AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 30, 1999
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CARRIAGE SERVICES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 76-0423828
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
1300 POST OAK BLVD, SUITE 1500
HOUSTON, TEXAS 77056
(281) 556-7400
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
CARRIAGE SERVICES CAPITAL TRUST
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE APPLIED FOR
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
1300 POST OAK BLVD, SUITE 1500
HOUSTON, TEXAS 77056
(281) 556-7400
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
MELVIN C. PAYNE
CHAIRMAN OF THE BOARD
AND CHIEF EXECUTIVE OFFICER
(281) 556-7400
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPY TO:
T. MARK KELLY
VINSON & ELKINS L.L.P.
2300 FIRST CITY TOWER
HOUSTON, TEXAS 77002-6760
(713) 758-2222
(713) 758-2346 (FAX)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
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. [ ]
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. [ ]
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. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
REGISTERED REGISTERED SECURITY PRICE FEE(1)
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<S> <C> <C> <C> <C>
7% Convertible Preferred Securities..... 1,875,000 $50.00(1)(2) $93,750,000(1)(2) $26,063
Convertible Junior Subordinated
Debentures due 2029 of Carriage
Services, Inc......................... (3) -- -- --
Class A Common Stock, par value $.01 per
share, of Carriage Services, Inc...... 4,587,188(4) -- -- --
Preferred Securities Guarantee(5)....... -- -- -- --
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Total............................... 1,875,000 100% $93,750,000 $26,063
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</TABLE>
(CONTINUED ON NEXT PAGE)
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(CONTINUED FROM COVER)
(1) Estimated solely for the purpose of computing the registration fee in
accordance with Rule 457(c) of the Securities Act, as amended, based upon
the average of the high and low prices on July 29, 1999.
(2) Exclusive of accrued interest and distributions, if any.
(3) $93,750,000 in aggregate principal amount of Convertible Junior Subordinated
Debentures due 2029 (the "Convertible Junior Subordinated Debentures") of
Carriage Services, Inc. (the "Company") were issued and sold to Carriage
Services Capital Trust (the "Trust") in connection with the issuance by
the Trust of 1,875,000 of its 7% Convertible Preferred Securities (the
"Convertible Preferred Securities"). The Convertible Junior Subordinated
Debentures may be distributed, under certain circumstances, to the holders
of the Convertible Preferred Securities for no additional consideration.
(4) Such number of shares of Class A Common Stock, par value $.01 per share, of
the Company (the "Class A Common Stock") as are initially issuable upon
conversion of the Convertible Preferred Securities or the Convertible Junior
Subordinated Debentures registered hereunder. This Registration Statement
also covers such shares of Class A Common Stock as may be issuable pursuant
to anti-dilution adjustments.
(5) Includes the rights of holders of the Convertible Preferred Securities under
the Preferred Securities Guarantee. No separate consideration will be
received for the Preferred Securities Guarantee.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SELLING HOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRAION STATEMENT
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS
IS NOT AN OFFER TO SELL THESE SECURITIES, AND IT IS NOT SOLICITING AN OFFER TO
BUY THESE SECURITIES, IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED JULY 30, 1999
PROSPECTUS
1,875,000 CONVERTIBLE PREFERRED SECURITIES
CARRIAGE SERVICES CAPITAL TRUST
7% Convertible Preferred Securities
(liquidation amount $50 per Convertible Preferred Security)
guaranteed by, and convertible into Class A Common Stock of,
CARRIAGE SERVICES, INC.
------------------------
The Selling Holders may offer, from time to time:
o 7% convertible preferred securities of Carriage Services Capital
Trust
o convertible junior subordinated debentures due 2029 of Carriage
Services, Inc.
o shares of Class A common stock of Carriage Services, Inc.
Carriage Services Capital Trust is a Delaware business trust. The 7%
convertible preferred securities represent undivided beneficial ownership
interests in the assets of Carriage Services Capital Trust.
The Selling Holders may sell these securities from time to time directly to
purchasers or through agents, underwriters or dealers. If required, the names of
any other Selling Holders, agents or underwriters involved in the sale of these
securities and the applicable agent's commission, dealer's purchase price or
underwriter's discount, if any, will be set forth in a supplement to this
prospectus.
YOU SHOULD CAREFULLY CONSIDER MATTERS DISCUSSED UNDER THE CAPTION "RISK
FACTORS" BEGINNING ON PAGE 2.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1999
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TABLE OF CONTENTS
PAGE
----
About this prospectus................ ii
Where you can find more
information........................ ii
Cautionary statement about forward-
looking statements................. iii
The Company.......................... 1
Risk factors......................... 2
Use of proceeds...................... 7
Accounting treatment................. 7
Ratios of earnings to fixed charges
and earnings to fixed charges plus
dividends.......................... 7
Carriage Services Capital Trust...... 8
Description of Convertible Preferred
Securities......................... 9
PAGE
----
Description of Convertible Junior
Subordinated Debentures............ 28
Description of Guarantee............. 36
Relationship among the Convertible
Preferred Securities, the
Convertible Junior Subordinated
Debentures and the Guarantee....... 39
Description of Company capital
stock.............................. 40
Federal income tax consequences...... 43
Certain ERISA considerations......... 50
Registration rights.................. 51
Selling holders...................... 52
Plan of distribution................. 53
Legal matters........................ 55
Experts.............................. 55
i
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AS USED IN THIS PROSPECTUS, (I) THE "INDENTURE" MEANS THE CONVERTIBLE
JUNIOR SUBORDINATED INDENTURE, BETWEEN THE COMPANY AND WILMINGTON TRUST COMPANY,
AS TRUSTEE (THE "DEBENTURE TRUSTEE") RELATING TO CARRIAGE SERVICES CAPITAL
TRUST (THE "TRUST" OR THE "ISSUER"), (II) THE "DECLARATION" MEANS THE
AMENDED AND RESTATED DECLARATION OF TRUST RELATING TO THE ISSUER AMONG CARRIAGE
SERVICES, INC. (THE "COMPANY"), AS DEPOSITOR (THE "DEPOSITOR"), WILMINGTON
TRUST COMPANY AS PROPERTY TRUSTEE (THE "PROPERTY TRUSTEE"), WILMINGTON TRUST
COMPANY AS DELAWARE TRUSTEE (THE "DELAWARE TRUSTEE"), AND THE INDIVIDUALS
NAMED AS ADMINISTRATIVE TRUSTEES THEREIN (THE "ADMINISTRATIVE TRUSTEES")
(COLLECTIVELY WITH THE PROPERTY TRUSTEE AND THE DELAWARE TRUSTEE, THE "ISSUER
TRUSTEES") AND (III) THE "GUARANTEE" MEANS THE GUARANTEE AGREEMENT BETWEEN
THE COMPANY AND WILMINGTON TRUST COMPANY (THE "GUARANTEE TRUSTEE").
ABOUT THIS PROSPECTUS
This prospectus contains summaries, believed to be accurate in all material
respects, of terms of certain agreements. These summaries are qualified in their
entirety by reference to the actual agreements, copies of which will be made
available to you upon request to us. While any 7% convertible preferred
securities (the "Convertible Preferred Securities"), convertible junior
subordinated debentures due 2029 (the "Convertible Junior Subordinated
Debentures") or Class A common stock issued upon conversion of such securities
remain outstanding, we will make available, upon request, to any holder and any
prospective purchaser of such securities the information required pursuant to
Rule 144A(d)(4) under the Securities Act during any period in which we are not
subject to Section 13 or 15(d) of the Exchange Act.
No separate financial statements of the Issuer have been included herein.
We do not consider such financial statements material to the holders of
Convertible Preferred Securities because:
o all of the voting securities of the Issuer will be owned, directly or
indirectly, by us, and we are subject to the reporting requirements under
the Exchange Act;
o the Issuer has no independent operations but exists for the sole purpose
of issuing securities representing undivided beneficial interests in the
assets of the Issuer and investing the proceeds thereof in Convertible
Junior Subordinated Debentures issued by us; and
o the obligations of the Issuer under the Trust Securities are fully and
unconditionally guaranteed by us to the extent that the Issuer has funds
available to meet such obligations. See "Description of Convertible
Junior Subordinated Debentures" and "Description of Guarantee."
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SEC's web site at http://www.sec.gov. You may also read and copy
any document we file at the SEC's public reference room at 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the regional offices of the SEC located at
7 World Trade Center, Suite 1300, New York, New York 10048 and at 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. You may obtain information
on the operation of the SEC's public reference room in Washington, D.C. by
calling the SEC at 1-800-SEC-0330. We also file such information with the New
York Stock Exchange (the "NYSE"). Such reports, proxy statements and other
information may be read and copied at 30 Broad Street, New York, New York 10005.
In this prospectus we have incorporated by reference certain reports and
other information we have filed with the SEC. 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 further filings made
ii
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with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act until
all of the securities are sold or this offering is terminated:
o Our Annual Report on Form 10-K for the year ended December 31, 1998;
o Our Current Reports on Form 8-K, filed April 13, 1999 and June 1, 1999;
o Our Current Report on Form 8-K/A, filed on June 11, 1999;
o Our Quarterly Report on Form 10-Q for the quarter ended March 31, 1999;
and
o The description of our common stock contained in our Form 8-A dated July
23, 1996 (as amended August 8, 1996) and April 28, 1998.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Carriage Services, Inc.
Attention: Investor Relations
1300 Post Oak Blvd., Suite 1500
Houston, Texas 77056
(281) 556-7400
You should rely only on the information incorporated by reference or
provided in this prospectus. We have not authorized anyone else to provide you
with different information. We are not making an offer of these securities in
any state where the offer is not permitted. You should not assume that the
information in this prospectus is accurate as of any date other than the date on
the front of those documents.
CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS
This prospectus and the documents we incorporate by reference contain
statements that constitute "forward-looking statements" within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act. These
statements appear in a number of places in this prospectus and the documents we
incorporate by reference and include statements regarding our plans, beliefs or
current expectations, including those plans, beliefs and expectations of our
officers and directors with respect to, among other things:
o future acquisitions;
o expected future cost savings;
o future capital expenditures;
o trends affecting our future financial condition or results of
operations; and
o our business strategy regarding future operations.
Any such forward-looking statements are not assurances of future
performance and involve risks and uncertainties. Actual results may differ
materially from anticipated results.
The information contained in this prospectus, including the information set
forth under the heading "Risk Factors," identifies additional factors that
could affect our operating results and performance. We urge you to carefully
consider those factors.
All forward-looking statements attributable to us are expressly qualified
in their entirety by this cautionary statement.
iii
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THE COMPANY
We are the fastest-growing and the fourth largest public death care company
in North America. We believe we are uniquely positioned to take advantage of the
consolidating death care industry due to our operating philosophy and our size.
We provide a complete range of services relating to funerals, burials and
cremations, as well as related products including caskets, burial vaults,
garments, cemetery interment rights and memorials. Our services and products are
sold both prior to and at the time of need.
Since 1993, our operations have grown significantly, primarily through
acquisitions. These acquisitions, in addition to our focus on operating
improvements, have driven our revenues, profit margins and earnings higher. Our
growth has been demonstrated by increases in the following:
o Funeral homes operated, from 25 in 1993 to 179 at June 30, 1999;
o Cemeteries operated, from 2 in 1993 to 38 at June 30, 1999;
o Revenues, from $11.3 million for the year ended 1993 to $116.8 million
for the year ended December 31, 1998;
o Operating margins, from 0.7% for the year ended 1993 to 22.9% for the
year ended December 31, 1998; and
o Diluted earnings per share, from a $0.66 loss for the year ended 1993 to
a $0.65 profit for the year ended December 31, 1998.
THE INDUSTRY
The death care industry has attractive fundamental characteristics,
including highly fragmented ownership, barriers to entry and stable, predictable
demand. In the past several years, the industry has witnessed considerable
consolidation, yet less than 25% of the 1997 United States death care industry
revenues are represented by the four publicly traded death care companies.
Additionally, due to the recent acquisition of a fifth public competitor by
another competitor and announcements by the Company's two largest publicly held
competitors that they have significantly reduced their acquisition spending, we
believe that the competitive landscape presents us with significant
opportunities to pursue various acquisition strategies at valuations that are
more attractive than those of the recent past.
STRATEGY
Our business strategy is to build upon our reputation as a premier
operating company and to grow through attractive acquisition opportunities. Our
operating strategy is focused on increasing the revenues and profitability of
each operating location through improved personalized local service and
operating efficiencies. Our acquisition strategy emphasizes both geographic
expansion and concentration of existing operations through the acquisition of
premier funeral homes and cemeteries that have a strong local market presence.
Since our formation in 1991, our management team has focused on developing
an operating philosophy that emphasizes:
o providing the highest level of personalized service to client families;
o comprehensive employee training;
o a decentralized management structure;
o establishing high standards of service, operational and financial
performance;
o measuring performance against such standards; and
o incentive compensation and broad-based employee stock ownership.
We believe our successful execution of this operating philosophy, combined
with fewer active public consolidators in the industry, will result in an
increasing number of highly attractive acquisition opportunities.
1
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In 1998, we acquired 48 funeral homes and seven cemeteries for an aggregate
consideration of approximately $159 million. In addition, through July 26, 1999,
we have either acquired or executed non-binding letters of intent to acquire 18
funeral homes and 14 cemeteries for consideration of approximately $48 million.
Our principal executive office is located at 1300 Post Oak Blvd., Suite
1500, Houston, Texas 77056. Our telephone number is (713) 556-7400.
RISK FACTORS
Prospective purchasers of the securities offered in this prospectus should
carefully review the information contained elsewhere in this prospectus and
should particularly consider the following matters.
RISKS RELATING TO THE COMPANY
WE MAY NOT BE ABLE TO IDENTIFY, FINANCE OR INTEGRATE ADDITIONAL ACQUISITIONS.
We have grown rapidly through acquisitions of funeral homes and cemeteries.
Although we believe we have an adequate infrastructure, we cannot assure you
that our current management, personnel and other corporate infrastructure will
be adequate to manage our growth. In addition, to the extent the success of our
strategy is contingent on making further acquisitions, we cannot assure you that
we will be able to identify and acquire acceptable acquisition candidates on
terms favorable to us or that we will be able to integrate such acquisitions
successfully without substantial costs, delays or other operational or financial
problems. Further, acquisitions involve a number of special risks, including
possible adverse effects on our operating results, diversion of management's
attention, failure to retain key acquired personnel, risks associated with
unanticipated events or liabilities and amortization of acquired intangible
assets, some or all of which could have a material adverse effect on our
business, financial condition and results of operations. In addition, to the
extent we are required to write down goodwill associated with acquisitions due
to a decline in the value of such acquired businesses, such write down could
have a material adverse effect on operating results.
We may finance future acquisitions through the incurrence of additional
bank indebtedness, the utilization of cash from operations, the issuance of
Class A common stock or other securities, or any combination thereof. In the
event that the Class A common stock does not maintain a sufficient market value,
or potential acquisition candidates are otherwise unwilling to accept Class A
common stock or other securities as part of the consideration for the sale of
their business, we may be required to utilize more of our cash resources or
available funds under our credit facility in order to finance future
acquisitions. If we do not have sufficient cash resources, our ability to make
acquisitions could be limited unless we are able to obtain additional capital
through debt or equity financings. We cannot assure you that we will be able to
obtain all the financing we will need in the future on terms we deem acceptable.
WE ARE DEPENDENT ON KEY EXECUTIVES AND PERSONNEL.
We depend to a large extent upon the abilities and continued efforts of
Melvin C. Payne, Chairman of the Board and Chief Executive Officer, Mark W.
Duffey, President, and our other senior management. The loss of the services of
the key members of our senior management could have a material adverse effect on
our continued ability to compete in the death care industry. We have entered
into employment agreements with our principal executive officers. Nonetheless,
our future success will depend upon our ability to attract and retain skilled
funeral home and cemetery management personnel.
CERTAIN STOCKHOLDERS CONTROL THE VOTING POWER.
Because our Class B common stock has ten votes per share, the holders of
Class B common stock control approximately 75% of our voting power. Through
their control of our Board of
2
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Directors, the holders of Class B common stock effectively control the deferral
of interest payments on the debentures, which would result in the deferral of
distributions on the Convertible Preferred Securities. In addition, these
stockholders are in a position to exert substantial influence over the outcome
of most corporate actions requiring stockholder approval, including the election
of directors, the future issuance of common stock or other securities by us, the
declaration of any dividend payable on our common stock or future issuances of
common stock and the approval of transactions involving a change in control. The
interests of this group could conflict with the interests of our other
stockholders.
A TAKEOVER WOULD BE DIFFICULT.
Certain provisions of our certificate of incorporation could make it more
difficult for a third party to acquire control of our company, even if such
change in control would be beneficial to stockholders. Our certificate of
incorporation allows us to issue preferred stock without stockholder approval.
Our certificate of incorporation also provides for a staggered board, limits who
may call special stockholders' meetings and limits stockholder action by written
consent. In addition, certain stockholders are party to a voting agreement which
prevents them from selling their shares to a competitor and requires them to
vote against a business combination with a competitor. These provisions could
make it more difficult for a third party to acquire us. See "Description of
Company Capital Stock."
THE RATE OF CREMATION IS INCREASING.
There is an increasing trend in the United States toward cremation.
According to industry studies, cremations represented approximately 24% of the
burials performed in the United States in 1997, as compared with approximately
10% in 1980. Compared to traditional funeral services, cremations have
historically generated similar gross profit percentages but lower revenues. A
substantial increase in the rate of cremations performed by us could have a
material adverse effect on our results of operations.
FEDERAL, STATE AND LOCAL REGULATIONS MAY CHANGE TO OUR DETRIMENT.
Our operations are subject to regulation, supervision and licensing under
numerous federal, state and local laws, ordinances and regulations, including
extensive regulations concerning trust funds, preneed sales of funeral and
cemetery products and services and various other aspects of our business. The
impact of such regulations varies depending on the location of our funeral homes
and cemeteries.
From time to time, states and other regulatory agencies have considered and
may enact additional legislation or regulations that could affect the death care
industry. For example, some states and regulatory agencies have considered or
are considering regulations that could require more liberal refund and
cancellation policies for preneed sales of products and services, prohibit
door-to-door or telephone solicitation of potential customers, increase trust
requirements and prohibit the common ownership of funeral homes and cemeteries
in the same market. If adopted in the states in which we operate, these and
other possible proposals could have a material adverse effect on our results of
operations.
THE DEATH RATE MAY DECREASE.
The death rate in the United States declined approximately 1% in 1997 and
approximately 2% in 1998, reversing a trend of an approximately 1% increase per
year since 1980. Industry studies indicate that the average age of the
population is increasing. Our financial results may be affected by any decline
in the death rate.
3
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RISKS RELATING TO THE CONVERTIBLE PREFERRED SECURITIES
THE TRUST MAY NOT BE ABLE TO MAKE DISTRIBUTIONS ON THE CONVERTIBLE PREFERRED
SECURITIES IF THE COMPANY DEFAULTS ON ITS SENIOR DEBT BECAUSE ITS OBLIGATIONS TO
PAY ON THE DEBENTURES AND THE GUARANTEE ARE JUNIOR TO THE COMPANY'S PAYMENT
OBLIGATIONS UNDER ITS SENIOR DEBT.
Because of the subordinated nature of the guarantee and the debentures, the
Company:
o will not be permitted to make any payments of principal, including
redemption payments, or interest on the debentures if it defaults on its
senior debt, as described under "Description of Convertible Junior
Subordinated Debentures -- Subordination;"
o will not be permitted to make payments on the guarantee if it defaults on
any of its other liabilities, including senor debt, other than
liabilities that are equal or subordinate to the guarantee by their terms
as described under "Description of Guarantee -- Status of the Guarantee;"
and
o must pay all of its senior debt before it makes payments on the Guarantee
or the debentures if it becomes bankrupt, liquidates or dissolves.
The Convertible Preferred Securities, the guarantee, and the debentures do
not limit the Company's ability or the ability of its subsidiaries to incur
additional indebtedness, including indebtedness that ranks senior to the
debentures and the guarantee. As of March 31, 1999, the Company had
approximately $242 million of senior debt.
THE DEBENTURES WILL BE EFFECTIVELY SUBORDINATED TO OBLIGATIONS OF THE COMPANY'S
SUBSIDIARIES.
Since the Company is principally a holding company, its right to
participate in any distribution of assets of any subsidiary upon that
subsidiary's dissolution, winding-up, liquidation or reorganization or otherwise
(and thus the ability of holders of the Convertible Preferred Securities to
benefit indirectly from the distribution), is subject to the prior claims of
creditors of that subsidiary, except to the extent that the Company may be a
creditor of that subsidiary and its claims are recognized. There are various
legal limitations on the extent to which some of the Company's subsidiaries may
extend credit, pay dividends or otherwise supply funds to, or engage in
transactions with, the Company or its other subsidiaries. The debentures will be
effectively subordinated to all indebtedness and other obligations of our
subsidiaries. Those subsidiaries are separate legal entities and have no
obligations to pay, or make funds available for the payment of, any amounts due
on the debentures, the Convertible Preferred Securities or the guarantee. At
March 31, 1999, our subsidiaries had total combined assets of $465 million, net
of receivables to the Company, and liabilities of $285 million, exclusive of net
payables to the Company.
THE COMPANY'S RIGHT TO DEFER INTEREST PAYMENTS ON THE DEBENTURES HAS TAX
CONSEQUENCES FOR YOU.
The Company can, on one or more occasions, defer interest payments on the
debentures for up to 20 consecutive quarterly periods unless an event of default
under the debentures has occurred and its continuing. The Company cannot,
however, defer interest payments beyond the earlier of the maturity date of the
debentures, which is June 1, 2029 or the date on which the debentures are
redeemed. If the Company defers interest payments on the debentures, the Trust
will also defer distribution payments on the Convertible Preferred Securities
and the Common Securities. During a deferral period, distributions will continue
to accumulate on the Convertible Preferred Securities.
If the Company defers payments of interest on the debentures, you will be
required to accrue interest income, as original issue discount, for the deferred
interest allocable to your share of Convertible Preferred Securities for United
States Federal income tax purposes. As a result, you will include that income in
gross income for United States Federal income tax purposes prior to your receipt
of any cash distributions. In addition, you will not receive cash from the trust
related to that income if you sell your Convertible Preferred Securities prior
to the record date on which those distributions are made. YOU SHOULD CONSULT
WITH YOUR OWN TAX ADVISOR REGARDING THE TAX
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CONSEQUENCES OF AN INVESTMENT IN THE CONVERTIBLE PREFERRED SECURITIES. Please
read "Federal Income Tax Consequences -- Interest Income and Original Issue
Discount" and " -- Sales of Convertible Preferred Securities" for more
information regarding the tax consequences of holding and selling the
Convertible Preferred Securities.
THE COMPANY'S RIGHT TO DEFER INTEREST PAYMENTS ON THE DEBENTURES MAY AFFECT THE
MARKET PRICE OF THE CONVERTIBLE PREFERRED SECURITIES.
If the Company defers interest payments on the debentures in the future,
the market price of the Convertible Preferred Securities may not fully reflect
the value of accrued but unpaid interest on the debentures. If you sell
Convertible Preferred Securities during a deferral period, you may not receive
the same return on investment as someone who continues to hold Convertible
Preferred Securities. In addition, the Company's right to defer interest
payments on the debentures may mean that the market price for the Convertible
Preferred Securities will be more volatile than other securities that are not
subject to these rights.
THE TRUST MAY REDEEM THE CONVERTIBLE PREFERRED SECURITIES WITHOUT YOUR CONSENT
IF SPECIFIED TAX CHANGES OCCUR RELATING TO NON-DEDUCTIBILITY OF INTEREST
PAYMENTS ON THE DEBENTURES.
If specified tax changes occur relating to the non-deductibility of
interest payments on the debentures or if the Trust is at risk of being required
to register as an investment company under the Investment Company Act of 1940,
as more fully described under "Description of the Convertible Preferred
Securities -- Tax Event or Investment Company Event Redemption," the Company
may redeem all of the debentures. If that happens, the Trust will use the cash
it receives from the redemption of the debentures to redeem the Convertible
Preferred Securities and the Common Securities.
THE GUARANTEE ONLY GUARANTEES PAYMENTS ON THE CONVERTIBLE PREFERRED SECURITIES
IF THE TRUST HAS CASH AVAILABLE.
If the Company fails to make payments on the debentures, the Trust will not
be able to make the related distribution, redemption or liquidation payments on
the Convertible Preferred Securities. In those circumstances, you will not be
able to rely upon the Guarantee for payments of those amounts.
Instead, if the Company is in default under the debentures you may:
o rely on the property trustee for the Trust to enforce the Trust's
rights under the debentures; or
o directly sue the Company or seek other remedies to collect your pro
rata share of payments owed.
THE COMPANY MAY CAUSE THE CONVERTIBLE PREFERRED SECURITIES TO BE REDEEMED ON OR
AFTER JUNE 5, 2002 WITHOUT YOUR CONSENT.
The Company may redeem all or some of the debentures at its option at any
time on or after June 5, 2002. The redemption price you would receive in such an
event may vary, but will not be less than 100% of the principal amount to be
redeemed plus any accrued and unpaid interest. Please read "Description of
Convertible Junior Subordinated Debentures -- Redemption -- Optional
Redemption." You should assume that the Company will exercise its redemption
option if it is able to refinance the debentures at a lower interest rate or if
it is otherwise in the Company's interest to redeem the debentures. If a
redemption occurs, the Trust will use the cash it receives from the redemption
of the debentures to redeem an equivalent amount of Convertible Preferred
Securities and Common Securities on a pro rata basis.
DISTRIBUTION OF THE DEBENTURES TO YOU MAY HAVE ADVERSE TAX AND OTHER
CONSEQUENCES FOR YOU.
The Company may terminate the Trust at any time. If that happens, the Trust
will redeem the Convertible Preferred Securities and the Common Securities by
distributing the debentures to you and the Company, as holder of the Common
Securities, on a pro rata basis.
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Under current United States Federal income tax laws, a distribution of
debentures on the dissolution of the Trust would not be a taxable event to you.
Nevertheless, if the Trust is classified for United States Federal income tax
purposes as a corporation at the time it is dissolved, the distribution of the
debentures would be a taxable event to you. In addition, if there is a change in
law, a distribution of debentures on the dissolution of the Trust could also be
a taxable event to you.
The Company has no current intention of terminating the Trust and causing
the distribution of the debentures. However, there are no restrictions on its
ability to do so at any time. We anticipate that we would consider exercising
this right if expenses associated with maintaining the Trust were substantially
greater than currently expected.
The Company cannot predict the market prices for the debentures that may be
distributed. Accordingly, the debentures you receive on a distribution, or the
Convertible Preferred Securities you hold pending that distribution, may trade
at a discount to the price you paid to purchase the Convertible Preferred
Securities.
Because you may receive debentures, you should make an investment decision
about the debentures in addition to the Convertible Preferred Securities. You
should carefully review all the information regarding the debentures contained
in this prospectus.
TRADING PRICES OF THE CONVERTIBLE PREFERRED SECURITIES MAY NOT REFLECT THE VALUE
OF ACCRUED BUT UNPAID INTEREST ON THE DEBENTURES.
The Convertible Preferred Securities are a new series of securities with no
established trading market. The Convertible Preferred Securities may trade at a
price that does not fully reflect the value of accrued but unpaid interest on
the underlying debentures. For tax purposes if you dispose of your Convertible
Preferred Securities between record dates for payments of distributions you will
be required to:
o include accrued but unpaid interest on the debentures through the date of
disposition in your gross ordinary income as original issue discount; and
o add that amount to your adjusted tax basis in your pro rata share of the
underlying debentures that you are deemed to have disposed of.
Accordingly, you will recognize a capital loss to the extent the selling price,
which may not fully reflect the value of accrued but unpaid interest, is less
than your adjusted tax basis, which will include accrued but unpaid interest. In
most instances, capital losses cannot be applied to offset ordinary income for
United States Federal income tax purposes.
ABSENCE OF PUBLIC MARKET.
There is no existing market for the Convertible Preferred Securities (or
the Convertible Junior Subordinated Debentures) and there can be no assurance as
to the liquidity of any markets that may develop for the Convertible Preferred
Securities (or the Convertible Junior Subordinated Debentures), the ability of
the holders to sell their Convertible Preferred Securities (or Convertible
Junior Subordinated Debentures) or at what price holders of the Convertible
Preferred Securities (or the Convertible Junior Subordinated Debentures) will be
able to sell such securities. Future trading prices of the Convertible Preferred
Securities (and the Convertible Junior Subordinated Debentures) will depend on
many factors including:
o prevailing interest rates;
o the Company's operating results; and
o the markets for similar securities.
The Initial Purchaser currently makes a market for the Convertible
Preferred Securities offered hereby; however, the Initial Purchaser is not
obligated to do so and such market making activity is subject to the limits
imposed by applicable law and may be discontinued at any time without notice.
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YOU WILL HAVE LIMITED VOTING RIGHTS AS A HOLDER OF CONVERTIBLE PREFERRED
SECURITIES.
As a holder of Convertible Preferred Securities, you will have limited
voting rights relating only to the modification of the Convertible Preferred
Securities and, in specified circumstances, the exercise of the Trust's rights
as holder of the debentures and the Guarantee. Absent an event of default or
certain other special circumstances, only the Company can replace or remove any
of the trustees or increase or decrease the number of trustees.
THE COMPANY MAY NOT BE ABLE TO PAY DIVIDENDS ON CLASS A COMMON STOCK INTO WHICH
YOUR CONVERTIBLE PREFERRED SECURITIES MAY BE CONVERTED.
The Company has no obligation to pay dividends on the Class A common stock
into which your Convertible Preferred Securities may be converted. The
declaration and payment of dividends on common stock of the Company is subject
to, and will depend upon, among other things:
o the Company's future earnings and financial condition, liquidity and
capital requirements;
o the Company's ability to pay under its bank credit agreement;
o the general economic and regulatory climate; and
o other factors deemed relevant by the Company's Board of Directors.
The Company's credit agreement prohibits the Company from paying any
dividends on its Class A common stock, but allows the payment of required
dividends on its preferred stock.
USE OF PROCEEDS
The Selling Holders will receive all of the proceeds from the sale of the
securities offered by this prospectus. Neither the Company nor the Trust will
receive any of the proceeds from the sale of the securities offered by this
prospectus.
ACCOUNTING TREATMENT
For financial reporting purposes, the Trust will be treated as a subsidiary
of the Company and, accordingly, the accounts of the Trust will be included in
the consolidated financial statements of the Company. The Convertible Preferred
Securities will be presented as a separate line item in the consolidated balance
sheet of the Company entitled "Company-obligated mandatorily redeemable
Convertible Preferred Securities of Carriage Services Capital Trust," and
appropriate disclosures about the Convertible Preferred Securities, the
Guarantee and the Convertible Junior Subordinated Debentures will be included in
the notes to the Company's consolidated financial statements. For financial
reporting purposes, the Company will record distributions payable on the
Convertible Preferred Securities as a financing charge to earnings in the
Company's statement of consolidated income.
RATIOS OF EARNINGS TO FIXED CHARGES
AND EARNINGS TO FIXED CHARGES PLUS DIVIDENDS
The following table contains our consolidated ratios of earnings to fixed
charges for the periods indicated.
<TABLE>
<CAPTION>
THREE
MONTHS
ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
----------------------------------------------------- ----------
1994 1995 1996 1997 1998 1999
--------- --------- --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges... 0.66 0.53 1.02 2.08 2.47 2.97
Ratio of earnings to fixed charges
plus dividends..................... 0.66 0.53 0.85 1.70 2.25 2.93
</TABLE>
For purposes of computing the ratios of earnings to fixed charges and
earnings to fixed charges plus dividends: (i) earnings consist of income before
provision for income taxes plus fixed charges
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(excluding capitalized interest) and (ii) "fixed charges" consist of interest
expensed and capitalized, amortization of debt discount and expense relating to
indebtedness and the portion of rental expense representative of the interest
factor attributable to leases for rental property. There were no dividends paid
or accrued during the periods presented above.
CARRIAGE SERVICES CAPITAL TRUST
Carriage Services Capital Trust is a statutory business trust that was
formed under Delaware law on May 24, 1999. The Trust's original declaration of
trust was amended and restated in its entirety by the Company, as sponsor of the
Trust, and the trustees of the Issuer (the "Issuer Trustees") (as so amended
and restated, the "Declaration") on June 3, 1999 (the "Original Offering
Date"). The Company owns all the common securities issued by the Trust (the
"Common Securities" and, together with the Convertible Preferred Securities,
the "Trust Securities"). The Company directly or indirectly owns Common
Securities in an aggregate liquidation amount equal to 3% of the total capital
of the Issuer. Payment on the Common Securities will be made PRO RATA with the
Convertible Preferred Securities except that upon the occurrence and during the
continuance of an event of default under the Declaration, the rights of the
holders of the Common Securities to payment in respect of distributions and
payments upon liquidation, redemption and otherwise will be subordinated to the
rights of the holders of the Convertible Preferred Securities. The assets of the
Trust will consist principally of the Convertible Junior Subordinated
Debentures, and payments under the Convertible Junior Subordinated Debentures
will be the sole revenue of the Trust. The Trust exists for the exclusive
purposes of (i) issuing the Trust Securities representing undivided beneficial
interests in the assets of the Trust, (ii) investing the gross proceeds of the
Trust Securities in the Convertible Junior Subordinated Debentures and (iii)
engaging in only those other activities necessary or incidental thereto.
Pursuant to the Declaration, the number of Issuer Trustees is initially
five. Three of the Issuer Trustees (the "Administrative Trustees") are
individuals who are employees or officers of or who are affiliated with the
Company. The fourth trustee is a financial institution that is unaffiliated with
the Company (the "Property Trustee"). The fifth trustee is an entity which
maintains its principal place of business in the State of Delaware (the
"Delaware Trustee"). Initially, Wilmington Trust Company, a Delaware banking
corporation, acts as Property Trustee and as Delaware Trustee until, in each
case, removed or replaced by the holder of the Common Securities or by holders
of a majority of the Convertible Preferred Securities in the case of an Event of
Default or certain other special circumstances. Wilmington Trust Company also
acts as indenture trustee under the Guarantee (the "Guarantee Trustee") and
under the Indenture (the "Debenture Trustee"). See "Description of
Guarantee" and "Description of Convertible Junior Subordinated Debentures."
In certain circumstances, the holders of a majority of the Convertible Preferred
Securities will be entitled to appoint one additional trustee (a "Special
Trustee"), who need not be an officer or employee of or otherwise affiliated
with the Company, who will have the same rights, powers and privileges as the
Administrative Trustees. See "Description of Convertible Preferred
Securities -- Voting Rights; Amendment of the Declaration."
The Property Trustee holds title to the Convertible Junior Subordinated
Debentures for the benefit of the holders of the Trust Securities and the
Property Trustee has the power to exercise all rights, powers and privileges
under the Indenture as the holder of the Convertible Junior Subordinated
Debentures. In addition, the Property Trustee maintains exclusive control of a
segregated non-interest bearing bank account (the "Property Account") to hold
all payments made in respect of the convertible Junior Subordinated Debentures
for the benefit of the holders of the Trust Securities. The Guarantee Trustee
holds the Guarantee for the benefit of the holders of the Convertible Preferred
Securities. Subject to the right of the holders of the Convertible Preferred
Securities to appoint a Special Trustee, the Company, as the direct or indirect
holder of all the Common Securities, has the right to appoint, remove or replace
any of the Issuer Trustees and to increase or decrease the number of trustees,
PROVIDED that the number of trustees shall be at least three, a majority of
which shall be
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<PAGE>
Administrative Trustees. The Company pays all fees and expenses related to the
Trust and the offering of the Convertible Preferred Securities (other than any
discounts, commissions, concessions or other compensation paid to any
underwriter, broker/dealer or agent in any offering of the Convertible Preferred
Securities subsequent to the Original Offering). See "Description of
Convertible Junior Subordinated Debentures."
The rights of the holders of the Convertible Preferred Securities,
including economic rights, rights to information and voting rights, are as set
forth in the Declaration and the Delaware Business Trust Act, as amended (the
"Trust Act"). See "Description of Convertible Preferred Securities." The
Declaration, the Indenture and the Guarantee also incorporate by reference the
terms of the Trust Indenture Act. It is expected that, at the time the Shelf
Registration Statement becomes effective, the Declaration, the Indenture and the
Guarantee will be qualified under the Trust Indenture Act.
The place of business and the telephone number of the Trust are the
principal executive offices and telephone number of the Company. See
"Incorporation of Certain Documents by Reference."
DESCRIPTION OF CONVERTIBLE PREFERRED SECURITIES
Pursuant to the terms of the Declaration, the Issuer Trustees on behalf of
the Trust issued the Convertible Preferred Securities and the Common Securities
in fully registered form without interest coupons. The Convertible Preferred
Securities represent preferred undivided beneficial ownership interests in the
assets of the Trust and the holders thereof are entitled to a preference in
certain circumstances with respect to Distributions and amounts payable on
redemption of the Trust Securities or liquidation of the Trust over the Common
Securities, as well as other benefits as described in the Declaration. See
"-- Subordination of Common Securities." The Declaration will be qualified
under the Trust Indenture Act and incorporates certain provisions of the Trust
Indenture Act. This summary of certain provisions of the Convertible Preferred
Securities, the Common Securities and the Declaration does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
all the provisions of the Declaration, including the definitions therein of
certain terms. The form of the Declaration is available upon request from the
Issuer Trustees.
GENERAL
Payments on the Convertible Preferred Securities will be made PRO RATA with
payments on the Common Securities, except as described under "-- Subordination
of Common Securities." Legal title to the Convertible Junior Subordinated
Debentures is held by the Property Trustee on behalf of the Trust in trust for
the benefit of the holders of the Convertible Preferred Securities and Common
Securities. The Guarantee Agreement executed by the Company for the benefit of
the holders of the Convertible Preferred Securities provides for the Guarantee
on a subordinated basis with respect to the Convertible Preferred Securities but
does not guarantee payment of Distributions or amounts payable on redemption of
the Convertible Preferred Securities or on liquidation of the Trust when the
Trust does not have funds on hand available to make such payments. See
"Description of Guarantee."
DISTRIBUTIONS
Distributions accrue on the Convertible Preferred Securities from the date
of their original issuance at the annual rate of 7% of the stated liquidation
amount of $50 per each of the Convertible Preferred Securities, and are payable
quarterly in arrears on each March 1, June 1, September 1 and December 1 (each,
a "Distribution Date"), commencing September 1, 1999, to the person in whose
name each of the Convertible Preferred Securities is registered, subject to
certain exceptions, at the close of business on the fifteenth of the month next
preceding the applicable Distribution Date. The amount of Distributions payable
for any period will be computed on the number of days elapsed in a 360-day year
consisting of twelve 30-day months. In the event that any Distribution Date is
not a Business Day, payment of the Distributions payable on such date will be
made on the next succeeding day that is a Business Day (and without any
additional Distributions or other payments in respect to any such delay) with
the same force and effect as if made on the date such payment was originally
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<PAGE>
payable. Accrued Distributions that are not paid on the applicable Distribution
Date will accrue additional Distributions on the amount thereof (to the extent
permitted by law), compounded quarterly from the relevant Distribution Date.
"Distribution" as used herein shall include quarterly distributions,
additional distributions on quarterly distributions not paid on the applicable
Distribution Date, Special Distributions and Additional Sums (as defined
herein), as applicable. See "Description of Convertible Junior Subordinated
Debentures -- Additional Sums" and "Registration Rights." A "Business Day"
shall mean any day other than a Saturday or a Sunday, or a day on which banking
institutions in The City of New York or Wilmington, Delaware are authorized or
required by law or executive order to remain closed, or a day on which the
corporate trust office of the Property Trustee or the Debenture Trustee is
closed for business.
So long as no Debenture Event of Default has occurred and is continuing,
the Company has the right under the Indenture to defer the payment of interest
on the Convertible Junior Subordinated Debentures at any time or from time to
time for a period not exceeding 20 consecutive quarters with respect to each
Deferral Period, PROVIDED that no Deferral Period may extend beyond the Stated
Maturity of the Convertible Junior Subordinated Debentures. See "Description of
Convertible Junior Subordinated Debentures -- Option to Extend Interest Payment
Date." As a consequence of any such election, quarterly Distributions on the
Convertible Preferred Securities by the Trust will be deferred during any such
Deferral Period. Deferred Distributions to which holders of the Convertible
Preferred Securities are entitled will accumulate additional Distributions
thereon, compounded quarterly from the relevant payment date for such
Distributions during any such Deferral Period, to the extent permitted by
applicable law. During any such Deferral Period, the Company may not (i) declare
or pay any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's capital stock (which
includes common and preferred stock) other than stock dividends paid by the
Company which consist of stock of the same class as that on which the dividend
is being paid, (ii) make any payment of principal, interest or premium, if any,
on or repay, repurchase or redeem any debt securities of the Company that rank
PARI PASSU with or junior in interest to the Convertible Junior Subordinated
Debentures, or (iii) make any guarantee payments with respect to any guarantee
by the Company of the debt securities of any subsidiary of the Company if such
guarantee ranks PARI PASSU with or junior in interest to the Convertible Junior
Subordinated Debentures (other than (a) dividends or distributions in Company
Common Stock, (b) any declaration of a dividend in connection with the
implementation of a stockholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, (c) payments under the Guarantee, (d) purchases or
acquisitions of shares of Company Common Stock in connection with the
satisfaction by the Company of its obligations under any employee benefit plan
or any other contractual obligation of the Company (other than a contractual
obligation ranking PARI PASSU with or junior to the Convertible Junior
Subordinated Debentures), (e) as a result of a reclassification of the Company's
capital stock or the exchange or conversion of one class or series of the
Company's capital stock for another class or series of the Company's capital
stock or (f) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged). A Deferral Period will
terminate upon the payment by the Company of all amounts then accrued and unpaid
on the Convertible Junior Subordinated Debentures (together with interest
thereon compounded quarterly, to the extent permitted by applicable law). Prior
to the termination of any such Deferral Period, the Company may further extend
such Deferral Period, PROVIDED that such deferral does not cause such Deferral
Period to exceed 20 consecutive quarters or to extend beyond the Stated Maturity
of the Convertible Junior Subordinated Debentures. Upon the termination of any
Deferral Period, and subject to the foregoing limitations, the Company may elect
to begin a new Deferral Period. No interest or other amounts shall be due and
payable during a Deferral Period, except at the end thereof. The Company must
give the Property Trustee, the Administrative Trustees and the Debenture Trustee
notice of its election of any such Deferral Period and shall cause the Issuer to
give such notice (which shall include notice of the deferral of Distributions on
Convertible Preferred
10
<PAGE>
Securities) to holders of Convertible Preferred Securities not later than ten
days prior to the related record date for Distributions on Convertible Preferred
Securities. There is no limitation on the number of times that the Company may
elect to begin a Deferral Period. See "Description of Convertible Junior
Subordinated Debentures -- Option to Extend Interest Payment Date" and
"Federal Income Tax Consequences -- Interest Income and Original Issue
Discount."
The Company has no current intention of exercising its right to defer
payments of interest on the Convertible Junior Subordinated Debentures.
The revenue of the Trust available for distribution to holders of the
Convertible Preferred Securities is limited to payments under the Convertible
Junior Subordinated Debentures. See "Description of Convertible Junior
Subordinated Debentures -- General." If the Company does not make interest
payments on the Convertible Junior Subordinated Debentures, the Property Trustee
will not have funds available to pay Distributions on the Convertible Preferred
Securities. The payment of Distributions (if and to the extent the Trust has
funds legally available for the payment of such Distributions and cash
sufficient to make such payments) is guaranteed by the Company on a limited
basis as set forth herein under "Description of Guarantee."
CONVERSION RIGHTS
GENERAL. Convertible Preferred Securities are convertible at any time
prior to 5:00 p.m., New York City time on the Stated Maturity date (except that
Convertible Preferred Securities called for redemption by the Company will be
convertible at any time prior to 5:00 p.m., New York City time, on any Optional
Redemption Date), at the option of the holder thereof and in the manner
described below, into shares of Class A common stock. Each of the Convertible
Preferred Securities is convertible, at the option of the holder, into 2.4465
shares of Class A common stock for each of the Convertible Preferred Securities
(equivalent to a conversion price (the "Initial Conversion Price") of $20.4375
per share of Class A common stock). The conversion ratio and the equivalent
conversion price will be subject to adjustment as described under
"-- Conversion Price Adjustments" below, and the conversion price and
equivalent conversion ratio in effect at any time after giving effect to all
such adjustments are hereinafter referred to as the Applicable Conversion Price
and the Applicable Conversion Ratio, respectively. The Issuer covenanted in the
Declaration not to convert Convertible Junior Subordinated Debentures held by it
except pursuant to a notice of conversion delivered to the Property Trustee, as
Conversion Agent, by a holder of Convertible Preferred Securities. A holder of
each of the Convertible Preferred Securities wishing to exercise its conversion
right shall deliver an irrevocable conversion notice, together, if each of the
Convertible Preferred Securities is in certificated form with such certificated
security, to the Conversion Agent which shall, on behalf of such holder,
exchange such Convertible Preferred Securities for a Like Amount (as defined
under "-- Liquidation of the Trust and Distribution of Convertible Junior
Subordinated Debt") of Convertible Junior Subordinated Debentures and
immediately convert such Convertible Junior Subordinated Debentures into Class A
common stock. Holders may obtain copies of the required form of the conversion
notice from the Conversion Agent.
Holders of Convertible Preferred Securities at the close of business on a
Distribution record date will be entitled to receive the Distribution payable on
such Convertible Preferred Securities on the corresponding Distribution Date
notwithstanding the conversion of such Convertible Preferred Securities
following such Distribution record date but prior to such Distribution Date.
Except as provided in the immediately preceding sentence, neither the Issuer nor
the Company will make, or be required to make, any payment, allowance or
adjustment for accrued and unpaid Distributions, whether or not in arrears, on
converted Convertible Preferred Securities. The Company will make no payment or
allowance for distributions on the shares of Class A common stock issued upon
such conversion, except to the extent that such shares of Class A common stock
are held of record on the record date for any such distributions. Each
conversion will be deemed to have been effected immediately prior to the close
of business on the day on which the related conversion notice was received by
the Issuer.
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<PAGE>
No fractional shares of Class A common stock will be issued as a result of
conversion, but in lieu thereof such fractional interest will be paid by the
Company in cash based on the then current market value of the Class A common
stock.
CONVERSION PRICE ADJUSTMENTS -- GENERAL. The Applicable Conversion Price
is subject to adjust-ment in certain events including, without duplication: (i)
the payment of dividends (and other distributions) payable in Company Common
Stock on the Company Common Stock; (ii) the issuance to all holders of Company
Common Stock of rights or warrants; (iii) subdivisions and combinations of Class
A common stock; (iv) the payment of dividends (and other distributions) to all
holders of Company Common Stock consisting of evidences of indebtedness of the
Company, securities or capital stock, cash or assets (including securities, but
excluding those rights, warrants, dividends and distributions referred to in
clauses (i) and (ii) and dividends and distributions paid exclusively in cash);
(v) the payment of dividends (and other distributions) on Company Common Stock
paid exclusively in cash, excluding (a) cash dividends that do not exceed the
per share amount of the smallest of the four immediately preceding quarterly
cash dividends (as adjusted to reflect any of the events referred to in clauses
(i) through (vi) of this sentence) and (b) cash dividends if the annualized per
share amount thereof does not exceed 12.5% of the current market price of
Company Common Stock as of the trading day immediately preceding the date of
declaration of such dividend; and (vi) payment to holders of Company Common
Stock in respect of a tender or exchange offer (other than an odd-lot offer) by
the Company or any subsidiary of the Company for Company Common Stock at a price
in excess of 110% of the current market price of Company Common Stock as of the
trading day next succeeding the last date tenders or exchanges may be made
pursuant to such tender or exchange offer.
The Company may, at its option, make such reductions in the Applicable
Conversion Price as the Company's Board of Directors deems advisable to avoid or
diminish any income tax to holders of Company Common Stock resulting from any
dividend or distribution of stock (or rights to acquire stock) or from any event
treated as such for income tax purposes. See "Federal Income Tax
Consequences -- Adjustment of Conversion Price."
No adjustment of the Applicable Conversion Price will be made upon the
issuance of any shares of Company Common Stock pursuant to any present or future
plan providing for the reinvestment of dividends or interest payable on
securities of the Company and the investment of additional optional amounts in
shares of Company Common Stock under any such plan or the issuance of any shares
of Company Common Stock or options or rights to purchase such shares pursuant to
any present or future employee, director or consultant benefit plan or program
of the Company or pursuant to any option, warrant, right, or exercisable,
exchangeable or convertible security outstanding as of the date the Convertible
Preferred Securities were first issued. There shall also be no adjustment of the
Applicable Conversion Price in case of the issuance of any Company Common Stock
(or securities convertible into or exchangeable for Company Common Stock),
except as specifically described above. If any action would require adjustment
of the Applicable Conversion Price pursuant to more than one of the
anti-dilution provisions, only one adjustment shall be made and such adjustment
shall be the amount of adjustment that has the highest absolute value to holders
of the Convertible Preferred Securities. No adjustment in the Applicable
Conversion Price will be required unless such adjustment would require an
increase or decrease of at least 1% of the Applicable Conversion Price, but any
adjustment that would otherwise be required to be made shall be carried forward
and taken into account in any subsequent adjustment.
CONVERSION PRICE ADJUSTMENTS -- MERGER, CONSOLIDATION OR SALE OF ASSETS OF
THE COMPANY. In the event that the Company is a party to any transaction
(including, without limitation, a merger, consolidation, sale of all or
substantially all of the assets of the Company, recapitalization or
reclassification of Class A common stock or any compulsory share exchange (each
of the foregoing being referred to as a "Company Transaction")), in each case,
as a result of which shares of Class A common stock shall be converted into the
right to receive other securities, cash or other property, then
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<PAGE>
lawful provision shall be made as part of the terms of such Company Transaction
whereby the holder of each of the Convertible Preferred Securities then
outstanding shall have the right thereafter to convert each of the Convertible
Preferred Securities only into (i) in the case of any Company Transaction other
than a Company Transaction involving a Common Stock Fundamental Change (as
defined herein), the kind and amount of securities, cash and other property
receivable upon the consummation of such Company Transaction by a holder of that
number of shares of Class A common stock into which each of the Convertible
Preferred Securities was convertible immediately prior to such Company
Transaction, or (ii) in the case of a Company Transaction involving a Common
Stock Fundamental Change, common stock of the kind received by holders of Class
A common stock (but in each case after giving effect to any adjustment discussed
below relating to a Fundamental Change (as defined herein) if such Company
Transaction constitutes a Fundamental Change). The holders of Convertible
Preferred Securities will have no voting rights with respect to any Company
Transaction described in this section.
In the case of any Company Transaction involving a Fundamental Change, the
Applicable Conversion Price will be adjusted immediately after such Fundamental
Change as follows:
(i) in the case of a Non-Stock Fundamental Change, the Applicable
Conversion Price of the Convertible Preferred Securities will thereupon
become the lower of (a) the Applicable Conversion Price immediately prior
to such Non-Stock Fundamental Change, but after giving effect to any other
prior adjustments, and (b) the result obtained by multiplying the greater
of the Relevant Price or the then applicable Reference Market Price by the
Optional Redemption Ratio (such product shall hereinafter be referred to as
the "Adjusted Relevant Price" or the "Adjusted Reference Market Price,"
as the case may be); and
(ii) in the case of a Common Stock Fundamental Change, the Applicable
Conversion Price of the Convertible Preferred Securities immediately prior
to such Common Stock Fundamental Change, but after giving effect to any
other prior adjustments, will thereupon be adjusted by multiplying such
Applicable Conversion Price by a fraction of which the numerator will be
the Purchaser Stock Price and the denominator will be the Relevant Price;
PROVIDED, HOWEVER, that in the event of a Common Stock Fundamental Change
in which (a) 100% of the value of the consideration received by a holder of
Class A common stock is common stock of the successor, acquiror or other
third party (and cash, if any, is paid only with respect to any fractional
interests in such common stock resulting from such Common Stock Fundamental
Change) and (b) all of Class A common stock will have been exchanged for,
converted into, or acquired for common stock (and cash with respect to
fractional interests) of the successor, acquiror or other third party, the
Applicable Conversion Price of the Convertible Preferred Securities
immediately prior to such Common Stock Fundamental Change will thereupon be
adjusted by multiplying such conversion price by a fraction of which the
numerator will be one and the denominator will be the number of shares of
common stock of the successor, acquiror, or other third party received by a
holder of one share of Class A common stock as a result of such Common
Stock Fundamental Change.
In the absence of the adjustments to the Applicable Conversion Price after
a Fundamental Change, in the case of a Company Transaction each of the
Convertible Preferred Securities would become convertible into the securities,
cash, or other property receivable by a holder of the number of shares of Class
A common stock into which each of the Convertible Preferred Securities was
convertible immediately prior to such Company Transaction. Thus, in the absence
of the Fundamental Change provisions, a Company Transaction could substantially
lessen or eliminate the value of the conversion privilege associated with the
Convertible Preferred Securities. For example, if the Company were acquired in a
cash merger, each of the Convertible Preferred Securities would become
convertible solely into cash and would no longer be convertible into securities
whose value would vary depending on the future prospects of the Company and
other factors.
In Non-Stock Fundamental Change transactions, the foregoing conversion
price adjustments are designed to increase the securities, cash or other
property into which each of the Convertible Preferred
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Securities is convertible. In a Non-Stock Fundamental Change transaction in
which the initial value received per share of Class A common stock (measured as
described in the definition of Relevant Price) is lower than the then Applicable
Conversion Price of each of the Convertible Preferred Securities but greater
than or equal to the Reference Market Price, the Applicable Conversion Price
will be adjusted as described above with the effect that each of the Convertible
Preferred Securities will be convertible into securities, cash or other property
of the same type received by the holders of Class A common stock in such
transaction with the Applicable Conversion Price adjusted as though such initial
value had been the Adjusted Relevant Price. In a Non-Stock Fundamental Change
transaction in which the initial value received per share of Class A common
stock (measured as described in the definition of Relevant Price) is lower than
both the Applicable Conversion Price of each of the Convertible Preferred
Securities and the Reference Market Price, the Applicable Conversion Price will
be adjusted as described above but calculated as though such initial value had
been the Adjusted Reference Market Price.
In Common Stock Fundamental Change transactions, the foregoing adjustments
are designed to provide in effect that (i) where Class A common stock is
converted partly into such common stock and partly into other securities, cash
or property, each of the Convertible Preferred Securities will be convertible
solely into a number of shares of such common stock determined so that the
initial value of such shares (measured as described in the definition of
Purchaser Stock Price) equals the value of the shares of Class A common stock
into which each of the Convertible Preferred Securities was convertible
immediately before the transaction (measured as aforesaid) and (ii) where Class
A common stock is converted solely into such common stock, each of the
Convertible Preferred Securities will be convertible into the same number of
shares of such common stock receivable by a holder of the number of shares of
Class A common stock into which each of the Convertible Preferred Securities was
convertible immediately before such transaction.
"Closing Price" of any security on any day means the last reported sale
price of such security on such day, or in case no sale takes place on such day,
the average of the closing bid and asked prices in each case on the principal
national securities exchange on which such securities are listed or admitted to
trading or, if not listed or admitted to trading on any national securities
exchange, on the National Market System of the Nasdaq Stock Market or any
successor national automated interdealer quotation system (the "NNM") or, if
such securities are not listed or admitted to trading on any national securities
exchange or quoted on the NNM, the average of the closing bid and asked prices
of such security in the over-the-counter market as furnished by any New York
Stock Exchange member firm selected by the Company for such purpose.
