of Preferred Guarantee Trustees
.
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may be appointed or removed
without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in accordance with Section 4.2(a)
until a Successor Preferred Guarantee Trustee has been appointed and has accepted such appointment
by written instrument executed by such Successor Preferred Guarantee Trustee and delivered to the
Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold office until a Successor
Preferred Guarantee Trustee shall have been appointed or until its removal or resignation. The
Preferred Guarantee Trustee may resign from office by an instrument in writing executed by the
Preferred Guarantee Trustee and delivered to the Guarantor, which resignation shall not take effect
until a Successor Preferred Guarantee Trustee has been appointed and has accepted such appointment
by instrument in writing executed by such Successor Preferred Guarantee Trustee and delivered to
the Guarantor and the resigning Preferred Guarantee Trustee,
10
whereupon the resigning Preferred Guarantee Trustee shall be released and discharged of the
trusts and other duties imposed on such trustee in connection herewith.
(d) If no Successor Preferred Guarantee Trustee shall have been appointed and accepted
appointment as provided in this Section 4.2 within 60 days after delivery to the Guarantor of an
instrument of resignation, the resigning Preferred Guarantee Trustee may petition any court of
competent jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper, appoint a Successor
Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts or omissions to act of any
Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or removal or resignation of the
Preferred Guarantee Trustee pursuant to this Section 4.2, the Guarantor shall pay to the Preferred
Guarantee Trustee all amounts accrued and owing to such Preferred Guarantee Trustee to the date of
such termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1
Guarantee
.
The Guarantor irrevocably and unconditionally agrees to pay in full to the Holders the
Guarantee Payments (without duplication of amounts theretofore paid by or on behalf of the Issuer
pursuant to the Declaration or by the Guarantor pursuant to the Indenture), as and when due,
regardless of any defense, right of set-off or counterclaim that the Issuer may have or assert. The
Guarantors obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay such amounts to
the Holders.
SECTION 5.2
Waiver of Notice and Demand
.
The Guarantor hereby waives notice of acceptance of this Preferred Securities Guarantee and of
any liability to which it applies or may apply, presentment, demand for payment, any right to
require a proceeding first against the Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 5.3
Obligations Not Affected
.
The obligations, covenants, agreements and duties of the Guarantor under this Preferred
Securities Guarantee shall in no way be affected or impaired by reason of the happening from time
to time of any of the following:
11
(a) the release or waiver, by operation of law or otherwise, of the performance or observance
by the Issuer of any express or implied agreement, covenant, term or condition relating to the
Preferred Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any portion of the
Distributions, Redemption Price, Liquidation Distribution or any other sums payable under the terms
of the Preferred Securities or the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the Preferred Securities (other than an extension of
time for payment of Distributions, Redemption Price, Liquidation Distribution or other sum payable
that results from the extension of any interest payment period on the Debentures as permitted by
the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of the Holders to enforce,
assert or exercise any right, privilege, power or remedy conferred on the Holders pursuant to the
terms of the Preferred Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any collateral,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition or readjustment of debt of, or other similar proceedings affecting, the
Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or hereby incurred; or
(g) to the extent permitted by law, any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being the intent of this
Section 5.3 that the obligations of the Guarantor hereunder shall be absolute and unconditional
under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain consent of, the
Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4
Rights of Holders
.
(a) The Holders of a Majority in liquidation amount of the Preferred Securities have the right
to direct the time, method and place of conducting any proceeding for any remedy available to the
Preferred Guarantee Trustee in respect of this Preferred Securities Guarantee or exercising any
trust or power conferred upon the Preferred Guarantee Trustee under this Preferred Securities
Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce its rights under this Preferred
Securities Guarantee, any Holder may directly institute a legal proceeding against the Guarantor to
enforce the Preferred Guarantee Trustees rights under this Preferred Securities Guarantee, without
first instituting a legal proceeding against the Issuer, the Preferred Guarantee Trustee or any
other Person or entity.
12
(c) A Holder may also directly institute a legal proceeding against the Guarantor to enforce
such Holders right to receive payment under this Preferred Securities Guarantee without first (i)
directing the Preferred Guarantee Trustee to enforce the terms of this Preferred Securities
Guarantee or (ii) instituting a legal proceeding directly against the Issuer or any other Person or
entity.
SECTION 5.5
Guarantee of Payment
.