"Common Stock Fundamental Change" means any Fundamental Change in which
more than 50% of the value (as determined in good faith by the Board of
Directors of the Company) of the consideration received by holders of Class A
common stock consists of common stock that for each of the ten consecutive
trading days immediately prior to and including the Entitlement Date has been
admitted for listing or admitted for listing subject to notice of issuance on a
national securities exchange or quoted on the NNM; PROVIDED, HOWEVER, that a
Fundamental Change shall not be a Common Stock Fundamental Change unless either
(i) the Company continues to exist after the occurrence of such Fundamental
Change and the outstanding Convertible Preferred Securities continue to exist as
outstanding Convertible Preferred Securities, or (ii) not later than the
occurrence of such Fundamental Change, the outstanding Convertible Junior
Subordinated Debentures are converted into or exchanged for debentures of a
corporation succeeding to the business of the Company, which debentures have
terms substantially similar to those of the Convertible Junior Subordinated
Debentures.
"Entitlement Date" means the record date for determination of the holders
of Company Common Stock entitled to receive securities, cash or other property
in connection with a Non-Stock Fundamental Change or a Common Stock Fundamental
Change or, if there is no such record date, the date upon which holders of Class
A common stock shall have the right to receive such securities, cash or other
property.
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"Fundamental Change" means the occurrence of any transaction or event in
connection with a plan pursuant to which all or substantially all of Class A
common stock shall be exchanged for, converted into, acquired for or constitute
solely the right to receive securities, cash or other property (whether by means
of an exchange offer, liquidation, tender offer, consolidation, merger,
combination, reclassification, recapitalization or otherwise); PROVIDED that, in
the case of a plan involving more than one such transaction or event, for
purposes of adjustment of the Applicable Conversion Price, such Fundamental
Change shall be deemed to have occurred when substantially all of the Class A
common stock shall be exchanged for, converted into, or acquired for or
constitute solely the right to receive securities, cash, or other property, but
the adjustment shall be based upon the highest weighted average per share
consideration that a holder of Class A common stock could have received in such
transactions or events as a result of which more than 50% of Class A common
stock shall have been exchanged for, converted into, or acquired for or
constitute solely the right to receive securities, cash or other property.
"Non-Stock Fundamental Change" means any Fundamental Change other than a
Common Stock Fundamental Change.
"Optional Redemption Ratio" means a fraction of which the numerator will
be $50 and the denominator will be the then current Optional Redemption Price
or, prior to June 5, 2002, an amount per each of the Convertible Preferred
Securities determined by the Company in its sole discretion, after consultation
with an investment banking firm, to be the equivalent of the hypothetical
redemption price that would have been applicable if the Convertible Preferred
Securities had been redeemable during such period.
"Purchaser Stock Price" means, with respect to any Common Stock
Fundamental Change, the average of the Closing Prices for the common stock
received in such Common Stock Fundamental Change for the ten consecutive trading
days prior to and including the Entitlement Date, as adjusted in good faith by
the Company to appropriately reflect any of the events referred to in clauses
(i) through (vi) of the first paragraph under "-- Conversion Price
Adjustments -- General."
"Reference Market Price"shall initially mean on the date of original
issuance of the Convertible Preferred Securities, $11.17 (which is an amount
equal to 66 2/3% of the last reported sale price for the Company Common Stock on
the New York Stock Exchange Composite Tape on May 27, 1999), and, in the event
of any adjustment to the Applicable Conversion Price, other than as a result of
a Non-Stock Fundamental Change, the Reference Market Price shall also be
adjusted so that the ratio of the Reference Market Price to the Applicable
Conversion Price after giving effect to any such adjustment shall always be the
same as the ratio of $11.17 to the Initial Conversion Price.
"Relevant Price" means (i) in the case of a Non-Stock Fundamental Change
in which the holder of Class A common stock receives only cash, the amount of
cash received by the holder of one share of Class A common stock and (ii) in the
event of any other Non-Stock Fundamental Change or any Common Stock Fundamental
Change, the average of the daily Closing Prices for Class A common stock during
the ten consecutive trading days prior to and including the Entitlement Date, in
each case as adjusted in good faith by the Company to appropriately reflect any
of the events referred to in clauses (i) through (vi) of the first paragraph
under "-- Conversion Price Adjustments -- General."
MANDATORY REDEMPTION
Upon the repayment in full of the Convertible Junior Subordinated
Debentures at the Stated Maturity or a redemption in whole or in part of the
Convertible Junior Subordinated Debentures (other than following any
distribution of the Convertible Junior Subordinated Debentures to the holders of
the Trust Securities), the Proceeds from such repayment or redemption shall be
applied by the Property Trustee to redeem, on a PRO RATA basis, a Like Amount of
Trust Securities, on the Redemption Date, in an amount per Trust Security equal
to the applicable Redemption Price, which Redemption Price will be equal to (i)
the liquidation amount of each of the Convertible Preferred Securities plus any
accrued and unpaid Distributions thereon (A) in the case of the repayment of the
Convertible Junior
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Subordinated Debentures at Stated Maturity (the "Stated Maturity Price"), or
(B) in the case of the redemption of the Convertible Junior Subordinated
Debentures in certain limited circumstances upon the occurrence of a Tax Event
or (ii) in the case of an Optional Redemption on or after June 5, 2002, the
Optional Redemption Price (as defined under "Description of Convertible Junior
Subordinated Debentures -- Redemption -- Optional Redemption").
If the Trust is required to pay a additional taxes, duties or other
governmental charges as a result of a Tax Event, the Company will pay as
additional amounts on the Convertible Junior Subordinated Debentures such
amounts as shall be required so that the Distributions payable by the Trust in
respect of the Trust Securities shall not be reduced as a result of any such
additional taxes, duties or other governmental charges. See "Description of
Convertible Junior Subordinated Debentures -- Additional Sums."
REDEMPTION PROCEDURES
Trust Securities shall be redeemed, if at all, at the applicable Redemption
Price with the proceeds from the contemporaneous repayment or redemption of the
Convertible Junior Subordinated Debentures. Redemptions of the Trust Securities
shall be made and the applicable Redemption Price shall be payable on each
Redemption Date only to the extent that the Trust has funds on hand available
for the payment of such Redemption Price. See also "-- Subordination of Common
Securities."
If the Trust gives a notice of redemption in respect of the Convertible
Preferred Securities, then, by 12:00 noon, New York City time, on the date fixed
for redemption (the "Redemption Date"), to the extent funds are available,
with respect to the Convertible Preferred Securities held in global form, the
Property Trustee will deposit irrevocably with DTC funds sufficient to pay the
applicable Redemption Price and will give DTC irrevocable instructions and
authority to pay the applicable Redemption Price to the holders of the
Convertible Preferred Securities. See "-- Form, Book-Entry Procedures and
Transfer." With respect to the Convertible Preferred Securities held in
certificated form, the Property Trustee, to the extent funds are available, will
irrevocably deposit with the paying agent for the Convertible Preferred
Securities funds sufficient to pay the applicable Redemption Price and will give
such paying agent irrevocable instructions and authority to pay the Redemption
Price to the holders thereof upon surrender of their certificates evidencing the
Convertible Preferred Securities. See "-- Payment and Paying Agency."
Notwithstanding the foregoing, Distributions payable on or prior to the
Redemption Date shall be payable to the holders of the Convertible Preferred
Securities on the relevant record dates for the related Distribution Dates. If
notice of redemption shall have been given and funds deposited as required, then
upon the date of such deposit, all rights of the holders of the Convertible
Preferred Securities will cease, except the right of the holders of the
Convertible Preferred Securities to receive the applicable Redemption Price, but
without interest on such Redemption Price, and the Convertible Preferred
Securities will cease to be outstanding. In the event that any Redemption Date
is not a Business Day, then payment of the applicable Redemption Price payable
on such date will be made on the next succeeding day which is a Business Day
(and without any interest or other payment in respect of any such delay), except
that, if such Business Day falls in the next calendar year, such payment will be
made on the immediately preceding Business Day. In the event that payment of the
applicable Redemption Price is improperly withheld or refused and not paid
either by the Trust or by the Company pursuant to the Guarantee as described
under "Description of Guarantee," Distributions on Convertible Preferred
Securities will continue to accrue from the Redemption Date originally
established by the Trust to the date such Redemption Price is actually paid, in
which case the actual payment date will be the date fixed for redemption for
purposes of calculating the Redemption Price.
Subject to applicable law (including, without limitation, United States
Federal securities law), the Company or its subsidiaries may at any time and
from time to time purchase outstanding Convertible Preferred Securities by
tender, in the open market or by private agreement.
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If the Company desires to consummate an Optional Redemption it must send a
notice to each holder of Trust Securities at its registered address in
accordance with the notice procedures set forth under "Description of
Convertible Junior Subordinated Debentures -- Redemption -- Optional
Redemption." Notice of a Tax Event Redemption will be mailed at least 20 days
but not more than 60 days before the Redemption Date to each holder of
Convertible Preferred Securities. Notice of repayment at Stated Maturity is not
required.
TAX EVENT OR INVESTMENT COMPANY EVENT REDEMPTION OR DISTRIBUTION
If a Tax Event shall occur and be continuing, the Company shall cause the
Issuer Trustees to dissolve the Issuer and cause Convertible Junior Subordinated
Debentures to be distributed to the holders of the Convertible Preferred
Securities in liquidation of the Issuer within 90 days following the occurrence
of such Tax Event; PROVIDED, HOWEVER, that such liquidation and distribution
shall be conditioned on (i) the Issuer Trustees' receipt of an opinion of
nationally recognized independent tax counsel (reasonably acceptable to the
Issuer Trustees) experienced in such matters (a "No Recognition Opinion"),
which opinion may rely on published revenue rulings of the Internal Revenue
Service, to the effect that the holders of the Convertible Preferred Securities
will not recognize any income, gain or loss for United States Federal income tax
purposes as a result of such liquidation and distribution of Convertible Junior
Subordinated Debentures, and (ii) the Company being unable to avoid such Tax
Event within such 90-day period by taking some ministerial action or pursuing
some other reasonable measure that, in the sole judgment of the Company, will
have no adverse effect on the Issuer, the Company or the holders of the
Convertible Preferred Securities and will involve no material cost. Furthermore,
if (i) the Company has received an opinion (a "Redemption Tax Opinion") of
nationally recognized independent tax counsel (reasonably acceptable to the
Issuer Trustees) experienced in such matters that, as a result of a Tax Event,
there is more than an insubstantial risk that the Company would be precluded
from deducting the interest on the Convertible Junior Subordinated Debentures
for United States Federal income tax purposes, even after the Convertible Junior
Subordinated Debentures were distributed to the holders of the Convertible
Preferred Securities upon liquidation of the Issuer as described above, or (ii)
the Issuer Trustees shall have been informed by such tax counsel that it cannot
deliver a No Recognition Opinion, the Company shall have the right, upon not
less than 20 nor more than 60 days' notice and within 90 days following the
occurrence and continuation of the Tax Event, to redeem the Convertible Junior
Subordinated Debentures, in whole, but not in part, for cash, for the principal
amount thereof plus accrued and unpaid interest thereon and, following such
redemption, all the Convertible Preferred Securities will be redeemed by the
Issuer at the aggregate liquidation amount thereof plus accrued and unpaid
Distributions thereon; PROVIDED, HOWEVER, that, if at the time there is
available to the Company or the Issuer the opportunity to eliminate, within such
90-day period, the Tax Event by taking some ministerial action or pursuing some
other reasonable measure that, in the sole judgment of the Company, will have no
adverse effect on the Issuer, the Company or the holders of the Convertible
Preferred Securities and will involve no material cost, the Issuer or the
Company will pursue such measure in lieu of redemption. See "-- Mandatory
Redemption." In lieu of the foregoing options, the Company will also have the
option of causing the Convertible Preferred Securities to remain outstanding and
pay Additional Sums on the Convertible Junior Subordinated Debentures. See
"Description of Convertible Junior Subordinated Debentures -- Additional
Sums."
"Tax Event" means the receipt by the Property Trustee of an opinion of a
nationally recognized independent tax counsel to the Company (reasonably
acceptable to the Issuer Trustees) experienced in such matters (a "Dissolution
Tax Opinion") to the effect that, as a result of (i) any amendment to or change
(including any announced prospective change (which shall not include a proposed
change), PROVIDED that a Tax Event shall not occur more than 90 days before the
effective date of any such prospective change) in the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, (ii) any judicial decision or official
administrative pronouncement, ruling, regulatory procedure, notice or
announcement, including any notice or
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announcement of intent to adopt such procedures or regulations (an
"Administrative Action") or (iii) any amendment to or change in the
administrative position or interpretation of any Administrative Action or
judicial decision that differs from the theretofore generally accepted position,
in each case, by any legislative body, court, governmental agency or regulatory
body, irrespective of the manner in which such amendment or change is made
known, which amendment or change is effective or such Administrative Action or
decision is announced, in each case, on or after the date of original issuance
of the Convertible Junior Subordinated Debentures or the issue date of the
Convertible Preferred Securities issued by the Trust, there is more than an
insubstantial risk that (a) if the Convertible Junior Subordinated Debentures
are held by the Property Trustee, (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 interest accrued or received on the Convertible Junior Subordinated
Debentures or subject to more than a DE MINIMIS amount of other taxes, duties or
other governmental charges as determined by such counsel, or (II) any portion of
interest payable by the Company to the Trust on the Convertible Junior
Subordinated Debentures is not, or within 90 days of the date of such opinion
will not be, deductible by the Company in whole or in part for United States
Federal income tax purposes or (b) with respect to Convertible Junior
Subordinated Debentures which are no longer held by the Property Trustee, any
portion of interest payable by the Company on the Convertible Junior
Subordinated Debentures is not, or within 90 days of the date of such opinion
will not be, deductible by the Company in whole or in part for United States
Federal income tax purposes.
If an Investment Company Event shall occur and be continuing, the Company
shall cause the Issuer Trustees to liquidate the Issuer and cause the
Convertible Junior Subordinated Debentures to be distributed to the holders of
the Convertible Preferred Securities in liquidation of the Issuer within 90 days
following the occurrence of such Investment Company Event.
"Investment Company Event" means the occurrence of a change in law or
regulation or a written change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law") to the effect that the Issuer is or
will be considered an "investment company" which is required to be registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), which
Change in 1940 Act Law becomes effective on or after the date of this Offering
Circular.
The distribution by the Company of the Convertible Junior Subordinated
Debentures will effectively result in the cancellation of the Convertible
Preferred Securities. See "-- Liquidation of the Trust and Distribution of
Convertible Junior Subordinated Debentures."
LIQUIDATION OF THE TRUST AND DISTRIBUTION OF CONVERTIBLE JUNIOR SUBORDINATED
DEBENTURES
The Company, as the holder of the outstanding Common Securities, has the
right at any time (including, without limitation, upon the occurrence of a Tax
Event or Investment Company Act Event) to dissolve the Trust and cause a Like
Amount of the Convertible Junior Subordinated Debentures to be distributed to
the holders of the Trust Securities upon liquidation of the Trust, PROVIDED that
the Issuer Trustees shall have received a No Recognition Opinion prior to the
liquidation of the Trust.
The Trust shall automatically dissolve upon the first to occur of: (i)
certain events of bankruptcy, dissolution or liquidation of the Company; (ii)
the distribution of a Like Amount of the Convertible Junior Subordinated
Debentures to the holders of the Trust Securities if the Company, as Depositor,
has given written direction to the Property Trustee to terminate the Trust
(which direction is optional and, except as described above, wholly within the
discretion of the Company, as Depositor); (iii) redemption of all the Trust
Securities as described under "-- Mandatory Redemption" above; (iv) expiration
of the term of the Trust; (v) the entry of an order for the dissolution of the
Trust by a court of competent jurisdiction; and (vi) the distribution of shares
of Class A common stock to holders of the Trust Securities upon conversion of
all of the Trust Securities.
If an early dissolution occurs as described in clause (i), (ii), (iv) or
(v) above, the Trust shall be liquidated by the Issuer Trustees as expeditiously
as the Issuer Trustees determine to be possible by
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distributing, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, to the holders of such Trust Securities a Like
Amount of the Convertible Junior Subordinated Debentures, unless such
distribution would not be practical, in which event such holders will be
entitled to receive out of the assets of the Trust available for distribution to
holders, after satisfaction of liabilities to creditors of the Trust as provided
by applicable law, an amount equal to, in the case of holders of Convertible
Preferred Securities, the aggregate liquidation amount thereof plus accrued and
unpaid Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"). If such 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 Convertible Preferred Securities shall be paid on a PRO RATA basis.
The Company, as holder of the Common Securities, will be entitled to receive
distributions upon any such liquidation PRO RATA with the holders of the
Convertible Preferred Securities, except that if a Debenture Event of Default
(or an event that, with notice or passage of time, would become such a Debenture
Event of Default) or an Event of Default under the Declaration has occurred and
is continuing, the Convertible Preferred Securities shall have a priority over
the Common Securities with respect to any such distributions. See
" -- Subordination of Common Securities."
"Like Amount" means (i) with respect to a redemption of Convertible
Preferred Securities, Convertible Preferred Securities having an aggregate
liquidation amount equal to that portion of the principal amount of Convertible
Junior Subordinated Debentures to be contemporaneously redeemed in accordance
with the Indenture, allocated to the Common Securities and to the Convertible
Preferred Securities based upon the relative liquidation amounts of such classes
and the proceeds of which will be used to pay the applicable Redemption Price of
the Convertible Preferred Securities and (ii) with respect to a distribution of
Convertible Junior Subordinated Debentures to holders of Convertible Preferred
Securities in connection with a dissolution or liquidation of the Trust,
Convertible Junior Subordinated Debentures having a principal amount equal to
the aggregate liquidation amount of the Trust Securities of the holder to whom
such Convertible Junior Subordinated Debentures are distributed.
If the Company does not redeem the Convertible Junior Subordinated
Debentures prior to maturity and the Trust is not liquidated and the Convertible
Junior Subordinated Debentures are not distributed to holders of the Trust
Securities, the Convertible Preferred Securities will remain outstanding until
the repayment of the Convertible Junior Subordinated Debentures at the Stated
Maturity and the distribution of the Liquidation Distribution to the holders of
the Convertible Preferred Securities.
On and after the liquidation date fixed for any distribution of Convertible
Junior Subordinated Debentures to holders of the Trust Securities, (i) the
Convertible Preferred Securities will no longer be deemed to be outstanding,
(ii) DTC or its nominee, as the record holder of the Convertible Preferred
Securities, will receive a registered global certificate or certificates
representing the Convertible Junior Subordinated Debentures to be delivered upon
such distribution with respect to Convertible Preferred Securities held by DTC
or its nominee and (iii) any certificates representing Convertible Preferred
Securities not held by DTC or its nominee will be deemed to represent
Convertible Junior Subordinated Debentures having a principal amount equal to
the liquidation amount of such Convertible Preferred Securities and bearing
accrued and unpaid interest in an amount equal to the accumulated and unpaid
Distributions on such Convertible Preferred Securities until such certificates
are presented to the Administrative Trustees or their agent for cancellation,
whereupon the Company will issue to such holder, and the Debenture Trustee will
authenticate, a certificate representing such Convertible Junior Subordinated
Debentures.
There can be no assurance as to the market prices for the Convertible
Preferred Securities or the Convertible Junior Subordinated Debentures that may
be distributed in exchange for the Trust Securities if a dissolution and
liquidation of the Trust were to occur. Accordingly, the Convertible Preferred
Securities that an investor may purchase, or the Convertible Junior Subordinated
Debentures
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that the investor may receive on dissolution and liquidation of the Trust, may
trade at a discount to the price that the investor paid to purchase the
Convertible Preferred Securities offered hereby.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, the Convertible
Preferred Securities and Common Securities, as applicable, shall be made PRO
RATA to the holders of Convertible Preferred Securities and Common Securities
based on the liquidation amount of the Trust Securities, PROVIDED that, if on
any Distribution Date or Redemption Date any Debenture Event of Default (or an
event that, with notice or passage of time, would become such an Event of
Default) or an Event of Default under the Declaration shall have occurred and be
continuing, no payment of any Distribution on, or applicable Redemption Price
of, any of the Common Securities, and no other payment on account of the
redemption, liquidation or other acquisition of such Common Securities, shall be
made unless payment in full in cash of all accrued and unpaid Distributions on
all of the outstanding Convertible Preferred Securities for all Distribution
periods terminating on or prior thereto, or, in the case of payment of the
applicable Redemption Price, the full amount of such Redemption Price on all of
the outstanding Convertible Preferred Securities, shall have been made or
provided for, and all funds available to the Property Trustee shall first be
applied to the payment in full in cash of all Distributions on, or the
applicable Redemption Price of, the Convertible Preferred Securities then due
and payable.
In the case of any Event of Default under the Declaration resulting from a
Debenture Event of Default, the Company as holder of the Common Securities will
be deemed to have waived any right to act with respect to any such Event of
Default under the Declaration until the effect of all such Events of Default
have been cured, waived or otherwise eliminated. Until all such Events of
Default under the Declaration have been so cured, waived or otherwise
eliminated, the Property Trustee shall act solely on behalf of the holders of
such Convertible Preferred Securities and not on behalf of the Company as holder
of the Common Securities, and only the holders of the Convertible Preferred
Securities will have the right to direct the Property Trustee to act on their
behalf.
EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an "Event of Default" under
the Declaration (an "Event of Default") (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) the occurrence of a Debenture Event of Default (see "Description
of Convertible Junior Subordinated Debentures -- Debenture Events of
Default"); or
(ii) default by the Issuer in the payment of any Distribution when it
becomes due and payable, and continuation of such default for a period of
30 days (subject to the deferral of any due date in the case of a Deferral
Period); or
(iii) default by the Issuer in the payment of any Redemption Price of
any Trust Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any material respect,
of any covenant or warranty of the Issuer Trustees in the Declaration
(other than a covenant or warranty, a default in the performance of which
or the breach of which is addressed in clause (ii) or (iii) above), and
continuation of such default or breach for a period of 60 days after there
has been given, by registered or certified mail, to the defaulting Issuer
Trustee or Issuer Trustees by the holders of at least 25% in aggregate
liquidation amount of the outstanding Convertible Preferred Securities, a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default" under the
Declaration; or
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(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Property Trustee and the failure by the Company to appoint a
successor Property Trustee within 60 days thereof.
Within 30 days after the occurrence of any Event of Default actually known
to the Property Trustee, the Property Trustee shall transmit notice of such
Event of Default to the holders of the Convertible Preferred Securities, the
Administrative Trustees and the Company, as Depositor, unless such Event of
Default shall have been cured or waived. The Company, as Depositor, and the
Administrative Trustees are required to file annually with the Property Trustee
a certificate as to whether or not they are in compliance with all the
conditions and covenants applicable to them under the Declaration.
If a Debenture Event of Default (or an event that with notice or the
passage of time, would become such an Event of Default) or an Event of Default
under the Declaration has occurred and is continuing, the Convertible Preferred
Securities shall have a preference over the Common Securities as described
above. See "-- Liquidation of the Trust and Distribution of Convertible Junior
Subordinated Debentures" and "-- Subordination of Common Securities."
REMOVAL OF ISSUER TRUSTEES
Unless a Debenture Event of Default shall have occurred and be continuing,
any Issuer Trustee may be removed at any time by the holder of the Common
Securities. If a Debenture Event of Default has occurred and is continuing, the
Property Trustee and the Delaware Trustee may be removed at such time by the
holders of a majority in liquidation amount of the outstanding Convertible
Preferred Securities. In no event will the holders of the Convertible Preferred
Securities have the right to vote to appoint, remove or replace the
Administrative Trustees, which voting fights are vested exclusively in the
Company as the holder of the Common Securities. No resignation or removal of the
Delaware Trustee or the Property Trustee and no appointment of a successor
trustee shall be effective until the acceptance of appointment by the successor
trustee in accordance with the provisions of the Declaration.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any person into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee that is not a natural person may be merged or converted
or with which it may be consolidated, or any person resulting from any merger,
conversion or consolidation to which such Issuer Trustee shall be a party, or
any person succeeding to all or substantially all the corporate trust business
of such Issuer Trustee, shall be the successor of such Issuer Trustee under the
Declaration, PROVIDED such person shall be otherwise qualified and eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE TRUST
The Trust may not merge with or into, consolidate, amalgamate or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other person, except as
described below or as otherwise set forth in the Declaration. The Trust may, at
the request of the Company, as Depositor, with the consent of the Administrative
Trustees but without the consent of the holders of the Convertible Preferred
Securities, the Property Trustee or the Delaware Trustee, merge with or into,
consolidate, amalgamate or be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to, a trust organized as such
under the laws of any State; PROVIDED, HOWEVER, that (i) such successor entity
either (a) expressly assumes all of the obligations of the Trust with respect to
the Convertible Preferred Securities or (b) substitutes for the Convertible
Preferred Securities other securities having substantially the same terms as the
Convertible Preferred Securities (the "Successor Securities") so long as the
Successor Securities rank the same as the Convertible Preferred Securities rank
in priority with respect to distributions and payments upon liquidation,
redemption and otherwise, (ii) the Company expressly appoints a trustee of such
successor entity possessing the same powers and duties as the Property Trustee
as the holder of the Convertible Junior Subordinated Debentures, (iii) the
Successor Securities are listed or traded, or any Successor
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Securities will be listed or traded upon notification of issuance, on any
national securities exchange, national automated quotation system or other
organization on which the Convertible Preferred Securities are then listed or
traded, if any, (iv) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the Convertible Preferred Securities (including
any Successor Securities) in any material respect, (v) such merger,
consolidation, amalgamation or replacement does not cause the Convertible
Preferred Securities (or any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization, (vi) such successor
entity has a purpose substantially identical and limited to that of the Trust,
(vii) prior to such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, the Company has received an opinion from
independent counsel to the Trust experienced in such matters to the effect that
(a) such merger, consolidation, amalgamation, replacement, conveyance, transfer
or lease does not adversely affect the rights, preferences and privileges of the
holders of the Convertible Preferred Securities (including any Successor
Securities) in any material respect, and (b) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, neither
the Trust nor such successor entity will be required to register as an
investment company under the 1940 Act, (viii) the Company or any permitted
successor or assignee owns all of the common securities of such successor entity
and guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Guarantee and (ix) such
merger, consolidation, amalgamation, replacement or lease is not a taxable event
for holders of the Convertible Preferred Securities. Notwithstanding the
foregoing, the Trust shall not, except with the consent of holders of 100% in
aggregate liquidation amount of the Trust Securities, 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 other entity or
permit any other entity to consolidate, amalgamate, merge with or into, or
replace it, if such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause the Trust or the successor entity to
be classified as an association taxable as a corporation (or to substantially
increase the likelihood that the Trust or the successor entity would be
classified as other than a grantor trust) for United States Federal income tax
purposes.
VOTING RIGHTS; AMENDMENT OF THE DECLARATION
Except as provided below and under "Description of Guarantee -- Amendments
and Assignment" and as otherwise required by law and the Declaration, the
holders of the Convertible Preferred Securities have no voting rights.
In addition to the rights of the holders of Convertible Preferred
Securities with respect to the enforcement of payment to the Issuer of principal
of or interest on the Convertible Junior Subordinated Debentures as provided
under "Description of Convertible Junior Subordinated Debentures -- Debenture
Events of Default," if (i) a Debenture Event of Default occurs and is
continuing or (ii) the Company defaults under the Guarantee with respect to the
Convertible Preferred Securities (each an "Appointment Event"), then the
holders of the Convertible Preferred Securities, acting as a single class, will
be entitled by the majority vote of such holders to appoint a Special Trustee.
Any holder of Convertible Preferred Securities (other than the Company or any of
its affiliates) shall be entitled to nominate any person to be appointed as
Special Trustee. Not later than 30 days after such right to appoint a Special
Trustee arises, the Issuer Trustees shall convene a meeting of the holders of
Convertible Preferred Securities for the purpose of appointing a Special
Trustee. If the Issuer Trustee fails to convene such meeting within such 30-day
period, the holders of not less than 10% of the aggregate stated liquidation
amount of the outstanding Convertible Preferred Securities will be entitled to
convene such meeting. The provisions of the Declaration relating to the
convening and conduct of the meetings of the holders will apply with respect to
any such meeting. Any Special Trustee so appointed shall cease to be a Special
Trustee if the Appointment Event pursuant to which the Special Trustee was
appointed and all other Appointment Events cease to be continuing.
Notwithstanding the appointment of any such Special Trustee, the Company shall
retain all rights under the Indenture, including the right to defer payments of
interest by extending the interest payment period as provided under
"Description of Convertible Junior Subordinated Debentures --
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Option to Extend Interest Payment Date." If such an extension occurs, there
will be no Debenture Event of Default and, consequently, no Event of Default for
failure to make any scheduled interest payment during the Deferral Period on the
date originally scheduled.
The Declaration may be amended from time to time by the Company, the
Property Trustee and the Administrative Trustees, without the consent of the
holders of the Trust Securities, (i) to cure any ambiguity, correct or
supplement any provision in the Declaration that may be inconsistent with any
other provision, or to make any other provisions with respect to ministerial
matters or questions arising under the Declaration, which shall not be
inconsistent with the other provisions of the Declaration, or (ii) to modify,
eliminate or add to any provisions of the Declaration to such extent as shall be
necessary to ensure that the Trust will not be taxable as a corporation or will
be classified for United States Federal income tax purposes as a grantor trust
at all times that any Trust Securities are outstanding or to ensure that the
Trust will not be required to register as an "investment company" under the
1940 Act; PROVIDED, HOWEVER, that in the case of clause (i), such action shall
not adversely affect in any material respect the interests of any holder of
Trust Securities, and any such amendments of the Declaration shall become
effective when notice thereof is given to the holders of the Trust Securities.
In accordance with the provisions of the preceding sentence, the Company, the
Property Trustee and the Administrative Trustee have executed an amendment to
the Declaration to correct an inconsistent provision contained in Section
3.08(h) which incorrectly provided that the Property Trustee would act as Paying
Agent and Registrar in New York. The amendment changed the reference to New York
to Wilmington, Delaware, which is the location of the office maintained by the
Property Trustee set forth in Section 7.04 of the Declaration. The delivery of
this prospectus to holders of the Trust Securities constitutes the notice to the
holders required by Section 12.01(a) of the Declaration.
The Declaration may be amended by the Issuer Trustees and the Company with
(i) the consent of holders representing not less than a majority (based upon
liquidation amounts) of the outstanding Convertible Preferred Securities, and
(ii) receipt by the Issuer Trustees of an opinion of counsel to the effect that
such amendment or the exercise of any power granted to the Issuer Trustees in
accordance with such amendment will not affect the Trust's status as a grantor
trust for United States Federal income tax purposes or the Trust's exemption
from status as an "investment company" under the 1940 Act. In addition,
without the consent of each holder of Trust Securities the Declaration may not
be amended to (i) change the amount or timing of any Distribution on the Trust
Securities or otherwise adversely affect the amount of any Distribution required
to be made in respect of the Trust Securities as of a specified date or (ii)
restrict the right of a holder of Trust Securities to institute suit for the
enforcement of any such payment on or after such date.
So long as any Convertible Junior Subordinated Debentures are held by the
Trust, the Issuer Trustees shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee, or
executing any trust or power conferred on the Property Trustee with respect to
the Convertible Junior Subordinated Debentures, (ii) waive any past default that
is waivable under the Indenture, (iii) exercise any right to rescind or annul a
declaration that the principal of all the Convertible Junior Subordinated
Debentures shall be due and payable or (iv) consent to any amendment,
modification or termination of the Indenture or the Convertible Junior
Subordinated Debentures, where such consent shall be required, without, in each
case, obtaining the prior approval of the holders of a majority in aggregate
liquidation amount of all outstanding Convertible Preferred Securities;
PROVIDED, HOWEVER, that where a consent under the Indenture would require the
consent of each holder of Convertible Junior Subordinated Debentures affected
thereby, no such consent shall be given by the Property Trustee without the
prior consent of each holder of the Convertible Preferred Securities. The Issuer
Trustees shall not revoke any action previously authorized or approved by a vote
of the holders of the Convertible Preferred Securities except by subsequent vote
of such holders. The Property Trustee shall notify each holder of Convertible
Preferred Securities of any notice of default with respect to the Convertible
Junior Subordinated Debentures. In addition to obtaining the foregoing approvals
of such holders of the Convertible Preferred Securities, prior to taking any of
the foregoing actions, the Issuer Trustees shall obtain an opinion of counsel
experienced
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in such matters to the effect that such action will not affect the Trust's
status as a grantor trust for United States Federal income tax purposes on
account of such action.
Any required approval of holders of Convertible Preferred Securities may be
given at a meeting of such holders convened for such purpose or pursuant to
written consent. The Property Trustee will cause a notice of any meeting at
which holders of Convertible Preferred Securities are entitled to vote, or of
any matter upon which action by written consent of such holders is to be taken,
to be given to each holder of record of Convertible Preferred Securities in the
manner set forth in the Declaration.
No vote or consent of the holders of Convertible Preferred Securities is
required for the Trust to redeem and cancel the Convertible Preferred Securities
in accordance with the Declaration.
Notwithstanding that holders of the Convertible Preferred Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Convertible Preferred Securities that are owned by the Company, the
Issuer Trustees or any affiliate of the Company or any Issuer Trustees, shall,
for purposes of such vote or consent, be treated as if they were not
outstanding.
EXPENSES AND TAXES
In the Indenture, the Company, as borrower, has agreed to pay all debts and
other obligations (other than with respect to payments of Distributions, amounts
payable upon redemption and the liquidation amount of the Trust Securities) and
all costs and expenses of the Trust (including costs and expenses relating to
the organization of the Trust, the fees and expenses of the Issuer Trustees and
the costs and expenses relating to the operation of the Trust) and the offering
of the Convertible Preferred Securities, and to pay any and all taxes and all
costs and expenses with respect to the foregoing (other than United States
withholding taxes) to which the Trust might become subject. The foregoing
obligations of the Company under the Indenture are for the benefit of, and shall
be enforceable by, any person to whom any such debts, obligations, costs,
expenses and taxes are owed (a "Creditor") whether or not such Creditor has
received notice thereof. Any such Creditor may enforce such obligations of the
Company directly against the Company, and the Company has irrevocably waived any
right or remedy to require that any such Creditor take any action against the
Trust or any other person before proceeding against the Company. The Company has
also agreed in the Indenture to execute such additional agreement(s) as may be
necessary or desirable to give full effect to the foregoing.
FORM, BOOK-ENTRY PROCEDURES AND TRANSFER
Convertible Preferred Securities originally sold to qualified institutional
buyers (as defined in Rule 144A under the Securities Act) were issued in the
form of one or more fully registered global Convertible Preferred Securities
certificates (the "Global Convertible Preferred Securities"), except as
described below. The Global Convertible Preferred Securities were deposited on
the Closing Date with, or on behalf of, DTC and registered in the name of Cede &
Co., as nominee of DTC. Except as set forth below, the Global Convertible
Preferred Securities may be transferred, in whole and not in part, only to DTC
or another nominee of the DTC. Investors may hold their beneficial interests in
the Global Convertible Preferred Securities directly through DTC if they have an
account with DTC or indirectly through organizations which have accounts with
DTC.
DTC has advised the Company as follows: DTC is a limited-purpose trust
company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code, and a "clearing agency" registered pursuant to
the provisions of Section 17A of the Exchange Act. DTC was created to hold
securities of institutions that have accounts with DTC ("participants") and to
facilitate the clearance and settlement of securities transactions among its
participants in such securities through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical movement
of securities certificates. DTC's participants include securities brokers and
dealers (which may include the Initial Purchasers), banks, trust companies,
clearing corporations and certain other organizations. Access to DTC's
book-entry system is also available to others such as banks, brokers,
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dealers and trust companies that clear through or maintain a custodial
relationship with a participant, whether directly or indirectly.
Upon the issuance of the Global Convertible Preferred Securities, DTC
credited, on its book-entry registration and transfer system, the principal
amount of the Convertible Preferred Securities represented by such Global
Convertible Preferred Securities to the accounts of participants. The accounts
credited are designated by the Initial Purchasers of such Convertible Preferred
Securities. Ownership of beneficial interests in the Global Convertible
Preferred Securities is limited to participants or persons that may hold
interests through participants. Ownership of beneficial interests in the Global
Convertible Preferred Securities is shown on, and the transfer of those
ownership interests will be effected only through, records maintained by DTC
(with respect to participants' interests) and such participants (with respect to
the owners of beneficial interests in the Global Convertible Preferred
Securities other than participants). The laws of some jurisdictions may require
that certain purchasers of securities take physical delivery of such securities
in definitive form. Such limits and laws may impair the ability to transfer or
pledge beneficial interests in the Global Convertible Preferred Securities.
So long as DTC or its nominee is the registered holder and owner of the
Global Convertible Preferred Securities, DTC or such nominee, as the case may
be, will be considered the sole legal owner and holder of the related
Convertible Preferred Securities for all purposes of the Declaration, the
Guarantee and the Indenture. Except as set forth below, owners of beneficial
interests in the Global Convertible Preferred Securities will not be entitled to
have the Convertible Preferred Securities represented by the Global Convertible
Preferred Securities registered in their names, will not receive or be entitled
to receive physical delivery of certificated Convertible Preferred Securities in
definitive form and will not be considered to be the owners or holders of any
Convertible Preferred Securities under the Declaration, the Guarantee or the
Indenture. The Company understands that under existing industry practice, in the
event an owner of a beneficial interest in the Global Convertible Preferred
Securities desires to take any action that DTC, as the holder of the Global
Convertible Preferred Securities, is entitled to take, DTC would authorize the
participants to take such action, and that the participants would authorize
beneficial owners owning through such participants to take such action or would
otherwise act upon the instructions of beneficial owners owning through them.
Payment of amounts with respect to the Convertible Preferred Securities
represented by the Global Convertible Preferred Securities registered in the
name of and held by DTC or its nominee will be made to DTC or its nominee, as
the case may be, as the registered owner and holder of the Global Convertible
Preferred Securities.
The Company expects that DTC or its nominee, upon receipt of payment of
amounts with respect to the Global Convertible Preferred Securities, will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of the Global
Convertible Preferred Securities as shown on the records of DTC or its nominee.
The Company also expects that payments by participants to owners of beneficial
interests in the Global Convertible Preferred Securities held through such
participants will be governed by standing instructions and customary practices
and will be the responsibility of such participants. None of the Company, the
Issuer or the Initial Purchasers will have any responsibility or liability for
any aspect of the records relating to, or payments made on account of,
beneficial ownership interests in the Global Convertible Preferred Securities or
for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests or for any other aspect of the relationship
between or the relationship between such participants and the owners of
beneficial interests in DTC and its participants or the relationship between
such participants and the owners of beneficial interests in the Global
Convertible Preferred Securities owning through such participants.
Unless and to the extent they are exchanged in whole or in part for
certificated Convertible Preferred Securities in definitive form, the Global
Convertible Preferred Securities may not be transferred except as a whole by DTC
to a nominee of DTC or by a nominee of DTC to DTC or another nominee of DTC.
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Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Global Convertible Preferred Securities among
participants of DTC, it is under no obligation to perform or continue to perform
such procedures, and such procedures may be discontinued at any time. None of
the Company, the Issuer or the Initial Purchasers will have any responsibility
for the performance by DTC or its participants or indirect participants of their
respective obligations under the rules and procedures governing their
operations.
None of the Company, the Issuer or the Initial Purchasers shall be liable
for any delay by DTC or any participant or indirect participant in identifying
the beneficial owners of the Convertible Preferred Securities, and the Company,
the Issuer and the Initial Purchasers may conclusively rely on, and shall be
protected in relying on, instructions from DTC for all purposes (including with
respect to the registration and delivery, and their respective principal
amounts, of the Convertible Preferred Securities to be issued).
The information in this Offering Circular concerning DTC and DTC's
book-entry system has been obtained from such sources that the Company believes
to be reliable. None of the Company, the Issuer or the Initial Purchasers will
have any responsibility for the performance by DTC or its participants of their
respective obligations as described hereunder or under the rules and procedures
governing their respective operations.
CERTIFICATED CONVERTIBLE PREFERRED SECURITIES
The Convertible Preferred Securities represented by the Global Convertible
Preferred Securities are exchangeable for certificated Convertible Preferred
Securities in definitive form of like tenor as such Convertible Preferred
Securities ("Certificated Convertible Preferred Securities") in denominations
of U. S. $1,000 and integral multiples thereof if (i) DTC notifies the Company
or the Issuer that it is unwilling or unable to continue as depositary for the
Global Convertible Preferred Securities or if at any time DTC ceases to be a
clearing agency registered under the Exchange Act, (ii) the Company or the
Issuer in its discretion at any time determines not to have all of the
Convertible Preferred Securities evidenced by the Global Convertible Preferred
Securities or (iii) a default entitling the holders of the Convertible Preferred
Securities to accelerate the maturity thereof has occurred and is continuing.
Any of the Convertible Preferred Securities that is exchangeable pursuant to the
preceding sentence is exchangeable for Certificated Convertible Preferred
Securities issuable in authorized denominations and registered in such names as
DTC shall direct. Subject to the foregoing, the Global Convertible Preferred
Securities are not exchangeable, except for Global Convertible Preferred
Securities of the same aggregate denomination to be registered in the name of
DTC or its nominee. In addition, Certificated Convertible Preferred Securities
will bear the legend referred to under "Transfer Restrictions" (unless the
Company determines otherwise in accordance with applicable law) and will be
subject to the provisions of such legend.
PAYMENT AND PAYING AGENCY
Payments in respect of the Global Convertible Preferred Securities shall be
made to DTC, which shall credit the relevant accounts at DTC on the applicable
Distribution Dates, or, in respect of the Convertible Preferred Securities that
are not held by DTC, such payments shall be made by check mailed to the address
of the holder entitled thereto as such address shall appear on the register. The
paying agent (the "Paying Agent") shall initially be the Property Trustee and
any co-paying agent chosen by the Property Trustee and acceptable to the
Administrative Trustees and the Company. The Paying Agent shall be permitted to
resign as Paying Agent upon 30 days' written notice to the Property Trustee, the
Administrative Trustees and the Company. In the event that the Property Trustee
shall no longer be the Paying Agent, the Administrative Trustees shall appoint a
successor (which shall be a bank or trust company acceptable to the
Administrative Trustees and the Company) to act as Paying Agent.
The Property Trustee has informed the Trust that so long as it serves as
paying agent for the Convertible Preferred Securities, it anticipates that
information regarding Distributions on the
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Convertible Preferred Securities, including payment date, record date and
redemption information, will be made available through Wilmington Trust Company.
REGISTRAR, CONVERSION AGENT, PAYING AGENT AND TRANSFER AGENT
The Property Trustee acts as registrar and conversion agent for the
Convertible Preferred Securities.
The Property Trustee acts as initial paying agent and transfer agent for
Restricted Certificated Convertible Preferred Securities and Certificated
Convertible Preferred Securities and may designate additional or substitute
paying agents and transfer agents at any time. Registration of transfers of
Restricted Certificated Convertible Preferred Securities and Certificated
Convertible Preferred Securities will be effected without charge by or on behalf
of the Trust, but upon payment (with the giving of such indemnity as the
Administrative Trustees, the Property Trustee or the Company may require) in
respect of any tax or other government charges that may be imposed in relation
thereto. The Trust will not be required to register the transfer of or exchange
Restricted Certificated Convertible Preferred Securities and Certificated
Convertible Preferred Securities during the period beginning at the opening of
business 15 days before any selection of Restricted Certificated Convertible
Preferred Securities and Certificated Convertible Preferred Securities to be
redeemed and ending at the close of business on the day of that selection or
register the transfer of or exchange any Certificated Convertible Preferred
Securities, or portion thereof, called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than during the occurrence and continuance of
an Event of Default, undertakes to perform only such duties as are specifically
set forth in the Declaration and, during the existence of an Event of Default,
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 Property Trustee is under no obligation to exercise any of the
powers vested in it by the Declaration at the request of any holder of Trust
Securities unless it is offered reasonable indemnity against the costs, expenses
and liabilities that might be incurred thereby. If no Event of Default has
occurred and is continuing and the Property Trustee is required to decide
between alternative causes of action, construe ambiguous provisions in the
Declaration or is unsure of the application of any provision of the Declaration,
and the matter is not one on which holders of the Convertible Preferred
Securities or the Common Securities are entitled under the Declaration to vote,
then the Property Trustee shall take such action as is directed by the Company
and, if not so directed, shall take such action as it deems advisable and in the
best interests of the holders of the Trust Securities and will have no liability
except for its own bad faith, negligence or willful misconduct.
MISCELLANEOUS
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Trust in such a way that the Trust will not be
deemed to be an "investment company" required to be registered under the 1940
Act or classified as an association taxable as a corporation for United States
Federal income tax purposes (or in a way that would substantially increase the
risk that the Trust would be classified as other than a grantor trust for United
States Federal income tax purposes), and so that the Convertible Junior
Subordinated Debentures will be treated as indebtedness of the Company for
United States Federal income tax purposes. In this connection, the Company and
the Administrative Trustees are authorized to take any action, not inconsistent
with applicable law, the certificate of trust of the Trust or the Declaration,
that the Company and the Administrative Trustees determine in their discretion
to be necessary or desirable for such purposes, as long as such action does not
materially adversely affect the interests of the holders of the Trust
Securities.
Holders of the Trust Securities have no preemptive or similar rights.
The Trust may not borrow money or issue debt or mortgage or pledge any of
its assets.
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DESCRIPTION OF CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES
The Convertible Junior Subordinated Debentures were issued under a
Convertible Junior Subordi-nated Indenture (the "Indenture"), between the
Company and Wilmington Trust Company, as trustee (the "Debenture Trustee").
The Indenture will be qualified under the Trust Indenture Act and incorporates
certain provisions of the Trust Indenture Act. This summary of certain terms and
provisions of the Convertible Junior Subordinated Debentures and the Indenture
does not purport to be complete, and where reference is made to particular
provisions of the Indenture, such provisions, including the definitions of
certain terms, some of which are not otherwise defined herein, are qualified in
their entirety by reference to all of the provisions of the Indenture and those
terms made a part of the Indenture by incorporation of the Trust Indenture Act.
GENERAL
Concurrently with the issuance of the Trust Securities, the Trust invested
the proceeds thereof in Convertible Junior Subordinated Debentures issued by the
Company. Interest accrues on the Convertible Junior Subordinated Debentures from
the date of their original issuance at the annual rate of 7% of the principal
amount thereof and is payable quarterly in arrears on March 1, June 1, September
1 and December 1 (each, an "Interest Payment Date"), commencing September 1,
1999, to the person in whose name each Convertible Junior Subordinated Debenture
is registered, subject to certain exceptions, at the close of business on the
fifteenth of the month next preceding the applicable Interest Payment Date. It
is anticipated that, until the liquidation of the Trust, each Convertible Junior
Subordinated Debenture will be registered in the name of the Trust and held by
the Property Trustee for the benefit of the holders of the Trust Securities. The
amount of interest payable for any period will be computed on the basis of the
number of days elapsed in a 360-day year consisting of twelve 30-day months. In
the event that any Interest Payment Date is not a Business Day, then payment of
the interest 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), with the same force and effect as if made on the applicable
Interest Payment Date. Accrued interest that is not paid on the applicable
Interest Payment Date will bear additional interest on the amount thereof (to
the extent permitted by law), compounded quarterly from the relevant Interest
Payment Date. The term "interest" as used herein shall include quarterly
interest payments, interest on quarterly interest payments not paid the
applicable Interest Payment Date, Special Interest and Additional Sums, as
applicable. See " -- Additional Sums" and "Registration Rights."
Unless previously redeemed or repurchased in accordance with the Indenture,
the Convertible Junior Subordinated Debentures will mature on June 1, 2029 (the
"Stated Maturity"). See "-- Redemption -- Repayment at Maturity; Redemption
of Convertible Junior Subordinated Debentures."
The Convertible Junior Subordinated Debentures are unsecured and rank
junior and are subordinate in right of payment to all Senior Debt. Because the
Company is principally a holding company, the right of the Company to
participate in any distribution of assets of any subsidiary upon such
subsidiary's liquidation or reorganization or otherwise (and thus the ability of
holders of the Convertible Preferred Securities to benefit indirectly from such
distribution), is subject to the prior claims of creditors of such subsidiary,
except to the extent that the Company may itself be recognized as a creditor of
such subsidiary. Accordingly, the Convertible Junior Subordinated Debentures
will be subordinated to all Senior Debt and effectively subordinated to all
existing and future liabilities of the Company's subsidiaries, and holders of
Convertible Junior Subordinated Debentures should look only to the assets of the
Company for payments on the Convertible Junior Subordinated Debentures. The
Indenture does not limit the incurrence or issuance of other secured or
unsecured debt of the Company, including Senior Debt, whether under the
Indenture or any existing or other indenture that the Company may enter into in
the future or otherwise. See "Risk Factors -- Risks Relating to the Convertible
Preferred Securities."
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OPTION TO EXTEND INTEREST PAYMENT DATE
As long as no Debenture Event of Default has occurred and is continuing,
the Company has the right under the Indenture to defer the payment of interest
on the Convertible Junior Subordinated Debentures at any time or from time to
time for a period not exceeding 20 consecutive quarters with respect to each
Deferral Period, PROVIDED that no Deferral Period may extend beyond the Stated
Maturity of the Convertible Junior Subordinated Debentures. At the end of a
Deferral Period, the Company must pay all interest then accrued and unpaid on
the Convertible Junior Subordinated Debentures (together with interest accrued
thereon compounded quarterly from the relevant Interest Payment Date, to the
extent permitted by applicable law). During a Deferral Period and for so long as
the Convertible Junior Subordinated Debentures remain outstanding, interest will
continue to accrue and holders of Convertible Junior Subordinated Debentures
(and holders of the Convertible Preferred Securities) will be required to accrue
interest income (in the form of OID) for United States Federal income tax
purposes. See "Federal Income Tax Consequences -- Interest Income and Original
Issue Discount."
During any Deferral Period, the Company may not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's capital stock (which
includes common and preferred stock) other than stock dividends paid by the
Company which consist of stock of the same class as that on which the dividend
is being paid and (ii) make any payment of principal, interest or premium, if
any, on or repay, repurchase or redeem any debt securities of the Company that
rank PARI PASSU with or junior in interest to the Convertible Junior
Subordinated Debentures or (iii) make any guarantee payments with respect to any
guarantee by the Company of the debt securities of any subsidiary of the Company
if such guarantee ranks PARI PASSU with or junior in interest to the Convertible
Junior Subordinated Debentures (other than (a) dividends or distributions in
Company Common Stock, (b) any declaration of a dividend in connection with the
implementation of a stockholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, (c) payments under the Guarantee, (d) purchases or
acquisitions of shares of Company Common Stock in connection with the
satisfaction by the Company of its obligations under any employee benefit plan
or any other contractual obligation of the Company (other than a contractual
obligation ranking PARI PASSU with or junior to the Convertible Junior
Subordinated Debentures), (e) as a result of a reclassification of the Company's
capital stock or the exchange or conversion of one class or series of the
Company's capital stock for another class or series of the Company's capital
stock or (f) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged). A Deferral Period will
terminate upon the payment by the Company of all interest then accrued and
unpaid on the Convertible Junior Subordinated Debentures (together with interest
accrued thereon, compounded quarterly, to the extent permitted by applicable
law). Prior to the termination of any Deferral Period, the Company may further
extend such Deferral Period, PROVIDED, HOWEVER, that such deferral does not
cause such Deferral Period to exceed 20 consecutive quarters or to extend beyond
the Stated Maturity of the Convertible Junior Subordinated Debentures. Upon the
termination of any Deferral Period, and subject to the foregoing limitations,
the Company may elect to begin a new Deferral Period. No interest shall be due
and payable during a Deferral Period, except at the end thereof. The Company
must give the Property Trustee, the Administrative Trustees and the Debenture
Trustee notice of its election of any Deferral Period at least ten days prior to
the record date for the Distributions on the Convertible Preferred Securities
that would have been payable except for the election to begin or extend such
Deferral Period. The Debenture Trustee shall give notice of the Company's
election to begin or extend a new Deferral Period to the holders of the
Convertible Preferred Securities. There is no limitation on the number of times
that the Company may elect to begin a Deferral Period.
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REDEMPTION
REPAYMENT AT MATURITY; REDEMPTION OF CONVERTIBLE JUNIOR SUBORDINATED
DEBENTURES
The Convertible Junior Subordinated Debentures must be repaid at Stated
Maturity, unless earlier redeemed. The circumstances in which the Company may
redeem the Convertible Junior Subordinated Debentures prior to Stated Maturity
are described below. Upon the repayment in full at maturity or redemption, in
whole or in part, of the Convertible Junior Subordinated Debentures (other than
following the distribution of the Convertible Junior Subordinated Debentures to
the holders of the Trust Securities), the proceeds from such repayment or
redemption shall concurrently be applied to redeem, at the applicable Redemption
Price, a Like Amount of Trust Securities, upon the terms and conditions
described herein. See "Description of Convertible Preferred
Securities -- Mandatory Redemption."
OPTIONAL REDEMPTION
The Company has the right to redeem the Convertible Junior Subordinated
Debentures, in whole or in part, at any time or from time to time after June 5,
2002, upon not less than 30 nor more than 60 days' notice, at a redemption price
equal to $51.75 per $50 principal amount of the Convertible Junior Subordinated
Debentures to be redeemed plus any accrued and unpaid interest, including
Additional Sums, if any, to the date of redemption, if redeemed on or before
June 1, 2003, and at the following redemption prices per $50 principal amount of
Convertible Junior Subordinated Debentures, if redeemed during the 12-month
period ending June 1:
PRICE PER
YEAR $40 PRINCIPAL AMOUNT
- ----- ---------------------
2004................................. $ 51.17
2005................................. $ 50.58
and thereafter at $50 per $50 principal amount of Convertible Junior
Subordinated Debentures plus, in each case, accrued and unpaid interest,
including Additional Sums, if any, to the redemption date.
In the event of any redemption in part, the Company shall not be required
(i) to issue, register the transfer of or exchange any Convertible Junior
Subordinated Debenture during a period beginning at the opening of business 15
days before any selection for redemption of Convertible Junior Subordinated
Debentures and ending at the close of business on the earliest date on which the
relevant notice of redemption is deemed to have been given to all holders of
Convertible Junior Subordinated Debentures to be so redeemed and (ii) to
register the transfer of or exchange any Convertible Junior Subordinated
Debentures so selected for redemption, in whole or in part, except the
unredeemed portion of any Convertible Junior Subordinated Debenture being
redeemed in part.
TAX EVENT REDEMPTION
The Company may also, under certain limited circumstances within 90 days of
the occurrence and continuation of a Tax Event, redeem (a "Tax Event
Redemption") the Convertible Junior Subordinated Debentures in whole, but not
in part, at the aggregate principal amount thereof plus accrued and unpaid
interest thereon to the date of redemption (the "Tax Event Redemption Price").
See "Description of Convertible Preferred Securities -- Tax Event or Investment
Company Event Redemption or Distribution."
If the Company is permitted to consummate a Tax Event Redemption and it
desires to do so, it must mail notice to holders of Convertible Preferred
Securities at least 20 days but not more than 60 days before the Redemption
Date.
ADDITIONAL SUMS
If (i) the Property Trustee is the sole holder of all Convertible Junior
Subordinated Debentures and (ii) the Trust is required to pay any additional
taxes, duties, assessments or other governmental charges as a result of a Tax
Event or otherwise ("Additional Sums"), the Company will pay as
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additional amounts on the Convertible Junior Subordinated Debentures such
amounts as shall be required so that the Distributions payable by the Trust in
respect of the Trust Securities shall not be reduced as a result of any such
Additional Sums.
RESTRICTIONS ON CERTAIN PAYMENTS
If (i) there shall have occurred a Debenture Event of Default, (ii) the
Company shall be in default with respect to its payment of any obligations under
the Guarantee or (iii) the Company shall have given notice of its election of a
Deferral Period as provided in the Indenture and shall not have rescinded such
notice, or such Deferral Period shall be continuing, the Company will covenant
that it will not (a) declare or pay any dividends or distributions on, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
the Company's capital stock (which includes common and preferred stock) other
than stock dividends paid by the Company which consist of stock of the same
class as that on which the dividend is being paid, (b) make any payment of
principal, interest or premium, if any, on or repay or repurchase or redeem any
debt securities of the Company that rank PARI PASSU with or junior in interest
to the Convertible Junior Subordinated Debentures or (c) make any guarantee
payments with respect to any guarantee by the Company of the debt securities of
any subsidiary of the Company if such guarantee ranks PARI PASSU with or junior
in interest to the Convertible Junior Subordinated Debentures (in each case
other than (A) dividends or distributions in Company Common Stock, (B) any
declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (C)
payments under the Guarantee, (D) purchases or acquisitions of shares of Company
Common Stock in connection with the satisfaction by the Company of its
obligations under any employee benefit plan or any other contractual obligation
of the Company (other than a contractual obligation ranking PARI PASSU with or
junior in interest to the Convertible Junior Subordinated Debentures), (E) as a
result of a reclassification of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for another
class or series of the Company's capital stock or (F) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged).
MODIFICATION OF INDENTURE
From time to time the Company and the Debenture Trustee may, without the
consent of the holders of Convertible Junior Subordinated Debentures, amend,
waive or supplement the Indenture for specified purposes, including, among other
things, curing ambiguities, defects or inconsistencies (PROVIDED that any such
action does not materially adversely affect the interest of the holders of
Convertible Junior Subordinated Debentures or the holders of the Convertible
Preferred Securities so long as they remain outstanding) and qualifying, or
maintaining the qualification of, the Indenture under the Trust Indenture Act.
The Indenture contains provisions permitting the Company and the Debenture
Trustee, with the consent of the holders of not less than a majority in
principal amount of Convertible Junior Subordinated Debentures, to modify the
Indenture in a manner affecting the rights of the holders of Convertible Junior
Subordinated Debentures; PROVIDED, HOWEVER, that no such modification may,
without the consent of the holder of each outstanding Convertible Junior
Subordinated Debenture so affected, change the Stated Maturity, or reduce the
principal amount of the Convertible Junior Subordinated Debentures, or reduce
the rate or extend the time of payment of interest thereon or reduce the
percentage of principal amount of Convertible Junior Subordinated Debentures the
consent of whose holders is required to amend, waive or supplement the
Indenture, or have certain other effects as set forth in the Indenture.
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DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events with respect to the Convertible Junior Subordinated Debentures that has
occurred and is continuing constitutes a "Debenture Event of Default":
(i) failure for 30 days to pay any interest on the Convertible Junior
Subordinated Debentures when due (subject to the deferral of any due date
in the case of a Deferral Period); or
(ii) failure to pay any principal or premium, if any, on the
Convertible Junior Subordinated Debentures when due, whether at maturity,
upon redemption, by declaration of acceleration or otherwise; or
(iii) failure to observe or perform certain other covenants contained
in the Indenture for 90 days after written notice to the Company from the
Debenture Trustee or the holders of at least 25% in aggregate outstanding
principal amount of the Convertible Junior Subordinated Debentures; or
(iv) failure by the Company to issue and deliver shares of Class A
common stock upon an election by a holder of Convertible Preferred
Securities to convert such Convertible Preferred Securities; or
(v) certain events in bankruptcy, insolvency or reorganization of the
Company; or
(vi) the voluntary or involuntary dissolution, winding-up or
termination of the Trust, except in connection with the distribution of the
Convertible Junior Subordinated Debentures to the holders of Trust
Securities in liquidation of the Trust, the redemption of all of the Trust
Securities of the Trust, or certain mergers, consolidations or
amalgamations, each as permitted by the Declaration.
The holders of a majority in aggregate outstanding principal amount of the
Convertible Junior Subordinated Debentures have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Debenture Trustee. The Debenture Trustee or the holders of not less than 25% in
aggregate outstanding principal amount of the Convertible Junior Subordinated
Debentures may declare the principal due and payable immediately upon a
Debenture Event of Default and, should the Debenture Trustee or such holders of
Convertible Junior Subordinated Debentures fail to make such declaration, the
holders of at least 25% in aggregate liquidation amount of the Convertible
Preferred Securities shall have such right. The holders of a majority in
aggregate outstanding principal amount of the Convertible Junior Subordinated
Debentures may annul such declaration and waive the default if the default
(other than the non-payment of the principal of the Convertible Junior
Subordinated Debentures which has become due solely by such acceleration) has
been cured and a sum sufficient to pay all matured installments of interest and
principal due otherwise than by acceleration has been deposited with the
Debenture Trustee. Should the holders of Convertible Junior Subordinated
Debentures fail to annul such declaration and waive such default, the holders of
a majority in aggregate liquidation amount of the Convertible Preferred
Securities shall have such right.
The holders of a majority in aggregate outstanding principal amount of the
Convertible Junior Subordinated Debentures affected thereby may, on behalf of
the holders of all the Convertible Junior Subordinated Debentures, waive any
past default, except a default in the payment of principal of (or premium, if
any) or interest (unless such default has been cured and a sum sufficient to pay
all matured installments of interest and principal due otherwise than by
acceleration has been deposited with the Debenture Trustee) or a default in
respect of a covenant or provision which under the Indenture cannot be modified
or amended without the consent of the holder of each outstanding Convertible
Junior Subordinated Debenture. Should the holders of such Convertible Junior
Subordinated Debentures fail to annul such declaration and waive such default,
the holders of a majority in aggregate liquidation amount of the Convertible
Preferred Securities shall have such right. The Company is required to file
annually with the Debenture Trustee a certificate as to whether or not
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the Company is in compliance with all the conditions and covenants applicable to
it under the Indenture.
In case a Debenture Event of Default shall occur and be continuing, the
Property Trustee will have the right to declare the principal of and the
interest on the Convertible Junior Subordinated Debentures, and any other
amounts payable under the Indenture, to be forthwith due and payable and to
enforce its other rights as a creditor with respect to the Convertible Junior
Subordinated Debentures.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF CONVERTIBLE PREFERRED SECURITIES
If a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of the Company to pay interest or principal
on the Convertible Junior Subordinated Debentures on the date such interest or
principal is otherwise payable, a holder of Convertible Preferred Securities may
institute a Direct Action. The Company may not amend the Indenture to remove the
foregoing right to bring a Direct Action without the prior written consent of
the holders of all of the Convertible Preferred Securities. If the right to
bring a Direct Action is removed following the effectiveness of the Shelf
Registration Statement in respect of the Convertible Junior Subordinated
Debentures, the Trust may become subject to the reporting obligations under the
Exchange Act. Notwithstanding any payments made to a holder of Convertible
Preferred Securities by the Company in connection with a Direct Action, the
Company shall remain obligated to pay the principal of and interest on the
Convertible Junior Subordinated Debentures, and the Company shall be subrogated
to the rights of the holders of such Convertible Preferred Securities with
respect to payments on the Convertible Preferred Securities to the extent of any
payments made by the Company to such holder in any Direct Action.
The holders of the Convertible Preferred Securities will not be able to
exercise directly any remedies, other than those set forth in the preceding
paragraph, available to the holders of the Convertible Junior Subordinated
Debentures unless there shall have been an Event of Default under the
Declaration. See "Description of Convertible Preferred Securities -- Events of
Default; Notice."
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Indenture provides that the Company shall not consolidate with or merge
with or into any other person or convey, transfer or lease its properties and
assets substantially as an entirety to any person, and no person shall
consolidate with or merge with or into the Company or convey, transfer or lease
its properties and assets substantially as an entirety to the Company, unless
(i) in case the Company consolidates with or merges with or into another person
or conveys or transfers its properties and assets substantially as an entirety
to any person, the successor person is organized under the laws of the United
States or any State of the United States or the District of Columbia, and such
successor person expressly assumes the Company's obligations on the Convertible
Junior Subordinated Debentures issued under the Indenture and shall have
provided for conversion rights in accordance with Article XIII of the Indenture;
(ii) immediately after giving effect thereto, no Debenture Event of Default, and
no event which, after notice or lapse of time or both, would become a Debenture
Event of Default, shall have occurred and be continuing; (iii) if at the time
any Convertible Preferred Securities are outstanding, such transaction is
permitted under the Declaration and the Guarantee and does not give rise to any
breach or violation of the Declaration or the Guarantee; and (iv) certain other
conditions as prescribed in the Indenture are met.
The general provisions of the Indenture do not afford holders of the
Convertible Junior Subordinated Debentures protection in the event of a highly
leveraged or other transaction involving the Company that may adversely affect
holders of the Convertible Junior Subordinated Debentures.
SUBORDINATION
In the Indenture, the Company has covenanted and agreed that any
Convertible Junior Subordinated Debentures issued thereunder shall be
subordinate and junior in right of payment to all Senior Debt to the extent
provided in the Indenture. Upon any payment or distribution of assets to
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creditors upon any liquidation, dissolution, winding-up, reorganization,
assignment for the benefit of creditors, marshaling of assets or any bankruptcy,
insolvency, debt restructuring or similar proceedings in connection with any
insolvency or bankruptcy proceeding of the Company, the holders of Senior Debt
will first be entitled to receive payment in full of such Senior Debt (including
any interest accruing subsequent to the filing of a petition for bankruptcy
regardless of whether such interest is an allowed claim in the bankruptcy
proceeding) before the holders of Convertible Junior Subordinated Debentures, or
the Property Trustee on behalf of the holders, will be entitled to receive or
retain any payment or distribution in respect thereof.
In the event of the acceleration of the maturity of the Convertible Junior
Subordinated Debentures, the holders of all Senior Debt outstanding at the time
of such acceleration will first be entitled to receive payment in full of all
amounts due thereon (including any amounts due upon acceleration) before the
holders of the Convertible Junior Subordinated Debentures will be entitled to
receive or retain any payment in respect of the principal of, and premium and
interest, if any, on, the Convertible Junior Subordinated Debentures.
In the event that the Company shall default in the payment of any principal
of, or premium or interest, if any, on, any Senior Debt when the same becomes
due and payable, whether at maturity or at a date fixed for prepayment or by
declaration of acceleration or otherwise, and such default continues beyond the
period of grace, if any, specified in the instrument evidencing such Senior
Debt, then, unless and until such default shall have been cured or waived or
shall have ceased to exist or all Senior Debt shall have been paid, no direct or
indirect payment (in cash, property, securities, by set-off or otherwise) shall
be made or agreed to be made for principal of, and premium and interest, if any,
on, the Convertible Junior Subordinated Debentures, or in respect of any
redemption, repayment, retirement, purchase or other acquisition of any of the
Convertible Junior Subordinated Debentures.
"Senior Debt" means (i) the principal of, and premium, if any, and
interest on, all obligations of every nature of the Company for money borrowed,
whether outstanding on the date of execution of the Indenture or thereafter
created, assumed or incurred, together with all fees, indemnities and expenses
payable under such obligations (ii) all obligations to make payment pursuant to
the terms of financial instruments, such as (a) securities contracts and foreign
currency exchange contracts, (b) derivative instruments, such as swap agreements
(including interest rate and foreign exchange rate swap agreements), cap
agreements, floor agreements, collar agreements, interest rate agreements,
foreign exchange agreements, options, commodity futures contracts and commodity
options contracts, and (c) similar financial instruments; except, in the case of
both (i) and (ii) above, such indebtedness and obligations that are expressly
stated to rank junior in right of payment to, or PARI PASSU in right of payment
with, the Convertible Junior Subordinated Debentures, (iii) indebtedness or
obligations of others of the kind described in both (i) and (ii) above for the
payment of which the Company is responsible or liable as guarantor or otherwise
and (iv) any deferrals, renewals or extensions of any such Senior Debt;
PROVIDED, HOWEVER, that Senior Debt shall not be deemed to include (a) any Debt
of the Company which, when incurred and without respect to any election under
Section 1111(b) of the United States Bankruptcy Code of 1978, was without
recourse to the Company, (b) trade accounts payable and accrued liabilities
arising in the ordinary course of business, (c) any Debt of the Company to any
of its subsidiaries, (d) Debt to any employee of the Company and (e) Debt which
by its terms is subordinated to trade accounts payable or accrued liabilities
arising in the ordinary course of business to the extent that payments made to
the holders of such Debt by the holders of the Convertible Junior Subordinated
Debentures as a result of the subordination provisions of the Indenture would be
greater than such payments otherwise would have been as a result of any
obligation of such holders of such Debt to pay amounts over to the obligees on
such trade accounts payable or accrued liabilities arising in the ordinary
course of business as a result of subordination provisions to which such Debt is
subject.
"Debt" means (i) the principal of, and premium and interest, if any, on,
indebtedness for money borrowed, (ii) purchase money and similar obligations,
(iii) obligations under capital leases,
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(iv) guarantees, assumptions or purchase commitments relating to, or other
transactions as a result of which the Company is responsible for the payment of
such indebtedness of others, (v) renewals, extensions and refunding of any such
indebtedness, (vi) interest or obligations in respect of any such indebtedness
accruing after the commencement of any insolvency or bankruptcy proceedings and
(vii) obligations associated with derivative products such as interest rate and
currency exchange contracts, foreign exchange contracts, commodity contracts and
similar arrangements.
The Indenture places no limitation on the amount of Senior Debt that may be
incurred by the Company. The Company expects from time to time to incur
additional indebtedness constituting Senior Debt. At March 31, 1999, the
aggregate outstanding Senior Debt of the Company was approximately $242 million.
The Indenture also places no limitation on the Debt of the Company's
subsidiaries, which is effectively senior in right of payment to the Convertible
Junior Subordinated Debentures. As of March 31, 1999, the Company's subsidiaries
had Debt and other liabilities of approximately $285 million.
REGISTRATION AND TRANSFER
Unless and until distributed to holders of the Trust Securities, the
Convertible Junior Subordinated Debentures will be registered in the name of and
held by the Property Trustee. Should the Convertible Junior Subordinated
Debentures be distributed to holders of the Trust Securities, (i) beneficial
interests in the Convertible Junior Subordinated Debentures issued to holders of
beneficial interests in Global Convertible Preferred Securities will be shown
on, and transfers thereof will be effected only through, records maintained by
participants in DTC and (ii) Convertible Junior Subordinated Debentures issued
to holders of Restricted Certificated Convertible Preferred Securities will be
in fully registered, certificated form.
A global security shall be exchangeable for Convertible Junior Subordinated
Debentures in certificated form registered in the names of persons other than
Cede & Co. only if (i) DTC notifies the Company that it is unwilling or unable
to continue as a depositary for such global security and no successor depositary
shall have been appointed, or if at any time DTC ceases to be a "clearing
agency" registered under the Exchange Act, at a time when DTC is required to be
so registered to act as such depositary, (ii) the Company in its sole discretion
determines that such global security shall be so exchangeable, or (iii) there
shall have occurred and be continuing a Debenture Event of Default. Any global
security that is exchangeable pursuant to the preceding sentence shall be
exchangeable for certificates registered in such names as DTC shall direct. It
is expected that such instructions will be based upon directions received by DTC
from its participants with respect to ownership of beneficial interests in such
global security.
Payments on Convertible Junior Subordinated Debentures held in global form
will be made to DTC, as the depositary for the Convertible Junior Subordinated
Debentures. In the case of Convertible Junior Subordinated Debentures issued in
certificated form, principal and interest will be payable, the transfer of the
Convertible Junior Subordinated Debentures will be registrable, and Convertible
Junior Subordinated Debentures will be exchangeable for Convertible Junior
Subordinated Debentures of other denominations of a like aggregate principal
amount, at the corporate office of the Debenture Trustee in New York, New York,
or at the offices of any paying agent or transfer agent appointed by the
Company, PROVIDED that payment of interest may be made at the option of the
Company by check mailed to the address of the persons entitled thereto or by
wire transfer.
For a description of DTC and the terms of the depositary arrangements
relating to payments, transfers, voting rights, redemptions and other notices
and other matters, see "Description of Convertible Preferred
Securities -- Form, Book-Entry Procedures and Transfer." If the Convertible
Junior Subordinated Debentures are distributed to the holders of the Trust
Securities upon the termination of the Trust, the form, book-entry and transfer
procedures with respect to the Convertible Preferred Securities as described
under "Description of Convertible Preferred Securities -- Form,
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Book-Entry Procedures and Transfer"shall apply to the Convertible Junior
Subordinated Debentures MUTATIS MUTANDIS.
PAYMENT AND PAYING AGENTS
Payment of the principal of, and premium and interest, if any, on, the
Convertible Junior Subordinated Debentures will be made at the office or agency
of the Company maintained for that purpose in New York, New York, in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; PROVIDED, HOWEVER, that, at the
option of the Company, payment of interest may be made (except in the case of
Convertible Junior Subordinated Debentures that are held in global form) by
check mailed to each registered holder or by wire transfer. Payment of any
interest on any Convertible Junior Subordinated Debenture will be made to the
person in whose name such Convertible Junior Subordinated Debenture is
registered at the close of business on the record date for such interest, except
in the case of defaulted interest.
GOVERNING LAW
The Indenture and the Convertible Junior Subordinated Debentures are
governed by and will be construed in accordance with the laws of the State of
New York.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee has and is subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to such provisions, the Debenture Trustee is under no
obligation to exercise any of the powers vested in it by the Indenture at the
request of any holder of Convertible Junior Subordinated Debentures, unless
offered reasonable indemnity by such holder against the costs, expenses and
liabilities which might be incurred thereby. The Debenture Trustee is not
required to expend or risk its own funds or otherwise incur personal financial
liability in the performance of its duties if the Debenture Trustee reasonably
believes that repayment or adequate indemnity is not reasonably assured to it.
DESCRIPTION OF GUARANTEE
The Guarantee was executed and delivered by the Company concurrently with
the issuance by the Trust of the Convertible Preferred Securities for the
benefit of the holders from time to time of such Convertible Preferred
Securities. Wilmington Trust Company acts as trustee (the "Guarantee Trustee")
under the Guarantee Agreement. The Guarantee Agreement will be qualified under
the Trust Indenture Act. This summary of certain provisions of the Guarantee
does not purport to be complete and is subject to, and qualified in its entirety
by reference to, all of the provisions of the Guarantee, including the
definitions therein of certain terms, and the Trust Indenture Act. The Guarantee
Trustee will hold the Guarantee for the benefit of the holders of the
Convertible Preferred Securities.
GENERAL
Pursuant to the Guarantee, the Company irrevocably agrees to pay in full on
a subordinated basis, to the extent set forth herein, the Guarantee Payments (as
defined herein) to the holders of the Convertible Preferred Securities, as and
when due, regardless of any defense, right of set-off or counterclaim that the
Trust may have or assert other than the defense of payment. The following
payments with respect to the Convertible Preferred Securities, to the extent not
paid by or on behalf of the Trust (the "Guarantee Payments"), will be subject
to the Guarantee: (i) any accrued and unpaid Distributions required to be paid
on the Convertible Preferred Securities, to the extent that the Trust has funds
on hand available therefor at such time, (ii) the applicable Redemption Price
with respect to Convertible Preferred Securities called for redemption, to the
extent that the Trust has funds on hand available therefor at such time, and
(iii) upon a voluntary or involuntary dissolution, winding up or liquidation of
the Trust (other than in connection with the distribution of Convertible Junior
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Subordinated Debentures to the holders of the Convertible Preferred Securities
or the redemption of all of the Convertible Preferred Securities) the lesser of
(a) the Liquidation Distribution, to the extent the Trust has funds available
therefor and (b) the amount of assets of the Trust remaining available for
distribution to holders of the Convertible Preferred Securities upon liquidation
of the Trust after satisfaction of liabilities to creditors of the Trust as
required by applicable law. The Company's obligation to make a Guarantee Payment
may be satisfied by direct payment of the required amounts by the Company to the
holders of the Convertible Preferred Securities or by causing the Trust to pay
such amounts to such holders.
The Guarantee will be an irrevocable guarantee on a subordinated basis of
the Trust's obligations under the Convertible Preferred Securities, although it
will apply only to the extent that the Trust has funds sufficient to make such
payments, and is not a guarantee of collection. If the Company does not make
interest payments on the Convertible Junior Subordinated Debentures held by the
Trust, the Trust will not be able to pay Distributions on the Convertible
Preferred Securities and will not have funds legally available therefor.
The Guarantee ranks subordinate and junior in right of payment to all
Senior Debt. See "-- Status of the Guarantee." Because the Company is
principally a holding company, the right of the Company to participate in any
distribution of assets of any subsidiary, upon such subsidiary's liquidation or
reorganization or otherwise (and thus the ability of the holders of Convertible
Preferred Securities to benefit indirectly from any such distribution), is
subject to the prior claims of creditors of such subsidiary, except to the
extent the Company may itself be recognized as a creditor of that subsidiary.
Accordingly, the Company's obligations under the Guarantee are effectively
subordinated to all existing and future liabilities of the Company's
subsidiaries, and claimants should look only to the assets of the Company for
payments thereunder. The Guarantee does not limit the incurrence or issuance of
other secured or unsecured debt of the Company, including Senior Debt, whether
under any indenture that the Company may enter into in the future or otherwise.
Taken together, the Company's obligations under the Guarantee, the
Declaration, the Convertible Junior Subordinated Debentures and the Indenture,
including the Company's obligation to pay the costs, expenses and other
liabilities of the Trust (other than the Trust's obligations to the holders of
the Trust Securities under the Trust Securities), provide, in the aggregate, a
full, irrevocable and unconditional guarantee of all of the Trust's obligations
under the Convertible Preferred Securities. No single document standing alone or
operating in conjunction with fewer than all the other documents constitutes
such guarantee. It is only the combined operation of these documents that has
the effect of providing a full, irrevocable and unconditional guarantee of the
Trust's obligations under the Convertible Preferred Securities. See
"Relationship Among the Convertible Preferred Securities, the Convertible
Junior Subordinated Debentures and the Guarantee."
STATUS OF THE GUARANTEE
The Guarantee constitutes an unsecured obligation of the Company and ranks
subordinate and junior in right of payment to all Senior Debt in the same manner
as Convertible Junior Subordinated Debentures.
The Guarantee constitutes a guarantee of payment and not of collection
(i.e., the guaranteed party may institute a legal proceeding directly against
the Company to enforce its rights under the Guarantee without first instituting
a legal proceeding against any other person or entity). The Guarantee is held
for the benefit of the holders of the Convertible Preferred Securities. The
Guarantee will not be discharged except by payment of the Guarantee Payments in
full to the extent not paid by the Trust or upon distribution to the holders of
the Convertible Preferred Securities of the Convertible Junior Subordinated
Debentures. The Guarantee does not place a limitation on the amount of
additional Senior Debt that may be incurred by the Company. The Company expects
from time to time to incur additional indebtedness constituting Senior Debt.
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AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not materially adversely affect
the rights of holders of the Convertible Preferred Securities (in which case no
vote will be required), the Guarantee may not be amended without the prior
approval of the holders of not less than a majority of the aggregate liquidation
amount of the outstanding Convertible Preferred Securities. The manner of
obtaining any such approval will be as set forth under "Description of
Convertible Preferred Securities -- Voting Rights; Amendment of the
Declaration." All guarantees and agreements contained in the Guarantee shall
bind the successors, assigns, receivers, trustees and representatives of the
Company and shall inure to the benefit of the holders of the Convertible
Preferred Securities then outstanding.
EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon the failure of the
Company to perform any of its payment or other obligations thereunder, PROVIDED,
HOWEVER, that except with respect to a default in payment of any Guarantee
Payment, the Company shall have received notice of default and shall not have
cured such default within 60 days after receipt of such notice. The holders of
not less than a majority in aggregate liquidation amount of the Convertible
Preferred Securities 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 the Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under the Guarantee.
Any holder of the Convertible Preferred Securities may institute a legal
proceeding directly against the Company to enforce its rights under the
Guarantee without first instituting a legal proceeding against the Trust, the
Guarantee Trustee or any other person or entity.
The Company, as guarantor, is required to file annually with the Guarantee
Trustee a certificate as to whether or not the Company is in compliance with all
the conditions and covenants applicable to it under the Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of
a default by the Company in performance of the Guarantee, undertakes to perform
only such duties as are specifically set forth in the Guarantee and, after
default with respect to the Guarantee, 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 is under no obligation
to exercise any of the powers vested in it by the Guarantee at the request of
any holder of the Convertible Preferred Securities unless it is offered
reasonable indemnity against the costs, expenses and liabilities that might be
incurred thereby.
TERMINATION OF THE GUARANTEE
The Guarantee will terminate as to each holder of Convertible Preferred
Securities upon (i) full payment of the Redemption Price and accrued and unpaid
distributions with respect to all Convertible Preferred Securities, (ii)
distribution of the Convertible Junior Subordinated Debentures held by the Trust
to the holders of the Convertible Preferred Securities, (iii) liquidation of the
Trust or (iv) the distribution of Class A common stock to such holder in respect
of the conversion of such holder's Convertible Preferred Securities into Class A
common stock and will terminate completely upon full payment of the amounts
payable in accordance with the Declaration. The Guarantee will continue to be
effective or will be reinstated, as the case may be, if at any time any holder
of the Convertible Preferred Securities must restore payment of any sums paid
under the Convertible Preferred Securities or the Guarantee.
GOVERNING LAW
The Guarantee is governed by and will be construed in accordance with the
laws of the State of New York.
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RELATIONSHIP AMONG THE CONVERTIBLE PREFERRED SECURITIES,
THE CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Convertible
Preferred Securities (to the extent the Trust has funds available for the
payment of such Distributions) are irrevocably guaranteed by the Company as and
to the extent set forth under "Description of Guarantee." Taken together, the
Company's obligations under the Convertible Junior Subordinated Debentures, the
Indenture, the Declaration and the Guarantee provide, in the aggregate, a full,
irrevocable and unconditional guarantee of payments of Distributions and other
amounts due on the Convertible Preferred Securities. No single document standing
alone or operating in conjunction with fewer than all of the other documents
constitutes such guarantee. It is only the combined operation of these documents
that has the effect of providing a full, irrevocable and unconditional guarantee
of the Trust's obligations under the Trust Securities. If and to the extent that
the Company does not make payments on the Convertible Junior Subordinated
Debentures, the Trust will not pay Distributions or other amounts due on the
Convertible Preferred Securities. The Guarantee does not cover payment of
Distributions when the Trust does not have sufficient funds to pay such
Distributions. In such event, the remedy of a holder of Convertible Preferred
Securities is to institute a Direct Action. The obligations of the Company under
the Guarantee are subordinate and junior in right of payment to all Senior Debt.
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on the
Convertible Junior Subordinated Debentures, such payments will be sufficient to
cover Distributions and other payments due on the Convertible Preferred
Securities, primarily because (i) the aggregate principal amount or applicable
Redemption Price of the Convertible Junior Subordinated Debentures will be equal
to the sum of the aggregate liquidation amount or applicable Redemption Price,
as applicable, of the Trust Securities; (ii) the interest rate payable on the
Convertible Junior Subordinated Debentures and interest and other payment dates
on the Convertible Junior Subordinated Debentures will match the Distribution
rate and Distribution and other payment dates for the Convertible Preferred
Securities; (iii) the Company shall pay for all costs, expenses and liabilities
of the Trust except the Trust's obligations to holders of Trust Securities under
such Trust Securities; and (iv) the Declaration further provides that the Trust
will not engage in any activity that is not consistent with the limited purposes
thereof.
Notwithstanding anything to the contrary in the Indenture, the Company has
the right to set off any payment it is otherwise required to make thereunder
with and to the extent the Company has theretofore made, or is concurrently on
the date of such payment making, any payment under the Guarantee used to satisfy
the related payment of indebtedness under the Indenture.
ENFORCEMENT RIGHTS OF HOLDERS OF CONVERTIBLE PREFERRED SECURITIES
A holder of any of the Convertible Preferred Securities may institute a
legal proceeding directly against the Company to enforce its rights under the
Guarantee without first instituting a legal proceeding against the Guarantee
Trustee, the Trust or any other person or entity.
A default or event of default under any Senior Debt would not constitute a
default or Event of Default under the Declaration. However, in the event of
payment defaults under, or acceleration of, Senior Debt, the subordination
provisions of the Indenture provide that no payments may be made in respect of
the Convertible Junior Subordinated Debentures until such Senior Debt has been
paid in full or any payment default thereunder has been cured or waived. Failure
to make required payments on Convertible Junior Subordinated Debentures would
constitute an Event of Default under the Declaration.
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LIMITED PURPOSE OF THE TRUST
The Convertible Preferred Securities evidence a beneficial interest in the
Trust, and the Trust exists for the sole purpose of issuing the Convertible
Preferred Securities and Common Securities and investing the proceeds of the
Trust Securities in Convertible Junior Subordinated Debentures.
RIGHTS UPON DISSOLUTION
Upon any voluntary or involuntary dissolution, winding-up or liquidation of
the Trust involving the liquidation of the Convertible Junior Subordinated
Debentures, after satisfaction of the liabilities of creditors of the Trust as
required by applicable law, the holders of the Trust Securities will be entitled
to receive, out of assets held by the Trust, the Liquidation Distribution in
cash. See "Description of Convertible Preferred Securities -- Liquidation of
the Trust and Distribution of Convertible Junior Subordinated Debentures." Upon
any voluntary or involuntary liquidation or bankruptcy of the Company, the
Property Trustee, as holder of the Convertible Junior Subordinated Debentures,
would be a subordinated creditor of the Company, subordinated in right of
payment to all Senior Debt as set forth in the Indenture, but entitled to
receive payment in full of principal and interest, before any stockholders of
the Company receive payments or distributions. Since the Company is the
guarantor under the Guarantee and has agreed to pay for all costs, expenses and
liabilities of the Trust (other than the Trust's obligations to the holders of
its Trust Securities), the positions of a holder of Convertible Preferred
Securities and a holder of Convertible Junior Subordinated Debentures relative
to other creditors and to stockholders of the Company in the event of
liquidation or bankruptcy of the Company are expected to be substantially the
same.
DESCRIPTION OF COMPANY CAPITAL STOCK
Our authorized capital stock consists of 50,000,000 shares of common stock
and 70,000,000 shares of preferred stock, par value $.01 per share. The common
stock is divided into two classes: Class A common stock and Class B common
stock.
COMMON STOCK
As of March 31, 1999, 15,848,000 shares of common stock were outstanding,
consisting of 12,187,000 shares of Class A common stock and 3,661,000 shares of
Class B common stock.
The holders of Class A common stock are entitled to one vote for each share
held on all matters submitted to a vote of common stockholders. The holders of
Class B common stock are entitled to ten votes for each share held on all
matters submitted to a vote of common stockholders. Our common stock does not
have cumulative voting rights, which means that the holders of a majority of the
voting power of shares of common stock outstanding can elect all the directors,
and the holders of the remaining shares will not be able to elect any directors.
Each share of our common stock is entitled to participate equally in dividends,
if, as and when declared by our Board of Directors, and in the distribution of
assets in the event of liquidation, subject in all cases to any prior rights of
outstanding shares of preferred stock. We have never paid cash dividends on our
common stock. The shares of our common stock have no preemptive rights,
redemption rights or sinking fund provisions. The outstanding shares of our
common stock are, and the shares of Class A common stock issuable upon
conversion of the Convertible Preferred Securities will be upon issuance, duly
authorized, validly issued, fully paid and nonassessable.
Certain holders of Class B common stock have entered into a voting
agreement. Pursuant to the voting agreement, each stockholder who is a party has
agreed not to sell his shares of Class B common stock to a competitor of ours
and not to vote in favor of any merger, consolidation or other similar business
combination with a competitor of ours. The term "competitor" is defined to
mean any person or entity who is engaged in the funeral service, cemetery,
crematory or related lines of business that, at the time of any proposed
disposition (as defined in the voting agreement), or at any time within the
12-month period preceding the date of the proposed disposition, has any
operations
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within a 50-mile radius of any of our locations or an entity that directly, or
indirectly through one or more intermediaries, controls, is controlled by or is
under common control with us, and includes any other person or entity who
directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with any such person or entity.
Each share of Class B common stock is convertible at any time, at the
option of the registered holder thereof, into one share of Class A common stock.
In addition, each share of Class B common stock automatically converts into one
share of Class A common stock upon a sale or transfer to anyone other than a
permitted transferee. In any event, all outstanding shares of Class B common
stock will be automatically converted into shares of Class A common stock on
December 31, 2001.
PREFERRED STOCK
We are authorized to issue 70,000,000 shares of preferred stock. Our Board
of Directors may establish, without stockholder approval, one or more classes or
series of preferred stock having the number of shares, designations, relative
voting rights, dividend rates, liquidation and other rights, preferences and
limitations that they may designate. We believe that this power to issue
preferred stock provides flexibility in connection with possible corporate
transactions. The issuance of preferred stock, however, could adversely affect
the voting power of holders of our common stock and restrict their rights to
receive payments upon liquidation. It could also have the effect of delaying,
deferring or preventing a change in control.
As of March 31, 1999, outstanding preferred stock consisted of 1,430,090
shares of Series D preferred stock. The following description is a summary of
the Certificate of Amendment to the Certificate of Designation for the Series D
preferred stock, and it is qualified in its entirety by reference to that
document.
DIVIDENDS. The Series D preferred stock ranks, with respect to dividend
rights and distribution of assets on liquidation, senior and prior to common
stock and junior to, or on parity with, as the case may be, any other stock of
ours designated as senior to, or on parity with, as the case may be, Series D
preferred stock. Holders of Series D preferred stock are entitled to receive
cumulative annual cash dividends ranging from $.06 to $.07 per share payable
quarterly, depending upon when such shares were issued. Upon any voluntary or
involuntary liquidation, dissolution or winding up, the holders of Series D
preferred stock then outstanding will be entitled to receive an amount of cash
per share equal to $1.00, together with all accrued and unpaid dividends, after
any distribution is made on any senior securities and before any distribution is
made on any junior securities, including common stock. As long as any shares of
Series D preferred stock are outstanding, we may not pay a dividend (other than
stock dividends in common stock) or other distribution on or repurchase common
stock, directly or indirectly, unless all past due cumulative dividends on the
Series D preferred stock have been paid. The terms of Series D preferred stock
may be amended with the consent of the holders of a majority of the outstanding
shares of Series D preferred stock.
REDEMPTION. The Series D preferred stock is mandatorily redeemable by us
on December 31, 2001 (subject to conversion rights at any time on or prior to
November 30, 2001) at a redemption price of $1.00 per share plus all accrued and
unpaid dividends to the date of redemption. The Series D preferred stock is
redeemable, in whole or in part, at our option at any time during the period
commencing on August 8, 1998 and ending on December 31, 2001 (subject to
conversion rights up to 15 days prior to the redemption date) at a redemption
price of $1.00 per share plus accrued and unpaid dividends to the date of
redemption. Partial redemptions must be pro rata.
CONVERSION. The Series D preferred stock is convertible at any time into
Class B common stock at a conversion price equal to the average market price for
the ten days preceding the date of delivery of notice of conversion on the
principal securities market on which the Class A common stock is then traded. At
March 31, 1999, the conversion price was $14.1563, yielding, a total of 118,851
shares of Class B common stock that would be issuable upon the conversion of the
1,682,500 shares of Series D preferred stock outstanding.
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VOTING RIGHTS. The Series D preferred stock has general voting rights on
all issues submitted to stockholders. The number of votes to which each share of
Series D preferred stock is entitled is a fraction of a vote determined by
dividing $1.00 by the then effective conversion price per share and dividing the
resulting fraction by 20. The Series D preferred stock is entitled, as a
separate class, to vote upon (or consent to) any amendment to the charter,
bylaws or Certificate of Designation which would adversely affect the rights or
powers of the Series D preferred stock. The requisite vote for approval is a
majority of the shares of Series D preferred stock outstanding.
DELAWARE LAW AND CERTAIN CHARTER PROVISIONS
We are a Delaware corporation and are subject to Section 203 of the
Delaware General Corporation Law. In general, Section 203 prevents an
"interested stockholder" (defined generally as a person owning 15% or more of
the company's outstanding voting stock) from engaging in a "business
combination" (as defined in Section 203) with a company for three years
following the date that person becomes an interested stockholder unless:
o before that person became an interested stockholder, the company's board
of directors approved the transaction in which the interested stockholder
became an interested stockholder or approved the business combination;
o upon completion of the transaction that resulted in the interested
stockholder becoming an interested stockholder, the interested
stockholder owns at least 85% of the voting stock outstanding at the time
the transaction commenced (excluding stock held by directors who are also
officers of the company and by employee stock plans that do not provide
employees with the right to determine confidentially whether shares held
subject to the plan will be tendered in a tender or exchange offer); or
o following the transaction in which that person became an interested
stockholder, the business combination is approved by the company's board
of directors and authorized at a meeting of stockholders by the
affirmative vote of the holders of at least two-thirds of the outstanding
voting stock not owned by the interested stockholder.
Under Section 203, these restrictions also do not apply to certain business
combinations proposed by an interested stockholder following the announcement or
notification of one of certain extraordinary transactions involving the company
and a person who was not an interested stockholder during the previous three
years or who became an interested stockholder with the approval of a majority of
the company's directors, if that extraordinary transaction is approved or not
opposed by a majority of the directors who were directors before any person
became an interested stockholder in the previous three years or who were
recommended for election or elected to succeed such directors by a majority of
such directors then in office.
Our Board of Directors is divided into three classes. The directors of each
class are elected for three-year terms, with the terms of the three classes
staggered so that directors from a single class are elected at each annual
meeting of stockholders. Stockholders may remove a director only for cause upon
the vote of holders of at least 80% of voting power of the outstanding shares of
our common stock. In general, our Board of Directors, not the stockholders, has
the right to appoint persons to fill vacancies on the Board of Directors.
The charter provides that special meetings of holders of our common stock
may be called only by our Board of Directors and that only business proposed by
the Board of Directors may be considered at special meetings of holders of our
common stock.
The charter provides that the only business (including election of
directors) that may be considered at an annual meeting of holders of our common
stock, in addition to business proposed (or persons nominated to be directors)
by our directors, is business proposed (or persons nominated to be directors) by
holders of our common stock who comply with the notice and disclosure
requirements set forth in the certificate of incorporation. In general, the
charter requires that a stockholder give us
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notice of proposed business or nominations no later than 60 days before the
annual meeting of holders of our common stock (meaning the date on which the
meeting is first scheduled and not postponements or adjournments thereof) or (if
later) ten days after the first public notice of the annual meeting is sent to
holders of our common stock. In general, the notice must also contain
information about the stockholder proposing the business or nomination, the
stockholders interest in the business, and (with respect to nominations for
director) information about the nominee of the nature ordinarily required to be
disclosed in public proxy solicitation statements. The stockholder also must
submit a notarized letter from each of the stockholders nominees stating the
nominees acceptance of the nomination and indicating the nominees intention to
serve as director if elected.
The Delaware General Corporation Law provides generally that the
affirmative vote of a majority of the shares entitled to vote on any matter is
required to amend a corporation's certificate of incorporation or bylaws, unless
the corporation's certificate of incorporation or bylaws requires a greater
percentage. The charter provides that approval by the holders of at least
66 2/3% of the voting power of our outstanding voting stock is required to amend
the provisions of the charter previously discussed and certain other provisions.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for our common stock is American Stock
Transfer & Trust Company.
FEDERAL INCOME TAX CONSEQUENCES
In the opinion of Vinson & Elkins L.L.P., counsel to us, the following are
the material United States federal income tax consequences of the ownership and
disposition of the Convertible Preferred Securities. Unless otherwise stated,
this summary deals only with the Convertible Preferred Securities held as
capital assets by holders who acquire the Convertible Preferred Securities upon
original issuance. The tax treatment of a holder may vary depending on its
particular situation. This summary does not deal with special classes of
holders, such as, for example, dealers in securities or currencies, banks,
thrifts, real estate investment trusts, regulated investment companies,
insurance companies, tax exempt organizations, foreign persons, persons holding
Convertible Preferred Securities as part of a straddle or as part of a hedging
or conversion transaction or other integrated investment, or persons whose
functional currency is not the United States dollar. Further, it does not
include any description of alternative minimum tax consequences or the tax laws
of any state, local or foreign government that may be applicable to the
Convertible Preferred Securities. This summary is based on the Internal Revenue
Code, Treasury Regulations thereunder and administrative and judicial
interpretations thereof as of the date hereof, all of which are subject to
change (possibly on a retroactive basis). In particular, legislation was
previously proposed by the Clinton Administration in 1996 and 1997 that, if
enacted, could have adversely affected our ability to deduct interest on the
Convertible Junior Subordinated Debentures, which would in turn have permitted
us to cause a redemption of the Convertible Junior Subordinated Debentures and
therefore cause a redemption of the Convertible Preferred Securities. See
"Description of the Convertible Preferred Securities -- Special Event
Redemption." The authorities on which this summary is based are subject to
various interpretations, and it is therefore possible that the federal income
tax treatment of the ownership and disposition of Convertible Preferred
Securities may differ from the treatment described below.
INVESTORS ARE ADVISED TO CONSULT THEIR TAX ADVISORS AS TO THE TAX
CONSEQUENCES OF THE OWNERSHIP AND DISPOSITION OF THE CONVERTIBLE PREFERRED
SECURITIES, IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES, UNDER FEDERAL INCOME TAX
LAWS AND ANY APPLICABLE STATE, LOCAL, FOREIGN AND OTHER TAX LAWS, INCLUDING THE
EFFECTS OF POSSIBLE FUTURE CHANGES IN SUCH LAWS.
CLASSIFICATION OF THE TRUST
In connection with the original issuance of the Convertible Preferred
Securities, Vinson & Elkins L.L.P., counsel to us, rendered its opinion
generally to the effect that, assuming full compliance with
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the terms of the declaration of trust, the trust will be classified for United
States Federal income tax purposes as a grantor trust and not as a corporation
or a publicly traded partnership taxed as a corporation. Accordingly, for United
States Federal income tax purposes each holder of Convertible Preferred
Securities will be considered the owner of an undivided interest in the
Convertible Junior Subordinated Debentures held by the trust and will be
required to include in gross income its pro rata share of income on the
Convertible Junior Subordinated Debentures, whether or not cash is actually
distributed to the holder.
CLASSIFICATION OF THE CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES
Although the matter is not free from doubt, Vinson & Elkins L.L.P., counsel
to us and the Trust, rendered its opinion that the Convertible Junior
Subordinated Debentures should be classified for United States Federal income
tax purposes as indebtedness of the Company under current law, and, by
acceptance of Convertible Preferred Securities, each holder covenants to treat
the Convertible Junior Subordinated Debentures as indebtedness and the
Convertible Preferred Securities as evidence of an indirect beneficial ownership
interest in the debentures. The Internal Revenue Service (the "IRS"), however,
has announced in Notice 94-47 that it will scrutinize and may challenge the debt
classification of instruments that have some features similar to the Convertible
Junior Subordinated Debentures. Thus, no assurance can be given that the
classification of the Convertible Junior Subordinated Debentures as indebtedness
will not be challenged by the IRS or, if challenged, that such a challenge will
not be successful. The remainder of this discussion assumes that the Convertible
Junior Subordinated Debentures will be classified for Federal income tax
purposes as indebtedness of the Company.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Unless the original issue discount ("OID") rules apply to the Convertible
Junior Subordinated Debentures, as discussed below, stated interest on the
Convertible Preferred Securities will generally be taxable to a holder as
ordinary income when paid or accrued in accordance with that holder's method of
accounting for United States Federal income tax purposes. While the existence of
an issuer's option to defer the payment of interest on debt instruments
generally results in the application of the OID rules, debt instruments like the
Convertible Junior Subordinated Debentures are not considered issued with OID if
there is only a "remote" likelihood of the Company exercising its option of
deferral.
The Company believes, and this discussion assumes, that, as of the date of
this Prospectus, the likelihood of deferring payments of interest under the
terms of the Convertible Junior Subordinated Debentures is "remote" within the
meaning of the applicable Treasury Regulations. This belief is based in part on
the fact that exercising that option would prevent the Company from declaring
dividends on its stock and would prevent the Company from making any payments
with respect to debt securities that rank PARI PASSU with or junior to the
Convertible Junior Subordinated Debentures. Therefore, although the matter is
not free from doubt, the Company believes that the Convertible Junior
Subordinated Debentures should not be treated as subject to the OID rules at the
time of their original issuance by reason of the Company's deferral option.
No rulings or other interpretations have been issued by the IRS which have
addressed the meaning of the term "remote" as used in the applicable Treasury
Regulations, and it is possible that the IRS could take a position contrary to
the interpretations herein.
If the likelihood of the Company exercising the option to defer any payment
of interest were determined not to be "remote" or if the Company were to
exercise its option to defer payments of interest, the Convertible Junior
Subordinated Debentures would be treated as subject to the OID rules at the time
of their original issuance or at the time of such exercise, as the case may be,
for the entire remaining term of the Convertible Junior Subordinated Debentures.
Under these rules, all of the stated interest on the Convertible Junior
Subordinated Debentures would be treated as OID and such OID would accrue on an
economic accrual basis and would be includible in income on the accrual method,
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including during any interest deferral period, regardless of the holder's method
of accounting for United States Federal income tax purposes. Consequently,
holders of the Convertible Preferred Securities would be required to include OID
in gross income even though the Company would not make any actual distributions
during the extension period. Actual distributions of stated interest on the
Convertible Junior Subordinated Debentures generally would not be separately
taxable. A holder that disposes of its Convertible Preferred Securities prior to
the record date for payment of distributions on the Convertible Junior
Subordinated Debentures will be subject to tax on OID accrued through the date
of disposition (and not previously included in income), but will not receive
cash from the Trust with respect to such OID.
Because the income underlying the Convertible Preferred Securities would
not be characterized as dividends for United States Federal income tax purposes,
corporate holders of the Convertible Preferred Securities will not be entitled
to a dividends-received deduction for any income recognized with respect to the
Convertible Preferred Securities.
RECEIPT OF CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES OR CASH UPON LIQUIDATION
OF THE TRUST
Under certain circumstances, the Convertible Junior Subordinated Debentures
may be distributed to holders in exchange for the Convertible Preferred
Securities and in liquidation of the Trust. Under current law, such a
distribution to holders, for United States Federal income tax purposes, would be
a nontaxable event to each holder, and each holder would receive an aggregate
tax basis in the Convertible Junior Subordinated Debentures equal to such
holder's aggregate tax basis in the Convertible Preferred Securities. A holder's
holding period in the Convertible Junior Subordinated Debentures so received in
liquidation of the Trust would include the period during which the Convertible
Preferred Securities were held by such holder.
The Convertible Junior Subordinated Debentures also may, under certain
circumstances, be redeemed for cash and the proceeds of such redemption
distributed to holders in redemption of their Convertible Preferred Securities.
Under current law, such a redemption would, for United States Federal income tax
purposes, constitute a taxable disposition of the redeemed Convertible Preferred
Securities, and a holder would recognize gain or loss as if it sold the redeemed
Convertible Preferred Securities for cash. See " -- Sale of Convertible
Preferred Securities."
SALE OF CONVERTIBLE PREFERRED SECURITIES
A holder who sells Convertible Preferred Securities will be considered to
have disposed of all or part of its PRO RATA share of the Convertible Junior
Subordinated Debentures and will recognize gain or loss equal to the difference
between the amount realized on the sale of the Convertible Preferred Securities
and the holder's adjusted tax basis in such Convertible Preferred Securities. A
holder's adjusted tax basis in the Convertible Preferred Securities generally
will be its initial purchase price decreased by principal payments received on
the Convertible Preferred Securities. If the OID rules apply to the Convertible
Junior Subordinated Debentures, a holder's adjusted tax basis is increased by
OID previously includible in income and decreased by distributions or other
payments received on the Convertible Junior Subordinated Debentures since and
including the day that the Convertible Junior Subordinated Debentures became
subject to the OID rules. Any such gain or loss generally will be a capital gain
or loss (except to the extent of any accrued interest with respect to such
holder's PRO RATA share of the Convertible Junior Subordinated Debentures
required to be included in income as ordinary income) and will be long term
capital gain or loss if the Convertible Preferred Securities have been held by
the holder for more than one year.
If the Convertible Junior Subordinated Debentures are subject to the OID
rules, a holder who disposes of its Convertible Preferred Securities between
record dates for payments of distributions thereon will be required to include
OID on the Convertible Junior Subordinated Debentures through the date of
disposition in income as ordinary income, and to add such amount to its adjusted
tax basis in the Convertible Preferred Securities. To the extent the amount
recognized on the sale is less than the holder's adjusted tax basis (which basis
will include all accrued but unpaid OID), a holder will
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recognize a capital loss. Subject to certain limited exceptions, capital losses
cannot be applied to offset ordinary income for United States Federal income tax
purposes.
CONVERSION OF CONVERTIBLE PREFERRED SECURITIES INTO CLASS A COMMON STOCK
A holder of Convertible Preferred Securities generally will not recognize
income, gain or loss upon the conversion, through the conversion agent, of
Convertible Junior Subordinated Debentures into Class A common stock. A holder
will, however, recognize gain upon the receipt of cash in lieu of a fractional
share of Class A common stock equal to the amount of cash so received less such
holder's tax basis in such fractional share. Such holder's tax basis in Company
common stock received upon conversion generally will be equal to such holder's
tax basis in the Convertible Preferred Securities delivered to the conversion
agent for exchange, less the basis allocated to any fractional share for which
cash is received. Such holder's holding period in Class A common stock received
upon conversion generally will include the holding period of the Convertible
Preferred Securities delivered to the conversion agent for exchange.
DIVIDENDS ON CLASS A COMMON STOCK
The amount of any distribution by the Company in respect of Class A common
stock will be equal to the amount of cash and the fair market value, on the date
of distribution, of any property distributed. Generally, distributions will be
treated as a dividend, subject to tax as ordinary income, to the extent of the
Company's current or accumulated earnings and profits as determined for Federal
income tax purposes, then as a tax-free return of capital to the extent of a
holder's tax basis in the Class A Common stock and thereafter as gain from the
sale or exchange of such stock as described below.
In general, a dividend distribution to a corporate holder will qualify for
the 70% dividends received deduction if the holder owns less than 20% of the
voting power and value of a corporation's stock (other than any non-voting,
non-convertible, non-participating preferred stock). A corporate holder that
owns 20% or more of the voting power and value of a corporation's stock (other
than any non-voting, non-convertible, non-participating preferred stock)
generally will qualify for an 80% dividends and received deduction. The
dividends received deduction is subject to certain holding period, taxable
income and other limitations.
SALE OF CLASS A COMMON STOCK
Upon the sale or exchange of Class A common stock, a holder generally will
recognize gain or loss equal to the difference between the amount of cash and
the fair market value of any property received on the sale or exchange and such
holder's adjusted tax basis in the Class A common stock. Any such gain or loss
generally will be capital gain or loss and will be long term capital gain or
loss if such holder's holding period for the Class A common stock exceeds one
year. A holder's basis and holding period in Class A common stock received upon
conversion of Convertible Preferred Securities are determined above under
" -- Conversion of Convertible Preferred Securities into Class A common
stock."
ADJUSTMENT OF CONVERSION PRICE
Treasury Regulations promulgated under Section 305 of the Internal Revenue
Code would treat holders of Convertible Preferred Securities as having received
a constructive distribution from the Company in certain events in which the
conversion rate of the Convertible Junior Subordinated Debentures was adjusted.
Accordingly, under certain circumstances, a reduction in the conversion price
for the Convertible Junior Subordinated Debentures may result in deemed dividend
income to holders of Convertible Preferred Securities to the extent of the
current or accumulated earnings and profits of the Company. Holders of
Convertible Preferred Securities would be required to include their allocable
share of such deemed dividend income in gross income but would not receive any
cash related thereto. Holders of Convertible Preferred Securities are advised to
consult their tax advisors as to the
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federal income tax consequences of adjustments in the conversion rate of
Convertible Preferred Securities.
INFORMATION REPORTING TO HOLDERS
The Trust will report the OID accrued during the year with respect to the
Convertible Junior Subordinated Debentures, and any gross proceeds received by
the Trust from the retirement or redemption of the Convertible Junior
Subordinated Debentures, annually to the holders of record of the Convertible
Preferred Securities and to the IRS. The Trust currently intends to deliver such
reports to holders of record not later than January 31 following each calendar
year. It is anticipated that persons who hold Convertible Preferred Securities
as nominees for beneficial owners will report the required tax information to
beneficial owners on Form 1099.
BACKUP WITHHOLDING
Payments made on, and proceeds from the sale of, Convertible Preferred
Securities, any Convertible Junior Subordinated Debentures distributed by the
Trust or any Class A common stock received on conversion may be subject to 31%
backup withholding unless the holder complies with certain identification
requirements or otherwise qualifies for exemption. Backup withholding is not an
additional tax. Any withheld amounts will generally be refunded or credited
against the holder's federal income tax liability, provided the required
information is timely filed with the IRS.
NON-U.S. HOLDERS
The following is a general discussion of certain U.S. Federal tax
consequences of the ownership and disposition of Convertible Preferred
Securities applicable to beneficial owners that are Non-U.S. Holders ("Non-U.S.
Holders") of Convertible Preferred Securities. A "Non-U.S. Holder" is any
person that is the beneficial owner of Convertible Preferred Securities other
than (i) an individual who is a citizen or resident of the United States, (ii) a
corporation or partnership created or organized in the United States or under
the laws of the United States or of any State thereof (including the District of
Columbia), (iii) an estate the income of which is subject to U.S. Federal income
tax regardless of its source or (iv) a trust whose administration is subject to
the primary supervision of a United States court and which has one or more
United States persons who have the authority to control all substantial
decisions of the trust. This discussion is for general information only and does
not deal with all aspects of U.S. Federal income and estate taxation that may be
relevant to Non-U.S. Holders in view of their particular circumstances, nor does
it address the effect of any applicable state and local or foreign tax law.
PAYMENTS OF INTEREST
Interest paid on Convertible Preferred Securities to a Non-U.S. Holder
should qualify as "portfolio interest" on which no withholding of U.S. income
tax is imposed, provided (i) such holder does not own, actually or
constructively 10% or more of the total combined voting power of all classes of
stock of the Company, (ii) such holder is not a controlled foreign corporation
that is related directly or indirectly to the Company, and (iii) either (a) the
beneficial owner of the Convertible Preferred Securities certifies to the
Company or its agent on IRS Form W-8 BEN (or applicable substitute form) under
penalties of perjury, that is not a U.S. Holder and provides its name and
address or (b) a securities clearing organization, bank, or other financial
institution that holds customers' securities in the ordinary course of its trade
or business (a "financial institution") and holds Convertible Preferred
Securities certifies to the Company or its agent, under penalties of perjury,
that such statement has been received from the beneficial owner by it or by a
financial institution between it and the beneficial owner and furnishes the
payor with a copy thereof.