This Preferred Securities Guarantee creates a guarantee of payment and not of collection
(i.e., a Covered Person may institute a legal proceeding directly against the Guarantor to enforce
its rights under this Preferred Securities Guarantee without first instituting a legal proceeding
against any other Person or entity). This Preferred Securities Guarantee will not be discharged
except by payment of the Guarantee Payments in full to the extent not previously paid or upon
Distribution to the Holders of the corresponding series of Debentures as provided in the
Declaration.
SECTION 5.6
Subrogation
.
The Guarantor shall be subrogated to all (if any) rights of the Holders against the Issuer in
respect of any amounts paid to such Holders by the Guarantor under this Preferred Securities
Guarantee; provided, however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any right that it may acquire by
way of subrogation or any indemnity, reimbursement or other agreement, in all cases as a result of
payment under this Preferred Securities Guarantee, if, at the time of any such payment, any amounts
are due and unpaid under this Preferred Securities Guarantee. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor agrees to hold such amount in trust
for the Holders and to pay over such amount to the Holders.
SECTION 5.7
Independent Obligations
.
The Guarantor acknowledges that its obligations hereunder are independent of the obligations
of the Issuer with respect to the Preferred Securities, and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the terms of this
Preferred Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1
Limitation of Transactions
.
So long as any Preferred Securities remain outstanding, if there shall have occurred any event
that would constitute an Event of Default hereunder or an Event of Default under the Declaration,
then (a) the Guarantor shall not declare or pay any dividend on, make any distributions with
respect to, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its
capital stock or make any guarantee payment with respect thereto (other than (i) repurchases,
redemptions or other acquisitions of shares of capital stock of the Guarantor
13
in connection with any employment contract, benefit plan or other similar arrangement with or
for the benefit of employees, officers, directors or consultants, (ii) as a result of a
reclassification of the Guarantors capital stock, or the exchange or conversion of any class or
series of the Guarantors capital stock for any other class or series of the Guarantors capital
stock, (iii) the purchase of fractional interests in shares of the Guarantors capital stock
pursuant to the conversion or exchange provisions of such capital stock or the security being
converted or exchanged or (iv) distribution of rights under any shareholders rights plan adopted
by the Company) and (b) the Guarantor shall not make any payment of interest on, or principal of
(or premium, if any, on), or repay, repurchase or redeem, any debt securities issued by the
Guarantor which rank pari passu with or junior to the Debentures and the Guarantor shall not make
any guarantee payments with respect thereto (other than pursuant to this Preferred Security
Guarantee); provided, however, the Guarantor may declare and pay a stock dividend where the
dividend stock is the same stock as that on which the dividend is being paid.
SECTION 6.2
Ranking
.
This Preferred Securities Guarantee will constitute an unsecured obligation of the Guarantor
and will rank [(i) subordinate and junior in right of payment to all Senior Indebtedness (as
defined in the Indenture) of the Guarantor, (ii) pari passu with (A) the most senior preferred or
preference stock now or hereafter issued by the Guarantor, (B) any guarantee now or hereafter
entered into by the Guarantor in respect of any preferred or preference stock or preferred trust
security of any Affiliate of the Guarantor [and (C) those debt securities previously issued and
from time to time issued and outstanding as described in clause (D) of the proviso to the
definition of Senior Indebtedness set forth in the Indenture] and (iii) senior to the Guarantors
common stock][equal to the Guarantors other senior and unsecured obligations].
ARTICLE VII
TERMINATION
SECTION 7.1
Termination
.
This Preferred Securities Guarantee shall terminate upon (i) full payment of the Redemption
Price of all Preferred Securities, (ii) the distribution of the Debentures to the Holders of all of
the Preferred Securities or (iii) full payment of the amounts payable in accordance with the
Declaration upon liquidation of the Issuer. Notwithstanding the foregoing, this Preferred
Securities Guarantee will continue to be effective or will be reinstated, as the case may be, if at
any time any Holder must restore payment of any sums paid under the Preferred Securities or under
this Preferred Securities Guarantee.
14
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1
Exculpation
.
(a) No Indemnified Person shall be liable, responsible or accountable in damages or otherwise
to the Guarantor or any Covered Person for any loss, damage or claim incurred by reason of any act
or omission performed or omitted by such Indemnified Person in good faith in accordance with this
Preferred Securities Guarantee and in a manner that such Indemnified Person reasonably believed to
be within the scope of the authority conferred on such Indemnified Person by this Preferred
Securities Guarantee or by law, except that an Indemnified Person shall be liable for any such
loss, damage or claim incurred by reason of such Indemnified Persons negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good faith upon the records
of the Guarantor and upon such information, opinions, reports or statements presented to the
Guarantor by any Person as to matters the Indemnified Person reasonably believes are within such
other Persons professional or expert competence and who has been selected with reasonable care by
or on behalf of the Guarantor, including information, opinions, reports or statements as to the
value and amount of the assets, liabilities, profits, losses, or any other facts pertinent to the
existence and amount of assets from which Distributions to Holders might properly be paid.