If a Non-U.S. Holder of Convertible Preferred Securities is engaged in a
trade or business in the United States, and if interest on the Convertible
Preferred Securities is effectively connected with the conduct of such trade or
business (or, in the case of an applicable tax treaty, is attributable to a U.S.
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permanent establishment maintained by the Non-U.S. Holder) the Non-U.S. Holder,
although exempt from U.S. withholding tax, will generally be subject to regular
U.S. Federal income tax on such interest in the same manner as if it were a U.S.
Holder. In order to establish an exemption from U.S. withholding tax, such
Non-U.S. Holder must provide to the Issuer or its agent a properly executed IRS
Form W-8ECI (or applicable substitute form). In addition to regular U.S. Federal
income tax, if such Non-U.S. Holder is a foreign corporation, it may be subject
to a U.S. branch profits tax.
The final Treasury withholding tax regulations ("Final Regulations")
would require, in the case of Convertible Preferred Securities held by a foreign
partnership, that (i) the certification described above be provided by the
partners rather than by the foreign partnership, and (ii) the partnership
provide certain information, including a U.S. taxpayer identification number. A
look-through rule would apply in the case of tiered partnerships. The Final
Regulations are generally effective for payments made after December 31, 2000.
The Final Regulations would alter the procedures for claiming the benefit of an
income tax treaty and change the certification procedures relating to the
receipt by intermediaries of payments on behalf of a beneficial owner of
Convertible Preferred Securities. Prospective investors should consult their tax
advisors concerning the effect, if any, of such Final Regulations on an
investment in Convertible Preferred Securities.
DIVIDENDS
If it is determined that the Convertible Junior Subordinated Debentures are
not classified as an indebtedness of the Company for United States Federal
income tax purposes, or if the Convertible Preferred Securities are converted
into Class A Common Stock, any dividend paid by the Company with respect to the
Convertible Preferred Securities, or the Class A Common Stock into which they
were converted, as the case may be, will generally be subject to withholding of
United States Federal income tax at the rate of 30% (unless reduced by an
applicable income tax treaty), unless the dividend is effectively connected with
the conduct of a trade or business in the United States by a Non-U.S. Holder, in
which case the dividend will be subject to the United States Federal income tax
on a net income that applies to United States persons generally (and with
respect to corporate shareholders and under certain circumstances, the branch
profit tax). If a Non-U.S. Holder is treated as receiving a deemed dividend as a
result of the adjustment of the conversion price of the Convertible Preferred
Securities as described above, such deemed dividend will generally be subject to
the same rules. Under current regulations, dividends paid to an address in a
foreign country are presumed to be paid to a resident of that country for the
purpose of determining the applicable income tax treaty rate, but regulations
issued pursuant to certain income tax treaties may require certain certification
and proof of residence to be furnished. The Final Regulations contain certain
certification requirements with respect to payments of dividends made after
December 31, 2000.
CONVERSION
A Non-U.S. Holder will be subject to the same rules described above under
"-- Conversion of Convertible Preferred Securities Into Class A common stock"
on the conversion of the Convertible Preferred Securities into Company Common
Stock.
SALES OF CONVERTIBLE PREFERRED SECURITIES OR CLASS A COMMON STOCK
A Non-U.S. Holder will not be subject to tax on any gain (except for gain
attributable to accrued and unpaid interest, which would be treated as interest
subject to the rules described above) recognized upon the sale or other
disposition of the Convertible Preferred Securities (or the Class A common stock
to which it was converted, or upon receipt of cash in lieu of fractional shares
upon conversion of the Convertible Preferred Securities into Class A common
stock) unless (i) the Non-U.S. Holder is an individual who is present in the
United States for 183 days or more in the taxable year of disposition, and
certain other conditions apply, (ii) the gain is effectively connected with the
conduct by the Non-U.S. Holder of a trade or business in the United States, or
(iii) the Company is, or during the preceding five years has been, a "United
States real property holding corporation" within the meaning of Section
897(c)(2) of the Code and either (a) if the Convertible Preferred
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Securities are considered to be "regularly traded interests," the Non-U.S.
Holder beneficially owns (actually or constructively), or during the preceding
five years has beneficially owned (actually or constructively), more than five
percent of the Convertible Preferred Securities, or (b) if the Convertible
Preferred Securities are not considered to be regularly traded interests, the
Non-U.S. Holder beneficially owned (actually or constructively), on the date it
acquired any Convertible Preferred Securities, Convertible Preferred Securities
having a fair market value greater than the fair market value of five percent of
the Class A common stock. A Non-U.S. Holder will not be subject to tax on any
gain recognized upon the sale or other disposition of the Company Common Stock
unless such Non-U.S. Holder is described in sub-sections (i) or (ii) above, or
if the Company is, or during the preceding five years has been, a "United
States real property holding corporation" within the meaning of section
897(c)(2) of the Code and the Non-U.S. Holder beneficially owns (actually or
constructively), or during the preceding five years has beneficially owned
(actually or constructively), more than five percent of the Company Common
Stock.
A corporation is generally considered a "United States real property
holding corporation" if the fair market value of its United States real
property interests equals or exceeds 50% of the sum of the fair market value of
its worldwide real property interests plus its other assets used or held for use
in a trade or business. It is not clear whether the Company is, or has been
during the preceding five years, a "United States real property holding
corporation" and accordingly, Non-U.S. Holders should consult their own tax
advisors regarding the investment in the Convertible Preferred Securities.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Under current law, information reporting and backup withholding will not
apply to payments of principal and interest made by the Issuer or a paying agent
to a Non-U.S. Holder on a Convertible Preferred Securities; provided that the
certification described under "Payments of Interest" above is received; and
provided further that the payor does not have actual knowledge that the holder
is a U.S. person.
Payments of the proceeds from the sale by or redemption from a Non-U.S.
Holder of Convertible Preferred Securities, or any payment of the proceeds of
the sale of Class A common stock, made to or through a foreign office of a
broker will not be subject to information reporting or backup with-
holding. However, if the broker is (i) a U.S. person, (ii) a controlled foreign
corporation for U.S. tax purposes, or (iii) a foreign person 50% or more of
whose gross income is effectively connected with a U.S. trade or business for a
specified three-year period, information reporting (but not backup withholding)
may apply to such payments, unless (a) such broker has documentary evidence in
its records that the beneficial owner is not a U.S. person and certain other
conditions are met or (b) the beneficial owner otherwise establishes an
exemption. Payments of the proceeds from the sale of Convertible Preferred
Securities or Class A common stock to or through the U.S. office of a broker are
subject to information reporting and backup withholding unless the holder or
beneficial owner certifies as to its non-U.S. status or otherwise establishes an
exemption from information reporting and backup withholding. If paid to an
address outside the United States, dividends on the Convertible Preferred
Securities and Class A Common Stock held by a Non-U.S. Holder generally will not
be subject to the information reporting and backup withholding requirements
described in this section. However, under the Final Regulations, dividend
payments will be subject to information reporting and backup withholding unless
certain certification requirements are satisfied.
Backup withholding is not an additional tax. Rather, any amounts withheld
from a payment to a holder under the backup withholding rules are allowed as a
refund or a credit against such holder's U.S. Federal income tax, provided that
the required information is furnished to the United States Internal Revenue
Service.
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CERTAIN ERISA CONSIDERATIONS
Each fiduciary of a pension, profit-sharing or other employee benefit plan
subject to the Employee Retirement Income Security Act of 1974, as amended
("ERISA") (a "Plan") should consider the fiduciary standards of ERISA in the
context of the Plan's particular circumstances before authorizing an investment
in the Convertible Preferred Securities. Accordingly, among other factors, the
fiduciary should consider whether the investment would satisfy the prudence and
diversification requirements of ERISA, whether the investment could result in an
improper delegation of fiduciary authority and whether the investment would be
consistent with the documents and instruments governing the Plan.
Section 406 of ERISA and Section 4975 of the Code prohibit Plans, as well
as individual retirement accounts and Keogh plans subject to Section 4975 of the
Code (also "Plans"), from engaging in certain transactions involving "plan
assets" with persons who are "parties in interest" under ERISA or
"disqualified persons" under the Code ("Parties in Interest") with respect
to such Plan. A violation of these "prohibited transaction" rules may result
in an excise tax or other liabilities under ERISA and/or Section 4975 of the
Code for such persons, unless exemptive relief is available under an applicable
statutory or administrative exemption. Employee benefit plans that are
governmental plans (as defined in Section 3(32) of ERISA), certain church plans
(as defined in Section 3(33) of ERISA) and foreign plans (as described in
Section 4(b)(4) of ERISA) are not subject to the requirements of ERISA or
Section 4975 of the Code.
Under a regulation (the "Plan Assets Regulation") issued by the United
States Department of Labor (the "DOL"), the assets of the Issuer would be
deemed to be "plan assets" of a Plan for purposes of ERISA and Section 4975 of
the Code if "plan assets" of the Plan were used to acquire an equity interest
in the Issuer and no exception were applicable under the Plan Assets Regulation.
An "equity interest" is defined under the Plan Assets Regulation as any
interest in an entity other than an instrument which is treated as indebtedness
under applicable local law and which has no substantial equity features and
specifically includes a beneficial interest in a trust.
Pursuant to an exception contained in the Plan Assets Regulation, the
assets of the Issuer would not be deemed to be "plan assets" of investing
Plans if, immediately after the most recent acquisition of any equity interest
in the Issuer, less than 25% of the value of each class of equity interests in
the Trust were held by Plans, other employee benefit plans not subject to ERISA
or Section 4975 of the Code (such as governmental, church and foreign plans),
and entities holding assets deemed to be "plan assets" of any Plan
(collectively, "Benefit Plan Investors"). No assurance can be given that the
value of the Convertible Preferred Securities held by Benefit Plan Investors
will be less than 25% of the total value of such Convertible Preferred
Securities at the completion of the initial offering or otherwise. All of the
Common Securities will be purchased and held by the Company.
Certain transactions involving the Issuer could be deemed to constitute
direct or indirect prohibited transactions under ERISA and Section 4975 of the
Code with respect to a Plan if the Convertible Preferred Securities were
acquired with "plan assets" of such Plan and assets of the Issuer were deemed
to be "plan assets" of Plans investing in the Issuer. For example, if the
Company is a Party in Interest with respect to an investing Plan (either
directly or by reason of its ownership of its subsidiaries), extensions of
credit between the Company and the Issuer (as represented by the Convertible
Junior Subordinated Debentures and the Guarantee) would likely be prohibited by
Section 406(a)(1)(B) of ERISA and Section 4975(c)(1)(B) of the Code, unless
exemptive relief were available under an applicable administrative exemption
(see below). Because the assets of the Issuer may be considered "plan assets"
for ERISA purposes as a result of a Plan's acquisition and holding of
Convertible Preferred Securities, a Plan fiduciary should consider (a) whether
powers which potentially may be exercised by any person or entity with respect
to the Issuer or its assets would result in such person or entity being
potentially deemed to be a fiduciary and, therefore, a Party in Interest with
respect to a Plan acquiring or holding Convertible Preferred Securities and (b)
if so, whether such acquisition and holding could result in a delegation of
fiduciary authority which is
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impermissible under the Plan's governing instruments or any investment
management agreement with the Plan. In making such determination, a Plan
fiduciary should note that prior to a default, the Issuer Trustees will have
only limited custodial and ministerial authority with respect to the assets of
the Issuer.
The DOL has issued five prohibited transaction class exemptions ("PTCEs")
that may provide exemptive relief for direct or indirect prohibited transactions
resulting from the purchase or holding of the Convertible Preferred Securities,
assuming that assets of the Trust were deemed to be "plan assets" of Plans
investing in the Issuer (see above). Those class exemptions are PTCE 96-23 (for
certain transactions determined by in-house asset managers), PTCE 95-60 (for
certain transactions involving insurance company general accounts), PTCE 91-38
(for certain transactions involving bank collective investment funds), PTCE 90-1
(for certain transactions involving insurance company separate accounts) and
PTCE 84-14 (for certain transactions determined by qualified professional asset
managers).
Because the Convertible Preferred Securities may be deemed to be equity
interests in the Issuer for purposes of applying ERISA and Section 4975 of Code,
the Convertible Preferred Securities may not be purchased or held by any Plan,
any entity whose underlying assets include "plan assets" by reason of any
Plan's investment in an entity (a "Plan Asset Entity") or any person investing
"plan assets" of any Plan, unless such purchaser or holder is eligible for the
exemptive relief available under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14. Any
purchaser of holder of the Convertible Preferred Securities or any interest
therein will be deemed to have represented by its purchase and holding thereof
that it either (a) is not a Plan or a Plan Asset Entity and is not purchasing
such securities on behalf of or with "plan assets" of any Plan or (b) is
eligible for the exemptive relief available under PTCE 96-23, 95-60, 91-38, 90-1
or 84-14. See "Transfer Restrictions." Further, the fiduciaries of any Plan or
Plan Asset Entity which may purchase or hold Convertible Preferred Securities
will be deemed as a result of such acquisition or holding to have (a) directed
the Issuer to invest in the Convertible Preferred Securities, (b) authorized and
directed any of the actions taken or which may be taken with respect to the
Issuer and the Convertible Preferred Securities by any of the Company, the
Issuer Trustees, the Debenture Trustee, or the Guarantee Trustee as contemplated
by the Indenture, the Convertible Junior Subordinated Debentures or the
Guarantee and (c) to have appointed the Issuer Trustees.
Due to the complexity of these rules and the penalties that may be imposed
upon persons involved in non-exempt prohibited transactions, it is particularly
important that fiduciaries or other persons considering purchasing the
Convertible Preferred Securities on behalf of or with "plan assets" of any
Plan consult with their counsel regarding the potential consequences if the
assets of the Issuer were deemed to be "plan assets" and the availability of
exemptive relief under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14.
REGISTRATION RIGHTS
The Company and the Trust entered into a registration agreement with the
Initial Purchaser (the "Registration Agreement") in connection with the
issuance and sale of the Convertible Preferred Securities (the "Original
Offering") for the benefit of the holders of the Convertible Preferred
Securities wherein the Company and the Trust agreed, at the Company's sole
expense, to (i) file as soon as practicable, but in no event more than 60 days
after the Original Offering Date a shelf registration (the "Shelf Registration
Statement") covering resales of the Convertible Preferred Securities, the
Guarantee, the Convertible Junior Subordinated Debentures and the related Class
A common stock issuable upon conversion thereof (the "Registerable
Securities"), (ii) use their best efforts to cause the Shelf Registration
Statement to be declared effective under the Securities Act within 150 days
after the Closing Date and (iii) use their best efforts to keep effective the
Shelf Registration Statement for two years or such other period as required
under Rule 144(k) of the Securities Act or any successor rule thereto or, if
earlier, such time as all of the applicable
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Registerable Securities have been sold thereunder. The Company will provide to
each holder for whom such Shelf Registration Statement was filed copies of this
prospectus notify each such holder when the Shelf Registration Statement for the
Registerable Securities has become effective and take certain other actions as
are required to permit unrestricted resales of the Registerable Securities. A
holder that sells Registerable Securities pursuant to the Shelf Registration
Statement will be required to be named as a selling security holder in the
related prospectus and to deliver a prospectus to purchasers, will be subject to
certain of the civil liability provisions under the Securities Act in connection
with such sales and will be bound by the provisions of the Registration
Agreement that are applicable to such a holder (including certain
indemnification rights and obligations).
If (i) within 150 days of the Original Offering Date the Shelf Registration
Statement has not been declared effective by the Commission, or (ii) in the
event that a Shelf Registration Statement is declared effective by the
Commission, the Company or the Trust fails to keep such Shelf Registration
Statement continuously effective and usable (subject to certain exceptions) for
the period required by the Registration Agreement (each such event referred to
in clauses (i) and (ii) a "Registration Default"), then additional interest
("Special Interest") will accrue on the Convertible Junior Subordinated
Debentures (including in respect of amounts accruing during any Deferral
Period), and corresponding additional distributions (the "Special
Distributions") will accrue on the Trust Securities, in each case from and
including the day following such Registration Default to but excluding the day
on which such Registration Default has been cured or has been deemed to have
been cured. Special Interest and Special Distributions will be paid in cash
quarterly in arrears on each Interest Payment Date commencing with the first
Interest Payment Date following the applicable Registration Default and will
accrue at a rate such that the interest rate or distribution rate, as the case
may, will be increased 0.50% per annum of the principal amount or liquidation
amount, as applicable. Following the cure of a Registration Default, Special
Interest and Special Distributions will cease to accrue with respect to such
Registration Default.
Each Registerable Security contains a legend to the effect that the holder
thereof, by its acceptance thereof, will be deemed to have agreed to be bound by
the provisions of the Registration Agreement.
The Registration Agreement is governed by, and will be construed in
accordance with, the laws of the State of New York. The summary herein of
certain provisions of the Registration Agreement does not purport to be complete
and is subject to, and is qualified in its entirety by reference to, all the
provisions of the Registration Agreement, a form of which is available upon
request to the Company. See "Where You Can Find More Information."
SELLING HOLDERS
The Convertible Preferred Securities were originally issued by the Trust
and sold by Credit Suisse First Boston Corporation (the "Initial Purchaser")
in a transaction exempt from the registration requirements of the Securities
Act, to persons reasonably believed by such Initial Purchaser to be "qualified
institutional buyers" (as defined in Rule 144A under the Securities Act). The
holders named below and their transferees, pledgees, donees or successors
(collectively, the "Selling Holders") may from time to time offer and sell
pursuant to this prospectus any or all of the Convertible Preferred Securities,
any Convertible Junior Subordinated Debentures and Class A common stock issued
upon conversion of the Convertible Preferred Securities.
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The following table sets forth information with respect to the Selling
Holders of the Convertible Preferred Securities and the respective number of
Convertible Preferred Securities beneficially owned by each Selling Holder that
may be offered pursuant to this prospectus.
NUMBER OF
CONVERTIBLE PREFERRED
SELLING HOLDER SECURITIES
- --------------- ----------------------
The Bank of New York................. 97,000
Bankers Trust Company................ 265,900
Bear, Stearns Securities Corp........ 237,000
Bank of America NA, Personal Trust... 200
Boston Safe Deposit and Trust
Company.............................. 45,400
Brown Brothers Harriman & Co. ....... 300
Chase Manhattan Bank................. 111,500
Chase Manhattan Bank Correspondence
Clearing Services.................... 160,000
Credit Suisse First Boston
Corporation.......................... 47,400
Custodial Trust Company.............. 110,000
Fiduciary Trust Company
International........................ 3,500
Fleet Bank of Massachusetts, N.A. ... 2,300
First National Bank of Omaha......... 5,000
Goldman, Sachs & Co. ................ 60,000
Keybank National Association......... 2,800
LaSalle National Bank................ 600
Merrill Lynch, Pierce Fenner & Smith
Safekeeping........................ 40,500
Morgan Stanley & Co. Incorporated.... 61,100
Neuberger Berman, LLC................ 3,500
The Northern Trust Company........... 24,100
State Street Bank and Trust
Company............................ 510,500
Union Bank of California, N.A. ...... 8,400
The Fifth Third Bank................. 50,000
----------------------
Total...................... 1,875,000
None of the Selling Holders has, or within the past three years has had,
any position, office or other material relationship with the Trust or the
Company or any of their predecessors or affiliates, except that Credit Suisse
First Boston Corporation or its respective affiliates has provided, and may
continue to provide investment banking or financial advisory services to the
Company. Because the Selling Holders may, pursuant to this prospectus, offer all
or some portion of the Convertible Preferred Securities, the Convertible Junior
Subordinated Debentures or the Common Stock issuable upon conversion of the
Convertible Preferred Securities, no estimate can be given as to the amount of
the Convertible Preferred Securities, the Convertible Junior Subordinated
Debentures or the Common Stock issuable upon conversion of the Convertible
Preferred Securities that will be held by the Selling Holders upon termination
of any such sales. In addition, the Selling Holders identified above may have
sold, transferred or otherwise disposed of all or a portion of their Convertible
Preferred Securities since the date on which they provided the information
regarding their Convertible Preferred Securities pursuant to transactions exempt
from the registration requirements of the Securities Act.
PLAN OF DISTRIBUTION
The Offered Securities may be sold from time to purchasers directly by the
Selling Holders. Alternatively, the Selling Holders may from time to time offer
the Offered Securities to or through underwriters, broker/dealers or agents, who
may receive compensation in the form of underwriting discounts, concessions or
commissions from the Selling Holders or the purchasers of such Offered
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Securities for whom they may act as agents. The Selling Holders and any
underwriters, broker/dealers or agents that participate in the distribution of
Offered Securities may be deemed to be "underwriters" within the meaning of
the Securities Act and any profit on the sale of such securities by them and any
underwriter, broker/dealer or agent may be deemed to be underwriting discounts
and commissions under the Securities Act.
The Offered Securities may be sold by the Selling Holders from time to
time, in one or more transactions at fixed prices, at prevailing market prices
at the time of sale, at varying prices determined at the time of sale or at
negotiated prices. Such prices will be determined by the Selling Holders. The
sale of the Offered Securities may be effected in transactions (which may
involve crosses or block transactions) (i) on any national securities exchange
or quotation service on which the Offered Securities may be listed or quoted at
the time of sale, (ii) in the over-the-counter market, (iii) otherwise than on
such exchanges or in the over-the-counter market or (iv) through the writing of
options. At the time a particular offering of the Offered Securities is made, if
required, a Prospectus Supplement will be distributed which will set forth the
names of the Selling Holders, the aggregate amount and type of Offered
Securities being offered, and, to the extent required, the terms of the
offering, including the name or names of any underwriters, broker/dealers or
agents, any discounts, commissions and other terms constituting compensation
from the Selling Holders and any discounts, commissions or concessions allowed
or reallowed or paid to broker/dealers.
To comply with the securities laws of certain jurisdictions, if applicable,
the Offered Securities will be offered or sold in such jurisdictions only
through registered or licensed brokers or dealers. In addition, in certain
jurisdictions the Offered Securities may not be offered or sold unless they have
been registered or qualified for sale in such jurisdictions ro any exemption
from registration or qualification is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person
engaged in a distribution of the Offered Securities may be limited in its
ability to engage in market activities with respect to such securities. In
addition and without limiting the foregoing, each Selling Holder will be subject
to applicable provisions of the Exchange Act and the rules and regulations
thereunder, which provisions may limit the timing of purchases and sales of any
of the Offered Securities by the Selling Holders. All of the foregoing may
affect the marketability of the Offered Securities.
Pursuant to the Registration Rights Agreement, all expenses of the
registration of the Offered Securities will be paid by the Company, including,
without limitation, Commission filing fees and expenses of compliance with state
securities or "blue sky" laws; provided, however, that the Selling Holders
will pay all underwriting discounts and selling commissions, if any. The Selling
Holders will be indemnified by the Company and the Trust, jointly and severally,
against certain civil liabilities, including certain liabilities under the
securities Act, or will be entitled to contribution in connection therewith. The
Company and the Trust will be indemnified by the Selling Holders severally
against certain civil liabilities, including certain liabilities under the
Securities Act, or will be entitled to contribution in connection therewith.
Pursuant to the Registration Rights Agreement, the Company is required to
use its best efforts to keep the Registration Statement continuously effective
for a period of two years from its effective date or such shorter period that
will terminate upon the earlier of the date on which the Offered Securities
shall have been sold pursuant to the Registration Statement or the date on which
the Offered Securities are permitted to be freely sold or distributed to the
public pursuant to any exemption from the registration requirements of the
Securities Act (including in reliance on Rule 144(k) but excluding in reliance
on Rule 144A under the Securities Act). Notwithstanding the foregoing
obligations, the Company may, under certain circumstances, postpone or suspend
the filing or the effectiveness of the Registration Statement (or any amendments
or supplements thereto) or the sale of Offered Securities pursuant thereto.
54
<PAGE>
LEGAL MATTERS
The validity of the Convertible Preferred Securities, the Convertible
Junior Subordinated Debentures, the Guarantee and the Class A common stock
issuable upon conversion of the Convertible Preferred Securities will be passed
upon by Vinson & Elkins L.L.P.
Certain matters of Delaware law relating to the validity of the Convertible
Preferred Securities will be passed upon by Richards, Layton & Finger, P.A.
In connection with the offering, certain matters relating to United States
Federal income tax considerations will be passed upon for the Company by Vinson
& Elkins L.L.P.
EXPERTS
The financial statements and schedules of Carriage Services, Inc. included
in the annual report on Form 10-K for the year ended December 31, 1998 and
incorporated by reference in this prospectus and elsewhere in the registration
statement have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
incorporated by reference herein in reliance upon the authority of said firm as
experts in giving said reports.
55
<PAGE>
================================================================================
------------------------
CARRIAGE SERVICES
CAPITAL TRUST
7% CONVERTIBLE PREFERRED
SECURITIES
GUARANTEED TO THE EXTENT SET FORTH
HEREIN BY, AND CONVERTIBLE INTO
CLASS A COMMON STOCK OF
CARRIAGE SERVICES, INC.
---------------------------------
PROSPECTUS
---------------------------------
, 1999
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses in connection with
the distribution of the securities covered by this Registration Statement. All
of the expenses will be borne by the Company except as otherwise indicated.
Registration fee..................... $ 26,063
Fees and expenses of accountants..... 5,000
Fees and expenses of legal counsel... 30,000
Fees and expenses of Trustee and
counsel............................ 5,000
Printing and engraving expenses...... 5,000
Miscellaneous........................ 8,937
----------
Total........................... $ 80,000
==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
THE COMPANY
The Company is empowered by Section 145 of the Delaware General Corporation
Law (the "DGCL"), subject to the procedures and limitations stated therein, to
indemnify any 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 by reason of
the fact that such person is or was a director, officer, employee or agent of
the company, or is or was serving at the request of the company as a director,
officer, employee or agent of another corporation or other enterprise, against
reasonable expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually incurred by him in connection with such action, suit
or proceeding, if such director, officer, employee or agent acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the company and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful. The Company is
required by Section 145 to indemnify any person against reasonable expenses
(including attorneys' fees) actually incurred by him in connection with an
action, suit or proceeding in which he is a party because he is or was a
director, officer, employee or agent of the company or is or was serving at the
request of the company as a director, officer, employee or agent of another
corporation or other enterprise, if he has been successful, on the merits or
otherwise, in the defense of the action, suit or proceeding. Section 145 also
allows a corporation to purchase and maintain insurance on behalf of any such
person against any liability asserted against him in any such capacity, or
arising out of his status as such, whether or not the corporation would have the
power to indemnify him against such liability under the provisions of Section
145. In addition, Section 145 provides that indemnification pursuant to its
provisions is not exclusive of other rights of indemnification to which a person
may be entitled under any bylaw, agreement, vote of shareholders or
disinterested directors, or otherwise.
Article 10 of the Company's charter provides that the company shall
indemnify and hold harmless any person who was, is, or is threatened to be made
a party to a proceeding by reason of the fact that he or she is or was a
director or officer of the company while a director or officer of the company,
is or was serving at the request of the company as a director, officer, partner,
venturer, proprietor, trustee, employee, agent, or similar functionary of
another foreign or domestic corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan, or other enterprise, to the
fullest extent permitted under the DGCL. The right to indemnification under
Article 10 of the charter is a contract right which includes, with respect to
directors and officers, the right to be paid by the company the expenses
incurred in defending any such proceeding in advance of its disposition.
II-1
<PAGE>
The Declaration of Trust (the "Declaration") provides that no Trustee,
affiliate of any Trustee, or any officers, directors, shareholders, members,
partners, employees, representatives or agents of any Trustee, or any employee
or agent of the Trust or its affiliates (each an "Indemnified Person") shall
be liable, responsible or accountable in damages or otherwise to any officer,
director, shareholder, partner, member, representative or agent of the Trust,
any affiliate of the Trust or any holder of Trust Securities 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 authority
conferred on such Indemnified Person by the Declaration, 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 gross
negligence (or, in the case of the Property Trustee, negligence) or willful
misconduct with respect to such acts or omissions. The directors and officers of
the Company and the Regular Trustees are covered by insurance policies
indemnifying them against certain liabilities, including certain liabilities
arising under the Securities Act of 1933, as amended (the "Securities Act"),
which might be incurred by them in such capacities and against which they cannot
be indemnified by the Company or the Trust. The Selling Holders will be
indemnified by the Company and the Trust, jointly and severally, against certain
civil liabilities, including certain liabilities under the Securities Act, or
will be entitled to contribution in connection therewith. The Company and the
Trust will be indemnified by the Selling Holders severally against certain civil
liabilities, including certain liabilities under the Securities Act, or will be
entitled to contribution in connection therewith.
ITEM 16. EXHIBITS.
The following documents are filed as exhibits to this Registration
Statement, including those exhibits incorporated herein by reference to a prior
filing of the Company under the Securities Act or the Exchange Act as indicated
in parenthesis:
EXHIBIT NO. DESCRIPTION
------------- --------------
4.1 -- Amended and Restated Certificate of
Incorporation, as amended, of
Carriage Services, Inc. (incorporated
by reference to Exhibit 3.1 to
Carriage Services, Inc.'s Annual
Report on Form 10-K for its fiscal
year ended December 31, 1996).
4.2 -- Certificate of Amendment dated May 9,
1996 (incorporated by reference to
Exhibit 10.2 to Carriage Services,
Inc.'s Quarterly Report on Form 10-Q
for its fiscal quarter ended
September 30, 1997).
4.3 -- Certificate of Decrease, reducing the
authorized Series D Preferred Stock
(incorporated by reference to Exhibit
10.3 to Carriage Services, Inc.'s
Quarterly Report on Form 10Q for its
fiscal quarter ended September 30, 1997).
4.4 -- Certificate of Decrease, reducing the
authorized Series F Preferred Stock
(incorporated by reference to Exhibit
10.4 to Carriage Services, Inc.'s
Quarterly Report on Form 10-Q for its
fiscal quarter ended September 30, 1997).
4.5 -- Amended and Restated Bylaws of
Carriage Services, Inc. (incorporated
by reference to Exhibit 3.2 to
Carriage Services, Inc.'s
Registration Statement on Form S-1
(File No. 333-05545)).
4.6 -- Certificate of Trust of Carriage
Services Capital Trust.
4.7 -- Amended and Restated Declaration of
Trust of Carriage Services Capital
Trust, dated as of June 3, 1999,
among Carriage Services, Inc. as
Sponsor, Wilmington Trust Company as
Property Trustee, Wilmington Trust
Company as Delaware Trustee, and Mark
W. Duffey, Thomas C. Livengood and
Terry E. Sanford as Administrative Trustees.
4.8 -- Indenture for the Convertible Junior
Subordinated Debentures due 2029,
dated as of June 3, 1999, among
Carriage Services, Inc. as Issuer,
and Wilmington Trust Company as
Indenture Trustee.
II-2
<PAGE>
4.9 -- Form of Carriage Services, Inc. Class
A common stock Certificate
(incorporated by reference to Exhibit
4.1 to Carriage Services, Inc.'s
Registration Statement on Form S-1
(File No. 333-05545).
4.10 -- Form of Carriage Services Capital
Trust 7% Convertible Preferred
Securities (included in Exhibit 4.7).
4.11 -- Form of Carriage Services, Inc.
Convertible Junior Subordinated
Debentures due 2029 (included in Exhibit 4.8)
4.12 -- Preferred Securities Guarantee, dated
as of June 3, 1999, between Carriage
Services, Inc. as Guarantor, and
Wilmington Trust Company as Guarantee Trustee.
4.13 -- Common Securities Guarantee, dated as
of June 3, 1999, by Carriage
Services, Inc. as Guarantor.
4.14 -- Amendment No. 1 to Amended and
Restated Declaration of Trust of
Carriage Services Capital Trust
included as Exhibit 4.7 herein.
5.1 -- Opinion of Vinson & Elkins L.L.P. as
to the legality of the Convertible
Preferred Securities, the Convertible
Junior Subordinated Debentures,
Preferred Securities Guarantee and
Class A common stock being registered hereby.
5.2 -- Opinion of Richards, Layton & Finger,
P.A. as to certain matters of Delaware law.
*8.1 -- Opinion of Vinson & Elkins L.L.P. as
to certain tax matters.
10.1 -- Registration Rights Agreement, dated
June 3, 1999, by and among Carriage
Services Capital Trust, Carriage
Services, Inc. and Credit Suisse
First Boston Corporation.
23.1 -- Consent of Arthur Andersen LLP,
independent auditors.
23.2 -- Consent of Vinson & Elkins L.L.P.
(included in the opinions filed as
Exhibits 5.1 and 8.1).
24.1 -- Powers of Attorney (included on the
signature page of the initial filing of
this registration statement).
25.1 -- Form T-1 Statement of Eligibility
under the Trust Indenture Act of
1939, as amended, of Wilmington Trust
Company, as Indenture Trustee under
the Convertible Junior Subordinated
Debentures Indenture due 2029.
25.2 -- Form T-1 Statement of Eligibility
under the Trust Indenture Act of
1939, as amended, of Wilmington Trust
Company as Property Trustee under the
Amended and Restated Declaration of Trust.
25.3 -- Form T-1 Statement of Eligibility
under the Trust Indenture Act of
1939, as amended, of Wilmington Trust
Company as Preferred Guarantee
Trustee under the Preferred
Securities Guarantee.
- ------------
* To be filed by amendment.
ITEM 17. UNDERTAKINGS
(a) The registrants hereby undertake:
(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 the 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 Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price
II-3
<PAGE>
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 the undertakings set forth in clauses (i) and (ii)
above do not apply if the information required to be included in a
post-effective amendment by those clauses is contained in periodic reports
filed with or furnished to the Securities and Exchange Commission by the
Company pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in 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.
(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.
(b) The registrant hereby undertakes that:
(1) That for purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of a registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrants pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed
to be part of this registration statement as of the time it was declared
effective.
(2) That, for purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
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) The registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Company's annual
report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan's 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.
(d) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrants pursuant to the provisions set forth in Item 15, or
otherwise, the registrants have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act 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 the 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, the 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 Act and will
be governed by the final adjudication of such issue.
(e) The registrant 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 ("Act") in accordance with the
rules and regulations prescribed by the Commission under Section 305(6)(2) of
the Act.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Carriage Services, Inc. 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 Houston, State of Texas, on July 28, 1999.
CARRIAGE SERVICES, INC.
By: /s/ MELVIN C. PAYNE
MELVIN C. PAYNE
CHAIRMAN OF THE BOARD AND CHIEF
EXECUTIVE OFFICER
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Mark W. Duffey and Thomas C. Livengood, or either
of them, his true and lawful attorney-in-fact and agent, with full power of
substitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement and to file the same with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and ratifying
and confirming all that said attorney-in-fact and agent or his substitute or
substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities indicated on the 28th day of July, 1999.
<TABLE>
<CAPTION>
SIGNATURES TITLE
--------------- ---------
<C> <S>
/s/ MELVIN C. PAYNE Chairman of the Board and Chief Executive Officer and
MELVIN C. PAYNE Director (Principal Executive Officer)
/s/ MARK W. DUFFEY President and Director
MARK W. DUFFEY
/s/ THOMAS C. LIVENGOOD Executive Vice President, Chief Financial Officer and
THOMAS C. LIVENGOOD Secretary (Principal Financial Officer)
/s/ TERRY E. SANFORD Corporate Controller (Principal Accounting Officer)
TERRY E. SANFORD
/s/ C. BYRON SNYDER Director
C. BYRON SNYDER
Director
BARRY K. FINGERHUT
/s/ GREG M. BRUDNICKI Director
GREG M. BRUDNICKI
/s/ RONALD A. ERICKSON Director
RONALD A. ERICKSON
/s/ ROBERT D. LARRABEE Director
ROBERT D. LARRABEE
/s/ STUART W. STEDMAN Director
STUART W. STEDMAN
</TABLE>
II-5
<PAGE>
SIGNATURES
Pursuant to the Securities Act of 1933, as amended, Carriage Services
Capital Trust has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Houston,
State of Texas, on July 28, 1999.
CARRIAGE SERVICES CAPITAL TRUST
By: /s/ TERRY E. SANFORD
TERRY E. SANFORD,
AS ADMINISTRATIVE TRUSTEE
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities indicated on the 28th day of July, 1999.
SIGNATURES TITLE
-------------- ----------
/s/ MARK W. DUFFEY Administrative Trustee
MARK W. DUFFEY
/s/ THOMAS C. LIVENGOOD Administrative Trustee
THOMAS C. LIVENGOOD
/s/ TERRY E. SANFORD Administrative Trustee
TERRY E. SANFORD
II-6
EXHIBIT 4.6
CERTIFICATE OF TRUST
The undersigned, the trustees of Carriage Services Capital Trust,
desiring to form a business trust pursuant to Delaware Business Trust Act, 12
Del. C. ss.3810, hereby certify as follows:
(a) The name of the business trust being formed hereby (the "Trust") is
"Carriage Services Capital Trust."
(b) The name and business address of the trustee of the Trust which has
its principal place of business in the State of Delaware is as follows:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
(c) This Certificate of Trust shall be effective as of the date of filing.
Dated: May 24, 1999
/S/ MARK W. DUFFEY
Name: Mark W. Duffey
Title:Trustee
/S/ THOMAS C. LIVENGOOD
Name: Thomas C. Livengood
Title:Trustee
/S/ TERRY SANFORD
Name: Terry Sanford
Title:Trustee
Wilmington Trust Company, as Trustee
By:/S/ JAMES P. LAWLER
Name: James P. Lawler
Title:Vice President
EXHIBIT 4.7
------------------------------------------------------------------------------
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
CARRIAGE SERVICES CAPITAL TRUST
Dated as of June 3, 1999
------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.01 DEFINITIONS....................................................1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.01 TRUST INDENTURE ACT; APPLICATION...............................9
SECTION 2.02 LISTS OF HOLDERS OF SECURITIES................................10
SECTION 2.03 REPORTS BY THE PROPERTY TRUSTEE...............................10
SECTION 2.04 PERIODIC REPORTS TO PROPERTY TRUSTEE..........................10
SECTION 2.05 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT..............10
SECTION 2.06 EVENTS OF DEFAULT; WAIVER.....................................11
SECTION 2.07 EVENT OF DEFAULT; NOTICE......................................13
ARTICLE III
ORGANIZATION
SECTION 3.01 NAME..........................................................13
SECTION 3.02 OFFICE........................................................13
SECTION 3.03 PURPOSE.......................................................14
SECTION 3.04 AUTHORITY.....................................................14
SECTION 3.05 TITLE TO PROPERTY OF THE TRUST................................14
SECTION 3.06 POWERS AND DUTIES OF THE ADMINISTRATIVE TRUSTEES..............14
SECTION 3.07 PROHIBITION OF ACTIONS BY THE TRUST AND THE TRUSTEES..........17
SECTION 3.08 POWERS AND DUTIES OF THE PROPERTY TRUSTEE.....................18
SECTION 3.09 CERTAIN DUTIES AND RESPONSIBILITIES OF THE PROPERTY TRUSTEE...20
SECTION 3.10 CERTAIN RIGHTS OF PROPERTY TRUSTEE............................22
SECTION 3.11 DELAWARE TRUSTEE..............................................24
SECTION 3.12 EXECUTION OF DOCUMENTS........................................24
SECTION 3.13 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES........24
SECTION 3.14 DURATION OF TRUST.............................................24
SECTION 3.15 MERGERS.......................................................25
<PAGE>
ARTICLE IV
SPONSOR
SECTION 4.01 SPONSOR'S PURCHASE OF COMMON SECURITIES.......................26
SECTION 4.02 RESPONSIBILITIES OF THE SPONSOR...............................27
SECTION 4.03 GUARANTEE OF PAYMENT OF TRUST OBLIGATIONS.....................27
ARTICLE V
TRUSTEES
SECTION 5.01 NUMBER OF TRUSTEES............................................28
SECTION 5.02 DELAWARE TRUSTEE..............................................28
SECTION 5.03 PROPERTY TRUSTEE; ELIGIBILITY.................................28
SECTION 5.04 QUALIFICATIONS OF ADMINISTRATIVE TRUSTEES AND DELAWARE TRUSTEE
GENERALLY.....................................................29
SECTION 5.05 INITIAL TRUSTEES..............................................29
SECTION 5.06 APPOINTMENT, REMOVAL AND RESIGNATION OF TRUSTEES..............30
SECTION 5.07 VACANCIES AMONG TRUSTEES......................................33
SECTION 5.08 EFFECT OF VACANCIES...........................................33
SECTION 5.09 MEETINGS......................................................34
SECTION 5.10 DELEGATION OF POWER...........................................34
SECTION 5.11 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS...34
ARTICLE VI
DISTRIBUTIONS
SECTION 6.01 DISTRIBUTIONS.................................................35
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.01 GENERAL PROVISIONS REGARDING SECURITIES.......................35
SECTION 7.02 EXECUTION AND AUTHENTICATION..................................36
SECTION 7.03 FORM AND DATING...............................................36
SECTION 7.04 REGISTRAR, PAYING AGENT AND CONVERSION AGENT..................39
SECTION 7.05 PAYING AGENT TO HOLD MONEY IN TRUST...........................39
SECTION 7.06 REPLACEMENT SECURITIES........................................39
SECTION 7.07 OUTSTANDING PREFERRED SECURITIES..............................40
SECTION 7.08 PREFERRED SECURITIES IN TREASURY..............................40
ii
<PAGE>
SECTION 7.09 TEMPORARY SECURITIES..........................................40
SECTION 7.10 CANCELLATION..................................................41
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.01 TERMINATION OF TRUST..........................................41
ARTICLE IX
TRANSFER AND EXCHANGE
SECTION 9.01 GENERAL.......................................................42
SECTION 9.02 TRANSFER PROCEDURES AND RESTRICTIONS..........................43
SECTION 9.03 DEEMED SECURITY HOLDERS.......................................48
SECTION 9.04 [RESERVED]....................................................48
SECTION 9.05 NOTICES TO CLEARING AGENCY....................................48
SECTION 9.06 APPOINTMENT OF SUCCESSOR CLEARING AGENCY......................48
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR
OTHERS
SECTION 10.01 LIABILITY.....................................................49
SECTION 10.02 EXCULPATION...................................................49
SECTION 10.03 FIDUCIARY DUTY................................................50
SECTION 10.04 INDEMNIFICATION...............................................51
SECTION 10.05 OUTSIDE BUSINESSES............................................51
ARTICLE XI
ACCOUNTING
SECTION 11.01 FISCAL YEAR...................................................52
SECTION 11.02 CERTAIN ACCOUNTING MATTERS....................................52
SECTION 11.03 BANKING.......................................................52
SECTION 11.04 WITHHOLDING...................................................53
iii
<PAGE>
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.01 AMENDMENTS....................................................53
SECTION 12.02 MEETINGS OF THE HOLDERS OF SECURITIES; ACTION BY WRITTEN
CONSENT.......................................................54
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE
SECTION 13.01 REPRESENTATIONS AND WARRANTIES OF PROPERTY TRUSTEE............55
SECTION 13.02 REPRESENTATIONS AND WARRANTIES OF DELAWARE TRUSTEE............56
ARTICLE XIV
REGISTRATION RIGHTS
SECTION 14.01 REGISTRATION RIGHTS...........................................57
ARTICLE XV
MISCELLANEOUS
SECTION 15.01 NOTICES.......................................................57
SECTION 15.02 GOVERNING LAW.................................................59
SECTION 15.03 INTENTION OF THE PARTIES......................................59
SECTION 15.04 HEADINGS......................................................59
SECTION 15.05 SUCCESSORS AND ASSIGNS........................................59
SECTION 15.06 PARTIAL ENFORCEABILITY........................................59
SECTION 15.07 COUNTERPARTS..................................................59
ANNEX I Terms of 7% Convertible Preferred Securities and 7%
Convertible Common Securities..................................I-1
Exhibit A-1 Form of Preferred Security.............................A-1-1
Exhibit A-2 Form of Common Security................................A-2-1
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CROSS-REFERENCE TABLE*
SECTION OF
TRUST INDENTURE ACT SECTION OF
OF 1939, AS AMENDED DECLARATION
- ------------------- -----------
310 (a) ........................................................ 5.03(a)
310 (c) ........................................................ Inapplicable
311 (c) ........................................................ Inapplicable
312 (a) ........................................................ 2.02(a)
312 (b) ........................................................ 2.02(b)
313 ........................................................ 2.03
314 (a) ........................................................ 2.04
314 (b) ........................................................ Inapplicable
314 (c) ........................................................ 2.05
314 (d) ........................................................ Inapplicable
314 (f) ........................................................ Inapplicable
315 (a) ........................................................3.09(a), 3.09(b)
315 (c) ........................................................ 3.09(a)
315 (d) ........................................................ 3.09(b)
316 (a) ........................................................ Annex I
316 (c) ........................................................ 3.06(e)
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
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AMENDED AND RESTATED DECLARATION OF TRUST
OF
CARRIAGE SERVICES CAPITAL TRUST
JUNE 3, 1999
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of June 3, 1999, by the undersigned trustees (together with all
other Persons from time to time duly appointed and serving as trustees in
accordance with the provisions of this Declaration, the "Trustees"), Carriage
Services, Inc., a Delaware corporation, as trust sponsor (the "Sponsor"), and by
the holders, from time to time, of undivided beneficial interests in the assets
of the Trust (as defined below) issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor established Carriage Services
Capital Trust (the "Trust") under the Business Trust Act (as hereinafter
defined) pursuant to a Declaration of Trust dated as of May 24, 1999 (the
"Original Declaration"), and a Certificate of Trust filed with the Secretary of
State of the State of Delaware on May 24, 1998, 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
of the Debenture Issuer (as herein after defined); and
WHEREAS, as of the date hereof, no interests in the Trust have been
issued;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration, amend
and restate each and every term and provision of the Original Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto to continue
the Trust as a business trust under the Business Trust Act and that this
Declaration constitute the governing instrument of such business 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 1.01 DEFINITIONS.
Unless the context otherwise requires:
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(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them in this
Declaration, and any capitalized term not defined in this Declaration shall have
the meaning assigned thereto in the Indenture;
(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) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles;
(f) 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
(g) a reference to the singular includes the plural and vice versa.
"ADMINISTRATIVE ACTION" has the meaning set forth in the definition of
"Tax Event".
"ADMINISTRATIVE TRUSTEE" means any Trustee other than the Property
Trustee and the Delaware Trustee.
"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;
the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"AGENT" means any Registrar, Paying Agent, Conversion Agent or
co-registrar.
"APPOINTMENT EVENT" means an event defined in the terms of the Preferred
Securities, as set forth in Annex I, which entitles the Holders of a Majority in
liquidation amount of the Preferred
Securities to appoint a Special Trustee.
"AUTHORIZED OFFICER" of a Person means any Person that is authorized to
bind such Person.
"BENEFICIARIES" has the meaning set forth in Section 4.03(a).
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"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 Depositary as described in Section 7.03.
"BUSINESS DAY" means any day other than a Saturday or a Sunday, a day on
which banking institutions in New York, New York or Wilmington, Delaware are
authorized or required by law to close.
"BUSINESS TRUST ACT" means Chapter 38 of Title 12 of the Delaware Code, 12
Del. Code Section 3801 et seq., as it may be amended from time to time, or any
successor legislation.
"CERTIFICATE" means a certificate in global or definitive form
representing a Common Security or a Preferred Security.
"CLOSING DATE" means June 3, 1999.
"CODE" means the Internal Revenue Code of 1986, as amended, or any
successor legislation.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON SECURITIES" has the meaning specified in Section 7.01(a).
"COMMON SECURITIES GUARANTEE" means the guarantee agreement to be dated as
of June 3, 1999 of the Sponsor in respect of the Common Securities.
"CONVERSION AGENT" has the meaning set forth in Section 7.04.
"COVERED PERSON" means: (a) any officer, director, shareholder, partner,
member, representative, employee or agent of (i) the Trust or (ii) the Trust's
Affiliates; and (b) any Holder of Securities.
"DEBENTURE 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.
"DEBENTURE ISSUER" means the Sponsor in its capacity as issuer of the
Debentures.
"DEBENTURE TRUSTEE" means Wilmington Trust Company, a Delaware banking
corporation, as trustee under the Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.
"DEBENTURES" means the series of Debentures to be issued by the Debenture
Issuer under the Indenture to be held by the Property Trustee, in the form
attached to the Indenture as Exhibit A.
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"DELAWARE TRUSTEE" has the meaning set forth in Section 5.02.
"DEFERRAL PERIOD" has the meaning set forth in the Indenture.
"DEFINITIVE PREFERRED SECURITIES" means any Preferred Securities in
definitive form issued by the Trust.
"DEPOSITARY" means The Depository Trust Company, the initial clearing
agency, until a successor shall be appointed pursuant to Section 9.06, and
thereafter means such successor Depositary.
"DISTRIBUTION" means a distribution payable to Holders of Securities in
accordance with Section 6.01.
"EVENT OF DEFAULT" means:
(i) a Debenture Event of Default; or
(ii) default by the Trust in the payment of any Distribution
when it becomes due and payable, and continuation of such default for a
period of 30 days (subject to the deferral of any due date in the case of
a Deferral Period); or
(iii) default by the Trust in the payment of any Redemption
Price of any Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any material
respect, of any covenant or warranty of the Trustees in the Declaration
(other than a covenant or warranty, a default in the performance of which
or the breach of which is addressed in clause (ii) or (iii) above), and
continuation of such default or breach for a period of 90 days after there
has been given, by registered or certified mail, to the defaulting Issuer
Trustee or Issuer Trustees by the holders of at least 25% in aggregate
liquidation amount of the outstanding Preferred Securities, a written
notice specifying such default or breach and requiring it to be remedied
and stating that such notice is a "Notice of Default" under the
Declaration; or
(v) the failure of the Sponsor to appoint a successor Property
Trustee in the manner required by Section 5.06(c).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation.
"GLOBAL PREFERRED SECURITIES" means Rule 144A Global Preferred Securities
and/or Unrestricted Global Preferred Securities, as the context requires.
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"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 Business Trust Act.
"INDEMNIFIED PERSON" means (a) any Trustee; (b) any Affiliate of any
Trustee; (c) any officers, directors, shareholders, members, partners,
employees, representatives or agents of any Trustee; or (d) any employee or
agent of the Trust or its Affiliates.
"INDENTURE" means the Indenture dated as of June 3, 1999, between the
Debenture Issuer and the Debenture Trustee, as it may be amended from time to
time.
"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 from time to time, or any successor legislation.
"LEGAL ACTION" has the meaning set forth in Section 3.06(g).
"LIKE AMOUNT" means (i) with respect to a redemption of Preferred
Securities, Preferred Securities having an aggregate liquidation amount equal to
that portion of the principal amount of Debentures to be contemporaneously
redeemed in accordance with the Indenture, allocated to the Common Securities
and to the Preferred Securities based upon the relative liquidation amounts of
such classes and the proceeds of which will be used to pay the applicable
Redemption Price of the Preferred Securities and (ii) with respect to a
distribution of Debentures to holders of Preferred Securities in connection with
a dissolution or liquidation of the Trust, Debentures having a principal amount
equal to the aggregate liquidation amount of the Securities of the Holder to
whom such Debentures are distributed.
"LIST OF HOLDERS" has the meaning set forth in Section 2.02(a).
"MAJORITY IN LIQUIDATION AMOUNT OF THE SECURITIES" means, except as
provided in the terms of the Preferred Securities and 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 more than 50% of the aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise of all outstanding Securities of the relevant class.
"MINISTERIAL ACTION" has the meaning set forth in the terms of the
Securities as set forth in Annex I.
"OBLIGATIONS" means any costs, expenses or liabilities of the Trust, other
than obligations of the Trust to pay to Holders of any Securities or other
similar interests in the Trust the amounts due
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such Holders pursuant to the terms of the Securities or such other similar
interests, as the case may be.
"OFFERING CIRCULAR" means the confidential offering circular, dated as of
May 27, 1999, relating to the issuance by the Trust of 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 Declaration shall include:
(i) a statement that each officer signing the Certificate has
read the covenant or condition and the definition relating thereto;
(ii) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering the
Certificate;
(iii) a statement that each such officer has made such
examination or investigation as, in such officer's 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.
"OPTIONAL CLOSING DATE" has the meaning assigned to such term in the
Purchase Agreement.
"PARTICIPANTS" has the meaning set forth in Section 7.03(b).
"PAYING AGENT" has the meaning specified in Section 7.04.
"PERSON" means a legal person, including any individual, corporation,
estate, company, 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" has the meaning specified in Section 7.01(a).
"PREFERRED SECURITIES GUARANTEE" means the guarantee agreement to be dated
as of June 3, 1999, of the Sponsor in respect of the Preferred Securities.
"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 Depositary,
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or on the books of a Person maintaining an account with such Depositary
(directly as a Participant or as an indirect participant, in each case in
accordance with the rules of such Depositary).
"PROPERTY TRUSTEE" means the Trustee meeting the eligibility requirements
set forth in Section 5.03.
"PROPERTY TRUSTEE ACCOUNT" has the meaning set forth in Section 3.08(c).
"PURCHASE AGREEMENT" has the meaning set forth in Section 7.03.
"QUORUM" means a majority of the Administrative Trustees or, if there
are only two Administrative Trustees, both of them.
"REDEMPTION PRICE" has the meaning set forth in Annex I.
"REGISTRABLE SECURITIES" has the meaning set forth in Section 14.01.
"REGISTRAR" has the meaning set forth in Section 7.04.
"REGISTRATION DEFAULT" has the meaning set forth in Section 14.01.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement,
dated June 3, 1999, among the Sponsor, the Trust, and the Initial Purchaser
named in the Purchase Agreement.
"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 Property Trustee, any
vice-president, any assistant vice-president, the treasurer, any assistant
treasurer, any trust officer or assistant trust officer or any other officer in
the Corporate Trust Department of the Property Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"RESTRICTED PREFERRED SECURITIES" shall include the Rule 144A Global
Preferred Securities.
"RESTRICTED SECURITIES LEGEND" has the meaning specified in Section
9.02(j).
"RULE 144A GLOBAL PREFERRED SECURITY" has the meaning specified in Section
7.03(a).
"SECURITIES" means the Common Securities and the Preferred Securities.
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"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
successor legislation.
"SECURITIES CUSTODIAN" means the custodian with respect to the Rule 144A
Global Preferred Security and any other Preferred Security in global form.
"SECURITIES GUARANTEES" means the Preferred Securities Guarantee and
the Common Securities Guarantee.
"SHELF REGISTRATION STATEMENT" has the meaning specified in Section
14.01.
"SPECIAL TRUSTEE" means a trustee appointed by the Holders of a Majority
in liquidation amount of the Preferred Securities in accordance with Section
5.06(a)(ii)(B).
"SPONSOR" means Carriage Services, Inc., a Delaware corporation, or any
successor entity in a merger, consolidation or amalgamation, in its capacity as
sponsor of the Trust.
"SUCCESSOR DELAWARE TRUSTEE" has the meaning set forth in Section 5.06.
"SUCCESSOR PROPERTY TRUSTEE" has the meaning set forth in Section 5.06.
"SUPER MAJORITY" has the meaning set forth in Section 2.06(a)(ii).
"TAX EVENT" means the Property Trustee shall have received an opinion of
nationally recognized independent tax counsel to the Sponsor (reasonably
acceptable to the Trustees) experienced in such matters (a "Dissolution Tax
Opinion") to the effect that, as a result of (i) any amendment to or change
(including any announced prospective change (which shall not include a proposed
change), provided that a Tax Event shall not occur more than 90 days before the
effective date of any such prospective change) in the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, (ii) any judicial decision or official
administrative pronouncement, ruling, regulatory procedure, notice or
announcement, including any notice or announcement of intent to adopt such
procedures or regulations (an "Administrative Action") or (iii) any amendment to
or change in the administrative position or interpretation of any Administrative
Action or judicial decision that differs from the theretofore generally accepted
position, in each case, by any legislative body, court, governmental agency or
regulatory body, irrespective of the manner in which such amendment or change is
made known, which amendment or change is effective or such Administrative Action
or decision is announced, in each case, on or after the date of original
issuance of the Debentures or the issue date of the Preferred Securities issued
by the Trust, there is more than an insubstantial risk that (a) if the
Debentures are held by the Property Trustee, (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 interest accrued or received on the Debentures or subject to
more than a de minimis amount of other taxes, duties or other governmental
charges as determined by such counsel, or (II) any portion of interest payable
by the Sponsor to the Trust on the Debentures is not, or within 90 days of the
date of such opinion will not be, deductible by the
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Sponsor in whole or in part for United States Federal income tax purposes or (b)
with respect to Debentures which are no longer held by the Property Trustee, any
portion of interest payable by the Sponsor on the Debentures is not, or within
90 days of the date of such opinion will not be, deductible by the Sponsor in
whole or in part for United States Federal income tax purposes.
"10% IN LIQUIDATION AMOUNT OF THE SECURITIES" means, except as provided in
the terms of the Preferred Securities or by the Trust Indenture Act, Holders 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, representing 10% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, of all outstanding Securities of the
relevant class.
"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).
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"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 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.
"UNRESTRICTED GLOBAL SECURITY" has the meaning set forth in Section
9.02(b).
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.01 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, which are
incorporated by reference in and made part of this Declaration and shall, to the
extent applicable, be governed by such
provisions.
(b) The Property Trustee shall be the only Trustee which 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.
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(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 2.02 LISTS OF HOLDERS OF SECURITIES.
(a) Each of the Sponsor and the Administrative Trustees on behalf of
the Trust shall provide the Property Trustee (i) within 14 days after each
record date for payment of Distributions, a list, in such form as the Property
Trustee may reasonably require, of the names and addresses of the Holders of the
Securities ("List of Holders") as of such record date, provided that neither the
Sponsor nor the Administrative 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 Property Trustee by
the Sponsor and the Administrative Trustees on behalf of the Trust, and (ii) at
any other time, within 30 days of receipt by the Trust of a written request for
a List of Holders as of a date no more than 14 days before such List of Holders
is given to the Property Trustee. The Property 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 its capacity as Paying Agent (if
acting in such capacity), provided that the Property Trustee may destroy any
List of Holders previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under
Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.03 REPORTS BY THE PROPERTY TRUSTEE.
Within 60 days after May 15 of each year, commencing May 15, 2000, the
Property 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 Section 313 of the Trust Indenture Act.
The Property Trustee shall also comply with the requirements of Section 313(d)
of the Trust Indenture Act.
SECTION 2.04 PERIODIC REPORTS TO PROPERTY TRUSTEE.
Each of the Sponsor and the Administrative Trustees on behalf of the Trust
shall provide to the Property Trustee 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 2.05 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
Each of the Sponsor and the Administrative Trustees on behalf of the Trust
shall provide to the Property 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 Section 314(c) of the Trust
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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 2.06 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 Event of Default:
(i) is caused by a Debenture Event of Default that is not
waivable under the Indenture, the Event of Default under the Declaration
shall also not be waivable;
(ii) is caused by a Debenture Event of Default that requires
the consent or vote of greater than a majority in principal amount of the
holders of the Debentures (a "Super Majority") to be waived under the
Indenture, the Event of Default under the Declaration may only be waived
by the vote of the Holders of at least the proportion in liquidation
amount of the Preferred Securities that the relevant Super Majority
represents of the aggregate principal amount of the Debentures
outstanding;
(iii) is the result of a default by the Trust in the payment
of any Distribution when it becomes due and payable, which default has
continued for 30 days (subject to the deferral of any due date in the case
of a Default Period), the Event of Default shall not be waivable; or
(iv) is the result of a default by the Trust in the payment of
any Redemption Price of any Preferred Security when it becomes due and
payable, the Event of Default shall not be waivable.
The foregoing provisions of this Section 2.06(a) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of
the Trust Indenture Act 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
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Default with respect to the Common Securities and its consequences, provided
that, if the Event of Default is caused by a Debenture Event of Default that:
(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 below in this Section 2.06(b),
the Event of Default under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be
waived, except where the Holders of the Common Securities are deemed to
have waived such Event of Default under the Declaration as provided below
in this Section 2.06(b), the Event of Default under the Declaration may
only be waived by the vote of the Holders of at least the proportion in
liquidation amount of the Common Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding;
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 the effects of all Events of Default with
respect to the Preferred Securities have been cured, waived or otherwise
eliminated, and until such Events of Default have been so cured, waived or
otherwise eliminated, the Property 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 Property Trustee in
accordance with the terms of the Securities. The foregoing provisions of this
Section 2.06(b) shall be in lieu of Sections 316(a)(1)(A) and 316(a)(1)(B) of
the Trust Indenture Act and such Section 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. Subject to the foregoing
provisions of this Section 2.06(b), upon such waiver, 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.
(c) A waiver of an Event of Default under the Indenture by the
Property 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 2.06(c) shall be in lieu
of Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B)
of the Trust Indenture Act is hereby expressly excluded from this Declaration
and the Securities, as permitted by the Trust Indenture Act.
SECTION 2.07 EVENT OF DEFAULT; NOTICE.
(a) The Property Trustee shall, within thirty days after the
occurrence of an Event of Default actually known to the Trustee, (i) transmit by
mail, first-class postage prepaid, to the Holders of the Securities, and (ii)
transmit by any means provided for in this Declaration to the
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Administrative Trustees and the Sponsor, notices of all defaults actually known
to the Property Trustee, unless such defaults have been cured before the giving
of such notice (the term "defaults" for the purposes of this Section 2.07(a)
being hereby defined to be an Event of Default, not including any periods of
grace and irrespective of the giving of any notice); 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 Property 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 and/or Responsible Officers of the Property Trustee
in good faith determines that the withholding of such notice is in the interests
of the Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge of
any default except:
(i) a default under Sections 5.01(1) and 5.01(2) of the
Indenture; or
(ii) any default as to which the Property Trustee shall have
received written notice.
ARTICLE III
ORGANIZATION
SECTION 3.01 NAME.
The Trust is named "Carriage Services Capital Trust," as such name may be
modified from time to time by the Administrative Trustees following written
notice to the Holders of Securities. The Trust's activities may be conducted
under the name of the Trust or any other name deemed advisable by the
Administrative Trustees.
SECTION 3.02 OFFICE.
The address of the principal office of the Trust is c/o Carriage Services,
Inc., 1300 Post Oak Boulevard, Suite 1500, Houston Texas 77056, Attention: Chief
Financial Officer. On ten Business Days written notice to the Holders of
Securities, the Administrative Trustees may designate another principal office.
SECTION 3.03 PURPOSE.
The exclusive purposes and functions of the Trust are (a) to issue and
sell Securities and use the proceeds from such sale to acquire the Debentures,
and (b) except as otherwise limited herein, to engage in only those other
activities necessary or incidental thereto. The Trust shall not borrow money,
issue debt or reinvest proceeds derived from investments, pledge any of its
assets, or
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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.
SECTION 3.04 AUTHORITY.
(a) Subject to the limitations provided in this Declaration and to
the specific duties of the Property Trustee, the Administrative Trustees shall
have exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Administrative Trustees in accordance with their powers
shall constitute the act of and serve to bind the Trust and an action taken by
the Property Trustee 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.
(b) Except as expressly set forth in this Declaration and except if
a meeting of the Administrative Trustees is called with respect to any matter
over which the Administrative Trustees have power to act, any power of the
Administrative Trustees may be exercised by, or with the consent of, any one
such Administrative Trustee.
(c) An Administrative 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 purposes of signing any documents which the Administrative
Trustees have power and authority to cause the Trust to execute pursuant to
Section 3.06.
SECTION 3.05 TITLE TO PROPERTY OF THE TRUST.
Except as provided in Section 3.08 with respect to the Debentures and the
Property Trustee Account or as otherwise 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 3.06 POWERS AND DUTIES OF THE ADMINISTRATIVE TRUSTEES.
The Administrative Trustees shall have, together (except in the case of
paragraphs (a), (b) and (c) of this Section 3.06) with any Special Trustee
holding office pursuant to Section 5.06, if any, 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 further, that there shall be no
interests in the Trust other than the Securities, and the issuance of
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Securities shall be limited to simultaneous issuances of both Preferred
Securities and Common Securities on the Closing Date and any Optional 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 the Offering Circular and a
preliminary offering circular, in each case prepared by the Sponsor, in
relation to the offering and sale of Preferred Securities to qualified
institutional buyers in reliance on Rule 144A under the Securities Act and
to execute and file with the Commission, at such time as determined by the
Sponsor, a registration statement filed on Form S-3 prepared by the
Sponsor, including any amendments thereto, in relation to the Preferred
Securities;
(ii) execute and file any documents prepared by the Sponsor,
or take any acts as determined by the Sponsor to be necessary in order to
qualify or register all or part of the Preferred Securities in any State
or foreign jurisdiction in which the Sponsor has determined to qualify or
register such Preferred Securities for sale;
(iii) execute and file an application, prepared by the
Sponsor, to the Private Offerings, Resale and Trading through Automated
Linkages ("PORTAL") Market and, at such time, if any, as determined by the
Sponsor, to the New York Stock Exchange or any other national stock
exchange or the Nasdaq National Market for listing or quotation of the
Preferred Securities;
(iv) to execute and deliver letters, documents, or instruments
with The Depository Trust Company relating the Preferred Securities;
(v) execute and file with the Commission, at such time as
determined by the Sponsor, a registration statement on Form 8-A, including
any amendments thereto, prepared by the Sponsor relating to the
registration of the Preferred Securities under Section 12 of the Exchange
Act; and
(vi) execute and enter into the Purchase Agreement,
Registration Rights Agreement and other related agreements providing for
the sale of the Preferred Securities and to provide any certificates or
other documents in connection with such agreements;
(c) to acquire the Debentures with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however, that the
Administrative Trustees shall cause legal title to the Debentures to be held of
record in the name of the Property Trustee for the benefit of the Holders of the
Preferred Securities and the Holders of Common Securities;
(d) to give the Sponsor and the Property Trustee prompt written
notice of the occurrence of a Tax Event; provided that the Administrative
Trustees (and Special Trustee, if any)
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shall consult with the Sponsor and the Property Trustee before taking or
refraining from taking any Ministerial Action in relation to a Tax 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;
(f) to take all actions and perform such duties as may be required
of the Administrative Trustees pursuant to the terms of the Securities and 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 3.08(e), the Property 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 cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by Section 314(a)(4) of the
Trust Indenture Act to the Property Trustee, which certificate may be executed
by any Administrative Trustee;
(k) to incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(m) 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;
(n) 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;
(o) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such
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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;
(p) to take any action, not inconsistent with this Declaration or
with applicable law, that the Administrative Trustees determine in their
discretion to be necessary or desirable in carrying out the activities of the
Trust as set out in this Section 3.06, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered 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 materially adversely affect the interests
of Holders; and
(q) 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 Administrative Trustees, on behalf of
the Trust.
The Administrative Trustees must exercise the powers set forth in this
Section 3.06 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.03, and the Administrative Trustees shall not
take any action that is inconsistent with the purposes and functions of the
Trust set forth in Section 3.03.
Subject to this Section 3.06, the Administrative Trustees shall have none
of the powers or the authority of the Property Trustee set forth in Section
3.08.
Any expenses incurred by the Administrative Trustee (or the Special
Trustee, if any) pursuant to this Section 3.06 shall be reimbursed by the
Debenture Issuer.
SECTION 3.07 PROHIBITION OF ACTIONS BY THE TRUST AND THE TRUSTEES.
(a) The Trust shall not, and the Trustees (including the Property
Trustee) on behalf of the Trust shall not, engage in any activity other than as
required or authorized by this Declaration. In particular, the Trust shall not
and the Trustees (including the Property Trustee) shall cause the Trust not to:
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(i) invest any proceeds received by the Trust from holding the
Debentures, but shall 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; or
(vii) other than as provided in the Declaration or Annex I
hereto, (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 Section 5.13 of the
Indenture, (C) exercise any right to rescind or annul any declaration that
the principal of all the Debentures shall be due and payable, or (D)
consent to any amendment, modification or termination of the Indenture or
the Debentures where such consent shall be required unless, in the case of
each action described in clause (A), (B), (C) or (D), the Trust shall have
received an opinion of counsel to the effect that such modification will
not cause more than an insubstantial risk that for United States federal
income tax purposes the Trust will not be classified as a grantor trust.
SECTION 3.08 POWERS AND DUTIES OF THE PROPERTY TRUSTEE.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Property Trustee in trust for the benefit of the
Holders of the Securities. The right, title and interest of the Property Trustee
to the Debentures shall vest automatically in each Person who may hereafter be
appointed as Property Trustee in accordance with Section 5.06. 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 Property Trustee shall not transfer its right, title and
interest in the Debentures to the Administrative Trustees or to the Delaware
Trustee (if the Property Trustee does
not also act as Delaware Trustee).
(c) The Property Trustee shall:
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(i) establish and maintain a segregated non-interest bearing
trust account (the "Property Trustee Account") in the name of and under
the exclusive control of the Property 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 Property Trustee, deposit such funds into
the Property Trustee Account and make payments to the Holders of the
Preferred Securities and Holders of the Common Securities from the
Property Trustee Account in accordance with Section 6.01. Funds in the
Property Trustee Account shall be held uninvested until disbursed in
accordance with this Declaration.
(ii) engage in such ministerial activities as so directed and
as shall be necessary or appropriate to effect the redemption of the
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
Administrative Trustees in accordance with the terms of the Securities,
engage in such ministerial activities as so directed as shall be necessary
or appropriate to effect the distribution of the Debentures to Holders of
Securities upon the occurrence of certain special events (as may be
defined in the terms of the Securities) arising from a change in law or a
change in legal interpretation or other specified circumstances pursuant
to the terms of the Securities.
(d) The Property Trustee shall take all actions and perform such
duties as may be specifically required of the Property Trustee pursuant to the
terms of the Securities.
(e) The Property Trustee shall take any Legal Action which arises
out of or in connection with an Event of Default or the Property Trustee's
duties and obligations under this Declaration or the Trust Indenture Act;
provided, however, that if a Debenture Event of Default has occurred and is
continuing and such event is attributable to the failure of the Sponsor 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 institute a legal proceeding directly
for enforcement of payment to such Holder 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 (a "Direct Action") on or after the
respective due date specified in the Securities. In connection with such Direct
Action, the Debenture Issuer Securities will be subrogated to the rights of such
Holder of Preferred Securities to the extent of any payment made by the Sponsor
to such Holder of Preferred Securities in such Direct Action. In addition, if
the Property Trustee fails to enforce its rights under the Debentures (other
than rights arising from an Event of Default described in the immediately
preceding sentence) after any Holder of Preferred Securities shall have made a
written request to the Property Trustee to enforce such rights, such Holder of
Preferred Securities may, to the fullest extent permitted by law, institute a
Direct Action to enforce such rights. Except as provided in the preceding
sentences, the Holders of Preferred Securities will not be able to exercise
directly any other remedy available to the holders of the Debentures.
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(f) The Property 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 Property Trustee has been appointed and has
accepted that appointment in accordance with Section 5.06.
(g) The Property 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 occurs and is continuing, the Property
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.
(h) The Property Trustee will act as Paying Agent and Registrar in
New York 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 Property Trustee at any time and a successor Paying Agent
or additional Paying Agents may be appointed at any time by the Property
Trustee.
(i) Subject to this Section 3.08, the Property Trustee shall have
none of the duties, liabilities, powers or the authority of the Administrative
Trustees set forth in Section 3.06.
(j) The Property Trustee must exercise the powers set forth in this
Section 3.08 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.03, and the Property Trustee shall not take any
action that is inconsistent with the purposes and functions of the Trust set out
in Section 3.03.
SECTION 3.09 CERTAIN DUTIES AND RESPONSIBILITIES OF THE PROPERTY TRUSTEE.
(a) The Property 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 Property Trustee. In case an Event of Default has occurred (that has
not been cured or waived pursuant to Section 2.06), the Property 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 its exercise, 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 Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
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(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 Property Trustee
shall be determined solely by the express provisions of this
Declaration and the Property 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 Property
Trustee; and
(B) in the absence of bad faith on the part of the
Property Trustee, the Property 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 Property Trustee and 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 Property Trustee, the Property Trustee shall be
under a duty to examine the same to determine whether or not they
conform to the requirements of this Declaration;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property
Trustee, unless it shall be proved that the Property Trustee was negligent
in ascertaining the pertinent facts;
(iii) the Property 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, method and
place of conducting any proceeding for any remedy available to the
Property Trustee, or exercising any trust or power conferred upon the
Property Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Property 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;
(v) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and the
Property Trustee Account shall be to deal with such property in a similar
manner as the Property Trustee deals with similar property for its own
account, subject to the protections and limitations on liability afforded
to the Property Trustee under this Declaration and the Trust Indenture
Act;
(vi) the Property 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;
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(vii) the Property Trustee shall not be liable for any
interest on any money received by it except as it may otherwise agree with
the Sponsor. Money held by the Property Trustee need not be segregated
from other funds held by it except in relation to the Property Trustee
Account maintained by the Property Trustee pursuant to Section 3.08(c)(i)
and except to the extent otherwise required by law; and
(viii)the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or the Sponsor
with their respective duties under this Declaration, nor shall the
Property Trustee be liable for the default or misconduct of the
Administrative Trustees or the Sponsor.
SECTION 3.10 CERTAIN RIGHTS OF PROPERTY TRUSTEE.
(a) Subject to the provisions of Section 3.09:
(i) the Property Trustee may rely conclusively 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 Administrative
Trustees contemplated by this Declaration shall be sufficiently evidenced
by an Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Property Trustee (unless other evidence is herein specifically prescribed)
may, in the absence of bad faith on its part, request and rely upon an
Officers' Certificate which, upon receipt of such request, shall be
promptly delivered by the Sponsor or the Administrative Trustees;
(iv) the Property 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 Property Trustee may consult with counsel of its
choice 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 Property Trustee shall have the
right at any time to seek instructions concerning the administration of
this Declaration from any court of competent jurisdiction;
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(vi) the Property 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 Property Trustee security satisfactory to the Property
Trustee, against the costs, expenses (including its attorneys' fees and
expenses) and liabilities that might be incurred by it in complying with
such request or direction, including such reasonable advances as may be
requested in writing by the Property Trustee, provided, that, nothing
contained in this Section 3.10(a)(vi) shall be taken to relieve the
Property 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 Property 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, security, bond, debenture, note, other evidence
of indebtedness or other paper or document, but the Property Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit;
(viii)the Property Trustee may execute any of its powers
hereunder or perform any of its duties hereunder either directly or by or
through agents or attorneys and the Property 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 Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and the
signature of the Property 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 Property Trustee to 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 Property
Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration the
Property Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder the Property 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 Property 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 acting in
accordance with such instructions;
(xi) except as otherwise expressly provided by this
Declaration, the Property Trustee shall not be under any obligation to
take any action that is discretionary under the provisions of this
Declaration; and
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(xii) the Property 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 Declaration.
(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Property 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 Property 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 Property Trustee
shall be construed to be a duty.
SECTION 3.11 DELAWARE TRUSTEE.
Notwithstanding any other provision of this Declaration other than Section
5.02, 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
Administrative Trustees or the Property Trustee described in this Declaration.
Except as set forth in Section 5.02, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of Section 3807 of
the Business Trust Act.
SECTION 3.12 EXECUTION OF DOCUMENTS.
Except as otherwise required by the Business Trust Act, any Administrative
Trustee is authorized to execute on behalf of the Trust any documents that the
Administrative Trustees have the power and authority to execute pursuant to
Section 3.06; provided that, the registration statement referred to in Section
3.06(b)(i), including any amendments thereto, shall be signed by a majority of
the Administrative Trustees.
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 exist until June 1, 2035.
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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 Person, except as described in Section
3.15(b) and (c) of this Declaration and Section 3 and 4 of the terms of the
Securities as set forth in Annex I attached hereto.
(b) The Trust may, with the consent of a majority of the
Administrative Trustees and without the consent of the Holders of the
Securities, the Delaware Trustee or the Property Trustee, consolidate,
amalgamate, merge with or into, or be replaced by a trust organized as such
under the laws of any State or the District of Columbia; provided that:
(i) if the Trust is not the surviving entity, the 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") as long as the Successor Securities rank,
with respect to participation in the profits and distributions and
payments upon liquidation, redemption and otherwise at least as high
as the Preferred Securities rank with respect to participation in
the profits and dividends and payments upon liquidation redemption
and otherwise;
(ii) the Debenture Issuer appoints a Trustee of such Successor
Entity possessing the same powers and duties of the Property 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;
(v) such merger, consolidation, amalgamation or replacement
does not adversely affect the powers, preferences and other special rights
of the Holders of the Preferred Securities (including any Successor
Securities) in any material respect;
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(vi) such Successor Entity has a purpose substantially
identical to that of the Trust;
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of a nationally
recognized independent counsel (reasonably acceptable to the Property
Trustee) to the Trust experienced in such matters to the effect that:
(A) the Successor Entity will be treated as a grantor
trust for United States federal income tax purposes;
(B) following such merger, consolidation, amalgamation
or replacement, neither the Sponsor nor the Successor Entity will be
required to register as an Investment Company; and
(C) such merger, consolidation, amalgamation or
replacement will not adversely affect the limited liability of the
Holders of the Securities (including any Successor Securities); and
(viii) the Sponsor provides a guarantee to the Holders of the
Successor Securities with respect to the Successor Entity having
substantially the same terms as the Preferred Securities Guarantee; and
(ix) such merger, consolidation, amalgamation, replacement or
lease is not a taxable event for holders of the Preferred Securities.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except
with the consent of Holders of 100% in liquidation amount of the Common
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 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.
ARTICLE IV
SPONSOR
SECTION 4.01 SPONSOR'S PURCHASE OF COMMON SECURITIES.
On the Closing Date and any Optional Closing Date the Sponsor will
purchase an amount of Common Securities issued by the Trust such that the
aggregate liquidation amount of such Common Securities purchased by the Sponsor
shall at such date equal 3% of the total capital of the Trust.
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SECTION 4.02 RESPONSIBILITIES OF THE SPONSOR.
In connection with the issue and sale of the Preferred Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) to prepare the Offering Circular and to prepare for filing by
the Trust with the Commission the Shelf Registration Statement, including any
amendments thereto;
(b) to determine the States and foreign jurisdictions in which to
take appropriate action to qualify or register for sale 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 and foreign jurisdictions;
(c) if deemed necessary or advisable by the Sponsor, to prepare for
filing by the Trust an application to PORTAL and to the New York Stock Exchange
or any other national stock exchange or the Nasdaq National Market for listing
or quotation of the Preferred Securities;
(d) if deemed necessary or advisable by the Sponsor, to prepare for
filing by the Trust with the Commission a registration statement on Form 8-A
relating to the registration of the Preferred Securities under Section 12 of the
Exchange Act, including any amendments thereto; and
(e) to negotiate the terms of the Purchase Agreement, Registration
Rights Agreement and other related agreements providing for the sale of the
Preferred Securities.
SECTION 4.03 GUARANTEE OF PAYMENT OF TRUST OBLIGATIONS.
(a) Subject to the terms and conditions of this Section 4.03, the
Sponsor 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 Obligations to such
Beneficiaries.
(b) The agreement of the Sponsor in Section 4.03(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 Sponsor set forth in Section 4.03(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
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payment of any sums paid under the Preferred Securities, under any Obligation,
under the Preferred Securities Guarantee or under this Agreement for any reason
whatsoever. Such agreement is continuing, irrevocable, unconditional and
absolute.
ARTICLE V
TRUSTEES
SECTION 5.01 NUMBER OF TRUSTEES.
The number of Trustees shall initially be five (5), 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:
(i) the number of Trustees may be increased or decreased,
except as provided in Sections 5.01(b)(ii) and 5.06(a)(ii)(B) with respect
to the Special Trustee, 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; and
(ii) the number of Trustees shall be increased automatically
by one (1) if an Appointment Event has occurred and is continuing and the
Holders of a Majority in liquidation amount of the Preferred Securities
appoint a Special Trustee in accordance with Section 5.06(a)(ii).
SECTION 5.02 DELAWARE TRUSTEE.
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall either be (1) a natural person who is at least 21 years of age
and a resident of the State of Delaware, or (ii) 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 Property Trustee has its
principal place of business in the State of Delaware and otherwise meets the
requirements of applicable law, then the Property Trustee shall also be the
Delaware Trustee and Section 3.11 shall have no application.
SECTION 5.03 PROPERTY TRUSTEE; ELIGIBILITY.
(a) There shall at all times be one Trustee which shall act as
Property Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
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(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 5.03(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 Property Trustee shall cease to be eligible
to so act under Section 5.03(a), the Property Trustee shall immediately resign
in the manner and with the effect set forth in Section 5.06(e).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Property Trustee and the Holder of the Common Securities (as if it 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.
(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.
SECTION 5.04 QUALIFICATIONS OF ADMINISTRATIVE TRUSTEES AND DELAWARE TRUSTEE
GENERALLY.
Each Administrative Trustee and the Delaware Trustee (unless the Property
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 act through one or more
Authorized Officers.
SECTION 5.05 INITIAL TRUSTEES.
The initial Administrative Trustees shall be:
Mark W. Duffey
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c/o Carriage Services, Inc.
1330 Post Oak Blvd.
Suite 1500
Houston, Texas 77056
Thomas C. Livengood
c/o Carriage Services, Inc.
1330 Post Oak Blvd.
Suite 1500
Houston, Texas 77056
Terry E. Sanford
c/o Carriage Services, Inc.
1330 Post Oak Blvd.
Suite 1500
Houston, Texas 77056
The initial Delaware Trustee shall be:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware
19890-0001
Attention: Corporate Trust Administration
The initial Property Trustee shall be:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware
19890-0001
Attention: Corporate Trust Administration
SECTION 5.06 APPOINTMENT, REMOVAL AND RESIGNATION OF TRUSTEES.
(a) Except as provided otherwise in this Section 5.06(b) and
5.06(d), 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; and
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(ii) after the issuance of any Securities:
(A) other than in respect to a Special Trustee, 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 by written consent, unless a Debenture Event of
Default shall have occurred and be continuing, in which event the
Property Trustee and the Delaware Trustee may only be removed by the
Holders of a Majority in liquidation amount of the Preferred
Securities, voting as a class at a meeting of the Holders of the
Preferred Securities or by written consent; and
(B) if an Appointment Event has occurred and is
continuing, one (1) additional trustee (the "Special Trustee"), who
shall have the same rights, powers and privileges as an
Administrative Trustee, may be appointed by vote of the Holders of a
Majority in liquidation amount of the Preferred Securities, voting
as a class at a meeting of the Holders of the Preferred Securities,
and such Special Trustee may only be removed (otherwise than by the
operation of Section 5.06(e)), by vote of the Holders of a Majority
in liquidation amount of the Preferred Securities voting as a class
at a meeting of the Holders of the Preferred Securities.
(b) The Trustee that acts as Property Trustee shall not be removed
in accordance with Section 5.06(a) until a successor Property Trustee meeting
the requirements of Section 5.03 (a "Successor Property Trustee") has been
appointed and has accepted such appointment by written instrument executed by
such Successor Property Trustee and delivered to the Administrative Trustees and
the Sponsor.
(c) The Holders of a Majority in liquidation amount of the Common
Securities shall remove the Property Trustee by written instrument upon:
(i) the entry or a decree or order by a court having
jurisdiction in the premises adjudging the Property Trustee as bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of
the Property Trustee under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law, or appointing a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) of
the Property Trustee 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 unstayed and in effect for a period of 60
consecutive days; or
(ii) the institution by the Property Trustee of proceedings to
be adjudicated a bankrupt or insolvent, or the consent by it to the
institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking reorganization or
relief under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law, or the consent by it to the filing of
any such petition or
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to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Property Trustee 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 and its
willingness to be adjudicated a bankrupt, or the taking of corporate
action by the Property Trustee in furtherance of any such action; or
The Sponsor shall appoint a Successor Property Trustee within 60 days of such an
event.
(d) The Trustee that acts as Delaware Trustee shall not be removed
in accordance with Section 5.06(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Sections 5.02 and 5.04 (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 Trustees and the Sponsor.
(e) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation,
provided that a Special Trustee shall only hold office while an Appointment
Event is continuing and shall cease to hold office immediately after the
Appointment Event pursuant to which the Special Trustee was appointed and all
other Appointment Events cease to be continuing. 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
Property Trustee shall be effective:
(A) until a Successor Property Trustee has been
appointed and has accepted such appointment by instrument executed
by such Successor Property Trustee and delivered to the Trust, the
Sponsor and the resigning Property Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of
the Securities;
(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; and
(iii) no such resignation of a Special Trustee shall be
effective until the 60th day following delivery of the instrument of
resignation of the Special Trustee to the Sponsor and the Trust or such
later date specified in such instrument during which period the
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Holders of the Preferred Securities shall have the right to appoint a
successor Special Trustee as provided in this Section 5.06.
(f) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Property Trustee or Successor Delaware
Trustee, as the case may be, if the Property Trustee or the Delaware Trustee
delivers an instrument of resignation in accordance with this Section 5.06.
(g) If no Successor Property Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
5.06 within 60 days after delivery to the Sponsor and the Trust of an instrument
of resignation or removal, at the cost of the Sponsor the resigning Property
Trustee or Delaware Trustee, resigning or being removed as applicable, may
petition any court of competent jurisdiction for appointment of a Successor
Property 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 Property Trustee or Successor Delaware Trustee, as the case may be.
(h) No Property Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Property Trustee or Successor Delaware
Trustee, as the case may be.
SECTION 5.07 VACANCIES AMONG TRUSTEES.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.01, or if the number of Trustees
is increased pursuant to Section 5.01, a vacancy shall occur. A resolution
certifying the existence of such vacancy by a majority of the Administrative
Trustees shall be conclusive evidence of the existence of such vacancy. The
vacancy shall be filled with a Trustee appointed in accordance with Section
5.06.
SECTION 5.08 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.
Whenever a vacancy in the number of Administrative Trustees shall occur,
until such vacancy is filled by the appointment of a Administrative Trustee in
accordance with Section 5.06, the Administrative Trustees in office, regardless
of their number, shall have all the powers granted to the Administrative
Trustees and shall discharge all the duties imposed upon the Administrative
Trustees by this Declaration.
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SECTION 5.09 MEETINGS.
Meetings of the Administrative Trustees shall be held from time to time
upon the call of any Administrative Trustee. Regular meetings of the
Administrative Trustees may be held at a time and place fixed by resolution of
the Administrative Trustees. Notice of any meetings of the Administrative
Trustees shall be hand delivered or otherwise delivered in writing (including by
facsimile or overnight courier) not less than 24 hours before such 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
Administrative Trustee at a meeting shall constitute a waiver of notice of such
meeting except where a Administrative 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 Administrative Trustees may be taken at a
meeting by vote of a majority of the Administrative Trustees present (whether in
person or by telephone) and eligible to vote with respect to such matter,
provided that a Quorum is present, or without a meeting and without prior notice
by the unanimous written consent of the Administrative Trustees.
In the event there is only one Administrative Trustee, any and all action
of such Administrative Trustee shall be evidenced by a written consent of such
Administrative Trustee. In the event a Special Trustee is holding office
pursuant to Section 5.06, such Special Trustee shall have the same rights as an
Administrative Trustee with respect to participation in a meeting of the
Administrative Trustees.
SECTION 5.10 DELEGATION OF POWER.
(a) Any Administrative 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
3.06, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) the Administrative 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 Administrative Trustees or otherwise as the
Administrative 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 Person into which the Property Trustee or the Delaware Trustee, as the
case may be, may be merged or converted or with which either may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Property Trustee or the Delaware Trustee, as the case
may be, shall be a party, or any Person succeeding to all or substantially all
the corporate trust
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business of the Property Trustee or the Delaware Trustee, as the case may be,
shall be the successor of the Property Trustee or the Delaware Trustee, as the
case may be, hereunder, provided such Person 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.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.01 DISTRIBUTIONS.
Holders shall receive Distributions (as defined herein) in accordance with
the applicable terms of the relevant Holder's 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 Compounded Interest
(as defined in the Indenture) and Additional Sums (as defined in the Indenture))
premium and principal on the Debentures held by the Property Trustee (the amount
of any such payment being a "Payment Amount"), the Property Trustee shall and is
directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.01 GENERAL PROVISIONS REGARDING SECURITIES.
(a) The Administrative Trustees shall on behalf of the Trust issue
one class of convertible preferred securities, designated as 7% Convertible
Preferred Securities, Term Income Deferrable Equity Securities (TIDES)(sm),
representing undivided beneficial interests in the assets of the Trust (the
"Preferred Securities"), having such terms as are set forth in Annex I and one
class of convertible common securities, liquidation amount $50, representing
undivided beneficial interests in the assets of the Trust (the "Common
Securities"), having such terms as are set forth in Annex I. The Trust shall
have no securities or other interests in the assets of the Trust other than the
Preferred Securities and the Common Securities. The Trust shall issue no
Securities in bearer form.
(b) 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.
(c) 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 10.01 with respect to the Common Securities.
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(d) 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 7.02 EXECUTION AND AUTHENTICATION.
(a) The Securities shall be signed on behalf of the Trust by one
Administrative Trustee. In case any Administrative Trustee of the Trust who
shall have signed any of the Securities shall cease to be such Administrative
Trustee before the Securities so signed shall be delivered by the Trust, such
Securities nevertheless may be delivered as though the person who signed such
Securities had not ceased to be such Administrative Trustee; and any Securities
may be signed on behalf of the Trust by such persons who, at the actual date of
execution of such Security, shall be the Administrative Trustees of the Trust,
although at the date of delivery of the Declaration any such person was not such
a Administrative Trustee.
(b) One Administrative Trustee shall sign the Preferred Securities
for the Trust by manual or facsimile signature. Unless otherwise determined by
the Trust, such signature shall, in the case of Common Securities, be a manual
signature.
A Preferred Security shall not be valid until authenticated by the manual
signature of an authorized signatory of the Property Trustee. The signature
shall be conclusive evidence that the Preferred Security has been authenticated
under this Declaration.
Upon a written order of the Trust signed by one Administrative Trustee,
the Property Trustee shall authenticate the Preferred Securities for original
issue by executing the Property Trustee's certificate of authentication
contained in the form of Preferred Securities attached hereto as Exhibit A-1.
The aggregate number of Preferred Securities outstanding at any time shall not
exceed the number set forth in the terms in Annex I hereto except as provided in
Section 7.06.
The Property Trustee may appoint an authenticating agent acceptable to the
Trust to authenticate Preferred Securities. An authenticating agent may
authenticate Preferred Securities whenever the Property Trustee may do so. Each
reference in this Declaration to authentication by the Property Trustee includes
authentication by such agent. An authenticating agent has the same rights as the
Property Trustee to deal with the Company or an Affiliate.
SECTION 7.03 FORM AND DATING.
The Preferred Securities and the Property Trustee's certificate of
authentication shall be substantially in the form of Exhibit A-1 and the Common
Securities shall be substantially in the form of Exhibit A-2, each of which is
hereby incorporated in and expressly made a part of this Declaration.
Certificates may be printed, lithographed or engraved or may be produced in any
other manner as is reasonably acceptable to the Administrative Trustees, as
evidenced by their execution thereof. The Securities may have letters, numbers,
notations or other marks of identification or
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designation and such legends or endorsements required by law, stock exchange
rule, agreements to which the Trust is subject, if any, or usage (provided that
any such notation, legend or endorsement is in a form acceptable to the Trust).
The Trust at the direction of the Sponsor shall furnish any such legend not
contained in Exhibit A-1 to the Property Trustee in writing. Each Preferred
Security shall be dated the date of its authentication. The terms and provisions
of the Securities set forth in Annex I and the forms of Securities set forth in
Exhibits A-1 and A-2 are part of the terms of this Declaration and to the extent
applicable, the Property Trustee and the Sponsor, by their execution and
delivery of this Declaration, expressly agree to such terms and provisions and
to be bound thereby.
The Preferred Securities are being offered and sold by the Trust pursuant
to a Purchase Agreement relating to the Preferred Securities, dated May 27,
1999, among the Trust, the Sponsor and the Purchaser named therein (the
"Purchase Agreement").
(a) GLOBAL SECURITIES. Preferred Securities offered and sold to
Qualified Institutional Buyers ("QIBs") in reliance on Rule 144A under the
Securities Act ("Rule 144A") as provided in the Purchase Agreement, shall be
issued in the form of one or more permanent global Securities in definitive,
fully registered form without distribution coupons with the appropriate global
legends and Restricted Securities Legend set forth in Exhibit A-1 hereto (each,
a "Rule 144A Global Preferred Security"), which shall be deposited on behalf of
the purchasers of the Preferred Securities represented thereby with the Property
Trustee, at its Wilmington, Delaware office, as custodian for the Depositary,
and registered in the name of the Depositary or a nominee of the Depositary,
duly executed by an Administrative Trustee on behalf of the Trust and
authenticated by the Property Trustee as provided herein. The number of
Preferred Securities represented by the Rule 144A Global Preferred Security may
from time to time be increased or decreased by adjustments made on the records
of the Property Trustee and the Depositary or its nominee as hereinafter
provided.
(b) BOOK-ENTRY PROVISIONS. This Section 7.03(b) shall apply only to
the Rule 144A Global Preferred Securities and such other Preferred Securities in
global form as may be authorized by the Trust to be deposited with or on behalf
of the Depositary.
An Administrative Trustee on behalf of the Trust shall execute and the
Property Trustee shall, in accordance with this Section 7.03, authenticate and
deliver initially one or more Rule 144A Global Preferred Securities that (a)
shall be registered in the name of Cede & Co. or other nominee of such
Depositary and (b) shall be delivered by the Trustee to such Depositary or
pursuant to such Depositary's written instructions or held by the Trustee as
custodian for the Depositary.
Members of, or participants in, the Depositary ("Participants") shall have
no rights under this Declaration with respect to any Rule 144A Global Preferred
Security held on their behalf by the Depositary or by the Property Trustee as
the custodian of the Depositary or under such Rule 144A Global Preferred
Security, and the Depositary may be treated by the Trust, the Property Trustee
and any agent of the Trust or the Property Trustee as the absolute owner of such
Rule 144A Global
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Preferred Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Trust, the Property Trustee or any agent of the
Trust or the Property Trustee from giving effect to any written certification,
proxy or other authorization furnished by the Depositary or impair, as between
the Depositary and its Participants, the operation of customary practices of
such Depositary governing the exercise of the rights of a holder of a beneficial
interest in any Rule 144A Global Preferred Security.
(c) CERTIFICATED SECURITIES. Except as provided in Section 7.03(d),
owners of beneficial interests in the Rule 144A Global Preferred Security will
not be entitled to receive physical delivery of certificated Preferred
Securities.
(d) A Global Preferred Security deposited with the Depositary or
with the Property Trustee as custodian for the Depositary pursuant to this
Section 7.03 shall be transferred to the beneficial owners thereof in the form
of certificated Preferred Securities only if such transfer complies with Section
9.02 and (i) the Depositary notifies the Company that it is unwilling or unable
to continue as Depositary for such Global Preferred Security or if at any time
such Depositary ceases to be a "clearing agency" registered under the Exchange
Act, at a time when the Depositary is required to be so registered to act as
such depositary, (ii) the Sponsor on behalf of the Trust in its sole discretion
determines that such Global Preferred Security shall be so exchangeable, or
(iii) an Event of Default has occurred and is continuing.
(e) Any Global Preferred Security that is transferable to the
beneficial owners thereof in the form of certificated Preferred Securities
pursuant to this Section 7.03 shall be surrendered by the Depositary to the
Property Trustee located in Wilmington, Delaware, to be so transferred, in whole
or from time to time in part, without charge, and the Property Trustee shall
authenticate and deliver, upon such transfer of each portion of such Global
Preferred Security, an equal aggregate liquidation amount of Preferred
Securities of authorized denominations in the form of certificated Preferred
Securities. Any portion of a Global Preferred Security transferred pursuant to
this Section shall be registered in such names as the Depositary shall direct.
Any Preferred Security in the form of certificated Preferred Securities
delivered in exchange for an interest in the Rule 144A Global Preferred Security
shall, except as otherwise provided by Section 9.01, bear the Restricted
Securities Legend set forth in Exhibit A hereto.
(f) Subject to the provisions of Section 7.03(e), the registered
holder of a Global Preferred Security may grant proxies and otherwise authorize
any person, including Participants and persons that may hold interests through
Participants, to take any action which a holder is entitled to take under this
Declaration or the Securities.
(g) In the event of the occurrence of any of the events specified in
Section 7.03(d), the Trust will promptly make available to the Property Trustee
a reasonable supply of certificated Securities in definitive, fully registered
form without distribution coupons.
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SECTION 7.04 REGISTRAR, PAYING AGENT AND CONVERSION AGENT.
The Trust shall maintain in Wilmington, Delaware (i) an office or agency
where Preferred Securities may be presented for registration of transfer or for
exchange ("Registrar"), (ii) an office or agency where Preferred Securities may
be presented for payment ("Paying Agent") and (iii) an office or agency where
Securities may be presented for conversion ("Conversion Agent"). The Registrar
shall keep a register of the Preferred Securities and of their transfer and
exchange. The Trust may appoint the Registrar, the Paying Agent and the
Conversion Agent and may appoint one or more co-registrars, one or more
additional paying agents and one or more additional conversion agents in such
other locations as it shall determine. The term "Paying Agent" includes any
additional paying agent and the term "Conversion Agent" includes any additional
conversion agent. The Trust may change any Paying Agent, Registrar, co-registrar
or Conversion Agent without prior notice to any Holder. The Trust shall notify
the Property 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, Paying Agent or Conversion Agent, the Property Trustee shall act as
such. The Trust or any of its Affiliates may act as Paying Agent, Registrar, or
Conversion Agent. The Trust shall act as Paying Agent, Registrar, co-registrar,
and Conversion Agent for the Common Securities.
The Trust initially appoints the Property Trustee as Registrar, Paying
Agent, and Conversion Agent for the Preferred Securities.
SECTION 7.05 PAYING AGENT TO HOLD MONEY IN TRUST.
The Trust shall require each Paying Agent other than the Property Trustee
to agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Property Trustee all money held by the Paying Agent for the
payment of principal or distribution on the Securities, and will notify the
Property Trustee if there are insufficient funds. While any such insufficiency
continues, the Property Trustee may require a Paying Agent to pay all money held
by it to the Property Trustee. The Trust at any time may require a Paying Agent
to pay all money held by it to the Property Trustee and to account for any money
disbursed by it. Upon payment over to the Property 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.
SECTION 7.06 REPLACEMENT SECURITIES.
If the Holder of a Security claims that the Security has been lost,
destroyed or wrongfully taken or if such Security is mutilated and is
surrendered to the Trust or in the case of the Preferred Securities to the
Property Trustee, an Administrative Trustee on behalf of the Trust shall issue
and, with respect to the Preferred Securities, the Property Trustee shall
authenticate a replacement Security if the Property Trustee's and the Trust's
requirements, as the case may be, are met. If required by the Property Trustee
or the Trust, an indemnity bond must be sufficient in the judgment
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of both to protect the Trustees, the Sponsor or any authenticating agent from
any loss which any of them may suffer if a Security is replaced. The Sponsor may
charge for its expenses in replacing a Security.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, or is about to be purchased by the
Sponsor pursuant to Article III hereof, the Sponsor in its discretion may,
instead of issuing a new Security, pay or purchase such Security, as the case
may be.
SECTION 7.07 OUTSTANDING PREFERRED SECURITIES.
The Preferred Securities outstanding at any time are all the Preferred
Securities authenticated by the Property Trustee except for those canceled by
it, those delivered to it for cancellation, and
those described in this Section as not outstanding.
If a Preferred Security is replaced, paid or purchased pursuant to Section
7.06 hereof, it ceases to be outstanding unless the Property Trustee receives
proof satisfactory to it that the replaced, paid or purchased Preferred Security
is held by a protected purchaser.
If Preferred Securities are considered paid in accordance with the terms
of this Declaration, they cease to be outstanding and Distributions on them
cease to accumulate.
A Preferred Security does not cease to be outstanding because one of the
Trustees, the Trust, the Sponsor or an Affiliate of the Sponsor or Trustees
holds the Security.
SECTION 7.08 PREFERRED SECURITIES IN TREASURY.
In determining whether the Holders of the required amount of Securities
have concurred in any direction, waiver or consent, Preferred Securities owned
by the Trust, the Sponsor or an Affiliate of the Sponsor, as the case may be,
shall be disregarded and deemed not to be outstanding, except that for the
purposes of determining whether the Property Trustee shall be fully protected in
relying on any such direction, waiver or consent, only Securities which the
Property Trustee actually knows are so owned shall be so disregarded.
SECTION 7.09 TEMPORARY SECURITIES.
Until definitive Securities are ready for delivery, an Administrative
Trustee may prepare and, in the case of the Preferred Securities, the Property
Trustee shall authenticate temporary Securities. Temporary Securities shall be
substantially in the form of definitive Securities but may have variations that
an Administrative Trustee considers appropriate for temporary Securities.
Without unreasonable delay, an Administrative Trustee shall prepare and deliver
to the Property Trustee Preferred Securities in certificated form (other than in
the case of Preferred Securities in global form) and thereupon any or all
temporary Preferred Securities (other than any such Preferred Securities in
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global form) may be surrendered in exchange therefor, at the office of the
Registrar, and the Property Trustee shall authenticate and deliver an equal
aggregate liquidation amount of definitive Preferred Securities in certificated
form in exchange for temporary Preferred Securities (other than any such
Preferred Securities in global form).
SECTION 7.10 CANCELLATION.
The Trust at any time may deliver Preferred Securities to the Property
Trustee for cancellation. The Registrar, Paying Agent and Conversion Agent shall
forward to the Property Trustee any Preferred Securities surrendered to them for
registration of transfer, redemption, conversion, exchange or payment. The
Property Trustee shall promptly cancel all Preferred Securities, surrendered for
registration of transfer, redemption, conversion, exchange, payment, replacement
or cancellation and shall return such canceled Preferred Securities to the
Administrative Trustees. The Trust may not issue new Preferred Securities to
replace Preferred Securities that it has paid or that have been delivered to the
Property Trustee for cancellation or that any holder has converted.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.01 TERMINATION OF TRUST.
(a) The Trust shall dissolve upon the earliest to occur of the
following:
(i) the bankruptcy of the Holder of the Common Securities
or the Sponsor;
(ii) the filing of a certificate of dissolution or its
equivalent with respect to the Holder of the Common Securities or the
Sponsor; the revocation of the charter of the Holder of the Common
Securities or the Sponsor and the expiration of 90 days after the date of
revocation without a reinstatement thereof;
(iii) the distribution of a Like Amount of Debentures to
Holders of the Securities in accordance with the terms of the Securities;
(iv) 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) the entry of a decree of judicial dissolution of the
Holder of the Common Securities, the Sponsor or the Trust;
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(vi) upon the distribution of the Common Stock (as defined in
the Indenture) of the Sponsor to Holders of all outstanding Securities
upon conversion of all such Securities; or
(vii) before the issuance of any Securities, with the consent
of all the Administrative Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.01(a) and after satisfaction of liabilities of
creditors of the Trust as provided by applicable law, the Trustees shall file a
certificate of cancellation with the Secretary of State of the State of
Delaware.
(c) The provisions of Sections 3.09, 4.03, 10.01(b), 10.04, the last
sentence of Section 3.06 and Article X shall survive the termination of the
Trust.
ARTICLE IX
TRANSFER AND EXCHANGE
SECTION 9.01 GENERAL.
(a) Where Preferred Securities are presented to the Registrar or a
co-registrar with a request to register a transfer or to exchange them for an
equal number of Preferred Securities represented by different certificates, the
Registrar shall register the transfer or make the exchange if its requirements
for such transactions are met. To permit registrations of transfers and
exchanges, the Administrative Trustee in accordance with this Declaration shall
execute and deliver and the Property Trustee shall authenticate Preferred
Securities at the Registrar's request.
(b) 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. To the fullest extent permitted by law, any
transfer or purported transfer of any Security not made in accordance with this
Declaration shall be null and void.
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 or
as otherwise permitted by Article VIII of the Indenture; provided that, any such
transfer is subject to the condition precedent that the transferor obtain the
written opinion of nationally recognized independent counsel experienced in such
matters that such transfer would not cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States
federal income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the
transferee would become an Investment Company.
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(c) The Administrative Trustees shall provide for the registration
of Securities and of transfers of Securities, which will be effected without
charge but only upon payment (with such indemnity as the Administrative Trustees
or Property Trustee may require) in respect of any tax or other governmental
charges that may be imposed in relation to it. Upon surrender for registration
of transfer of any Securities, the Administrative Trustees shall cause one or
more new Securities to be issued in the name of the designated transferee or
transferees. Every Security surrendered for registration of transfer shall be
accompanied by a written instrument of transfer in form satisfactory to the
Administrative Trustees duly executed by the Holder or such Holder's attorney
duly authorized in writing. Each Security surrendered for registration of
transfer shall be cancelled in accordance with Section 7.10. A transferee of a
Security shall be entitled to the rights and subject to the obligations of a
Holder hereunder upon the receipt by such transferee of a Security. By
acceptance of a Security, each transferee shall be deemed to have agreed to be
bound by this Declaration.
(d) The Trust shall not be required (i) to issue, register the
transfer of, or exchange, Preferred Securities during a period beginning at the
opening of business 15 days before the day of any selection of Preferred
Securities for redemption set forth in the terms of the Securities as set forth
in Annex I hereto and ending at the close of business on the day of selection,
or (ii) to register the transfer or exchange of any Preferred Security so
selected for redemption in whole or in part, except the unredeemed portion of
any Preferred Security being redeemed in part.
(e) All Preferred Securities issued upon any transfer or exchange
pursuant to the terms of this Declaration shall evidence the same security and
shall be entitled to the same benefits under this Declaration as the Preferred
Securities surrendered upon such transfer or exchange.
SECTION 9.02 TRANSFER PROCEDURES AND RESTRICTIONS.
(a) GENERAL. Subject to Sections 9.02(b) and 9.02(j)(iii), if
Preferred Securities are issued upon the transfer, exchange or replacement of
Preferred Securities bearing the Restricted Securities Legend set forth in
Exhibit A-1 hereto, or if a request is made to remove such Restricted Securities
Legend on Preferred Securities, the Preferred Securities so issued shall bear
the Restricted Securities Legend, or the Restricted Securities Legend shall not
be removed, as the case may be, unless there is delivered to the Trust and the
Property Trustee such satisfactory evidence, which may include an opinion of
counsel licensed to practice law in the State of New York, as may be reasonably
required by the Company, that (i) neither the legend nor the restrictions on
transfer set forth therein are required to ensure that transfers thereof comply
with the provisions of Rule 144A or Rule 144 under the Securities Act or (ii)
that such Securities are not "restricted" within the meaning of Rule 144 under
the Securities Act. Upon provision of such satisfactory evidence, the Property
Trustee, at the written direction of an Administrative Trustee on behalf of the
Trust, shall authenticate and deliver Preferred Securities that do not bear the
Restricted Securities Legend.
(b) TRANSFERS AFTER EFFECTIVENESS OF SHELF REGISTRATION STATEMENT.
After the effectiveness of a Shelf Registration Statement for any Preferred
Securities, all requirements pertaining to Restricted Securities Legends on any
Preferred Security included within such Shelf
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Registration Statement will cease to apply, and beneficial interests in a
Preferred Security in global form without Restricted Securities Legends will be
available to transferees of such Preferred Securities, upon directions to
transfer such Holder's beneficial interest in the Rule 144A Global Preferred
Security. After the effectiveness of the Shelf Registration Statement, the
Administrative Trustees shall execute and deliver and the Property Trustee shall
authenticate a Preferred Security in global form without the Restricted
Securities Legend (the "Unrestricted Global Preferred Security") to deposit with
the Depositary to evidence transfers of beneficial interests from the Rule 144A
Global Preferred Security.
(c) [Reserved]
(d) TRANSFER AND EXCHANGE OF DEFINITIVE PREFERRED SECURITIES.
When Definitive Preferred Securities are presented to the Registrar or
co-Registrar
(x) to register the transfer of such Definitive Preferred
Securities; or
(y) to exchange such Definitive Preferred Securities for an
equal number of Definitive Preferred Securities of another
denomination.
the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Preferred Securities surrendered for
transfer or exchange:
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to an
Administrative Trustee on behalf of the Trust and the Registrar or
co-registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing; and
(ii) in the case of Definitive Preferred Securities that are
Restricted Preferred Securities, and are being transferred or exchanged
(x) pursuant to an effective registration statement under the Securities
Act or (y) pursuant to, and in compliance with, clause (A) or (B) below:
(A) if such Restricted Preferred Securities are being
delivered to the Registrar by a Holder for registration in the name
of such Holder, without transfer, such Holder shall deliver a
certification to that effect (in the form set forth on the reverse
of the Preferred Security); or
(B) if such Restricted Preferred Securities are being
transferred pursuant to an exemption from registration in accordance
with Rule 144A or Rule 144 under the Securities Act such Holder
shall deliver: (i) a certification to that effect (in the form set
forth on the reverse of the Preferred Security) and (ii) if the
Trust or
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Registrar so requests, evidence reasonably satisfactory to them as
to the compliance with the restrictions set forth in the Restricted
Securities Legend.
Definitive Preferred Securities that are transferred to QIBs in accordance
with Rule 144A under the Securities Act must take delivery of their interests in
the Preferred Securities in the form of a beneficial interest in the Rule 144A
Global Preferred Security in accordance with Section 9.02(e).
(e) RESTRICTIONS ON TRANSFER OF A DEFINITIVE PREFERRED SECURITY FOR
A BENEFICIAL INTEREST IN A GLOBAL PREFERRED SECURITY. A Definitive Preferred
Security may not be exchanged for a beneficial interest in a Global Preferred
Security except upon satisfaction of the requirements set forth below. Upon
receipt by the Property Trustee of a Definitive Preferred Security, duly
endorsed or accompanied by appropriate instruments of transfer, in form
satisfactory to the Property Trustee, together with written instructions
directing the Property Trustee to make, or to direct the Depositary to make, an
adjustment on its books and records with respect to such Global Preferred
Security to reflect an increase in the number of the Preferred Securities
represented by the Global Preferred Security, then the Property Trustee shall
cancel such Definitive Preferred Security and cause, or direct the Depositary to
cause, the aggregate number of Preferred Securities represented by the Global
Preferred Security to be increased accordingly. If no Global Preferred
Securities are then outstanding, the Administrative Trustee shall execute and
deliver and the Property Trustee shall authenticate, upon written order of any
Administrative Trustee, an appropriate number of Preferred Securities in global
form.
(f) TRANSFER AND EXCHANGE OF GLOBAL PREFERRED SECURITIES. The
transfer and exchange of Global Preferred Securities or beneficial interests
therein shall be effected through the Depositary, in accordance with this
Declaration (including applicable restrictions on transfer set forth herein, if
any) and the procedures of the Depositary therefor.