SECTION 8.2
Indemnification
.
(a) To the fullest extent permitted by applicable law, the Guarantor shall indemnify and hold
harmless each Indemnified Person from and against any loss, damage or claim incurred by such
Indemnified Person by reason of any act or omission performed or omitted by such Indemnified Person
in good faith in accordance with this Preferred Securities Guarantee and in a manner such
Indemnified Person reasonably believed to be within the scope of authority conferred on such
Indemnified Person by this Preferred Securities Guarantee, except that no Indemnified Person shall
be entitled to be indemnified in respect of any loss, damage or claim incurred by such Indemnified
Person by reason of such Indemnified Persons negligence or willful misconduct with respect to such
acts or omissions.
(b) To the fullest extent permitted by applicable law, reasonable expenses (including legal
fees) incurred by an Indemnified Person in defending any claim, demand, action, suit or proceeding
shall, from time to time, be advanced by the Guarantor prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by the Guarantor of an undertaking by or on
behalf of the Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as authorized in Section 8.2(a).
(c) The obligation to indemnify as set forth in this Section 8.2 shall survive the termination
of this Preferred Securities Guarantee.
15
(d) The Guarantor agrees to pay to the Preferred Guarantee Trustee compensation for its
services as shall be mutually agreed upon by the Guarantor and the Preferred Guarantee Trustee. The
Guarantor shall reimburse the Preferred Guarantee Trustee upon request for all reasonable
out-of-pocket expenses incurred by it, including the reasonable compensation and expenses of the
Preferred Guarantee Trustees agents and counsel, except any expense as may be attributable to the
negligence of the Preferred Guarantee Trustee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1
Successors and Assigns
.
All guarantees and agreements contained in this Preferred Securities Guarantee shall bind the
successors, assigns, receivers, trustees and representatives of the Guarantor and shall inure to
the benefit of the Holders of the Preferred Securities then outstanding.
SECTION 9.2
Amendments
.
Except with respect to any changes that do not adversely affect the rights of Holders (in
which case no consent of Holders will be required), this Preferred Securities Guarantee may be
amended only with the prior approval of the Holders of not less than a majority in aggregate
liquidation amount (including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the voting percentages are
determined) of all the outstanding Preferred Securities. The provisions of Section 12.2 of the
Declaration with respect to meetings of Holders apply to the giving of such approval. This
Preferred Securities Guarantee may not be amended, and no amendment hereof that affects the
Preferred Guarantee Trustees rights, duties or immunities hereunder or otherwise shall be
effective, unless such amendment is executed by the Preferred Guarantee Trustee (which shall have
no obligation to execute any such amendment, but may do so in its sole discretion).
SECTION 9.3
Notices
.
All notices provided for in this Preferred Securities Guarantee shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or mailed by registered
or certified mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred Guarantee Trustees mailing
address set forth below (or such other address as the Preferred Guarantee Trustee may give notice
of to the Holders): The Bank of New York Mellon Trust Company, N.A.,
ZZZ Berkeley Street, 2nd Floor, Boston, Massachusetts, 02116-3748.
(b) If given to the Guarantor, at the Guarantors mailing address set forth below (or such
other address as the Guarantor may give notice of to the Holders) The Travelers Companies, Inc.,
385 Washington Street, St. Paul, Minnesota 55102, Attention: Matthew S. Furman, with a copy to the
attention of the Treasurer at such address.
16
(c) If given to any Holder, at the address set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in person, telecopied with
receipt confirmed, or mailed by first class mail, postage prepaid except that if a notice or other
document is refused delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered on the date of such
refusal or inability to deliver.
SECTION 9.4
Benefit
.
This Preferred Securities Guarantee is solely for the benefit of the Holders of the Preferred
Securities and, subject to Section 3.1(a), is not separately transferable from the Preferred
Securities.
SECTION 9.5
Governing Law
.
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
17
THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year first above written.
|
|
|
|
|
|
THE TRAVELERS COMPANIES, INC.,
as Guarantor
|
|
|
By:
|
|
|
|
|
Name:
|
Matthew S. Furman
|
|
|
|
Title:
|
Senior Vice President
|
|
|
|
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as
Preferred Guarantee Trustee
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
Authorized Officer
|
|
|
18