(g) TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL PREFERRED
SECURITY FOR A DEFINITIVE PREFERRED SECURITY.
(i) The transfer of a beneficial interest in a Rule 144A
Global Preferred Security in exchange for a Definitive Preferred Security
will require the delivery by the transferee of a transfer certificate in
the form set forth in Exhibit
A-1.
(ii) Definitive Preferred Securities issued in exchange for a
beneficial interest in a Global Preferred Security pursuant to this
Section 9.02(g) shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from its
Participants or indirect participants or otherwise, shall instruct the
Property Trustee. The Property Trustee shall deliver such Preferred
Securities to the Persons in whose names such Preferred Securities are so
registered in accordance with the instructions of the Depositary.
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(h) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL PREFERRED
SECURITIES. Notwithstanding any other provisions of this Declaration (other than
the provisions set forth in Section 7.03), a Global Preferred Security may not
be transferred as a whole except by the Depositary to a nominee of the
Depositary or another nominee of the Depositary or by the Depositary or any such
nominee to a successor Depositary or a nominee of such successor Depositary.
(i) [Reserved].
(j) LEGEND.
(i) Except as permitted by the following paragraph (iii), each
Preferred Security certificate evidencing the Global Preferred Securities
and the Definitive Preferred Securities (and all Preferred Securities
issued in exchange therefor or substitution thereof) shall bear a legend
in substantially the following form:
"THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THIS SECURITY AND
ANY CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES ISSUED UPON EXCHANGE
FOR THIS SECURITY AND ANY COMMON STOCK ISSUABLE UPON CONVERSION
THEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER
OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS
OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE ISSUER AND
THE COMPANY THAT (A) THIS SECURITY AND ANY CONVERTIBLE JUNIOR
SUBORDINATED DEBENTURES ISSUABLE UPON EXCHANGE THEREFORE AND COMMON
STOCK ISSUABLE UPON CONVERSION THEREOF MAY BE OFFERED, RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED, ONLY (i) INSIDE THE UNITED STATES
TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (ii)
PURSUANT TO AN
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EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE) OR (iii) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES
(i) THROUGH (iii) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE
RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE."
(ii) Upon any sale or transfer of a Restricted Preferred
Security (including any Restricted Preferred Security represented by a
Global Preferred Security) pursuant to Rule 144 under the Securities Act
or an effective registration statement under the Securities Act the
Registrar shall permit the holder thereof to exchange such Restricted
Preferred Security for an interest in the Unrestricted Global Security.
(k) CANCELLATION OR ADJUSTMENT OF GLOBAL PREFERRED SECURITY. At such
time as all beneficial interests in a Global Preferred Security have either been
exchanged for Definitive Preferred Securities to the extent permitted by the
Declaration or redeemed, repurchased or cancelled in accordance with the terms
of this Declaration, such Global Preferred Security shall be returned to the
Depositary for cancellation or retained and cancelled by the Property Trustee.
At any time prior to such cancellation, if any beneficial interest in a Global
Preferred Security is exchanged for Definitive Preferred Securities, Preferred
Securities represented by such Global Preferred Security shall be reduced and an
adjustment shall be made on the books and records of the Property Trustee (if it
is then the Securities Custodian for such Global Preferred Security) with
respect to such Global Preferred Security, by the Property Trustee or the
Securities Custodian, to reflect such reduction.
(l) [Reserved]
(m) NO OBLIGATION OF THE PROPERTY TRUSTEE.
(i) The Property Trustee shall have no responsibility or
obligation to any beneficial owner of a Global Preferred Security, a
Participant in the Depositary or other Person with respect to the accuracy
of the records of the Depositary or its nominee or of any Participant
thereof, with respect to any ownership interest in the Preferred
Securities or with respect to the delivery to any Participant, beneficial
owner or other Person (other than the Depositary) of any notice (including
any notice of redemption) or the payment of any amount, under or with
respect to such Preferred Securities. All notices and communications to be
given to the Holders and all payments to be made to Holders under the
Preferred Securities shall be given or made only to or upon the order of
the registered Holders (which shall be the Depositary or its nominee in
the case of a Global Preferred Security). The rights
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of beneficial owners in any Global Preferred Security shall be exercised
only through the Depositary subject to the applicable rules and procedures
of the Depositary. The Property Trustee may conclusively rely and shall be
fully protected in relying upon information furnished by the Depositary or
agent thereof with respect to its Participants and any beneficial owners.
(ii) The Property Trustee and Registrar shall have no
obligation or duty to monitor, determine or inquire as to compliance with
any restrictions on transfer imposed under this Declaration or under
applicable law with respect to any transfer of any interest in any
Preferred Security (including any transfers between or among Depositary
Participants or beneficial owners in any Global Preferred Security) other
than to require delivery of such certificates and other documentation or
evidence as are expressly required by, and to do so if and when expressly
required by, the terms of this Declaration, and to examine the same to
determine substantial compliance as to form with the express requirements
hereof.
SECTION 9.03 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, the Trustees,
the Registrar or a co-registrar shall have actual or other notice thereof.
SECTION 9.04 [RESERVED].
SECTION 9.05 NOTICES TO CLEARING AGENCY.
Whenever a notice or other communication to the Preferred Security Holders
is required under this Declaration, the Trustees shall, in the case of any
Global Preferred Security, give all such notices and communications specified
herein to be given to the Preferred Security Holders to the Depositary, and
shall have no notice obligations to the Preferred Security Beneficial Owners.
SECTION 9.06 APPOINTMENT OF SUCCESSOR CLEARING AGENCY.
If the Depository elects to discontinue its services as securities
depositary with respect to the Preferred Securities, the Administrative Trustees
may, in their sole discretion, appoint a successor Clearing Agency with respect
to such Preferred Securities.
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ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR
OTHERS
SECTION 10.01 LIABILITY.
(a) Except as expressly set forth in this Declaration, the
Securities Guarantees 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; or
(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 Trust's assets.
(c) Pursuant to Section 3803(a) of the Business 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 10.02 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 Person's gross negligence (or, in
the case of the Property Trustee, 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 Person's
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
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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.
SECTION 10.03 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 Property 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
an Indemnified Person and any Covered 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.
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SECTION 10.04 INDEMNIFICATION.
(a) To the fullest extent permitted by applicable law, the Debenture
Issuer shall indemnify and hold harmless each Indemnified Person from and
against any loss, damage, liability, tax, penalty, expense or claim of any kind
or nature whatsoever incurred by such Indemnified Person by reason of the
creation, operation or termination of the Trust or 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 authority conferred on such Indemnified Person by this Declaration, 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 gross
negligence (or, in the case of the Property Trustee, negligence) or willful
misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees and expenses) incurred by an Indemnified Person in
defending any claim, demand, action, suit or proceeding shall, from time to
time, be advanced by the Debenture Issuer prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by the Debenture Issuer
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 10.4(a). The indemnification shall survive
the termination of this Declaration.
SECTION 10.05 OUTSIDE BUSINESSES.
Any Covered Person, the Sponsor, the Delaware Trustee and the Property
Trustee (subject to Section 5.03(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. None of the Sponsor, any
Covered Person, the Delaware Trustee, or the Property 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 Property 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 Property Trustee may engage or be interested in any financial or
other transaction with the Sponsor or any Affiliate of the Sponsor, or may act
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.
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ARTICLE XI
ACCOUNTING
SECTION 11.01 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 11.02 CERTAIN ACCOUNTING MATTERS.
(a) At all times during the existence of the Trust, the
Administrative 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, consistently applied. The Trust shall use the accrual method of
accounting for United States federal income tax purposes. The books of account
and the records of the Trust shall be examined by and reported upon as of the
end of each Fiscal Year by a firm of independent certified public accountants
selected by the Administrative Trustees.
(b) The Administrative 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 Administrative 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 Administrative Trustees shall
endeavor to deliver all such statements within 30 days after the end of each
Fiscal Year of the Trust.
(d) The Administrative 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 Administrative Trustees on behalf of the Trust with any state or
local taxing authority.
SECTION 11.03 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 Property Trustee shall be made directly to
the Property Trustee Account and no other funds of the
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Trust shall be deposited in the Property Trustee Account. The sole signatories
for such accounts shall be designated by the Administrative Trustees; provided,
however, that the Property Trustee shall designate the signatories for the
Property Trustee Account.
SECTION 11.04 WITHHOLDING.
The Administrative Trustees on behalf of the Trust shall comply with all
withholding requirements under United States federal, state and local law. The
Administrative Trustees on behalf of 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 Administrative
Trustees on behalf of the Trust to assist it in determining the extent of, and
in fulfilling, its withholding obligations. The Administrative 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 overwithholding, 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 (at the
written direction of one of the Administrative Trustees of the Trust) may reduce
subsequent Distributions by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.01 AMENDMENTS.
(a) This Declaration may be amended from time to time by the
Sponsor, the Property Trustee and the Administrative Trustees, without the
consent of the Holders of the Securities, (i) to cure any ambiguity, correct or
supplement any provision in the Declaration that may be inconsistent with any
other provision, or to make any other provisions with respect to ministerial
matters or questions arising under the Declaration, which shall not be
inconsistent with the other provisions of the Declaration, or (ii) to modify,
eliminate or add to any provisions of the Declaration to such extent as shall be
necessary to ensure that the Trust will not be taxable as a corporation or will
be classified for United States federal income tax purposes as a grantor trust
at all times that any Securities are outstanding 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 the case of clause (i), such action
shall not adversely affect in any material respect the interests of any Holder
of Securities, and any such amendments of the Declaration shall become effective
when notice thereof is given to the Holders of the Securities.
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(b) Except as provided in (c) below, this Declaration may be amended
by the Trustees and the Sponsor with (i) the consent of Holders representing not
less than a Majority in liquidation amount of the outstanding Preferred
Securities, and (ii) receipt by the Trustees of an opinion of counsel to the
effect that such amendment or the exercise of any power granted to the Trustees
in accordance with such amendment will not affect the Trust's status as a
grantor trust for United States federal income tax purposes or the Trust's
exemption from status as an "investment company" under the Investment Company
Act.
(c) Without the consent of each holder of Securities, the
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 of a specified
date or (ii) restrict the right of a Holder of Securities to institute suit for
the enforcement of any such payment on or after such date.
SECTION 12.02 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 Administrative 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 Administrative Trustees shall
call a meeting of the Holders of such class if directed to do so by the Holders
of at least 25% in liquidation amount of such class of Securities. Such
direction shall be given by delivering to the Administrative Trustees one or
more requests 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 Certificates held by the Holders of Securities exercising
the right to call a meeting and only those Securities represented by the
Certificates so 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 and
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 and without prior notice if a
consent in writing setting forth the action so taken is signed by the
Holders of Securities owning not less than the minimum aggregate
liquidation amount of Securities that would be necessary to authorize or
take such action at a meeting at which all Holders of Securities
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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 have not consented in writing. The
Administrative Trustees may specify that any written ballot submitted to
the Holders for the purpose of taking any action without a meeting shall
be returned to the Trust within the time specified by the Administrative
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 Administrative Trustees or by such other Person that the
Administrative Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the
terms of the Securities, the Trust Indenture Act or the listing rules of
any stock exchange on which the Preferred Securities are then listed or
trading, provide otherwise, the Administrative 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 PROPERTY TRUSTEE AND DELAWARE TRUSTEE
SECTION 13.01 REPRESENTATIONS AND WARRANTIES OF PROPERTY TRUSTEE.
The Trustee that acts as initial Property Trustee represents and warrants
to the Trust and to the Sponsor at the date of this Declaration, at the Closing
Date and at each Optional Closing Date, if any, and each Successor Property
Trustee represents and warrants to the Trust and the Sponsor at the time of the
Successor Property Trustee's acceptance of its appointment as Property Trustee
that:
(a) The Property Trustee is a banking corporation with trust powers,
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization,
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with corporate 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 Property Trustee
of the Declaration has been duly authorized by all necessary corporate action on
the part of the Property Trustee. The Declaration has been duly executed and
delivered by the Property Trustee, and constitutes a legal, valid and binding
obligation of the Property 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) The execution, delivery and performance of the Declaration by
the Property Trustee does not conflict with or constitute a breach of the
certificate of incorporation or by-laws of
the Property Trustee.
(d) No consent, approval or authorization of, or registration with
or notice to, any Delaware or Federal banking authority is required for the
execution, delivery or performance by the Property Trustee, of the Declaration.
(e) The Property Trustee, pursuant to this Declaration, shall hold
legal title to, and an ownership interest on behalf of the Holders of the
Securities, in the Debentures and agrees that, except as expressly provided or
contemplated by this Declaration, it will not create, incur or assume, or suffer
to exist any mortgage, pledge, hypothecation, encumbrance, lien or other charge
or security interest upon the Debentures.
SECTION 13.02 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, at the Closing
Date and at each Optional Closing Date, if any, and each Successor Delaware
Trustee represents and warrants to the Trust and the Sponsor at the time of the
Successor Property Trustee's acceptance of its appointment as Delaware Trustee
that:
(a) The Delaware Trustee is a banking corporation with trust powers,
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, with corporate 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 Delaware Trustee
of the Declaration has been duly authorized by all necessary corporate action on
the part of the Delaware Trustee. The Declaration has been duly executed and
delivered by the Delaware Trustee, and constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in
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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 Delaware Trustee does not conflict with or constitute a breach of the
certificate of incorporation or by-laws of
the Delaware Trustee.
(d) No consent, approval or authorization of, or registration with
or notice to, any Delaware or Federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee, of the Declaration.
(e) The Delaware Trustee is an entity which has its principal place
of business in the State of Delaware.
ARTICLE XIV
REGISTRATION RIGHTS
SECTION 14.01 REGISTRATION RIGHTS.
The Holders of the Preferred Securities, the Debentures, the Preferred
Securities Guarantee and the shares of Common Stock of the Sponsor issuable upon
conversion of the Securities are entitled to the benefits of a Registration
Rights Agreement as set forth in the Purchase Agreement and the Indenture.
ARTICLE XV
MISCELLANEOUS
SECTION 15.01 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 Administrative Trustees at
the Trust's mailing address set forth below (or such other address as the Trust
may give notice of to the Holders of the Securities):
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c/o Carriage Services, Inc.
1300 Post Oak Blvd.
Suite 1500
Houston, Texas 77056-3012
Attention: Chief Financial Officer
(b) if given to the Property Trustee, at the mailing address set
forth below (or such other address as the Property Trustee may give notice of to
the Holders of the Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware
19890-0001
Attention: Corporate Trust Administration
(c) if given to the Delaware Trustee, at the mailing address set
forth below (or such other address as the Delaware Trustee may give notice of to
the Holders of the Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware
19890-0001
Attention: Corporate Trust Administration
(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 to the Trust):
c/o Carriage Services, Inc.
1300 Post Oak Blvd.
Suite 1500
Houston, Texas 77056-3012
Attention: Chief Financial Officer
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust or the Registrar, as applicable.
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
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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 15.02 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. Sections 3540 and 3561 of Title 12 of the Delaware Code
shall not apply to the Trust.
SECTION 15.03 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 15.04 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 15.05 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 15.06 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 15.07 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 Trustees 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.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
/S/ MARK W. DUFFEY
as Administrative Trustee
/S/ THOMAS C. LIVENGOOD
as Administrative Trustee
/S/ TERRY E. SANFORD
as Administrative Trustee
WILMINGTON TRUST COMPANY, as
Delaware Trustee
By:/S/ JAMES P. LAWLER
Name: James P. Lawler
Title: Vice President
WILMINGTON TRUST COMPANY, as
Property Trustee
By:/S/ JAMES P. LAWLER
Name: James P. Lawler
Title: Vice President
CARRIAGE SERVICES, INC., as Sponsor
and Debenture Issuer
By:/S/ THOMAS C. LIVENGOOD
Name: Thomas C. Livengood
Title: Executive Vice President
and Chief Financial Officer
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ANNEX I
TERMS OF 7% CONVERTIBLE PREFERRED SECURITIES
TERM INCOME DEFERABLE EQUITY SECURITIES (TIDESSM)
7% CONVERTIBLE COMMON SECURITIES
Pursuant to Section 7.01 of the Amended and Restated Declaration of Trust,
dated as of June 3, 1999 (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 the Indenture (as defined in the Declaration) or, if
not defined in the Declaration or Indenture, as defined in the Offering Circular
(as defined in the Declaration):
1. DESIGNATION AND NUMBER.
(a) "PREFERRED SECURITIES." 1,875,000 Preferred Securities of the Trust
with an aggregate liquidation preference with respect to the assets of the Trust
of Ninety Three Million Seven Hundred Fifty Thousand Dollars ($93,750,000), and
a liquidation amount with respect to the assets of the Trust of $50 per
Preferred Security, are hereby designated for the purposes of identification
only as "7% Convertible Preferred Securities, Term Income Deferrable Equity
Securities (TIDES)" (the "Preferred Securities"). The Preferred Security
Certificates evidencing the Preferred Securities shall be substantially in the
form attached hereto as Exhibit A-1, 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 or other organization on which the
Preferred Securities are listed.
(b) "COMMON SECURITIES." 57,990 Common Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust of Two
Million Eight Hundred Ninety Nine Thousand Five Hundred Dollars ($2,899,500) and
a liquidation amount with respect to the assets of the Trust of $50 per Common
Security, are hereby designated for the purposes of identification only as "7%
Convertible Common Securities" (the "Common Securities"). The Common Security
Certificates evidencing the Common Securities shall be substantially in the form
attached hereto as Exhibit A-2, 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 7% (the "Coupon Rate") of the stated liquidation amount of $50 per
Security, such rate being the rate of interest payable on the Debentures to be
held by the Property Trustee. Distributions in arrears for more than one quarter
will bear interest thereon compounded quarterly at the Coupon Rate (to the
extent permitted by applicable law), subject to adjustment in the event of a
Registration Default, as described in the Declaration. The term "Distributions"
as used herein includes such quarterly distributions, additional distributions
on quarterly distributions not paid on the applicable
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Distribution Date, Special Distributions and Additional Sums, as applicable. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Property Trustee and to the extent the Property
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 of twelve 30-day months, and for any period shorter than
a full quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days elapsed
per 30-day month.
(b) Distributions on the Securities will be cumulative, will accrue from
the date of their original issuance and will be payable quarterly in arrears, on
the following dates, which dates correspond to the interest payment dates on the
Debentures: March 1, June 1, September 1 and December 1 of each year, commencing
on September 1, 1999, except as otherwise described below. The Sponsor 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 consecutive quarters (each a "Deferral 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 Deferral Period. Prior to three Business Days before a
Regular Record Date fixed for a Payment Resumption Date (as defined in the
Indenture), the Sponsor may further extend such Deferral Period; provided that
such Deferral Period together with all such previous and further extensions
thereof may not exceed 20 consecutive quarters 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 Regular Record Date for the relevant Payment
Resumption Date. Upon the termination of any Deferral Period and the payment of
all amounts then due, the Sponsor may commence a new Deferral Period, subject to
the above requirements.
(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. The relevant record dates shall be on the 15th of the
month next preceding the relevant payment dates, except as otherwise described
in this Annex I to the Declaration. Subject to any applicable laws and
regulations and the provisions of the Declaration, each such payment in respect
of Preferred Securities being held in book-entry form through The Depository
Trust Company (the "Depositary") will be made as described under the heading
"Description of TIDES -- Form, Book-Entry Procedures and Transfer" in the
Offering Circular. The relevant record dates for the Common Securities shall be
the same record dates as for the Preferred Securities. Distributions payable on
any Securities that are not punctually paid on any Distribution payment date, as
a result of the Sponsor having failed to make a payment under the Debentures,
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
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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, with
respect to any Redemption Date, if such Business Day is in the next succeeding
calendar year, such Redemption Date shall be the immediately preceding Business
Day, in each case with the same force and effect as if made on such date.
(d) In the event of an election by the Holder to convert its Securities
through the Conversion Agent into Common Stock pursuant to the terms of the
Securities as forth in this Annex I to the Declaration, no payment, allowance or
adjustment shall be made with respect to accumulated and unpaid Distributions on
such Securities, or be required to be made; provided that Holders of Securities
at the close of business on any record date for the payment of Distributions
will be entitled to receive the Distributions payable on such Securities on the
corresponding payment date notwithstanding the conversion of such Securities
into Common Stock following such record date.
(e) 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 dissolution of the Trust, the
Trust shall be liquidated by the Trustees as expeditiously as the Trustees
determine to be possible by distributing, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, to the Holders of the
Securities a Like Amount of Debentures, unless such distribution would not be
practical as determined by the Administrative Trustees, in which event such
Holders will be entitled to receive out of the assets of the Trust available for
distribution to holders, after satisfaction of liabilities to creditors of the
Trust as provided by applicable law, an amount equal to, in the case of Holders
of Preferred Securities, the aggregate liquidation amount thereof plus accrued
and unpaid Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"). If such 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 Preferred Securities shall be paid on a Pro Rata (as defined below)
basis in accordance with paragraph 9. The Holder of the Common Securities will
be entitled to receive distributions upon any such liquidation Pro Rata with the
Holders of the Preferred Securities, except as provided in paragraph 10.
4. REDEMPTION AND DISTRIBUTION.
(a) Upon the repayment or payment of the Debentures in whole or in part,
whether at maturity or upon redemption or otherwise (other than following any
distribution of the Debentures to the Holders), the proceeds from such repayment
or redemption shall be simultaneously applied to redeem, on a Pro Rata basis, a
Like Amount of Securities, on the redemption date, in an amount per Security
equal to the applicable redemption price, which redemption price will be equal
to (i) the
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liquidation amount of each of the Securities plus any accrued and unpaid
Distributions thereon (A) in the case of the repayment of the Debentures at
stated maturity, or (B) in the case of a redemption of the Debentures in certain
limited circumstances set forth in the Indenture upon the occurrence of a Tax
Event or (ii) in the case of an Optional Redemption on or after June 5, 2002,
the Optional Redemption Price (as defined in the Indenture), payable in cash (as
applicable, the "Redemption Price"). Holders will be given not less than 30 (or,
in the case of a redemption pursuant to subparagraph (d) below, 20) nor more
than 60 days' notice of such redemption. Upon the repayment of the Debentures at
maturity or upon any acceleration, earlier redemption or otherwise, the proceeds
from such repayment will be applied to redeem the Securities, in whole, upon not
less than 30 nor more than 60 days' notice.
(b) If fewer than all the outstanding Securities are to be so redeemed,
the Common Securities and the Preferred Securities will be redeemed Pro Rata and
the Preferred Securities to be redeemed will be as described in Paragraph
4(f)(ii) below.
(c) The Sponsor, as the Holder of the outstanding Common Securities, shall
have the right at any time (including, without limitation, upon the occurrence
of a Tax Event or Investment Company Act Event) to dissolve the Trust and, after
satisfaction of the creditors of the Trust, cause a Like Amount of the
Debentures to be distributed to the Holders of the Securities upon liquidation
of the Trust, provided that the Administrative Trustees shall have received a No
Recognition Opinion (as defined below) prior to the dissolution of the Trust;
and provided further that, following such distribution of the Debentures, the
Sponsor shall use its best efforts to maintain a rating of such Debentures by
any nationally recognized rating agency for so long as any such Debentures are
outstanding.
(d) If, at any time, a Tax Event shall occur and be continuing the Sponsor
shall cause the Administrative Trustees to dissolve the Trust and, after
satisfaction of creditors of the Trust, cause Debentures to be distributed to
the Holders of the Securities in liquidation of the Trust within 90 days
following the occurrence of such Tax Event (the "90 Day Period"); provided,
however, that such dissolution and distribution shall be conditioned on (i) the
Trustees' receipt of an opinion of a nationally recognized independent tax
counsel (reasonably acceptable to the Trustees) experienced in such matters (a
"No Recognition Opinion"), which opinion may rely on published revenue rulings
of the Internal Revenue Service, to the effect that the Holders of the
Securities will not recognize any income, gain or loss for United States federal
income tax purposes as a result of such liquidation and distribution of
Debentures, and (ii) the Sponsor being unable to avoid such Tax Event within the
90 Day Period by taking some ministerial action or pursuing some other
reasonable measure that, in the sole judgment of the Sponsor, will have no
adverse effect on the Trust, the Sponsor or the Holders of the Securities and
will involve no material cost ("Ministerial Action").
If (i) the Sponsor has received an opinion (a "Redemption Tax Opinion") of
a nationally recognized independent tax counsel (reasonably acceptable to the
Trustees) experienced in such matters that, as a result of a Tax Event, there is
more than an insubstantial risk that the Sponsor would be precluded from
deducting the interest on the Debentures for United States federal income
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tax purposes, even after the Debentures were distributed to the Holders of
Securities upon liquidation of the Trust as described in this paragraph 4(d), or
(ii) the Trustees shall have been informed by such tax counsel that it cannot
deliver a No Recognition Opinion, the Sponsor shall have the right, upon not
less than 20 nor more than 60 days' notice, and within 90 days following the
occurrence of such Tax Event, to redeem the Debentures in whole (but not in
part) for cash, for the principal amount plus accrued and unpaid interest
thereon and, following such redemption, all the Securities will be redeemed by
the Trust at the liquidation amount of $50 per Security plus accrued and unpaid
Distributions thereon; provided, however, that, if at the time there is
available to the Sponsor or the Trust the opportunity to eliminate, within the
90 Day Period, the Tax Event by taking some Ministerial Action, the Trust or the
Sponsor will pursue such Ministerial Action in lieu of redemption.
In lieu of the foregoing options, the Company shall also have the option
of causing the Securities to remain outstanding and pay Additional Sums on the
Debentures.
"Tax Event" means that the Property Trustee shall have received an opinion
of a nationally recognized independent tax counsel to the Sponsor (reasonably
acceptable to the Trustees) experienced in such matters (a "Dissolution Tax
Opinion") to the effect that, as a result of (a) any amendment to, or change
(including any announced prospective change (which shall not include a proposed
change), provided that a Tax Event shall not occur more than 90 days before the
effective date of any such prospective change) in the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority therefor or therein, (ii) any judicial decision or official
administrative pronouncement, ruling, regulatory procedure, notice or
announcement, including any notice or announcement of intent to adopt such
procedures or regulations (an "Administrative Action") or (iii) any amendment to
or change in the administrative position or interpretation of any Administrative
Action or judicial decision that differs from the theretofore generally accepted
position, in each case, by any legislative body, court, governmental agency or
regulatory body, irrespective of the manner in which such amendment or change is
made known, which amendment or change is effective or such Administrative Action
or decision is announced, in each case, on or after the date of original
issuance of the Debentures or the issue date of the Preferred Securities issued
by the Trust, there is more than an insubstantial risk that (a) if the
Debentures are held by the Property Trustee, (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 interest accrued or received on the Debentures or subject to
more than a de minimis amount of other taxes, duties or other governmental
charges as determined by such counsel, or (II) any portion of interest payable
by the Sponsor to the Trust on the Debentures is not, or within 90 days of the
date of such opinion will not be, deductible by the Sponsor in whole or in part
for United States federal income tax purposes or (b) with respect to Debentures
which are no longer held by the Property Trustee, any portion of interest
payable by the Sponsor on the Debentures is not, or within 90 days of the date
of such opinion will not be, deductible by the Sponsor in whole or in part for
United States federal income tax purposes.
If an Investment Company Event (as hereinafter defined) shall occur and be
continuing, the Sponsor shall cause the Trustees to dissolve the Trust and,
after satisfaction of liabilities of the
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creditors of the Trust as provided by applicable law, cause the Debentures to be
distributed to the Holders of the Securities in liquidation of the Trust within
90 days following the occurrence of such Investment Company Event.
"Investment Company Event" means the occurrence of a change in law or
regulation or a written change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law"), to the effect that the Trust is or will
be considered an Investment Company which is required to be registered under the
Investment Company Act, which Change in 1940 Act Law becomes effective on or
after the date of the Offering Circular.
After the date fixed for any distribution of Debentures: (i) the
Securities will no longer be deemed to be outstanding, (ii) the Depositary or
its nominee (or any successor Depositary or its nominee), as record Holder of
Preferred Securities represented by global certificates, 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
the Depositary or its nominee (or any successor Depositary or its nominee), will
be deemed to represent Debentures having an aggregate principal amount equal to
the aggregate stated liquidation amount of such Securities, with accrued and
unpaid interest equal to accrued and unpaid Distributions on such Securities
until such certificates are presented to the Sponsor or its agent for transfer
or reissuance.
(e) The Securities will not be redeemed 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.
(f) REDEMPTION OR DISTRIBUTION PROCEDURES.
(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 an Administrative Trustee on behalf of the Trust
by mail to each Holder of Securities to be redeemed or exchanged not fewer
than 30 (or 20, in the case of redemption or distribution upon the
occurrence of a Tax Event) 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 paragraph 4(f)(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.
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(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 the Depositary (or any successor Depositary) or
any nominee, the distribution of the proceeds of such redemption will be
made to each 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 an Administrative
Trustee on behalf of the Trust gives a Redemption/Distribution Notice,
which notice may only be issued if the Debentures are redeemed as set out
in this paragraph 4 (which notice will be irrevocable), then (A) with
respect to Preferred Securities held in book-entry form, by 12:00 noon,
New York City time, on the redemption date, to the extent funds are
available, with respect to Preferred Securities held in global form, the
Property Trustee will deposit irrevocably with the Depositary (or
successor Depositary) funds sufficient to pay the amount payable on
redemption with respect to such Preferred Securities and will give the
Depositary irrevocable instructions and authority to pay the amount
payable on redemption to the Holders of such Preferred Securities, and (B)
with respect to Preferred Securities issued in certificated form and
Common Securities, to the extent funds are available, the Property Trustee
will irrevocably deposit with the Paying Agent funds sufficient to pay the
amount payable on redemption to the Holders of such Securities and will
give the Paying Agent irrevocable instructions and authority to pay the
amount payable on redemption to the Holders thereof upon surrender of
their certificates. If a Redemption/Distribution Notice shall have been
given and funds deposited as required, then on the date of such deposit,
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, and such
Securities will cease to be outstanding. Neither the Administrative
Trustees nor the Property Trustee 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 amount payable on such date will be made
on the next succeeding day that is a Business Day (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 Trust or by the Sponsor as guarantor
pursuant to the relevant Securities Guarantee, Distributions on such
Securities will continue to accrue at the then applicable rate, from the
original redemption date to the date of payment, in which case the actual
payment date will be considered the date fixed for redemption for purposes
of calculating the amount payable upon redemption (other than for purposes
of calculating any premium).
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(iv) Redemption/Distribution Notices shall be sent by the
Administrative Trustees on behalf of the Trust to (A) in the case of
Preferred Securities held in book-entry form, the Depositary and, in the
case of Securities held in certificated form, the Holders of such
certificates and (B) in respect of the Common Securities, the Holder
thereof.
(v) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws), the Sponsor or
any of its subsidiaries may at any time and from time to time purchase
outstanding Preferred Securities by tender, in the open market or by
private agreement.
5. CONVERSION RIGHTS.
The Holders of Securities shall have the right at any time, at their
option, to cause the Conversion Agent to convert Securities, on behalf of the
converting Holders, into shares of Class A Common Stock, par value $.01 per
share, of the Sponsor (the "Common Stock") in the manner described herein on and
subject to the following terms and conditions:
(a) The Securities will be convertible at the office of the Conversion
Agent into fully paid and nonassessable shares of Common Stock pursuant to the
Holder's direction to the Conversion Agent to exchange such Securities for a
portion of the Debentures theretofore held by the Trust on the basis of one
Security per $50 principal amount of Debentures, and immediately convert such
amount of Debentures into fully paid and nonassessable shares of Common Stock at
an initial rate of 2.4465 shares of Common Stock per $50 principal amount of
Debentures (which is equivalent to a conversion price of $20.4375 per share of
Common Stock, subject to certain adjustments set forth in the Indenture).
(b) In order to convert Securities into Common Stock the Holder shall
submit to the Conversion Agent at the office referred to above an irrevocable
request to convert Securities on behalf of such Holder (the "Conversion
Request"), together, if the Securities are in certificated form, with such
certificates. The Conversion Request shall (i) set forth the number of
Securities to be converted and the name or names, if other than the Holder, in
which the shares of Common Stock should be issued and (ii) direct the Conversion
Agent (a) to exchange such Securities for a portion of the Debentures held by
the Trust (at the rate of exchange specified in the preceding paragraph) and (b)
to immediately convert such Debentures on behalf of such Holder, into Common
Stock (at the conversion rate specified in the preceding paragraph). The
Conversion Agent shall notify the Trust of the Holder's election to exchange
Securities for a portion of the Debentures held by the Trust and the Trust
shall, upon receipt of such notice, deliver to the Conversion Agent the
appropriate principal amount of Debentures for exchange in accordance with this
Section. The Conversion Agent shall thereupon notify the Sponsor of the Holder's
election to convert such Debentures into shares of Common Stock. Holders of
Securities at the close of business on a Distribution record date will be
entitled to receive the Distribution payable on such Securities on the
corresponding Distribution payment date notwithstanding the conversion of such
Securities following such record date but prior to such distribution payment
date. Except as provided above,
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neither the Trust nor the Sponsor will make, or be required to make, any
payment, allowance or adjustment upon any conversion on account of any
accumulated and unpaid Distributions accrued on the Securities, whether or not
in arrears, (including any Additional Amounts accrued thereon) surrendered for
conversion, or on account of any accumulated and unpaid dividends on the shares
of Common Stock issued upon such conversion, except to the extent that such
shares are held of record on the record date for any such distributions.
Securities shall be deemed to have been converted immediately prior to the close
of business on the day on which a Notice of Conversion relating to such
Securities is received by the Trust in accordance with the foregoing provision
(the "Conversion Date"). The Person or Persons entitled to receive the Common
Stock issuable upon conversion of the Debentures shall be treated for all
purposes as the record holder or holders of such Common Stock at such time. As
promptly as practicable on or after the Conversion Date, the Sponsor shall issue
and deliver at the office of the Conversion Agent a certificate or certificates
for the number of full shares of Common Stock issuable upon such conversion,
together with the cash payment, if any, in lieu of any fraction of any share to
the Person or Persons entitled to receive the same, unless otherwise directed by
the Holder in the notice of conversion and the Conversion Agent shall distribute
such certificate or certificates to such Person or Persons.
(c) Each Holder of a Security by his acceptance thereof appoints
Wilmington Trust Company "Conversion Agent" for the purpose of effecting the
conversion of Securities in accordance with this Section. In effecting the
conversion and transactions described in this Section, the Conversion Agent
shall be acting as agent of the Holders of Securities directing it to effect
such conversion transactions. The Conversion Agent is hereby authorized (i) to
exchange Securities from time to time for Debentures held by the Trust in
connection with the conversion of such Securities in accordance with this
Section and (ii) to convert all or a portion of the Debentures into Common Stock
and thereupon to deliver such shares of Common Stock in accordance with the
provisions of this Section and to deliver to the Trust a new Debenture or
Debentures for any resulting unconverted principal amount.
(d) No fractional shares of Common Stock will be issued as a result of
conversion, but in lieu thereof, such fractional interest will be paid in cash
by the Sponsor to the Trust, which in turn will make such payment to the Holder
or Holders of Securities so converted.
(e) The Sponsor shall at all times reserve and keep available out of its
authorized and unissued Common Stock, solely for issuance upon the conversion of
the Debentures, free from any preemptive or other similar rights, such number of
shares of Common Stock as shall from time to time be issuable upon the
conversion of all the Debentures then outstanding. Notwithstanding the
foregoing, the Sponsor shall be entitled to deliver upon conversion of
Debentures, shares of Common Stock reacquired and held in the treasury of the
Sponsor (in lieu of the issuance of authorized and unissued shares of Common
Stock), so long as any such treasury shares are free and clear of all liens,
charges, security interests or encumbrances. Any shares of Common Stock issued
upon conversion of the Debentures shall be duly authorized, validly issued and
fully paid and nonassessable. The Trust shall deliver the shares of Common Stock
received upon conversion of the Debentures to the converting Holder free and
clear of all liens, charges, security interests and
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encumbrances, except for United States withholding taxes. Each of the Sponsor
and the Trust shall prepare and shall use its best efforts to obtain and keep in
force such governmental or regulatory permits or other authorizations as may be
required by law, and shall comply with all applicable requirements as to
registration or qualification of the Common Stock (and all requirements to list
the Common Stock issuable upon conversion of Debentures that are at the time
applicable), in order to enable the Sponsor to lawfully issue Common Stock upon
conversion of the Debentures and to lawfully deliver the Common Stock to each
Holder upon conversion of the Securities.
(f) The Sponsor will pay any and all taxes that may be payable in respect
of the issue or delivery of shares of Common Stock on conversion of Debentures
and the delivery of the shares of Common Stock upon conversion of the
Securities. The Sponsor shall not, however, be required to pay any tax which may
be payable in respect of any transfer involved in the issue and delivery of
shares of Common Stock in a name other than that in which the Securities so
converted were registered, and no such issue or delivery shall be made unless
and until the person requesting such issue has paid to the Sponsor the amount of
any such tax, or has established to the satisfaction of the Sponsor that such
tax has been paid.
(g) Nothing in the preceding Paragraph (f) shall limit the requirement of
the Trust to withhold taxes pursuant to the terms of the Securities set forth in
this Annex I to the Declaration or in the Declaration itself or otherwise
require the Property Trustee or the Trust to pay any amounts on account of such
withholdings.
6. VOTING RIGHTS--PREFERRED SECURITIES.
(a) Except as provided under paragraphs 6(b) and 8, in the Business Trust
Act and as otherwise required by law, the Declaration and the Indenture, the
Holders of the Preferred Securities
will have no voting rights.
(b) In addition to the rights of the Holders of the Preferred Securities
with respect to the enforcement of payment of principal and interest on the
Debentures set forth herein, in the Declaration or in the Indenture, if (i) a
Debenture Event of Default occurs and is continuing or (ii) the Company defaults
under the Guarantee (each of (i) and (ii) being an "Appointment Event"), then
the Holders of the Preferred Securities, acting as a single class, will be
entitled by the vote of a Majority in liquidation amount of the Preferred
Securities to appoint a Special Trustee in accordance with Section
5.06(a)(ii)(B) of the Declaration. Any Holder of Preferred Securities (other
than the Sponsor, or any entity directly or indirectly controlling or controlled
by or under direct or indirect common control with the Sponsor) will be entitled
to nominate any Person to be appointed as Special Trustee. Not later than 30
days after such right to appoint a Special Trustee arises, the Trustees will
convene a meeting for the purpose of appointing a Special Trustee. If the
Trustees fail to convene such meeting within such 30-day period, the Holders of
not less than 10% in aggregate liquidation amount of the Preferred Securities
will be entitled to convene such meeting in accordance with Section 12.02 of the
Declaration. The record date for such meeting will be the close of business on
the Business Day that is one Business Day before the day on which notice of the
meeting is sent to
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the Holders. The provisions of the Declaration relating to the convening and
conduct of the meetings of the Holders will apply with respect to any such
meeting.
Any Special Trustee so appointed shall cease to be a Special Trustee if
the Appointment Event pursuant to which the Special Trustee was appointed and
all other Appointment Events cease to be continuing. A Special Trustee may be
removed without cause at any time by vote of the Holders of a Majority in
liquidation amount of the Preferred Securities at a meeting of the Holders of
the Preferred Securities or by written consent in accordance with Section
5.06(a)(ii)(B) of the Declaration. The Holders of 10% in liquidation amount of
the Preferred Securities will be entitled to convene such a meeting in
accordance with Section 12.02 of the Declaration. The record date for such
meeting will be the close of business on the Business Day which is one Business
Day before the day on which the notice of meeting is sent to Holders.
Notwithstanding the appointment of a Special Trustee, the Sponsor shall retain
all rights under the Indenture, including the right to defer payments of
interest by extending the interest payment period on the Debentures.
Subject to the requirements set forth in this paragraph, the Holders of a
majority in liquidation amount of the Preferred Securities, voting separately as
a class may, and the Trustees shall not, without obtaining the prior approval of
the Holders of a Majority in aggregate liquidation amount of all outstanding
Preferred Securities (i) direct the time, method, and place of conducting any
proceeding for any remedy available to the Trustee under the Indenture, or
executing any trust or power conferred upon the Property Trustee with respect to
the Debentures, (ii) waive any past default and its consequences that is
waivable under Section 5.13 of the Indenture or otherwise, (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 amendment, modification or
termination of the Indenture or the Debentures, where such consent shall be
required, provided, however, that, where a consent under the Indenture would
require the consent or act of the Holders of greater than a majority of the
Holders in principal amount of Debentures affected thereby (a "Super Majority"),
the Property Trustee may only give such consent or take such action at the
direction of the Holders of at least the proportion in liquidation preference of
the Preferred Securities which the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding. The Property Trustee
shall not, and none of the other Trustees shall in any event, revoke any action
previously authorized or approved by a vote of the Holders of the Preferred
Securities, except by a subsequent vote of the Holders of the Preferred
Securities. Other than with respect to directing the time, method and place of
conducting any remedy available to the Property Trustee or the Debenture Trustee
as set forth above, the Property Trustee shall not take any action in accordance
with the directions of the Holders of the Preferred Securities under this
paragraph unless the Property Trustee has obtained an opinion of tax counsel 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 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 directly institute a proceeding for enforcement of
payment to
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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. 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 any Direct
Action, the Debenture Issuer will be subrogated to the rights of such Holder of
Preferred Securities under the Declaration to the extent of any payment made by
the Debenture Issuer to such Holder of Preferred Securities in such Direct
Action.
Any 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
without notice pursuant to written consent. The Administrative Trustees 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 the following
information (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 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.
7. VOTING RIGHTS--COMMON SECURITIES.
(a) Except as provided under paragraphs 7(b), (c) and 8, in the Business
Trust Act and 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,
subject to the exclusive right of the Holders of the Preferred Securities to
appoint, remove or replace a Special Trustee.
(c) Subject to Section 2.06 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 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
Property Trustee, or exercising any trust or power conferred upon the Property
Trustee under the Declaration, including (i) directing
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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) waive any past default
and its consequences that is waivable under Section 5.13 of the Indenture, or
(iii) exercise 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 the Holders of
greater than a majority in principal amount of Debentures affected thereby (a
"Super Majority"), the Property Trustee may only give such consent or take such
action at the 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
paragraph 7(c), the Property Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the Preferred Securities,
except by a subsequent vote of the Holders of the Preferred Securities. Other
than with respect to directing the time, method and place of conducting any
remedy available to the Property Trustee or the Debenture Trustee as set forth
above, the Property Trustee shall not take any action in accordance with the
directions of the Holders of the Common Securities under this paragraph unless
the Property Trustee has obtained an opinion of tax counsel 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 Property Trustee
fails to enforce its rights, as holder of the Debentures, under the Indenture,
any Holder of Common Securities may, to the fullest extent permitted by law and
after a period of 30 days has elapsed from such Holder's written request to the
Property Trustee to enforce such rights, institute a legal proceeding directly
against the Sponsor, to enforce the Property Trustee's rights, as holder of the
Debentures, under the Indenture, without first instituting any legal proceeding
against the Property Trustee or any other Person.
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 without notice
pursuant to written consent. The Administrative 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.
8. AMENDMENTS TO DECLARATION AND INDENTURE.
(a) In addition to any requirements under Section 12.01 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Administrative Trustees otherwise
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propose to effect, (i) any action that would adversely affect the powers,
preferences or 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 8.01 of the Declaration, then the
Holders of outstanding Securities 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, that, the rights of Holders of Preferred
Securities under Article V of the Declaration to appoint, remove or replace a
Special Trustee shall not be amended without the consent of each Holder of
Preferred Securities; and provided further that 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 at least a Majority in
liquidation amount of such class of Securities.
(b) In the event the consent of the Property Trustee as the holder of the
Debentures is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the Property
Trustee shall request the 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 at least
the same proportion in aggregate stated liquidation preference of the
Securities; provided, however, that the Property Trustee shall not take any
action in accordance with the directions of the Holders of the Securities under
this paragraph 8(b) unless the Property Trustee has obtained 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.
9. 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, on any Distribution Date or redemption date an
Event of Default under the Declaration has occurred and is continuing, in which
case no payment of any Distribution on, or amount payable upon redemption of,
any Common Security, and no other payment on account of the redemption,
liquidation or other acquisition of Common Securities, shall be made unless
payment in full in cash of all accumulated and unpaid Distributions on all
outstanding Preferred Securities for all Distribution periods terminating on or
prior thereto, or in the case of payment of the amount payable upon redemption
of the Preferred Securities, the full amount of such amount in respect of all
outstanding Preferred Securities shall have been made or provided for, and all
funds available to the Property Trustee shall first be applied to the payment in
full in cash of all Distributions on, or the amount payable upon redemption of
Preferred Securities then due and payable.
10. RANKING.
I-14
<PAGE>
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 Property 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.
11. ACCEPTANCE OF SECURITIES GUARANTEES AND INDENTURE.
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture which
are incorporated by reference herein and which include, among other things,
provisions relating to certain rights of the Holders of the Preferred Securities
all as set forth therein.
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 the Declaration, the Preferred
Securities Guarantee or the Common Securities Guarantee (as may be appropriate),
and the Indenture to a Holder without charge on written request to the Sponsor
at its principal place of business.
I-15
<PAGE>
EXHIBIT A-1
FORM OF PREFERRED SECURITY
[FORM OF FACE OF SECURITY]
[Include the following Restricted Securities Legend on all Restricted
Preferred Securities, including Rule 144A Global Preferred Securities, unless
otherwise determined by the Sponsor in accordance with applicable law--
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THIS SECURITY AND
ANY CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES ISSUED UPON EXCHANGE
FOR THIS SECURITY AND ANY COMMON STOCK ISSUABLE UPON CONVERSION
THEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF
THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE ISSUER AND
THE COMPANY THAT (A) THIS SECURITY AND ANY CONVERTIBLE JUNIOR
SUBORDINATED DEBENTURES ISSUABLE UPON EXCHANGE THEREFORE AND COMMON
STOCK ISSUABLE UPON CONVERSION THEREOF MAY BE OFFERED, RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED, ONLY (i) INSIDE THE UNITED STATES
TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (ii)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (iii) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH OF CASES (i) THROUGH (iii) IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE
A-1-1
<PAGE>
OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (B)
THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY
ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.]
[Include if Preferred Security is in global form and the Depository
Trust Company is the Depository--
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW
YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
[Include if Preferred Security is in global form--
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF
OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE DECLARATION REFERRED TO BELOW.]
Certificate Number
Number of Preferred Securities
CUSIP NO. 14444T 10 1
Preferred Securities of
Carriage Services Capital Trust
A-1-2
<PAGE>
7% Convertible Preferred Securities
Term Income Deferrable Equity Securities (TIDESSM)*
(liquidation amount $50 per Convertible Preferred Security)
Carriage Services Capital Trust, a statutory business trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that
____________________________________________
(the "Holder")
is the registered owner of preferred securities of the Trust representing
undivided beneficial interests in the assets of the Trust designated the 7%
Convertible Preferred Securities, Term Income Deferrable Equity Securities
(TIDESSM)* (liquidation amount $50 per Convertible Preferred Security)
(the "Preferred Securities"). Subject to the terms of the Declaration (as
defined below), 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, rights, privileges, restrictions, preferences and other terms and
provisions of the Preferred Securities represented hereby are issued and shall
in all respects be subject to the provisions of the Amended and Restated
Declaration of Trust of the Trust dated as of June 3, 1999, 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 to the Declaration.
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 Trust at its principal place
of business.
____________
* The terms Term Income Deferrable Equity Securities (TIDES)(sm) and
TIDES(sm) are registered servicemarks of Credit Suisse First Boston Corporation.
A-1-3
<PAGE>
Reference is hereby made to select provisions of the Preferred Securities
set forth on the reverse hereof, which select provisions shall for all purposes
have the same effect as if set forth at this place.
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.
Unless the Property Trustee's Certificate of Authentication hereon has
been properly executed, these Preferred Securities shall not be entitled to any
benefit under the Declaration or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Trust has executed this certificate this 3rd day
of June, 1999.
Carriage Services Capital Trust
By:____________________________
Name:
Title:Administrative Trustee
A-1-4
<PAGE>
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the
within-mentioned Declaration.
Dated:
WILMINGTON TRUST COMPANY,
as Property Trustee
By:_________________________
Authorized Signature
A-1-5
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at a rate
per annum of 7% (the "Coupon Rate") of the stated liquidation amount of $50 per
Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one quarter will bear interest thereon compounded quarterly at the Coupon
Rate (to the extent permitted by applicable law). The term "Distributions" as
used herein includes such quarterly distributions, additional distributions on
quarterly distributions not paid on the applicable Distribution Date, Special
Distributions and Additional Sums, as applicable. A Distribution is payable only
to the extent that payments are made in respect of the Debentures held by the
Property Trustee and to the extent the Property 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 of
twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 30-day month.
Except as otherwise described below, Distributions on the Preferred
Securities will be cumulative, will accrue from the date of their original
issuance and will be payable quarterly in arrears, on March 1, June 1, September
1 and December 1 of each year, commencing on September 1, 1999, to Holders of
record at the close of business on the 15th of the month next preceding the
applicable payment date, which payment dates shall correspond to the interest
payment dates (each an "Interest Payment Date") on the Debentures. 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 consecutive quarters (each a "Deferral 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 Deferral Period. Prior to the termination
of any such Deferral Period, the Debenture Issuer may further extend such
Deferral Period; provided that such Deferral Period together with all such
previous and further deferrals thereof may not exceed 20 consecutive quarters 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 on an Interest
Payment Date elected by the Company to Holders as they appear on the books and
records of the Trust on the record date fixed for such Interest Payment Date.
Upon the termination of any Deferral Period and the payment of all amounts then
due, the Debenture Issuer may commence a new Deferral Period, subject to the
above requirements.
The Preferred Securities shall be redeemable as provided in the
Declaration.
The Preferred Securities shall be convertible into shares of Common Stock,
through (i) the exchange of Preferred Securities for a portion of the Debentures
and (ii) the immediate conversion of such Debentures into Common Stock, in the
manner and according to the terms set forth in the Declaration.
A-1-6
<PAGE>
CONVERSION REQUEST
To: Wilmington Trust Company
as Property Trustee of
Carriage Services Capital Trust
The undersigned owner of these Preferred Securities hereby irrevocably
exercises the option to convert these Preferred Securities, or the portion below
designated, into Common Stock of Carriage Services, Inc. (the "Common Stock") in
accordance with the terms of the Amended and Restated Declaration of Trust (the
"Declaration"), dated as of June 3, 1999, by Mark W. Duffey, Thomas C. Livengood
and Terry Sanford as Administrative Trustees, Wilmington Trust Company, as
Delaware Trustee, Wilmington Trust Company, as Property Trustee, Carriage
Services, Inc., as Sponsor, and by the Holders, from time to time, of undivided
beneficial interests in the Trust to be issued pursuant to the Declaration.
Pursuant to the aforementioned exercise of the option to convert these Preferred
Securities, the undersigned hereby directs the Conversion Agent (as that term is
defined in the Declaration) to (i) exchange such Preferred Securities for a
portion of the Debentures (as that term is defined in the Declaration) held by
the Trust (at the rate of exchange specified in the terms of the Preferred
Securities set forth as Annex I to the Declaration) and (ii) immediately convert
such Debentures on behalf of the undersigned, into Common Stock (at the
conversion rate specified in the terms of the Preferred Securities set forth as
Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
Any holder, upon the exercise of its conversion rights in accordance with
the terms of the Declaration and the Preferred Securities, agrees to be bound by
the terms of the Registration Rights Agreement relating to the Common Stock
issuable upon conversion of the
Preferred Securities.
Date:
in whole |_| in part |_|
Number of Preferred Securities to be converted: ___________________
If a name or names other than the undersigned, please indicate in the spaces
below the name or names in which the shares of Common Stock are to be issued,
along with the address or addresses of such person or persons:
A-1-7
<PAGE>
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
___________________________________
Signature (for conversion only)
Please Print or Typewrite Name and Address, Including Zip Code, and Social
Security or Other Identifying Number:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
___________________________________
Signature Guarantee:*
____________
* (Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include membership
or participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.)
A-1-8
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
agent to transfer this Preferred Security on the books of the Trust. The agent
may substitute another to act for him or her.
Date:
Signature:__________________
(Sign exactly as your name appears on the other side of this Preferred
Security Certificate)
Signature Guarantee:*
________________________
* (Signature must be guaranteed by an "eligible guarantor institution"that
is, a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
A-1-9
<PAGE>
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF RESTRICTED
PREFERRED SECURITIES
This certificate relates to _____________ Preferred Securities held in (check
applicable space) ____ book-entry or ____ definitive form by the undersigned.
(A) The undersigned (check one box below):
|_| has requested the Property Trustee by written order to deliver in
exchange for its beneficial
interest in the Rule 144A Global Preferred Security held by the
Depositary a Preferred Security
or Preferred Securities in definitive, registered form in such number
equal to its beneficial
interest in such Rule 144A Global Preferred Security (or the number
thereof indicated above);
or
|_| has requested the Property Trustee by written order to exchange its
Preferred Security in definitive registered form for an interest in the
Rule 144A Global Preferred Security held by the Depositary in such number
equal to number of Preferred Securities in definitive registered form so
held; or
|_| has requested the Property Trustee by written order to exchange or register
the transfer of a Preferred Security or Preferred Securities.
(B) The undersigned confirms that such Securities are being (check one box
below):
(1)|_|acquired for the undersigned's own account, without transfer (in
satisfaction of Section
9.02(d)(ii)(A) of the Declaration); or
(2)|_|transferred pursuant to and in compliance with Rule 144A under the
Securities Act of
1933; or
(3)|_|transferred pursuant to Rule 144 of the Securities Act of 1933; or
(4)|_|transferred pursuant to an effective registration statement under
the Securities Act.
Unless one of the boxes in (B) above is checked, the Property Trustee will
refuse to register any of the Preferred Securities evidenced by this certificate
in the name of any person other than the registered Holder thereof; provided,
however, that if box (3) or (4) is checked, the Property Trustee may require,
prior to registering any such transfer of the Preferred Securities such legal
opinions, certifications and other information as the Trust has reasonably
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the
A-1-10
<PAGE>
registration requirements of the Securities Act of 1933, such as the exemption
provided by Rule 144 under such Act.
_________________________________
Signature
Signature Guarantee:*
_________________________________
Signature must be guaranteed
Signature
_________________________________
Signature
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing these Preferred
Securities for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Trust as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
Dated:__________________________________________________________________________
NOTICE: To be executed by an executive officer
____________
*(Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
A-1-11
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY
[FORM OF FACE OF SECURITY]
[THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN EFFECTIVE REGISTRATION
STATEMENT.]
[OTHER THAN AS PROVIDED IN THE DECLARATION (AS DEFINED HEREIN), THIS
SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT TO A
RELATED PARTY (AS DEFINED IN THE DECLARATION) OF UNION PACIFIC CORPORATION.]
Certificate Number Number of Common Securities
Common Securities
of
Carriage Services Capital Trust
7% Convertible Common Securities
(liquidation amount $50 per Convertible Common Security)
Carriage Services Capital Trust, a statutory business trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that
________________________________________________________________________________
(the "Holder") is the registered owner of common securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the 7% Convertible Common Securities (liquidation amount $50 per
Convertible Common Security) (the "Common Securities"). Subject to the terms of
the Declaration (as defined below), 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. 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 Amended and
Restated Declaration of Trust of the Trust dated as of June 3, 1999, 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 to the
Declaration. 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 Common Securities Guarantee to the extent provided therein. The Sponsor will
provide a copy of the Declaration, the
A-2-1
<PAGE>
Common Securities Guarantee and the Indenture to a Holder without charge upon
written request to the Sponsor at its principal place of business.
Reference is hereby made to select provisions of the Common Securities set
forth on the reverse hereof, which select provisions shall for all purposes have
the same effect as if set forth at this place.
Upon receipt of this certificate, the Sponsor 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 Common Securities as
evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this ___ day
of _________, 1999.
Carriage Services Capital Trust
By:______________________________
Name:
Title:Administrative Trustee
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate per
annum of 7% (the "Coupon Rate") of the stated liquidation amount of $50 per
Common Security, such rate being the rate of interest payable on the Debentures
to be held by the Property Trustee. Distributions in arrears for more than one
quarter will bear interest thereon compounded quarterly at the Coupon Rate (to
the extent permitted by applicable law). The term "Distributions" as used herein
includes quarterly distributions, additional distributions on quarterly
distributions not paid on the applicable Distribution Date, Special
Distributions and Additional Sums, as applicable. A Distribution is payable only
to the extent that payments are made in respect of the Debentures held by the
Property Trustee and to the extent the Property 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 of
twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 30-day month.
Except as otherwise described below, Distributions on the Common
Securities will be cumulative, will accrue from the date of their original
issuance and will be payable quarterly in arrears, on March 1, June 1, September
1 and December 1 of each year, commencing on September
A-2-2
<PAGE>
1, 1999, to Holders of record one (1) day prior to such payment dates, which
payment dates shall correspond to the interest payment dates (each, an "Interest
Payment Date") on the Debentures. 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 consecutive
quarters (each a "Deferral 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 Deferral Period. Prior to the termination of any such Deferral Period, the
Debenture Issuer may further extend such Deferral Period; provided that such
Deferral Period together with all such previous and further deferrals thereof
may not exceed 20 consecutive quarters 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 on an Interest Payment Date elected by the Company
to Holders as they appear on the books and records of the Trust on the record
date fixed for such Interest Payment Date. Upon the termination of any Deferral
Period and the payment of all amounts then due, the Debenture Issuer may
commence a new Deferral Period, subject to the above requirements.
The Common Securities shall be redeemable as provided in the Declaration.
The Common Securities shall be convertible into shares of Common Stock,
through (i) the exchange of Common Securities for a portion of the Debentures
and (ii) the immediate conversion of such Debentures into Common Stock, in the
manner and according to the terms set forth in the Declaration.
CONVERSION REQUEST
To: Wilmington Trust Company,
as Property Trustee of
Carriage Services Capital Trust
The undersigned owner of these Common Securities hereby irrevocably
exercises the option to convert these Common Securities, or the portion below
designated, into Common Stock of CARRIAGE SERVICES, INC. (the "Common Stock") in
accordance with the terms of the Amended and Restated Declaration of Trust (the
"Declaration"), dated as of June __, 1999, by Mark W. Duffey, Thomas C.
Livengood, and Terry Sanford as Administrative Trustees, Wilmington Trust
Company as Delaware Trustee, Wilmington Trust Company, as Property Trustee,
Carriage Services, Inc., as Sponsor, and by the Holders, from time to time, of
undivided beneficial interests in the Trust to be issued pursuant to the
Declaration. Pursuant to the aforementioned exercise of the option to convert
these Common Securities, the undersigned hereby directs the Conversion Agent (as
that term is defined in the Declaration) to (i) exchange such Common Securities
for a portion of the Debentures (as that term is defined in the Declaration)
held by the Trust (at the rate of exchange specified in the terms of the Common
Securities set forth as Annex I to the Declaration) and (ii) immediately convert
such Debentures on behalf of the undersigned, into Common Stock (at the
A-2-3
<PAGE>
conversion rate specified in the terms of the Common Securities set forth as
Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
Any holder, upon the exercise of its conversion rights in accordance with
the terms of the Declaration and the Common Securities, agrees to be bound by
the terms of the Registration Rights Agreement relating to the Common Stock
issuable upon conversion of the Common Securities.
Date:
in whole _________ in part_________
Number of Common Securities to be converted: _____________________
If a name or names other than the undersigned, please indicate in the spaces
below the name or names in which the shares of Common Stock are to be issued,
along with the address or addresses of such person or persons
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Signature (for conversion only)
Please Print or Typewrite Name and Address, Including Zip Code, and Social
Security or Other Identifying Number
A-2-4
<PAGE>
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Signature Guarantee:*______
___________________________
___________________________
*(Signature must be guaranteed by an "eligible guarantor institution" that is,
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
A-2-5
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common
Security Certificate to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________________
________________________________________________________________________________
A-2-6
<PAGE>
agent to transfer this Common Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
Signature:__________________________________________
(Sign exactly as your name appears on the other side
of this Common Security Certificate)
Signature Guarantee:*_______________________________
________________________
*(Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.)
A-2-7
EXHIBIT 4.8
------------------------------------------------------------------------------
CARRIAGE SERVICES, INC.
TO
WILMINGTON TRUST COMPANY
TRUSTEE
------------
INDENTURE
------------
DATED AS OF JUNE 3, 1999
$96,649,600
CONVERTIBLE JUNIOR SUBORDINATED
DEBENTURES DUE 2029
------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01 DEFINITIONS....................................................2
SECTION 1.02 COMPLIANCE CERTIFICATES AND OPINIONS..........................11
SECTION 1.03 FORM OF DOCUMENTS DELIVERED TO TRUSTEE........................12
SECTION 1.04 ACTS OF HOLDERS; RECORD DATES.................................12
SECTION 1.05 NOTICES, ETC., TO TRUSTEE AND THE COMPANY.....................14
SECTION 1.06 NOTICE TO HOLDERS; WAIVER.....................................15
SECTION 1.07 CONFLICT WITH TRUST INDENTURE ACT.............................15
SECTION 1.08 EFFECT OF HEADINGS AND TABLE OF CONTENTS......................15
SECTION 1.09 SUCCESSORS AND ASSIGNS........................................15
SECTION 1.10 SEPARABILITY CLAUSE...........................................15
SECTION 1.11 BENEFITS OF INDENTURE.........................................16
SECTION 1.12 GOVERNING LAW.................................................16
SECTION 1.13 LEGAL HOLIDAYS................................................16
ARTICLE II
SECURITY FORMS
SECTION 2.01 FORMS GENERALLY...............................................16
SECTION 2.02 INITIAL ISSUANCE TO PROPERTY TRUSTEE..........................17
SECTION 2.03 ADDITIONAL PROVISIONS REQUIRED IN GLOBAL SECURITY.............18
SECTION 2.04 ISSUANCE OF GLOBAL SECURITIES TO HOLDERS......................19
ARTICLE III
THE SECURITIES
SECTION 3.01 TITLE AND TERMS...............................................19
SECTION 3.02 DENOMINATIONS.................................................20
SECTION 3.03 EXECUTION, AUTHENTICATION, DELIVERY AND DATING................20
SECTION 3.04 TEMPORARY SECURITIES..........................................21
SECTION 3.05 GLOBAL SECURITIES.............................................21
SECTION 3.06 REGISTRATION, TRANSFER AND EXCHANGE GENERALLY; CERTAIN
TRANSFERS AND EXCHANGES.......................................23
SECTION 3.07 MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES..............25
SECTION 3.08 PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED................26
SECTION 3.09 PERSONS DEEMED OWNERS.........................................28
<PAGE>
SECTION 3.10 CANCELLATION..................................................28
SECTION 3.11 RIGHT OF SET OFF..............................................28
SECTION 3.12 CUSIP NUMBERS.................................................28
SECTION 3.13 EXTENSION OF INTEREST PAYMENT PERIOD; NOTICE OF EXTENSION.....29
SECTION 3.14 PAYING AGENT, SECURITY REGISTRAR AND CONVERSION AGENT.........30
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01 SATISFACTION AND DISCHARGE OF INDENTURE.......................30
SECTION 4.02 APPLICATION OF TRUST MONEY....................................31
ARTICLE V
REMEDIES
SECTION 5.01 EVENTS OF DEFAULT.............................................31
SECTION 5.02 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT............33
SECTION 5.03 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.......................................................34
SECTION 5.04 TRUSTEE MAY FILE PROOFS OF CLAIM..............................34
SECTION 5.05 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES...35
SECTION 5.06 APPLICATION OF MONEY COLLECTED................................35
SECTION 5.07 LIMITATION ON SUITS...........................................36
SECTION 5.08 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL AND
INTEREST AND TO CONVERT.......................................36
SECTION 5.09 RESTORATION OF RIGHTS AND REMEDIES............................37
SECTION 5.10 RIGHTS AND REMEDIES CUMULATIVE................................37
SECTION 5.11 DELAY OR OMISSION NOT WAIVER..................................37
SECTION 5.12 CONTROL BY HOLDERS............................................37
SECTION 5.13 WAIVER OF PAST DEFAULTS.......................................37
SECTION 5.14 UNDERTAKING FOR COSTS.........................................38
SECTION 5.15 WAIVER OF STAY OR EXTENSION LAWS..............................38
SECTION 5.16 ENFORCEMENT BY HOLDERS OF PREFERRED SECURITIES................38
ARTICLE VI
THE TRUSTEE
SECTION 6.01 CERTAIN DUTIES AND RESPONSIBILITIES...........................39
SECTION 6.02 NOTICE OF DEFAULTS............................................39
SECTION 6.03 CERTAIN RIGHTS OF TRUSTEE.....................................40
ii
<PAGE>
SECTION 6.04 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES........41
SECTION 6.05 MAY HOLD SECURITIES...........................................41
SECTION 6.06 MONEY HELD IN TRUST...........................................41
SECTION 6.07 COMPENSATION AND REIMBURSEMENT................................41
SECTION 6.08 DISQUALIFICATION; CONFLICTING INTERESTS.......................42
SECTION 6.09 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.......................42
SECTION 6.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.............42
SECTION 6.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR........................43
SECTION 6.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS...44
SECTION 6.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.............44
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.01 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.....44
SECTION 7.02 PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS........45
SECTION 7.03 REPORTS BY TRUSTEE............................................45
SECTION 7.04 REPORTS BY COMPANY............................................45
SECTION 7.05 TAX REPORTING.................................................46
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.01 COMPANY MAY CONSOLIDATE, ETC. ONLY ON CERTAIN TERMS...........46
SECTION 8.02 SUCCESSOR SUBSTITUTED.........................................47
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS............47
SECTION 9.02 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS...............48
SECTION 9.03 EXECUTION OF SUPPLEMENTAL INDENTURES..........................49
SECTION 9.04 EFFECT OF SUPPLEMENTAL INDENTURES.............................49
SECTION 9.05 CONFORMITY WITH TRUST INDENTURE ACT...........................50
SECTION 9.06 REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES............50
iii
<PAGE>
ARTICLE X
COVENANTS; REPRESENTATIONS AND WARRANTIES
SECTION 10.01 PAYMENT OF PRINCIPAL AND INTEREST.............................50
SECTION 10.02 MAINTENANCE OF OFFICE OR AGENCY...............................50
SECTION 10.03 MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST...............51
SECTION 10.04 STATEMENT BY OFFICERS AS TO DEFAULT...........................52
SECTION 10.05 LIMITATION ON DIVIDENDS; TRANSACTIONS WITH AFFILIATES;
COVENANTS AS TO THE TRUST.....................................52
SECTION 10.06 PAYMENT OF EXPENSES OF THE TRUST..............................53
SECTION 10.07 REGISTRATION RIGHTS...........................................53
SECTION 10.08 OFFERING DOCUMENT AMENDMENT OR SUPPLEMENT.....................54
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.01 OPTIONAL REDEMPTION...........................................54
SECTION 11.02 TAX EVENT REDEMPTION..........................................55
SECTION 11.03 SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.............56
SECTION 11.04 NOTICE OF REDEMPTION..........................................56
SECTION 11.05 DEPOSIT OF REDEMPTION PRICE...................................57
SECTION 11.06 SECURITIES PAYABLE ON REDEMPTION DATE.........................57
SECTION 11.07 SECURITIES REDEEMED IN PART...................................58
ARTICLE XII
SUBORDINATION OF SECURITIES
SECTION 12.01 AGREEMENT TO SUBORDINATE......................................58
SECTION 12.02 DEFAULT ON SENIOR DEBT........................................59
SECTION 12.03 LIQUIDATION; DISSOLUTION; BANKRUPTCY..........................59
SECTION 12.04 SUBROGATION...................................................60
SECTION 12.05 TRUSTEE TO EFFECTUATE SUBORDINATION...........................61
SECTION 12.06 NOTICE BY THE COMPANY.........................................61
SECTION 12.07 RIGHTS OF THE TRUSTEE; HOLDERS OF SENIOR DEBT.................62
SECTION 12.08 SUBORDINATION MAY NOT BE IMPAIRED.............................63
iv
<PAGE>
ARTICLE XIII
CONVERSION OF SECURITIES
SECTION 13.01 CONVERSION RIGHTS.............................................63
SECTION 13.02 CONVERSION PROCEDURES.........................................64
SECTION 13.03 CONVERSION PRICE ADJUSTMENTS..................................66
SECTION 13.04 RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE OF ASSETS.....70
SECTION 13.05 NOTICE OF ADJUSTMENTS OF CONVERSION PRICE.....................71
SECTION 13.06 PRIOR NOTICE OF CERTAIN EVENTS................................71
SECTION 13.07 ADJUSTMENTS IN CASE OF FUNDAMENTAL CHANGES....................72
SECTION 13.08 DIVIDEND OR INTEREST REINVESTMENT PLANS.......................75
SECTION 13.09 CERTAIN ADDITIONAL RIGHTS.....................................75
SECTION 13.10 RESTRICTIONS ON COMMON STOCK ISSUABLE UPON CONVERSION.........76
SECTION 13.11 TRUSTEE NOT RESPONSIBLE FOR DETERMINING CONVERSION PRICE OR
ADJUSTMENTS...................................................76
ARTICLE XIV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND
DIRECTORS
SECTION 14.01 NO RECOURSE...................................................76
EXHIBIT A Form of Security
v
<PAGE>
CERTAIN SECTIONS OF THIS INDENTURE RELATING TO SECTIONS 310 THROUGH 318 OF THE
TRUST INDENTURE ACT OF 1939:
TRUST INDENTURE ACT INDENTURE
SECTION SECTION
- -------------------- ---------
Section 310 (a)(1).............................................. 6.09
(a)(2).............................................. 6.09
(a)(3).............................................. Not Applicable
(a)(4).............................................. Not Applicable
(b)................................................. 6.08, 6.10
Section 311 (a)................................................. 6.13
(b)................................................. 6.13
Section 312 (a)................................................. 7.01
7.02(a)
(b)................................................. 7.02(b)
(c)................................................. 7.02(c)
Section 313 (a)................................................. 7.03(a)
(a)(4).............................................. 7.03(a)
(b)................................................. 7.03(a)
(c)................................................. 7.03(a)
(d)................................................. 7.03(b)
Section 314 (a)................................................. 7.04
(b)................................................. Not Applicable
(c)(1).............................................. 1.02
(c)(2).............................................. 1.02
(c)(3).............................................. Not Applicable
(d)................................................. Not Applicable
(e)................................................. 1.02
Section 315 (a)................................................. 6.01
6.03
(b)................................................. 6.02
(c)................................................. 6.01
(d)................................................. 6.01
(e)................................................. 5.14
Section 316 (a)(1)(A)........................................... 5.02
5.12
(a)(1)(B)........................................... 5.13
(a)(2).............................................. Not Applicable
(b)................................................. 5.08
(c)................................................. 1.04(c)
Section 317 (a)(1).............................................. 5.03
(a)(2).............................................. 5.04
(b)................................................. 1.003
Section 318 (a)................................................. 1.07
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
vi
<PAGE>
INDENTURE, dated as of June 3, 1999, between Carriage Services, Inc., a
corporation duly organized and existing under the laws of the State of Delaware
(herein called the "Company"), and Wilmington Trust Company, a Delaware banking
corporation, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
WHEREAS Carriage Services Capital Trust, a Delaware business trust (the
"Trust"), formed under the Amended and Restated Declaration of Trust among the
Company, as Sponsor, Wilmington Trust Company, as property trustee (the
"Property Trustee"), and Wilmington Trust Company, as Delaware trustee (the
"Delaware Trustee"), and Mark W. Duffey, Thomas C. Livengood and Terry E.
Sanford, as trustees (together with the Property Trustee and the Delaware
Trustee, the "Issuer Trustees"), dated as of June 3, 1999, (the "Declaration"),
pursuant to the Purchase Agreement (the "Purchase Agreement") dated May 27,
1999, among the Company, the Trust and the Initial Purchaser named therein, will
issue and sell up to 1,500,000 of its 7% Convertible Preferred Securities, Term
Income Deferrable Equity Securities (TIDES) ("Preferred Securities") (or up to
1,875,000 of its Preferred Securities to the extent the over-allotment option is
exercised in full) with a liquidation amount of $50 per Preferred Security,
having an aggregate liquidation amount with respect to the assets of the Trust
of up to $75,000,000 (or up to $93,750,000 to the extent the over-allotment
option is exercised in full);
WHEREAS the trustees of the Trust, on behalf of the Trust, will execute
and deliver to the Company Common Securities evidencing an ownership interest in
the Trust, registered in the name of the Company, in an aggregate amount equal
to three percent of the capitalization of the Trust, equivalent to up to 46,392
7% Common Securities (the "Common Securities" and, together with the Preferred
Securities, the "Trust Securities") (or up to 57,990 Common Securities to the
extent the over-allotment option is exercised in full), with a liquidation
amount of $50 per Common Security, having an aggregate liquidation amount with
respect to the assets of the Trust of up to $2,319,550 (or up to $2,899,500 to
the extent the over-allotment option is exercised in full);
WHEREAS the Trust will use the proceeds from the sale of the Preferred
Securities and the Common Securities to purchase from the Company the
Convertible Junior Subordinated Debentures Due 2029 (the "Securities") in an
aggregate principal amount of up to $77,319,600 (or up to $96,649,600 to the
extent the over-allotment option is exercised in full);
WHEREAS the Company is guaranteeing the payment of distributions on the
Trust Securities and payment of the Redemption Price (as defined herein) and
payments on liquidation with respect to the Trust Securities, to the extent
provided in the Common Securities Guarantee Agreement, dated June 3, 1999,
between the Company and the Trust, and the Preferred Securities Guarantee
Agreement, dated June 3, 1999, between the Company and Wilmington Trust Company,
as Guarantee Trustee, for the benefit of the holders of the Trust Securities
from time to time (together, the "Guarantee");
<PAGE>
WHEREAS the Company has duly authorized the creation of an issue of the
Securities of substantially the tenor and amount hereinafter set forth and to
provide therefor the Company has duly authorized the execution and delivery of
this Indenture;
WHEREAS, so long as the Trust is a Holder of Securities and any Preferred
Securities are outstanding, the Declaration provides that the holders of
Preferred Securities may cause the Conversion Agent (as defined herein) to (i)
exchange such Preferred Securities for Securities held by the Trust and (ii)
immediately convert such Securities into Common Stock (as defined herein); and
WHEREAS all things necessary to make the Securities, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company and to make this Indenture a valid
agreement of the Company, in accordance with their and 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 (as defined herein) thereof, it is mutually agreed,
for the equal and proportionate benefit of all
Holders of the Securities, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION
SECTION 1.01 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
(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.
2
<PAGE>
"ACT", when used with respect to any Holder, has the meaning specified in
Section 1.04.
"ADDITIONAL PAYMENTS" means Compounded Interest and Additional Sums, if
any.
"ADDITIONAL SUMS" has the meaning specified in Section 3.01.
"ADJUSTED REFERENCE MARKET PRICE" has the meaning specified in Section
13.07(a)(i).
"ADJUSTED RELEVANT PRICE" has the meaning specified in Section
13.07(a)(i).
"ADMINISTRATIVE ACTION" has the meaning specified in the definition of Tax
Event in this Section 1.01.
"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;
the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"AGENT" means any Registrar, Paying Agent, Conversion Agent or
co-registrar.
"AGENT MEMBER" means any member of, or participant in, the Depositary.
"APPLICABLE CONVERSION PRICE" has the meaning specified in Section 13.01.
"APPLICABLE CONVERSION RATIO" has the meaning specified in Section 13.01.
"APPLICABLE RATE" means the rate at which the Securities accrue interest
and the corresponding Trust Securities accrue distributions, which in the
absence of a Registration Default shall mean 7%. In the event of a Registration
Default, the Applicable Rate shall be increased in accordance with the
provisions of Section 10.07 hereof.
"BOARD OF DIRECTORS" means either the board of directors of the Company or
any duly authorized committee of that board.
"BOARD RESOLUTION" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"BUSINESS DAY" means any day other than a Saturday or a Sunday, or a day
on which banking institutions in New York, New York or Wilmington, Delaware are
authorized or required by law or
3
<PAGE>
executive order to remain closed, or a day on which the corporate trust office
of the Property Trustee or the Trustee is closed for business.
"CLASS A COMMON STOCK" has the meaning specified in Section 13.01.
"CLOSING PRICE" has the meaning specified in Section 13.07(b).
"COMMISSION" means the Securities and Exchange Commission, as from time to
time constituted, created, 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.
"COMMON SECURITIES" has the meaning specified in the Second Recital to
this instrument.
"COMMON STOCK" includes any stock of any class of the Company which has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which is not subject to redemption by the Company. However, subject to the
provisions of Article XIII, shares issuable on conversion of Securities shall
include only shares of the class designated as Class A Common Stock of the
Company at the date of this instrument or shares of any class or classes
resulting from any reclassification or reclassifications thereof and which have
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which are not subject to redemption by the Company; provided, that if at any
time there shall be more than one such resulting class, the shares of each such
class then so issuable on conversion shall be substantially in the proportion
which the total number of shares of such class resulting from all such
reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.
"COMMON STOCK FUNDAMENTAL CHANGE" has the meaning specified in Section
13.07(b).
"COMPANY" means the Person named as the "Company" in the first paragraph
of this instrument until a successor Person shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"COMPANY REQUEST" or "COMPANY ORDER" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President or a Vice President, and by its Treasurer,
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
"COMPANY TRANSACTION" has the meaning specified in Section 13.04.
"COMPOUNDED INTEREST" has the meaning specified in Section 3.13.
4
<PAGE>
"CONVERSION AGENT" means the Person appointed to act on behalf of the
holders of Preferred Securities in effecting the conversion of Preferred
Securities as and in the manner set forth in the Declaration and Section 13.02
hereof.
"CONVERSION DATE" has the meaning specified in Section 13.02.
"CORPORATE TRUST OFFICE" means the principal office of the Trustee in
Wilmington, Delaware, at which at any particular time its corporate trust
business shall be administered and which at the date of this Indenture is Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19890.
"DECLARATION" has the meaning specified in the Recitals to this
instrument.
"DEBT" means (i) the principal of and premium and interest, if any, on
indebtedness for money borrowed, (ii) purchase money and similar obligations,
(iii) obligations under capital leases, (iv) guarantees, assumptions or purchase
commitments relating to, or other transactions as a result of which the Company
is responsible for the payment of, such indebtedness of others, (v) renewals,
extensions and refunding of any such indebtedness, (vi) interest or obligations
in respect of any such indebtedness accruing after the commencement of any
insolvency or bankruptcy proceedings and (vii) obligations associated with
derivative products such as interest rate and currency exchange contracts,
foreign exchange contracts, commodity contracts and similar arrangements.
"DEFAULTED INTEREST" has the meaning specified in Section 3.08.
"DEFERRAL PERIOD" has the meaning specified in Section 3.13.
"DEFERRAL NOTICE" has the meaning specified in Section 3.13.
"DELAWARE TRUSTEE" has the meaning given it in the first recital of this
instrument.
"DEPOSITARY" means The Depository Trust Company, or any successor thereto.
"DISSOLUTION TAX OPINION" has the meaning specified in the definition of
Tax Event in this Section 1.01.
"ENTITLEMENT DATE" has the meaning specified in Section 13.07(b).
"EVENT OF DEFAULT" has the meaning specified in Section 5.01.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation.
"EXPIRATION DATE" has the meaning specified in Section 1.04(d).
5
<PAGE>
"EXPIRATION TIME" has the meaning specified in Section 13.03(vi).
"FUNDAMENTAL CHANGE" has the meaning specified in Section 13.07(b).
"GLOBAL SECURITY" means a Security issued in the form prescribed in
Section 2.03, issued to the Depositary or its nominee, and registered in the
name of the Depositary or its nominee.
"GUARANTEE" has the meaning specified in the Fourth Recital to this
instrument.
"HOLDER" means a Person in whose name a Security is registered in the
Security Register.
"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, including, for
all purposes of this instrument and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this instrument and any such supplemental indenture, respectively.
"INITIAL CONVERSION PRICE" has the meaning specified in Section 13.01.
"INITIAL CONVERSION RATIO" has the meaning specified in Section 13.01.
"INITIAL PURCHASER", with respect to the Preferred Securities, means
Credit Suisse First Boston Corporation.
"INTEREST PAYMENT DATE" has the meaning specified in Section 3.01.
"ISSUER TRUSTEES" has the meaning specified in the First Recital of this
Indenture.
"MATURITY", when used with respect to any Security, means the date on
which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"90 DAY PERIOD" has the meaning specified in Section 11.02.
"NNM" means the National Market System of the National Association of
Securities Dealers, Inc., or any successor national automated interdealer
quotation system.
"NON-STOCK FUNDAMENTAL CHANGE" has the meaning specified in Section
13.07(b).
"NO RECOGNITION OPINION" means an opinion of a nationally recognized
independent tax counsel (reasonably acceptable to the Issuer Trustees)
experienced in such matters, which opinion may rely on published revenue rulings
of the Internal Revenue Service, to the effect that the Holders of the
Securities will not recognize any income, gain or loss for United States Federal
income tax
6
<PAGE>
purposes as a result of the liquidation of the Trust and the distribution of the
Securities to the holders of the Preferred Securities.
"NOTICE OF CONVERSION" means the notice to be given by a Holder of
Preferred Securities to the Conversion Agent directing the Conversion Agent to
exchange such Preferred Securities for Securities and to convert such Securities
into Common Stock on behalf of such holder.
"OFFICERS' CERTIFICATE" means a certificate signed by the Chairman of the
Board, the Vice 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 10.04 shall be the principal
executive, financial or accounting officer of the Company.
"OPINION OF COUNSEL" means a written opinion of counsel, who may be
counsel for the Company, and who shall be reasonably acceptable to the Trustee.
"OPTIONAL REDEMPTION" has the meaning specified in Section 11.01.
"OPTIONAL REDEMPTION PRICE" has the meaning specified in Section 11.01.
"OPTIONAL REDEMPTION RATIO" has the meaning specified in Section 13.07(b).
"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 canceled 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 3.08, converted into
Common Stock pursuant to Section 13.01, or in exchange for or in lieu of which
other Securities have been authenticated and delivered pursuant to this
Indenture, other than any such Securities in respect of which there shall have
been presented to the Trustee proof satisfactory to it that such Securities are
held by a bona fide purchaser in whose hands such Securities are valid
obligations of the Company.
"PAYING AGENT" means any Person authorized by the Company to pay the
principal of or interest on any Securities on behalf of the Company.
"PAYMENT RESUMPTION DATE" has the meaning set forth in Section 3.13.
7
<PAGE>
"PERSON" means any individual, corporation, estate company, partnership,
joint venture, association, joint-stock company, limited liability company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"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 3.07 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" has the meaning specified in the first recital
to this instrument.
"PROPERTY TRUSTEE" has the meaning specified in the Recitals to this
instrument.
"PURCHASE AGREEMENT" has the meaning specified in the Recitals to this
instrument.
"PURCHASED SHARES" has the meaning specified in Section 13.03(vi).
"PURCHASER STOCK PRICE" has the meaning specified in Section 13.07(b).
"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.
"REDEMPTION TAX OPINION" means an opinion of a nationally recognized
independent tax counsel (reasonably acceptable to the Issuer Trustees)
experienced in such matters that, as a result of a Tax Event, there is more than
an insubstantial risk that the Company would be precluded from deducting the
interest on the Securities for United States Federal income tax purposes, even
after the Trust was liquidated and the Securities were distributed to the
holders of the Preferred Securities.
"REFERENCE DATE" has the meaning specified in Section 13.03(iv).
"REFERENCE MARKET PRICE" has the meaning specified in Section 13.07(b).
"REGISTRATION DEFAULT" has the meaning specified in Section 10.07.
"REGISTRATION RIGHTS AGREEMENT" has the meaning specified in Section
10.07.
"REGULAR RECORD DATE" has the meaning specified in Section 3.01.
"RELEVANT PRICE" has the meaning specified in Section 13.07(b).
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"RESPONSIBLE OFFICER", when used with respect to the Trustee, means the
chairman or any Vice-chairman of the board of directors, the chairman or any
Vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any Vice president, any assistant vice
president, the treasurer, any assistant treasurer, any trust officer or
assistant trust officer, the controller or any assistant controller or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"RESTRICTED PREFERRED SECURITIES" means each Preferred Security required
to bear the restricted securities legend required by Section 9.02(j) of the
Declaration.
"RESTRICTED SECURITIES" means each Security required to bear a Restricted
Securities Legend pursuant to Section 2.02 hereof.
"RESTRICTED SECURITIES LEGEND" has the meaning specified in Section 2.02.
"SECURITIES" has the meaning specified in the Third Recital to this
instrument.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time to
time, or any successor legislation.
"SECURITY REGISTER" and "Security Registrar" have the respective meanings
specified in Section 3.06.
"SENIOR DEBT" means (i) the principal of, premium, if any, and interest,
on all obligations of every nature of the Company for money borrowed, whether
outstanding on the date of execution of the Indenture or thereafter created,
assumed or incurred, together with all fees, indemnities and expenses payable
under such obligations, (ii) all obligations to make payment pursuant to the
terms of financial instruments, such as (a) securities contracts and foreign
currency exchange contracts, (b) derivative instruments, such as swap agreements
(including interest rate and foreign exchange rate swap agreements), cap
agreements, floor agreements, collar agreements, interest rate agreements,
foreign exchange agreements, options, commodity futures contracts and commodity
options contracts, and (c) similar financial instruments; except, in the case of
both (i) and (ii) above, such indebtedness and obligations that are expressly
stated to rank junior in right of payment to, or pari passu in right of payment
with, the Securities, (iii) indebtedness or obligations of others of the kind
described in both (i) and (ii) above for the payment of which the Company is
responsible or liable as guarantor or otherwise, and (iv) deferrals, renewals or
extensions of any such Senior Debt; provided, however, that Senior Debt shall
not be deemed to include (a) any Debt of the Company which, when incurred and
without respect to any election under Section 1111(b) of the United States
Bankruptcy Code of 1978, was without recourse to the Company, (b) trade accounts
payable and accrued liabilities arising in the ordinary course of business, (c)
any Debt of the Company to any of its subsidiaries, (d) Debt to any employee of
the Company and (e) Debt which by its terms is
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subordinated to trade accounts payable or accrued liabilities arising in the
ordinary course of business to the extent that payments made to the holders of
such Debt by the Holders of the Securities as a result of the subordination
provisions of the Indenture would be greater than such payments otherwise would
have been as a result of any obligation of such holders of such Debt to pay
amounts over to the obligees on such trade accounts payable or accrued
liabilities arising in the ordinary course of business as a result of
subordination provisions to which such Debt is subject.
"SHELF REGISTRATION STATEMENT" has the meaning specified in Section 10.07.
"SPECIAL RECORD DATE" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.08.
"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, together with any
accrued and unpaid interest (including Compounded Interest), of such Security or
such installment of interest is due and payable.
"SUBSIDIARY" of any Person means (i) a corporation more than 50% of the
outstanding Voting Stock of which is owned, directly or indirectly, by such
Person or by one or more other Subsidiaries of such Person or by such Person and
one or more Subsidiaries thereof or (ii) any other Person (other than a
corporation) in which such Person, or one or more other Subsidiaries of such
Person or such Person and one or more other Subsidiaries thereof, directly or
indirectly, has at least a majority ownership and power to direct the policies,
management and affairs thereof.
"TAX EVENT" means the receipt by the Property Trustee of an opinion of a
nationally recognized independent tax counsel to the Company experienced in such
matters (a "Dissolution Tax Opinion") to the effect that, as a result of (a) any
amendment to or change (including any announced prospective change (which shall
not include a proposed change), provided that a Tax Event shall not occur more
than 90 days before the effective date of any such prospective change) in the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, (b) any judicial decision or
official administrative pronouncement, ruling, regulatory procedure, notice or
announcement, including any notice or announcement of intent to adopt such
procedures or regulations (an "Administrative Action") or (c) any amendment to
or change in the administrative position or interpretation of any Administrative
Action or judicial decision that differs from the theretofore generally accepted
position, in each case, by any legislative body, court, governmental agency or
regulatory body, irrespective of the manner in which such amendment or change is
made known, which amendment or change is effective or such Administrative Action
or decision is announced, in each case, on or after the date of original
issuance of the Securities or the issue date of the Preferred Securities issued
by the Trust, there is more than an insubstantial risk that (x) if the
Securities are held by the Property Trustee, (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 interest accrued or received on the Securities or subject to
more than a de minimis amount of other taxes, duties or other governmental
charges as determined by such counsel, or (ii) any portion of interest payable
by the
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Company to the Trust on the Securities is not, or within 90 days of the date of
such opinion will not be, deductible by the Company in whole or in part for
United States Federal income tax purposes or (y) with respect to Securities
which are no longer held by the Property Trustee, any portion of interest
payable by the Company on the Securities is not, or within 90 days of the date
of such opinion will not be, deductible by the Company in whole or in part for
United States Federal income tax purposes.
"TRADING DAY" has the meaning specified in Section 13.07(b).
"TRUST" has the meaning specified in the first recital to this instrument.
"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
such successor Trustee.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"TRUST SECURITIES" has the meaning specified in the second recital to this
instrument.
"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".
"VOTING STOCK" of any Person means capital stock of such Person which
ordinarily has voting power for the election of directors (or Persons performing
similar functions) of such Person, whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.
SECTION 1.02 COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee such certificates and opinions as may be required under the Trust
Indenture Act or reasonably requested by the Trustee in connection with such
application or request. Each such certificate or opinion shall be given in the
form of an Officers' Certificate, if to be given by an officer of the Company,
or an Opinion of Counsel, if to be given by counsel, and shall comply with the
applicable requirements of the Trust Indenture Act and any other applicable
requirement set forth in this Indenture. Every certificate or opinion with
respect to compliance with a condition or covenant provided for in this
Indenture shall include:
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(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 or caused to be 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 1.03 FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.04 ACTS OF HOLDERS; RECORD DATES.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given to 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
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or by an agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments is or 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 6.01)
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 or the Company, as the case may be, deems
sufficient.
(c) The Company may, in the circumstances permitted by the Trust
Indenture Act, fix any day as the record date for the purpose of determining the
Holders of Outstanding Securities entitled to give, make or take any request,
demand, authorization, direction, notice, consent, waiver or other action, or to
vote on any action, authorized or permitted to be given or taken by Holders. If
not set by the Company prior to the first solicitation of a Holder made by any
Person in respect of any such action, or, in the case of any such vote, prior to
such vote, the record date for any such action or vote shall be the 30th day
(or, if later, the date of the most recent list of Holders required to be
provided pursuant to Section 7.01) prior to such first solicitation or vote, as
the case may be. With regard to any record date, only the Holders on such date
(or their duly designated proxies) shall be entitled to give or take, or vote
on, the relevant action.
(d) The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to join in the giving
or making of (i) any notice of default, (ii) any declaration of acceleration
referred to in Section 5.02, (iii) any request to institute proceedings referred
to in Section 5.07(2) or (iv) any direction referred to in Section 5.12. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities on such record date, and no other Holders, shall be entitled to join
in such notice, declaration, request or direction, whether or not such Holders
remain Holders after such record date; provided that no such action shall be
effective hereunder unless taken on or prior to the date set by the Trustee by
which any such determination shall be made (the "Expiration Date") by Holders of
the requisite principal amount of Outstanding Securities on such record date.
Nothing in this paragraph shall be construed to prevent the Trustee from setting
a new record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be canceled and of no effect),
and nothing in this paragraph shall be construed to render ineffective any
action taken by Holders of the requisite
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principal amount of Outstanding Securities on the date such action is taken.
Promptly after any record date is set pursuant to this paragraph, the Trustee,
at the Company's expense, shall cause notice of such record date, the proposed
action by Holders and the applicable Expiration Date to be given to the Company
in writing and to each Holder of Securities in the manner set forth in Section
1.06.
(e) The ownership of Securities shall be proved by the Security
Register.
(f) 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.
(g) Without limiting the foregoing, a Holder entitled hereunder to
give or take any such action with regard to any particular Security may do so
with regard to all or any part of the principal amount of such Security or by
one or more duly appointed agents each of which who may do so pursuant to such
appointment with regard to all or any different part of such principal amount.
SECTION 1.05 NOTICES, ETC., TO TRUSTEE AND THE 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:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
(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:
Carriage Services, Inc.
1300 Post Oak Blvd., Suite 1500
Houston, Texas 77056-3012
Attention: Chief Financial Officer
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SECTION 1.06 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 such Holder's address as it appears in the Security Register,
not later than the latest date (if any), and not earlier than the earliest date
(if any), prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Any notice when mailed
to a Holder in the aforesaid manner shall be conclusively deemed to have been
received by such Holder whether or not actually received by such Holder. 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 1.07 CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with a provision of
the Trust Indenture Act that is required under such Act to be a part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
that may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be.
SECTION 1.08 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 1.09 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 1.10 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.
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SECTION 1.11 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 Debt, the holders of Preferred Securities (to
the extent provided herein) and the Holders of Securities, any benefit or any
legal or equitable right, remedy or claim under this Indenture.
SECTION 1.12 GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.
SECTION 1.13 LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security or the last date on which a Holder has the right to
convert his Securities shall not be a Business Day, then (notwithstanding any
other provision of this Indenture or of the Securities) payment of interest or
principal or conversion of the Securities need not be made on such date, but may
be made on the next succeeding Business Day (except that, with respect to any
Redemption Date, if such Business Day is in the next succeeding calendar year,
such Redemption Date shall be the immediately preceding Business Day) with the
same force and effect as if made on the Interest Payment Date or Redemption
Date, or at the Stated Maturity or on such last day for conversion, provided
that no interest shall accrue for the period from and after such Interest
Payment Date, Redemption Date or Stated Maturity, as the case may be.
ARTICLE II
SECURITY FORMS
SECTION 2.01 FORMS GENERALLY.
The Securities and the Trustee's certificates of authentication shall be
substantially in the form of Exhibit A which is hereby incorporated in and
expressly made a part of this Indenture. The Securities may have notations,
legends or endorsements required by law, stock exchange rule, agreements to
which the Company is subject, if any, or usage (provided that any such notation,
legend or endorsement is in a form acceptable to the Company). The Company shall
furnish any such legend not contained in Exhibit A to the Trustee in writing.
Each Security shall be dated the date of its authentication. The terms and
provisions of the Securities set forth in Exhibit A are part of the terms of
this Indenture and to the extent applicable, the Company and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
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The definitive Securities shall be typewritten or printed, lithographed or
engraved or produced by any combination of these methods on steel engraved
borders or may be produced in any other manner permitted by the rules of any
securities exchange on which the Securities may be listed, all as determined by
the officers executing such Securities, as evidenced by their execution of such
Securities.
SECTION 2.02 INITIAL ISSUANCE TO PROPERTY TRUSTEE.
The Securities initially issued to the Property Trustee of the Trust shall
be in the form of one or more individual certificates in definitive, fully
registered form without distribution coupons and shall bear the following legend
(the "Restricted Securities Legend") unless the Company determines otherwise in
accordance with applicable law:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THIS SECURITY AND
ANY COMMON STOCK ISSUABLE UPON CONVERSION HEREOF MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANS FERRED IN THE ABSENCE OF SUCH REGISTRATION
OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER IS HEREBY
NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE ISSUER AND
THE COMPANY THAT (A) THIS SECURITY AND ANY COMMON STOCK ISSUABLE
UPON CONVERSION HEREOF MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (i) INSIDE THE UNITED STATES TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (ii) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (iii) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES
(i) THROUGH (iii) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
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JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE
RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
SECTION 2.03 ADDITIONAL PROVISIONS REQUIRED IN GLOBAL SECURITY.
Any Global Security issued hereunder shall, in addition to the provisions
contained in Section 2.02, 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
THE DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") OR A NOMINEE OF THE
DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED
IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND NO
TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS
A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF
THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK)
TO CARRIAGE SERVICES, INC. OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY 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 INASMUCH
AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
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SECTION 2.04 ISSUANCE OF GLOBAL SECURITIES TO HOLDERS.
The Securities may be represented by one or more Global Securities
registered in the name of the Depositary or its nominee if, and only if, the
Securities are distributed to the Holders of the Trust Securities. Until such
time, the Securities shall be registered in the name of and held by the Property
Trustee. Securities distributed to Holders of book-entry Trust Securities shall
be distributed in the form of one or more Global Securities registered in the
name of the Depositary or its nominee, and deposited with the Security
Registrar, as custodian for such Depositary, or held by such Depositary for
credit by the Depositary to the respective accounts of the beneficial owners of
the Securities represented thereby (or such other accounts as they may direct).
Securities distributed to Holders of Trust Securities other than book-entry
Trust Securities shall not be issued in the form of a Global Security or any
other form intended to facilitate book-entry trading in beneficial interests in
such Securities.
ARTICLE III
THE SECURITIES
SECTION 3.01 TITLE AND TERMS.
The aggregate principal amount of Securities that may be authenticated and
delivered under this Indenture is limited to the sum of $96,649,600 except for
Securities authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Securities pursuant to Section 3.04, 3.05,
3.06, 3.07, 9.06, 11.07 or 13.02.
The Securities shall be known and designated as the "7% Convertible Junior
Subordinated Debentures Due 2029" of the Company. Their Stated Maturity shall be
June 1, 2029, and they shall bear interest at the Applicable Rate, from June 3,
1999, or from the most recent Interest Payment Date (as defined below) to which
interest has been paid or duly provided for, as the case may be, payable
quarterly (subject to deferral as set forth herein), in arrears, on March 1,
June 1, September 1 and December 1 (each an "Interest Payment Date") of each
year, commencing September 1, 1999, until the principal thereof is paid or made
available for payment, and they shall be paid to the Person in whose name the
Security is registered at the close of business on the regular record date for
such interest installment, which shall be the close of business on the fifteenth
day of the month next preceding the applicable Interest Payment Date (the
"Regular Record Date"). Interest will compound quarterly and will accrue at the
Applicable Rate on any interest installment in arrears for more than one quarter
or during an extension of an interest payment period as set forth in Section
3.13 hereof.
The amount of interest payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months. Except as provided in the
following sentence, the amount of interest payable for any period shorter than a
full quarterly period for which interest is computed, will be computed on the
basis of the actual number of days elapsed in such a 30-day month. In the event
that any date on which interest is payable on the Securities is not a Business
Day, then payment of
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interest payable on such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of any such
delay), with the same force and effect
as if made on such date.
If at any time (including upon the occurrence of a Tax Event) while the
Property Trustee is the Holder of all the Securities, the Trust or the Property
Trustee is required to pay any taxes, duties, assessments or governmental
charges of whatever nature (other than withholding taxes) imposed by the United
States, or any other taxing authority, then, in any case, the Company will pay
as additional amounts ("Additional Sums") on the Securities held by the Property
Trustee, such additional amounts as shall be required so that the net amounts
received and retained by the Trust and the Property Trustee after paying such
taxes, duties, assessments or other governmental charges will be equal to the
amounts the Trust and the Property Trustee would have received had no such
taxes, duties, assessments or other governmental charges been imposed.
The principal of and interest on the Securities shall be payable at the
office or agency of the Company in New York, New York maintained for such
purpose and at any other office or agency maintained by the Company for such
purpose in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts; provided,
however, that at any time that the Property Trustee is not the sole holder of
the Securities, payment of interest may, at the option of the Company, be made
by check mailed to the address of the Person entitled thereto as such address
shall appear in the Security Register or by wire transfer.
The Securities shall be redeemable as provided in Article XI hereof.
The Securities shall be subordinated in right of payment to Senior Debt as
provided in Article XII hereof.
The Securities shall be convertible as provided in Article XIII hereof.
SECTION 3.02 DENOMINATIONS.
The Securities shall be issuable only in registered form without coupons
and only in denominations of $1,000 and integral multiples thereof.
SECTION 3.03 EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Securities shall be executed on behalf of the Company by its Chairman
of the Board, its Vice Chairman of the Board, its President or one of its Vice
Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile.
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
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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 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 such Company
Order shall manually authenticate and make available for delivery such
Securities as in this Indenture provided and not otherwise.
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.
SECTION 3.04 TEMPORARY SECURITIES.
Pending the preparation of definitive Securities, the Company may execute,
and upon Company Order the Trustee shall authenticate and make available for
delivery, 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 are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at any office
or agency of the Company designated pursuant to Section 10.02, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary
Securities, the Company shall execute and the Trustee shall authenticate and
make available for delivery in exchange therefor a like principal amount of
definitive Securities of authorized denominations. Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
SECTION 3.05 GLOBAL SECURITIES.
(a) Each Global Security issued under this Indenture shall be
registered in the name of the Depositary designated by the Company for such
Global Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
(b) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered, and no
transfer of a Global Security in
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whole or in part may be registered, in the name of any Person other than the
Depositary for such Global Security or a nominee thereof unless (i) such
Depositary advises the Trustee in writing that such Depositary is no longer
willing or able to continue as a Depositary with respect to such Global
Security, and no successor depositary shall have been appointed, or if at any
time the Depositary ceases to be a "clearing agency" registered under the
Exchange Act, at a time when the Depositary is required to be so registered to
act as such depositary, (ii) the Company in its sole discretion determines that
such Global Security shall be so exchangeable or (iii) there shall have occurred
and be continuing an Event of Default.
(c) If any Global Security is to be exchanged for other Securities
or canceled in whole, it shall be surrendered by or on behalf of the Depositary
or its nominee to the Security Registrar for exchange or cancellation as
provided in this Article III. If any Global Security is to be exchanged for
other Securities or canceled in part, or if another Security is to be exchanged
in whole or in part for a beneficial interest in any Global Security, then
either (i) such Global Security shall be so surrendered for exchange or
cancellation as provided in this Article III or (ii) the principal amount
thereof shall be reduced or increased by an amount equal to the portion thereof
to be so exchanged or canceled, or equal to the principal amount of such other
Security to be so exchanged for a beneficial interest therein, as the case may
be, by means of an appropriate adjustment made on the records of the Security
Registrar, whereupon the Trustee shall instruct the Depositary or its authorized
representative to make a corresponding adjustment to its records. Upon any such
surrender or adjustment of a Global Security by the Depositary, accompanied by
registration instructions and, to the extent required by Section 3.06, a
Restricted Securities Certificate, the Trustee shall, subject to Section 3.05(b)
and as otherwise provided in this Article III, authenticate and make available
for delivery any Securities issuable in exchange for such Global Security (or
any portion thereof) in accordance with the instructions of the Depositary. The
Trustee shall not be liable for any delay in delivery of such instructions and
may conclusively rely on, and shall be fully protected in relying on, such
instructions.
(d) The Depositary or its nominee, as registered owner of a Global
Security, shall be the Holder of such Global Security for all purposes under
this Indenture and the Securities, and owners of beneficial interests in a
Global Security shall hold such interest pursuant to the rules and procedures of
the Depositary. Accordingly, any such owner's beneficial interests in a Global
Security shall be shown only on, and the transfer of such interest shall be
effected only through, records maintained by the Depositary or its nominee or
its Agent Members. Neither the Trustee nor the Security Registrar shall have any
liability in respect of any transfers effected by the Depositary.
(e) The rights of the beneficial interests in a Global Security
shall be exercised only through the Depositary and shall be limited to those
established by law and agreements between such owners and the Depositary and/or
its Agent Members.
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SECTION 3.06 REGISTRATION, TRANSFER AND EXCHANGE GENERALLY; CERTAIN TRANSFERS
AND EXCHANGES.
(a) 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 designated pursuant to Section 10.02 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 at an office
or agency of the Company designated pursuant to Section 10.02 for such purpose,
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 any authorized denominations and of a like aggregate principal amount and
bearing such restrictive legends as may be required by this Indenture.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denominations and of a like aggregate principal
amount and bearing such restrictive legends as may be required by this
Indenture, 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 make available for
delivery, 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 3.04, 3.05, 9.06, 11.09 or 13.01 not involving any
transfer.
Neither the Company nor the Trustee shall be required (i) in the case of a
partial redemption of the Securities, to issue, register the transfer of or
exchange any Security during a period beginning at the opening of business 15
days before the day of the mailing of a notice of redemption of Securities
selected for redemption under Section 11.04 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.
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(b) TRANSFER AND EXCHANGE PROCEDURES AND RESTRICTIONS. The
Securities may not be transferred except in compliance with the Restricted
Securities Legend unless otherwise determined by the Company in accordance with
applicable law. Upon any distribution of the Securities to the holders of the
Trust Securities in accordance with the Declaration, the Company and the Trustee
shall enter into a supplemental indenture pursuant to Section 9.01(6) to provide
for transfer procedures and restrictions with respect to the Securities
substantially similar to those contained in the Declaration to the extent
applicable in the circumstances existing at the time of such distribution.
Notwithstanding any other provision of the Indenture, transfers and exchanges of
Securities and beneficial interests in a Global Security of the kinds specified
in this Section 3.06(b) shall be made only in accordance with this Section
3.06(b).
(1) NON-GLOBAL SECURITY TO GLOBAL SECURITY. If the Holder of a
Security (other than a Global Security) wishes at any time to transfer all
or any portion of such Security to a Person who wishes to take delivery
thereof in the form of a beneficial interest in a Global Security, such
transfer may be effected only in accordance with the provisions of this
clause (b)(1) and subject to the rules and procedures of the Depositary.
Upon receipt by the Security Registrar of (A) such Security as provided in
Section 3.06(a) and instructions satisfactory to the Security Registrar
directing that a beneficial interest in the Global Security in a specified
principal amount not greater than the principal amount of such Security be
credited to a specified Agent Member's account and (B) a Securities
Certificate duly executed by such Holder or such Holder's attorney duly
authorized in writing, then the Security Registrar shall cancel such
Security (and issue a new Security in respect of the untransferred portion
thereof) as provided in Section 3.06(a) and increase the aggregate
principal amount of the Global Security by the specified principal amount
as provided in Section 3.05(c).
(2) NON-GLOBAL SECURITY TO NON-GLOBAL SECURITY. A Security
that is not a Global Security may be transferred, in whole or in part, to
a Person who takes delivery in the form of another Security that is not a
Global Security as provided in Section 3.06(a); provided, that if such
Security to be transferred in whole or in part is a Restricted Security,
the Security Registrar shall have received the assignment form attached to
the Security duly executed by the transferor Holder or such Holder's
attorney duly authorized in writing.
(3) EXCHANGES BETWEEN GLOBAL SECURITY AND NON-GLOBAL SECURITY.
A beneficial interest in a Global Security may be exchanged for a Security
that is not a Global Security as provided in Section 3.05.
(c) RESTRICTED SECURITIES LEGEND.
(1) Except as set forth below, all Securities shall bear
the Restricted Securities Legend set forth in Section 2.02.
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(2) Subject to Section 3.06(d) and to the following clauses of
this Section 3.06(c), a Security (other than a Global Security) that does
not bear a Restricted Securities Legend may be issued in exchange for or
in lieu of a Restricted Security or any portion thereof that bears such
legend if, in the Company's judgment, placing such a legend upon such new
Security is not necessary to ensure compliance with the registration
requirements of the Securities Act, and the Trustee, at the written
direction of the Company in the form of an Officers' Certificate, shall
countersign and deliver such a new Security.
(3) Notwithstanding the foregoing provisions of this Section
3.06(c), a successor Security of a Security that does not bear a
Restricted Securities Legend shall not bear such form of legend unless the
Company has reasonable cause to believe that such successor Security is a
"restricted security" within the meaning of Rule 144 under the Securities
Act, in which case the Trustee, at the written direction of the Company in
the form of an Officers' Certificate, shall countersign and deliver a new
Security bearing a Restricted Securities Legend in exchange for such
successor Security.
(4) Upon any sale or transfer of a Restricted Security
(including any Restricted Security represented by a Global Security)
pursuant to an effective registration statement under the Securities Act
or pursuant to Rule 144 under the Securities Act after such registration
ceases to be effective: (A) in the case of any Restricted Security that is
a definitive Security, the Security Registrar shall permit the Holder
thereof to exchange such Restricted Security for a definitive Security
that does not bear the Restricted Securities Legend and shall rescind any
restriction on the transfer of such Restricted Security; and (B) in the
case of any Restricted Security that is represented by a Global Security,
the Security Registrar shall permit the Holder of such Global Security to
exchange such Global Security for another Global Security that does not
bear the Restricted Securities Legend.
(5) If Restricted Securities are being presented or
surrendered for transfer or exchange then there shall be (if so required
by the Trustee), (A) if such Restricted Securities are being delivered to
the Security Registrar by a Holder for registration in the name of such
Holder, without transfer, a certification from such Holder to that effect;
or (B) if such Restricted Securities are being transferred, a
certification from the transferor as to the compliance with the
restrictions set forth in the Restricted Securities Legend.
SECTION 3.07 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 make available for delivery in
exchange therefor a new Security 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
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to the Company or the Trustee that such Security has been acquired by a bona
fide purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of 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 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 duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.08 PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
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.
Any interest on any Security 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 (or their respective
Predecessor Securities) are registered at the close of business on a
Special Record Date (as defined below) 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 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
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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 (the "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 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 (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 in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and, if so
listed, upon such notice as may be required by such exchange (or by the
Trustee if the Securities are not listed), if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause,
such manner of payment shall be deemed practicable by the Trustee provided
that any such payment will be made in coin or currency of the United
States of America which at the time of payment is a legal tender for
payment of public and private debt.
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 interest (including in each such case Compounded
Interest), which were carried by such other Security.
In the case of any Security which is converted after any Regular Record
Date and on or prior to the next succeeding Interest Payment Date (other than
any Security whose Maturity is prior to such Interest Payment Date), interest
whose Stated Maturity is on such Interest Payment Date shall be payable on such
Interest Payment Date notwithstanding such conversion, and such interest
(whether or not punctually paid or duly provided for) 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 such Regular Record Date. Except as
otherwise expressly provided in the immediately preceding sentence, in the case
of any Security that is converted prior to any Regular Record Date, interest
whose Stated Maturity is after the date of conversion of such Security shall not
be payable, and the Company shall not make nor be required to make any other
payment, adjustment or allowance with respect to accrued but unpaid interest
(including Additional Payments) on the Securities being converted, which shall
be deemed to be paid in full.
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SECTION 3.09 PERSONS DEEMED OWNERS.
The Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name any Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and (subject to
Section 3.08) 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. No holder of any beneficial interest in any Global Security held on
its behalf by a Depositary shall have any rights under this Indenture with
respect to such Global Security, and such Depositary may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the owner of
such Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company or the Trustee from giving effect to
any written certification, proxy, or other authorization furnished by a
Depositary or impair, as between the Depositary and such holders of beneficial
interests, the operation of customary practices governing the exercise of the
rights of the Depositary (or its nominee) as Holder of any Security.
SECTION 3.10 CANCELLATION.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or conversion shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and shall be promptly canceled 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 all Securities so delivered
shall be promptly canceled by the Trustee. No Securities shall be authenticated
in lieu of or in exchange for any Securities canceled as provided in this
Section, except as expressly permitted by this Indenture. All canceled
Securities held by the Trustee shall be disposed of as directed by a Company
Order; provided, however, that the Trustee shall not be required to destroy the
certificates representing such canceled Securities.
SECTION 3.11 RIGHT OF SET OFF.
Notwithstanding anything to the contrary in this Indenture, the Company
shall have the right to set off any payment it is otherwise required to make
hereunder to the extent the Company has theretofore made, or is concurrently on
the date of such payment making, a payment under the Guarantee.
SECTION 3.12 CUSIP NUMBERS.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided, that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and
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that reliance may be placed only on the other identification numbers printed on
the Securities, and any such redemption shall not be affected by any defect in
or omission of such numbers.
SECTION 3.13 EXTENSION OF INTEREST PAYMENT PERIOD; NOTICE OF EXTENSION.
(a) So long as no Event of Default has occurred and is continuing,
the Company shall have the right, at any time during the term of this Security,
from time to time to defer payments of interest by extending for successive
periods not exceeding 20 consecutive quarters for each such period (a "Deferral
Period"); provided that no Deferral Period may extend beyond June 1, 2029. To
the extent permitted by applicable law, interest, the payment of which has been
deferred because of the extension of the interest payment period pursuant to
this Section 3.13, will bear interest thereon at the Applicable Rate compounded
quarterly for each quarter of the Deferral Period ("Compounded Interest"). On
the applicable Payment Resumption Date, the Company shall pay all interest then
accrued and unpaid on the Securities, including any Compounded Interest that
shall be payable to the Holders of the Securities in whose names the Securities
are registered in the Security Register on the Regular Record Date fixed for
such Payment Resumption Date. A Deferral Period shall terminate upon the payment
by the Company of all interest then accrued and unpaid on the Securities
(together with interest thereon accrued at an annual rate equal to the
Applicable Rate, compounded quarterly, to the extent permitted by applicable
law). Before the termination of any Deferral Period, the Company may further
extend such period as provided in paragraph (b) of this Section 3.13, provided
that such period together with all such further extensions thereof shall not
exceed 20 consecutive quarters or extend beyond the Stated Maturity of the
Securities. Upon the termination of any Deferral Period, and subject to the
foregoing requirements, the Company may elect to begin a new Deferral Period. No
interest shall be due and payable during a Deferral Period except on the Payment
Resumption Date as determined pursuant to paragraph (b) of this Section 3.13.
There is no limitation on the number of times that the Company may elect to
begin a Deferral Period.
(b) The Company shall give the Holder of the Security and the
Trustee written notice (a "Deferral Notice") of its selection of a Deferral
Period at least ten days prior to the record date for any distributions that
would have been payable on the Trust Securities except for the decision to begin
or extend a Deferral Period. On or prior to the Regular Record Date immediately
preceding the Interest Payment Date on which the Company elects to pay all
interest then accrued and unpaid on the Securities, including Compound Interest
(the "Payment Resumption Date"), the Company shall give the Holder of the
Security and the Trustee written notice that the Deferral Period will end on
such Payment Resumption Date. Notwithstanding the provision of such notice, the
Company may elect to further extend the Deferral Period, subject to the
limitations set forth in Section 3.13(a), by providing the Holder of the
Security and the Trustee with a new Deferral Notice not less than three Business
Days prior to the Regular Record Date immediately preceding the previously
scheduled Payment Resumption Date. The Company may elect to pay all interest
then accrued and unpaid on the Securities, including Compound Interest, on an
Interest Payment Date prior to its most recently established Payment Resumption
Date provided that the Company gives the Holder of the Security and the Trustee
a new Deferral Notice setting forth the revised Payment
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Resumption Date at least three Business Days prior to the Regular Record Date
for such revised Payment Resumption Date.
(c) The quarter in which any Deferral Notice is given pursuant to
paragraph (b) hereof shall be counted as one of the 20 quarters permitted in the
maximum Deferral Period permitted under paragraph (a) hereof.
SECTION 3.14 PAYING AGENT, SECURITY REGISTRAR AND CONVERSION AGENT.
The Trustee will initially act as Paying Agent, Security Registrar and
Conversion Agent. The Company may change any Paying Agent, Security Registrar,
co-registrar or Conversion Agent without prior notice. The Company or any of its
Affiliates may act in any
such capacity.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01 SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall cease to be of further effect (except as to any
surviving rights of conversion, registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, on demand of and 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 3.06 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 10.03) have been delivered
to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation
1) have become due and payable, or
2) will become due and payable at their Stated
Maturity within one year, or
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3) 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 interest
(including Compounded 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 6.07 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 4.02 and the last
paragraph of Section 10.03 shall survive.
SECTION 4.02 APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 10.03, all
money deposited with the Trustee pursuant to Section 4.01 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and interest for
whose payment such money has been deposited with the Trustee. All moneys
deposited with the Trustee pursuant to Section 4.01 (and held by it or any
Paying Agent) for the payment of Securities subsequently converted shall be
returned to the Company upon Company Request.
ARTICLE V
REMEDIES
SECTION 5.01 EVENTS OF DEFAULT.
"EVENT OF DEFAULT," wherever used herein, means any one of the following
events that has occurred and is continuing (whatever the reason for such Event
of Default and whether it shall be
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occasioned by the provisions of Article XI 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,
including any Additional Payments, when it becomes due and payable, and
continuance of such default for a period of 30 days (subject to the
deferral of any due date in the case of a Deferral Period); or
(2) default in the payment of the principal of any Security
when due, whether at its Maturity, upon redemption, by declaration of
acceleration or otherwise; or
(3) default in the observation or performance, in any material
respect, of any covenant of the Company in this Indenture (other than a
covenant a default in the performance of which or the breach of which is
elsewhere in this Section specifically dealt with), and continuance of
such default 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 aggregate
outstanding principal amount of the Securities a written notice specifying
such default and requiring it to be remedied; or
(4) failure by the Company to issue and deliver Common Stock
upon an election to convert the Securities into Common Stock; or
(5) the entry or a decree or order by a court having
jurisdiction in the premises adjudging the Company as 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 bankruptcy, insolvency,
reorganization or other similar law, or appointing a 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 unstayed and in effect for a period of 60 consecutive days; or
(6) the institution by the Company of proceedings to be
adjudicated a bankrupt or insolvent, or the consent by it to the
institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking reorganization or
relief under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law, or the consent by it to the filing of
any such petition or to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of the Company
or of any substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the admission by it in writing
of its inability to pay its debts generally as they become due and its
willingness to be adjudicated a bankrupt, or the taking of corporate
action by the Company in furtherance of any such action; or
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(7) the voluntary or involuntary dissolution, winding up or
termination of the Trust, except in connection with (i) the distribution
of Securities to holders of Preferred Securities in liquidation or
redemption of their interests in the Trust, (ii) the redemption of all of
the outstanding Preferred Securities of the Trust or (iii) certain
mergers, consolidations or amalgamations, each as permitted by the
Declaration.
SECTION 5.02 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default 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 may declare the principal of all the Outstanding
Securities and any other amounts payable hereunder (including any Additional
Payments) to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders); provided that, if the Property
Trustee is the sole Holder of the Securities and if upon an Event of Default,
the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities fail to declare the principal of all the Securities to be
immediately due and payable, the holders of at least 25% in aggregate
liquidation amount of Preferred Securities then outstanding shall have such
right by a notice in writing to the Company and the Trustee; and upon any such
declaration such principal and all accrued interest shall become immediately due
and payable. Upon any such declaration such principal amount (or specified
amount) of and the accrued interest (including any Additional Payments) on all
the Securities shall then become immediately due and payable; provided that the
payment of principal and interest on such Securities (including Additional
Payments) shall remain subordinated to the extent provided in Article XII.
At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as provided in this Article hereinafter, the Holders of a majority
in aggregate principal amount of the Outstanding Securities or of a majority in
liquidation amount of Preferred Securities, as the case may be, 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 (including any Compounded
Interest) on all Securities,
(B) the principal of any Securities which have become
due otherwise than by such declaration of acceleration and interest
thereon at the rate borne by the Securities, and
(C) all sums paid or advanced by the Trustee hereunder
and the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel;
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and
(2) all Events of Default, other than the non-payment of the
principal of Securities which have become due solely by such declaration
of acceleration, have been cured or waived as provided in Section 5.13.
The Company is required to file annually with the Trustee a certificate as
to whether or not the Company is in compliance with all the conditions and
covenants applicable to it under this Indenture.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 5.03 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.
The Company covenants that if
(1) default is made in the payment of any interest (including
any Compounded 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
any Security at the Stated 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 interest (including any Additional Payments) and,
to the extent that payment thereof shall be legally enforceable, interest on any
overdue principal and on any overdue interest (including any Additional Sums),
at the rate borne by the Securities, and, in addition thereto, all amounts owing
to the Trustee under Section 6.07.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders 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 5.04 TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of any judicial proceeding relative to the Company (or any other
obligor upon the Securities), its property or its creditors, the Trustee shall
be entitled and empowered, by intervention in such proceeding or otherwise, to
take any and all actions authorized under the Trust Indenture Act in order to
have claims of the Holders and the Trustee allowed in any such proceeding. In
particular, the Trustee shall be authorized to collect and receive any moneys or
other property payable or
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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 and any predecessor Trustee under Section 6.07.
No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 5.05 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 all the amounts owing to the Trustee and any predecessor
Trustee under Section 6.07, be for the ratable benefit of the Holders of the
Securities in respect of which such judgment has been recovered.
SECTION 5.06 APPLICATION OF MONEY COLLECTED.
Subject to Article XII, 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 interest (including any Additional Payments), 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 and any
predecessor Trustee under Section 6.07;
SECOND: To the payment of the amounts then due and unpaid for
principal of and interest (including any Additional Payments) 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 interest (including any Compounded
Interest), respectively; and
THIRD: The balance, if any, to the Company.
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SECTION 5.07 LIMITATION ON SUITS.
Subject to Section 5.08, no Holder of any Security 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;
(2) the Holders of not less than 25% in aggregate principal
amount of the Outstanding Securities shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default,
in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities;
it being understood and intended that no one or more 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 Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 5.08 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL AND INTEREST
AND TO CONVERT.
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 (subject to Section 3.08) interest (including
any Additional Payments) on such Security on the respective Stated Maturities
expressed in such Security (or, in the case of redemption, on the Redemption
Date) and to convert such Security in accordance with Article XIII and to
institute suit for the enforcement of any such payment and right to convert, and
such rights shall not be impaired without the consent of such Holder. If the
Property Trustee is the sole Holder of the Securities, any holder of the
Preferred Securities shall have the right to institute suit on behalf of the
Trust for the enforcement of any such payment and right to convert.
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SECTION 5.09 RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
SECTION 5.10 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
3.07, 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 5.11 DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Security 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 5.12 CONTROL BY HOLDERS.
The Holders of a majority in principal amount of the Outstanding
Securities 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; provided, that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture; and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 5.13 WAIVER OF PAST DEFAULTS.
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Subject to Section 9.02 hereof, the Holders of not less than a majority in
principal amount of the Outstanding Securities may on behalf of the Holders of
all the Securities waive any past default hereunder and its consequences, except
a default
(1) in the payment of the principal of, premium, if any, or
interest (including any Additional Payments) on any Security (unless such
default has been cured and a sum sufficient to pay all matured
installments of interest and principal due otherwise than by acceleration
has been deposited with the Trustee); or
(2) in respect of a covenant or provision hereof which under
Article IX cannot be modified or amended without the consent of the Holder
of each Outstanding
Security affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right
consequent thereon.
SECTION 5.14 UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided, that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company or the Trustee or in
any suit for the enforcement of the right to receive the principal of and
interest (including any Additional Payments) on any Security or to convert any
Security in accordance with Article XIII.
SECTION 5.15 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.
SECTION 5.16 ENFORCEMENT BY HOLDERS OF PREFERRED SECURITIES.
Notwithstanding anything to the contrary contained herein, if an Event of
Default has occurred and is continuing and such event is attributable to the
failure of the Company to pay interest
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or principal on the Securities on the date such interest or principal is
otherwise payable, the Company acknowledges that, in such event, a holder of
Preferred Securities may institute a legal proceeding directly for enforcement
of payment to such Holder 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 (a "Direct Action") on or after the
respective due date specified in the Securities. The Company may not amend this
Indenture to remove the foregoing right to bring a Direct Action without the
prior written consent of all the holders of Preferred Securities.
Notwithstanding any payment made to such holder of Preferred Securities by the
Company in connection with a Direct Action, the Company shall remain obligated
to pay the principal of and interest on the Securities (including Additional
Payments, if any) held by the Trust or the Property Trustee and the Company
shall be subrogated to the rights of the holder of such Preferred Securities
with respect to payments on the Preferred Securities to the extent of any
payments made by the Company to such holder in any Direct Action. The holders of
Preferred Securities will not be able to exercise directly any other remedy
available to the Holders of the Securities.
ARTICLE VI
THE TRUSTEE
SECTION 6.01 CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an Event of Default, 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.
(b) In case an Event of Default 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 person would exercise or use under the circumstances in the conduct of
his own affairs.
(c) Notwithstanding the foregoing, (i) the duties and
responsibilities of the Trustee shall be as provided by the Trust Indenture Act
and (ii) no provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it. Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
SECTION 6.02 NOTICE OF DEFAULTS.
The Trustee shall give the Holders notice of any default hereunder as and
to the extent provided by the Trust Indenture Act; provided, however, that in
the case of any default of the
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character specified in Section 5.01(3), 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.
SECTION 6.03 CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 6.01:
(a) the Trustee may conclusively rely and shall be protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors 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,
rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel of its choice 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
reasonable examination of 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
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responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder; and
(h) the Trustee shall not be liable for any action taken, suffered,
or omitted to be taken by it in good faith, without negligence or willful
misconduct, and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture.
SECTION 6.04 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee assumes no responsibility for their correctness. The Trustee
makes no representations as to the validity or sufficiency of this Indenture or
of the Securities. The Trustee shall not be accountable for the use or
application by the Company of the Securities or the proceeds thereof.
SECTION 6.05 MAY HOLD SECURITIES.
The Trustee, any Paying Agent, any Security Registrar or any other agent
of the Company, in its individual or any other capacity, may become the owner or
pledgee of Securities and, subject to Sections 6.08 and 6.13, may otherwise deal
with the Company with the same rights it would have if it were not Trustee,
Paying Agent, Security Registrar, or such other agent.
SECTION 6.06 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 6.07 COMPENSATION AND REIMBURSEMENT.
The Company agrees:
(1) to pay to the Trustee from time to time such reasonable
compensation as the Company and the Trustee shall from time to time agree
in writing 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, fees,
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
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(3) to indemnify the Trustee and any predecessor 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 this trust, including
the costs and expenses of defending itself against any claim or liability
in connection with the exercise or performance of any of its powers or
duties hereunder.
SECTION 6.08 DISQUALIFICATION; CONFLICTING INTERESTS.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
SECTION 6.09 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be a Person
that is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus of at least $50,000,000 and has its Corporate Trust
Office in Wilmington, Delaware. If such Person 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 Person shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
SECTION 6.10 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 under Section 6.11.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If an instrument of acceptance by a successor Trustee
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.
(c) The Trustee may be removed at any time by Act of the Holders of
a majority in principal amount of the Outstanding Securities, delivered to the
Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.08 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
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(2) the Trustee shall cease to be eligible under Section 6.09
and shall fail to resign after written request therefor by the Company or
by any such Holder; or
(3) the Trustee shall become incapable of acting or shall be
adjudged 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 may remove the Trustee, or (ii) subject
to Section 5.14, 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 and
the appointment of a successor Trustee.
(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, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Trustee and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed by the Company or the
Holders and accepted appointment in the manner hereinafter provided, 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 appointment of a successor Trustee.
(f) The Company shall give written notice of each resignation and
each removal of the Trustee and each appointment of a successor Trustee to all
Holders in the manner provided in Section 1.06. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.
SECTION 6.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
Every successor Trustee appointed hereunder 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; provided, that on 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. Upon request of any such successor Trustee, the
Company shall execute any and all instruments required to more fully and
certainly vest in and confirm to such successor Trustee all such rights, powers
and trusts.
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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 6.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any Person into which the Trustee may be merged or converted or with which
it may be consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding to
all or substantially all the corporate trust business of the Trustee, shall be
the successor of the Trustee hereunder; provided such Person 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 6.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If and when the Trustee shall be or become a creditor of the Company (or
any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other
obligor).
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.01 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.
The Company will furnish or cause to be furnished to the Trustee
(a) semiannually, not later than January 15 and July 15 in each
year, a list, in such form as the Trustee may reasonably require, of the names
and addresses of the Holders as of a date not more than 15 days prior to the
delivery thereof; 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.
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SECTION 7.02 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 7.01 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 7.01 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(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 any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
SECTION 7.03 REPORTS BY TRUSTEE.
(a) Within 60 days after May 15 of each year, commencing May 15,
2000, the Trustee shall transmit by first-class mail to Holders such reports
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 the 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 7.04 REPORTS BY COMPANY.
The Company shall file with the Trustee and the Commission, and transmit
to Holders, such information, documents and other reports, and such summaries
thereof, as may be required pursuant to the Trust Indenture Act at the times and
in the manner provided pursuant to such Act; provided, that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission.
Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
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SECTION 7.05 TAX REPORTING.
The Company shall provide to the Trustee on a timely basis such
information as the Trustee requires to enable the Trustee to prepare and file
any form required to be submitted by the Company with the Internal Revenue
Service and the Holders relating to original issue discount, including, without
limitation, Form 1099-0ID or any successor form.
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE
SECTION 8.01 COMPANY MAY CONSOLIDATE, ETC. ONLY ON CERTAIN TERMS.
The Company shall not consolidate with or merge with or into any other
Person or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, and no Person shall consolidate with or merge with or
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 with
or into another Person or convey, transfer or lease all or substantially
all of its properties and assets on a consolidated basis to any Person,
the Person formed by such consolidation or into which the Company is
merged or the Person which acquires by conveyance, transfer or lease, all
or substantially all of the properties and assets of the Company on a
consolidated basis shall be a corporation, limited liability company,
partnership or trust, shall be organized and validly existing under the
laws of the United States of America, any State thereof or the District of
Columbia and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form reasonably satisfactory to
the Trustee, the due and punctual payment of the principal of and interest
(including any Additional Payments) on all the Securities and the
performance or observance of every covenant of this Indenture on the part
of the Company to be performed or observed and shall have provided for
conversion rights in accordance with Article XIII;
(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 at the time any Preferred Securities are outstanding,
such consolidation or merger or conveyance, transfer or lease of assets of
the Company is permitted under, and does not give rise to any breach or
violation of, the Declaration or the Guarantee; and
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(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 8.02 SUCCESSOR SUBSTITUTED.
Upon any consolidation of the Company with, or merger of the Company into,
any other Person or any conveyance, transfer or lease of all or substantially
all the properties and assets of the Company on a consolidated basis in
accordance with Section 8.01, the successor Person formed by such consolidation
or into which the Company is merged or to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the same effect as if
such successor Person had been named as the Company herein, and thereafter,
except in the case of a lease, the predecessor Person shall be relieved of all
obligations and covenants under this Indenture and the Securities.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants of the
Company herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of
the Holders, or to surrender any right or power herein conferred upon the
Company; or
(3) to make provision with respect to the conversion rights of
Holders pursuant to the requirements of Article XIII; or
(4) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture which shall not be inconsistent
with the provisions of this Indenture; provided, that such action pursuant
to this clause (4) shall not adversely affect the interests of the Holders
of the Securities or, so long
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as any of the Preferred Securities shall remain outstanding, the holders
of the Preferred Securities;
(5) to comply with the requirements of the Commission in order
to effect or maintain the qualification of this Indenture under the Trust
Indenture Act; or
(6) to make provision for transfer procedures, certification,
book-entry provisions, the form of restricted securities legends, if any,
to be placed on Securities, and all other matters required pursuant to
Section 3.06(b) or otherwise necessary, desirable or appropriate in
connection with the issuance of Securities to holders of Preferred
Securities in the event of a distribution of Securities by the Trust if a
Tax Event or Investment Company Event occurs and is continuing.
SECTION 9.02 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities, 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 under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of EACH
Outstanding Security affected thereby,
(1) extend the Stated Maturity of the principal of, or any
installment of interest (including any Additional Payments) on, such
Security, or reduce the principal amount thereof, or reduce the rate or
extend the time for payment of interest thereon, or reduce any premium
payable upon the redemption thereof, or change the place of payment where,
or the coin or currency in which, such Security or interest thereon is
payable, or impair the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), or adversely affect the
right to convert such Security as provided in Article XIII (except as
permitted by Section 9.01(3)), or modify the provisions of this Indenture
with respect to the subordination of the Securities in a manner adverse to
the Holders,
(2) reduce the percentage in principal amount of the
Outstanding Securities, 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 or Section
5.13, except to increase any such percentage or to provide that certain
other provisions of this Indenture
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cannot be modified or waived without the consent of the Holder of each
Outstanding Security affected thereby.
Notwithstanding anything to the contrary in this Indenture or the
Declaration, if the Property Trustee is the sole holder of the Securities, so
long as any of the Preferred Securities remains outstanding, no amendment shall
be made that adversely affects the holders of such Preferred Securities, and no
termination of this Indenture shall occur, and no waiver of any Event of Default
or compliance with any covenant under this Indenture shall be effective, without
the prior consent of the holders of the percentage of the aggregate liquidation
amount of such Preferred Securities then outstanding which is at least equal to
the percentage of aggregate stated principal amount of the Outstanding
Securities as shall be required under this Indenture to effect any such
amendment, termination or waiver.
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.
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, that unless such consent shall have
become effective by virtue of the requisite percentage having been obtained
prior to the date which is 90 days after such record date, any such consent
previously given shall automatically and without further action by any Holder be
canceled and of no further effect.
SECTION 9.03 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 6.01) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 9.04 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. No such supplemental indenture shall directly or
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indirectly modify the provisions of Article XII in any manner which might
terminate or impair the rights of the Senior Debt pursuant to such subordination
provisions.
SECTION 9.05 CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
SECTION 9.06 REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.
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 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.
ARTICLE X
COVENANTS; REPRESENTATIONS AND WARRANTIES
SECTION 10.01 PAYMENT OF PRINCIPAL AND INTEREST.
The Company will duly and punctually pay the principal of and interest on
the Securities in accordance with the terms of the Securities and this
Indenture.
SECTION 10.02 MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in the United States an office or agency where
Securities may be presented or surrendered for payment, where Securities may be
surrendered for registration of transfer, exchange or conversion, and where
notices and demands to or upon the Company in respect of the Securities 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 (in the United States) where the Securities 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 the United States for such purposes. The Company will give prompt written
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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 10.03 MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent, it will, on
or before each due date of the principal of or interest on any of the
Securities, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal 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.
Whenever the Company shall have one or more Paying Agents, it will, prior
to each due date of the principal of or interest on any Securities, deposit with
a Paying Agent a sum sufficient to pay the principal or interest so becoming
due, such sum to be held as provided by the Trust Indenture Act, and (unless
such Paying Agent is the Trustee) the Company will promptly notify the Trustee
of its action or failure so to act.
The Company will cause each Paying Agent 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 (i) comply with the provisions of the Trust Indenture Act applicable
to it as a Paying Agent and (ii) during the continuance of any default by the
Company (or any other obligor upon the Securities) in the making of any payment
in respect of the Securities, upon the written request of the Trustee, forthwith
pay to the Trustee all sums held in trust by such Paying Agent as such.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of or interest on any
Security and remaining unclaimed for two years after such principal 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 any 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.
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SECTION 10.04 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
material terms, provisions and conditions of this Indenture (without regard to
any period of grace or requirement of notice provided hereunder) and, if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.
SECTION 10.05 LIMITATION ON DIVIDENDS; TRANSACTIONS WITH AFFILIATES; COVENANTS
AS TO THE TRUST.
(a) If at such time (x) there shall have occurred an Event of
Default, (y) the Company shall be in default with respect to its payment of any
obligations under the Guarantee or (z) the Company shall have given notice of
its election to begin a Deferral Period as provided herein and shall not have
rescinded such notice, or such Deferral Period shall be continuing, the Company
covenants that the Company shall not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Company's capital stock (which includes common and
preferred stock) other than stock dividends which consist of stock of the same
class as that on which the dividends are being paid, (ii) make any payment of
principal, interest or premium, if any, on or repay or repurchase or redeem any
debt securities of the Company that rank pari passu with or junior in interest
to the Securities or (iii) make any guarantee payments with respect to any
guarantee by the Company of the debt securities of any subsidiary of the Company
if such guarantee ranks pari passu with or junior in interest to the Securities
(in each case, other than (A) dividends or distributions in Common Stock, (B)
any declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (C)
payments under the Guarantee, (D) purchases or acquisitions of shares of the
Common Stock in connection with the satisfaction by the Company of its
obligations under any employee benefit plan or any other contractual obligation
of the Company (other than a contractual obligation ranking pari passu with or
junior in interest to the Securities), (E) as a result of a reclassification of
the Company's capital stock or the exchange or conversion of one class or series
of the Company's capital stock for another class or series of the Company's
capital stock or (F) the purchase of fractional interests in shares of the
Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged).
(b) The Company also covenants and agrees (i) for so long as the
Preferred Securities remain outstanding, (a) to maintain directly or indirectly
100% ownership of the Common Securities, provided that certain successor Persons
in transactions which are permitted by Article VIII may succeed to the Company's
ownership of the Common Securities, (b) not to voluntarily terminate, wind-up or
liquidate the Trust, except in connection with (I) a distribution of the
Securities to the holders of the Trust Securities in liquidation of the Trust,
(II) the redemption of all Trust Securities or (iii) certain mergers,
consolidations or amalgamations permitted by the
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Declaration, and (c) not to convert Securities except pursuant to a notice of
conversion delivered to the Conversion Agent by a Holder or by a holder of
Common Securities, (ii) to use its reasonable efforts, consistent with the terms
and provisions of the Declaration, to cause the Trust to remain classified as a
grantor trust and not taxable as a corporation for United States federal income
tax purposes, (iii) to maintain the reservation for issuance of the number of
shares of Class A Common Stock that would be required from time to time upon the
conversation of al the Securities then outstanding, (iv) to deliver shares of
Class A Common Stock upon an election by a Holder to convert such Preferred
Securities into or for Class A Common Stock, and (v) to honor all obligations
relating to the conversion or exchange of Preferred Securities into or for Class
A Common Stock or Securities.
SECTION 10.06 PAYMENT OF EXPENSES OF THE TRUST.
In connection with the offering, sale and issuance of the Securities to
the Property Trustee in connection with the sale of the Trust Securities by the
Trust, the Company shall:
(a) pay for all costs, fees and expenses relating to the offering,
sale and issuance of the Securities, including commissions to the Initial
Purchaser payable pursuant to the Purchase Agreement and compensation of the
Trustee under the Indenture in accordance with the provisions of Section 6.07 of
the Indenture;
(b) be responsible for and pay for all debts and obligations (other
than with respect to the Trust Securities) of the Trust, pay for all costs and
expenses of the Trust (including, but not limited to, costs and expenses
relating to the organization of the Trust, the offering, sale and issuance of
the Trust Securities (including commissions to the Initial Purchaser in
connection therewith), the fees and expenses of the Property Trustee and the
Delaware Trustee, the costs and expenses relating to the operation of the Trust,
including without limitation, costs and expenses of accountants, attorneys,
statistical or bookkeeping services, expenses for printing and engraving and
computing or accounting equipment, paying agent(s), registrar(s), transfer
agent(s), duplicating, travel and telephone and other telecommunications
expenses and costs and expenses incurred in connection with the acquisition,
financing, and disposition of Trust assets); and
(c) pay any and all taxes (other than United States withholding
taxes attributable to the Trust or its assets) and all liabilities, costs and
expenses with respect to such taxes of the Trust.
SECTION 10.07 REGISTRATION RIGHTS.
The holders of the Preferred Securities, the Securities, the Guarantee and
the shares of Common Stock of the Company issuable upon conversion of the
Securities (collectively, the "Registrable Securities") are entitled to the
benefits of a Registration Rights Agreement, dated as of June 3, 1999, among the
Company, the Trust and the Initial Purchaser (the "Registration Rights
Agreement"). Pursuant to the Registration Rights Agreement the Company and the
Trust have agreed for the benefit of the holders of the Registrable Securities
that (i) they will, at the Company's sole
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expense, prior to August 3, 1999, file a shelf registration statement (the
"Shelf Registration Statement") with the Commission with respect to resales of
the Registrable Securities, (ii) they will use their best efforts to cause such
Shelf Registration Statement to be declared effective under the Securities Act
prior to November 1, 1999 and (iii) they will use their best efforts to maintain
such Shelf Registration Statement continuously effective under the Securities
Act (subject to certain exceptions under the Registration Rights Agreement)
until the second anniversary of the effectiveness of the Shelf Registration
Statement or such other period as shall be required under Rule 144(k) thereunder
or any successor rule or regulation thereto or such earlier date as is provided
in the Registration Rights Agreement. If the Company fails to comply with either
of clauses (ii) or (iii) above, subject to certain exceptions provided in the
Registration Rights Agreement, (a "Registration Default") then, at such time,
the Applicable Rate will increase by 50 basis points (.50%). Such increase will
remain in effect from and including the date on which any such Registration
Default shall occur to but excluding the date on which all Registration Defaults
have been cured, on which date the interest rate on the Securities will revert
to the interest rate originally borne by the Securities.
SECTION 10.08 OFFERING DOCUMENT AMENDMENT OR SUPPLEMENT.
The Trust and the Company will advise the Initial Purchaser promptly of
any proposal to amend or supplement the final confidential offering circular
dated May 27, 1999 (the "Offering Document"), and will not effect such amendment
or supplementation without the Initial Purchaser's consent. If, at any time, any
event occurs as a result of which the Offering Document as then amended or
supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or if
it is necessary at any such time to amend or supplement the Offering Document to
comply with any applicable law, the Trust and the Company promptly will notify
the Initial Purchaser of such event and promptly will prepare, at their own
expense, an amendment or supplement which will correct such statement or
omission or effect such compliance. Neither the Initial Purchaser's consent to
nor the Initial Purchaser's delivery to offerees or investors of, any such
amendment or supplement shall constitute a waiver of any of the conditions set
forth in Section 6 of the Purchase Agreement.
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.01 OPTIONAL REDEMPTION.
The Company shall have the right to redeem the Securities (an "Optional
Redemption") in whole or in part, at any time or from time to time on or after
June 5, 2002, at a Redemption Price (the "Optional Redemption Price") equal to
$51.75 per $50 principal amount of the Securities to be redeemed plus any
accrued and unpaid interest, including Additional Payments, if any, to the
Redemption Date, if redeemed on or before June 1, 2003, and at the prices per
$50 principal amount
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of Securities set forth in the following table, plus accrued and unpaid
interest, including Additional Payments, if any, to the Redemption Date, if
redeemed during the 12-month period ending on June 1:
PRICE PER $50
YEAR PRINCIPAL AMOUNT
------------------ -----------------
2004.............. $ 51.17
2005.............. $ 50.58
and thereafter at $50 per $50 principal amount of the Securities plus, in each
case, any accrued and unpaid interest, including Additional Payments, if any, to
the Redemption Date.
SECTION 11.02 TAX EVENT REDEMPTION.
If a Tax Event has occurred and is continuing and:
(1) the Company has received a Redemption Tax Opinion; or
(2) the Issuer Trustees shall have been informed by nationally
recognized independent tax counsel (reasonably acceptable to the Issuer
Trustees) experienced in such matters that a No Recognition Opinion cannot
be delivered,
then the Company shall have the right upon not less than 20 days, nor more than
60 days, notice to the Holders of the Securities to redeem the Securities in
whole, but not in part, for cash at $50 per $50 principal amount of the
Securities plus accrued and unpaid interest, including Additional Payments, if
any, to the Redemption Date, within 90 days following the occurrence of such Tax
Event (the "90 Day Period"); provided, however, that if, at the time there is
available to the Company or the Trust the opportunity to eliminate, within the
90 Day Period, the Tax Event by taking some ministerial action, including, but
not limited to, filing a form or making an election, or pursuing some other
similar reasonable measure which, in the sole judgment of the Company, will have
no adverse effect on the Company, the Trust or the Holders of the Preferred
Securities and will involve no material cost, then the Company or the Trust
shall pursue such ministerial action or other measure in lieu of redemption; and
provided further that the Company shall have no right to redeem the Securities
while the Trust is pursuing any ministerial action or other similar measure
pursuant to its obligations under the Declaration.
If the Company opts not to redeem the Securities pursuant to this Section
11.02, the Company shall be required to pay Additional Sums in respect of the
Securities pursuant to Section 3.01 for so long as (i) a Tax Event has occurred
and is continuing and (ii) the Property Trustee is the sole Holder of the
Securities.
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SECTION 11.03 SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.
If less than all the Securities are to be redeemed (unless such redemption
affects only a single Security), the particular Securities to be redeemed shall
be selected not more than 60 days prior to the Redemption Date by the Trustee by
such method as the Trustee shall deem fair and appropriate, from the Outstanding
Securities not previously called for redemption. Such selection method may
provide for the selection for redemption of portions (equal to $50 or any
integral multiple thereof) of the principal amount of the Securities.
The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption as aforesaid and, in case of any Securities selected for
partial redemption as aforesaid, the principal amount thereof to be redeemed.
The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.
SECTION 11.04 NOTICE OF REDEMPTION.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 (or, in the case of a redemption pursuant to Section
11.02 hereof, 20) nor more than 60 days prior to the Redemption Date, to each
Holder of Securities to be redeemed, at such Holder's address appearing in the
Security Register.
All notices of redemption given pursuant to this Article XI shall identify
the Securities to be redeemed (including, if relevant, CUSIP number) and shall
state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security to be redeemed and that
interest thereon will cease to accrue on and after said date,
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(4) the place or places where such Securities are to be
surrendered for payment of the Redemption Price, and
(5) the date on which the right to convert the Securities to
be redeemed will terminate and the places where such Securities may be
surrendered for conversion.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 11.05 DEPOSIT OF REDEMPTION PRICE.
Prior to 12:00 noon 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 10.03) 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.
If any Security called for redemption is converted, any money deposited
with the Trustee or with any Paying Agent or so segregated and held in trust for
the redemption of such Security shall (subject to any right of the Holder of
such Security or any Predecessor Security to receive interest as provided in the
last paragraph of Section 3.08) be paid to the Company upon Company Request or,
if then held by the Company, shall be discharged from such trust.
SECTION 11.06 SECURITIES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price; 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 Record Dates according to the terms and the provisions of Section 3.08.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal shall, until paid, bear interest from the
Redemption Date at the rate borne by the Security.
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SECTION 11.07 SECURITIES REDEEMED IN PART.
(a) In the event of any redemption in part, the Company shall not be
required (i) to issue, register the transfer of or exchange any Security during
a period beginning at the opening of business 15 days before the date of the
mailing of a notice of redemption of Securities selected for redemption and
ending at the close of business on the day of such mailing and (ii) to register
the transfer of or exchange any Securities so selected for redemption, in whole
or in part, except for the unredeemed portion of any Securities being redeemed
in part.
(b) If a partial redemption of the Securities would result in the
delisting of the Preferred Securities issued by the Trust from any national
securities exchange or other organization on which the Preferred Securities are
listed, the Company shall not be permitted to effect such partial redemption and
may only redeem the Securities in whole.
(c) 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 make available for delivery to the Holder of
such Security without service charge, a new Security or Securities, 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. If a Global Security is surrendered, such new
Security will (subject to Section 3.06) also be a new Global Security.
ARTICLE XII
SUBORDINATION OF SECURITIES
SECTION 12.01 AGREEMENT TO SUBORDINATE.
The Company covenants and agrees, and each Holder of Securities by such
Holder's acceptance thereof likewise covenants and agrees, that all Securities
shall be issued subject to the provisions of this Article XII; and each Holder
of a Security, whether upon original issue or upon transfer or assignment
thereof, accepts and agrees to be bound by such provisions. The payment by the
Company of the principal of, premium, if any, and interest (including Additional
Payments) on all Securities issued hereunder shall, to the extent and in the
manner hereinafter set forth, be subordinated and junior in right of payment to
the prior payment in full of all Senior Debt, whether outstanding at the date of
this Indenture or thereafter incurred; provided, however, that no provision of
this Article XII shall prevent the occurrence of any default or Event of Default
hereunder.
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SECTION 12.02 DEFAULT ON SENIOR DEBT.
In the event and during the continuation of any default by the Company in
the payment of principal, premium, interest or any other payment due on any
Senior Debt continuing beyond the period of grace, if any, specified in the
instrument evidencing such Senior Debt, unless and until such default shall have
been cured or waived or shall have ceased to exist, and in the event that the
maturity of any Senior Debt has been accelerated because of a default, then no
payment shall be made by the Company with respect to the principal of (including
redemption payments), premium, if any, or interest on the Securities.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee when such payment is prohibited by the preceding
paragraph of this Section 12.02, such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Senior Debt
or their respective representatives, or to the trustee or trustees under any
indenture pursuant to which any of such Senior Debt may have been issued, as
their respective interests may appear, but only to the extent that the holders
of the Senior Debt (or their representative or representatives or a trustee)
notify the Trustee in writing within 90 days of such payment of the amounts then
due and owing on the Senior Debt and only the amounts specified in such notice
to the Trustee shall be paid to the holders of Senior Debt.
SECTION 12.03 LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any payment by the Company or distribution of assets of the Company
of any kind or character, whether in cash, property or securities, to creditors
upon any dissolution or winding up or liquidation or reorganization of the
Company, whether voluntary or involuntary, or in bankruptcy, insolvency,
receivership or other proceedings, all amounts (including principal, premium, if
any, and interest) due or to become due upon all Senior Debt (including any
interest accruing subsequent to the filing of a petition for bankruptcy
regardless of whether such interest is an allowed claim in the bankruptcy
proceeding) shall first be paid in full in cash, or payment thereof provided for
in money in accordance with and to the extent permitted by the terms of such
Senior Debt, before any payment is made on account of the principal (and
premium, if any) or interest on the Securities; and upon any such dissolution or
winding up or liquidation or reorganization, any payment by the Company, or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, to which the Holders of the Securities or the Trustee
would be entitled, except for the provisions of this Article XII, shall be paid
by the Company or by any receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution, or by the Holders of
the Securities or by the Trustee under this Indenture if received by them or it,
directly to the holders of Senior Debt (pro rata to such holders on the basis of
the respective amounts of Senior Debt held by such holders, as calculated by the
Company) or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing such
Senior Debt may have been issued, as their respective interests may appear, to
the extent necessary to pay such Senior Debt in full, in cash or in money's
worth in accordance with and to the extent permitted by the terms of such Senior
Debt, after giving effect to any concurrent payment or distribution to or
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for the holders of such Senior Debt, before any payment or distribution is made
to the Holders of Securities or to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing shall be received by the
Trustee or the Holders of the Securities before all Senior Debt is paid in full
in cash, or provision is made for such payment in money in accordance and to the
extent permitted by the terms of such Senior Debt, such payment or distribution
shall be held in trust for the benefit of and shall be paid over or delivered to
the holders of Senior Debt or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing such Senior Debt may have been issued, and their respective interests
may appear, as calculated by the Company, for application to the payment of all
Senior Debt remaining unpaid to the extent necessary to pay such Senior Debt in
full in cash or in money's worth in accordance with and to the extent permitted
by the terms of such Senior Debt, after giving effect to any concurrent payment
or distribution to or for the holders of such Senior Debt.
For purposes of this Article XII, the words, "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article XII with respect
to the Securities to the payment of all Senior Debt which may at the time be
outstanding; provided that (i) such Senior Debt is assumed by the new
corporation, if any, resulting from any such reorganization or readjustment, and
(ii) the rights of the holders of such Senior Debt are not, without the consent
of such holders, altered by such reorganization or readjustment. The
consolidation of the Company with, or the merger of the Company with or into,
another Person or the liquidation or dissolution of the Company following the
conveyance, transfer or lease of all or substantially all its properties and
assets on a consolidated basis to another Person upon the terms and conditions
provided for in Article VIII hereof shall not be deemed a dissolution, winding
up, liquidation or reorganization for the purposes of this Section 12.03 if such
other Person shall, as a part of such consolidation, merger, conveyance,
transfer or lease, comply with the conditions stated in Article VIII hereof.
Nothing in Section 12.02 or in this Section 12.03 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 6.07 hereof.
SECTION 12.04 SUBROGATION.
Subject to the prior payment in full of all Senior Debt in cash or in
money's worth in accordance with and to the extent permitted by the terms of
such Senior Debt, the rights of the Holders of the Securities shall be
subrogated to the rights of the holders of such Senior Debt to receive payments
or distributions of cash, property or securities of the Company, as the case may
be, applicable to such Senior Debt until the principal of (and premium, if any)
and interest on the Securities shall be paid in full; and, for the purposes of
such subrogation, no payments or distributions to the holders of such Senior
Debt 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
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XII, and no payment pursuant to the provisions of this Article XII, to or for
the benefit of the holders of such Senior Debt by Holders of the Securities or
the Trustee, shall, as between the Company, its creditors other than holders of
Senior Debt, and the Holders of the Securities, be deemed to be a payment by the
Company to or on account of such Senior Debt. It is understood that the
provisions of this Article XII are and are intended solely for the purposes of
defining the relative rights of the Holders of the Securities, on the one hand,
and the holders of such Senior Debt on the other hand.
Nothing contained in this Article XII or elsewhere in this Indenture or in
the Securities is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Debt, and the Holders of the
Securities, the obligation of the Company, which is absolute and unconditional,
to pay to the Holders of the Securities the principal of (and premium, if any)
and interest on the Securities as and when the same shall become due and payable
in accordance with their terms, or is intended to or shall affect the relative
rights of the Holders of the Securities and creditors of the Company, as the
case may be, other than the holders of Senior Debt, nor shall anything herein or
therein 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 XII of the holders
of such Senior Debt in respect of cash, property or securities of the Company,
as the case may be, received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to in
this Article XII, the Trustee, subject to the provisions of Section 6.03, and
the Holders of the Securities shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which such dissolution, winding
up, liquidation or reorganization proceedings are pending, or a certificate of
the receiver, trustee in bankruptcy, liquidation trustee, agent or other Person
making such payment or distribution, delivered to the Trustee or to the Holders
of the Securities, for the purposes of ascertaining the Persons entitled to
participate in such distribution, the holders of the Senior Debt and other
indebtedness of the Company, as the case may be, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article XII.
SECTION 12.05 TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder of Securities by such Holder's acceptance thereof authorizes
and directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article XII and appoints the Trustee as such Holder's attorney-in-fact for any
and all such purposes.
SECTION 12.06 NOTICE BY THE COMPANY.
The Company shall give prompt written notice to a Responsible Officer of
the Trustee of any fact known to the Company which would prohibit the making of
any payment of monies to or by the Trustee in respect of the Securities pursuant
to the provisions of this Article XII. Notwithstanding the provisions of this
Article XII or any other provision of this Indenture, the Trustee shall not be
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charged with knowledge of the existence of any facts which would prohibit the
making of any payment of monies to or by the Trustee in respect of the
Securities pursuant to the provisions of this Article XII unless and until a
Responsible Officer of the Trustee shall have received written notice thereof at
the Corporate Trust Office of the Trustee from the Company or a holder or
holders of Senior Debt or from any trustee therefor; and before the receipt of
any such written notice, the Trustee, subject to the provisions of Section 6.03
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 12.06 at least two 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 (and premium, if
any) or interest on any Security), then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purposes for which it 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.
The Trustee, subject to the provisions of Section 6.03, 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 Debt (or a trustee on behalf of such holder) to
establish that such notice has been given by a holder of such Senior Debt or a
trustee on behalf of any such holder or holders. 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 Debt to participate in any payment or
distribution pursuant to this Article XII, the Trustee may request such Person
to furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of Senior Debt 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 right of such Person under this Article XII, 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.
SECTION 12.07 RIGHTS OF THE TRUSTEE; HOLDERS OF SENIOR DEBT.
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article XII in respect of any Senior Debt at any time held by
it, to the same extent as any other holder of Senior Debt, and nothing in this
Indenture shall deprive the Trustee of any of its rights as such holder.
With respect to the holders of Senior Debt of the Company, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are set forth in this Article XII, and no implied covenants or obligations
with respect to the holders of such Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of such Senior Debt and, subject to the provisions
of Section 6.03, the Trustee shall not be liable to any holder of such Senior
Debt if it shall pay over or deliver to Holders of Securities, the Company or
any other Person money or assets to which any holder of such Senior Debt shall
be entitled by virtue of this Article XII or otherwise.
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SECTION 12.08 SUBORDINATION MAY NOT BE IMPAIRED.
No right of any present or future holder of any Senior Debt 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 which any such holder may have or otherwise
be charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Debt 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 XII or the obligations
hereunder of the Holders of the Securities to the holders of Senior Debt, 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, such Senior Debt, or
otherwise amend or supplement in any manner such Senior Debt or any instrument
evidencing the same or any agreement under which such Senior Debt is
outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing such Senior Debt; (iii) release any
Person liable in any manner for the collection of such Senior Debt; and (iv)
exercise or refrain from exercising any rights against the Company and any other
Person.
ARTICLE XIII
CONVERSION OF SECURITIES
SECTION 13.01 CONVERSION RIGHTS.
Subject to and upon compliance with the provisions of this Article, the
Securities are convertible, at the option of the Holder, at any time prior to
5:00 p.m. New York City time on June 1, 2029 into fully paid and nonassessable
shares of Class A Common Stock of the Company, par value $.01 per share ("Class
A Common Stock"), at an initial conversion rate of 2.4465 shares of Class A
Common Stock for each $50 in aggregate principal amount of Securities (the
"Initial Conversion Ratio") (equal to a conversion price of $20.4375 principal
amount of Securities per share of Class A Common Stock (the "Initial Conversion
Price")). The conversion ratio and the equivalent conversion price in effect at
any given time are known as the "Applicable Conversion Ratio" and the
"Applicable Conversion Price", respectively, and are subject to adjustment as
described in this Article XIII. A Holder of Securities may convert any portion
of the principal amount of the Securities into that number of fully paid and
nonassessable shares of Class A Common Stock (calculated as to each conversion
to the nearest 1/100th of a share) obtained by dividing the principal amount of
the Securities to be converted by the Applicable Conversion Ratio. In case a
Security or portion thereof is called for redemption, such conversion right in
respect of the Security or portion so called shall expire at the close of the
Business Day immediately preceding the corresponding Redemption Date, unless the
Company defaults in making the payment due upon redemption.
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SECTION 13.02 CONVERSION PROCEDURES.
(a) In order to convert all or a portion of the Securities, the
Holder thereof shall deliver to the Conversion Agent an irrevocable Notice of
Conversion setting forth the principal amount of Securities to be converted,
together with the name or names, if other than the Holder, in which the shares
of Class A Common Stock should be issued upon conversion and, if such Securities
are definitive Securities, surrender to the Conversion Agent the Securities to
be converted, duly endorsed or assigned to the Company or in blank. In addition,
a holder of Preferred Securities may exercise its right under the Declaration to
convert such Preferred Securities into Class A Common Stock by delivering to the
Conversion Agent an irrevocable Notice of Conversion setting forth the
information called for by the preceding sentence and directing the Conversion
Agent (i) to exchange such Preferred Security for a portion of the Securities
held by the Trust (at an exchange rate of $50 principal amount of Securities for
each Preferred Security) and (ii) to immediately convert such Securities, on
behalf of such holder, into Class A Common Stock of the Company pursuant to this
Article XIII and, if such Preferred Securities are in definitive form,
surrendering such Preferred Securities, duly endorsed or assigned to the Company
or in blank. So long as any Preferred Securities are outstanding, the Trust
shall not convert any Securities except pursuant to a Notice of Conversion duly
executed and delivered to the Conversion Agent by a holder of Preferred
Securities.
If a Notice of Conversion is delivered on or after the Regular Record Date
and prior to the subsequent Interest Payment Date, the Holder will be entitled
to receive the interest payable on the subsequent Interest Payment Date on the
portion of Securities to be converted notwithstanding the conversion thereof
prior to such Interest Payment Date. Except as otherwise provided in the
immediately preceding sentence, in the case of any Security which is converted,
interest whose Stated Maturity is after the date of conversion of such Security
shall not be payable, and the Company shall not make nor be required to make any
other payment, adjustment or allowance with respect to accrued but unpaid
interest on the Securities being converted, which shall be deemed to be paid in
full. Each conversion shall be deemed to have been effected immediately prior to
the close of business on the day on which the Notice of Conversion was received
(the "Conversion Date") by the Conversion Agent from the Holder or from a holder
of the Preferred Securities effecting a conversion thereof pursuant to its
conversion rights under the Declaration, as the case may be. The Person or
Persons entitled to receive the Class A Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder or holders of
such Class A Common Stock as of the Conversion Date. As promptly as practicable
on or after the Conversion Date, the Company shall issue and deliver at the
office of the Conversion Agent, unless otherwise directed by the Holder in the
Notice of Conversion, a certificate or certificates for the number of full
shares of Class A Common Stock issuable upon such conversion, together with the
cash payment, if any, in lieu of any fraction of any share to the Person or
Persons entitled to receive the same. The Conversion Agent shall deliver such
certificate or certificates to such Person or Persons.
(b) Subject to any right of the Holder of such Security or any
Predecessor Security to receive interest as provided in the last paragraph of
Section 3.08 and the second paragraph of clause (a) of Section 13.02, the
Company's delivery upon conversion of the whole number of shares
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of Class A Common Stock into which the Securities are convertible (together with
the cash payment, if any, in lieu of fractional shares) shall be deemed to
satisfy the Company's obligation to pay the principal amount at Maturity of the
portion of Securities so converted and any unpaid interest (including Compounded
Interest and Additional Sums) accrued on such Securities at the time of such
conversion.
(c) No fractional shares of Class A Common Stock will be issued as a
result of conversion, but in lieu thereof, the Company shall pay to the
Conversion Agent a cash adjustment in an amount equal to the same fraction of
the Closing Price of such fractional interest on the date on which the
Securities or Preferred Securities, as the case may be, were duly surrendered to
the Conversion Agent for conversion, or, if such day is not a Trading Day, on
the next Trading Day, and the Conversion Agent in turn will make such payment,
if any, to the Holder of the Securities or the holder of the Preferred
Securities so converted.
(d) In the event of the conversion of any Security in part only, a
new Security or Securities for the unconverted portion thereof will be issued in
the name of the Holder thereof upon the cancellation thereof in accordance with
Section 3.06.
(e) In effecting the conversion transactions described in this
Section, the Conversion Agent is acting as agent of the holders of Preferred
Securities (in the exchange of Preferred Securities for Securities) and as agent
of the Holders of Securities (in the conversion of Securities into Class A
Common Stock), as the case may be, directing it to effect such conversion
transactions. The Conversion Agent is hereby authorized (x) if the Trust exists,
(i) to exchange Securities held by or on behalf of the Trust from time to time
for Preferred Securities in connection with the conversion of such Preferred
Securities in accordance with this Article XIII and (ii) to convert all or a
portion of the Securities into Class A Common Stock and thereupon to deliver
such shares of Class A Common Stock in accordance with the provisions of this
Article XIII and to deliver to the Trust a new Security or Securities for any
resulting unconverted to exchange Securities held by the Holders in connection
with the conversion of such Securities in accordance with this Article XIII and
(y) if the Trust has been dissolved and the Securities have been distributed to
the holders of the Preferred Securities, to convert all or a portion of the
Securities into Class A Common Stock and thereupon to deliver such shares of
Class A Common Stock in accordance with the provisions of this Article XIII and
to deliver to such Holders a new Security or Securities for any resulting
unconverted principal amount.
(f) All shares of Class A Common Stock delivered upon any conversion
of Restricted Securities shall bear a restrictive legend substantially in the
form of the legend required to be set forth on such Securities and shall be
subject to the restrictions on transfer provided in such legend and in Section
3.06(b) hereof. Neither the Trustee nor the Conversion Agent shall have any
responsibility for the inclusion or content of any such restrictive legend on
such Class A Common Stock; provided, however, that the Trustee or the Conversion
Agent shall have provided to the Company or to the Company's transfer agent for
such Class A Common Stock, prior to or concurrently with a request to the
Company to deliver to such Conversion Agent certificates for such
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Class A Common Stock, written notice that the Securities delivered for
conversion are Restricted Securities.
SECTION 13.03 CONVERSION PRICE ADJUSTMENTS.
The Applicable Conversion Price shall be subject to adjustment (without
duplication) from time to time as follows:
(i) In case the Company shall pay a dividend or make a
distribution on the Common Stock exclusively in Common Stock, the
Applicable Conversion Price in effect at the opening of business on the
day following the date fixed for the determination of stockholders
entitled to receive such dividend or other distribution shall be reduced
by multiplying such Applicable Conversion Price by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding at the
close of business on the date fixed for such determination and the
denominator shall be the sum of such number of shares and the total number
of shares constituting such dividend or other distribution, such reduction
to become effective immediately after the opening of business on the day
following the date fixed for such determination. For the purposes of this
subparagraph (i), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company.
In the event that such dividend or distribution is not so paid or made,
the Applicable Conversion Price shall again be adjusted to be the Applicable
Conversion Price which would then be in effect if such dividend or distribution
had not occurred.
(ii) In case the Company shall pay or make a dividend or other
distribution on its Common Stock consisting exclusively of, or shall
otherwise issue to all holders of its Common Stock, rights or warrants, in
each case entitling the holders thereof to subscribe for or purchase
shares of Common Stock at a price per share less than the current market
price per share (determined as provided in subparagraph (vii)) of the
Common Stock on the date fixed for the determination of stockholders
entitled to receive such rights or warrants, the Applicable Conversion
Price in effect at the opening of business on the day following the date
fixed for such determination shall be reduced by multiplying such
Applicable Conversion Price by a fraction of which the NUMERATOR shall be
the number of shares of Common Stock outstanding at the close of business
on the date fixed for such determination plus the number of shares of
Common Stock which the aggregate of the offering price of the total number
of shares of Common Stock so offered for subscription or purchase would
purchase at such current market price and the denominator shall be the
number of shares of Common Stock outstanding at the close of business on
the date fixed for such determination plus the number of shares of Common
Stock so offered for subscription or purchase, such reduction to become
effective immediately prior to the opening of business on the day
following the date fixed for such determination. To the extent that rights
are not so issued or shares of Common Stock are not so delivered after the
expiration of such rights or
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warrants, the Applicable Conversion Price shall be readjusted to the
Applicable Conversion Price which would then be in effect if such date
fixed for the determination of stockholders entitled to receive such
rights or warrants had not been fixed. For the purposes of this
subparagraph (ii), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company.
(iii) In case outstanding shares of Class A Common Stock shall
be subdivided into a greater number of shares of Class A Common Stock, the
Applicable Conversion Price in effect at the opening of business on the
day following the day upon which such subdivision becomes effective shall
be proportionately reduced and, conversely, in case outstanding shares of
Class A Common Stock shall each be combined into a smaller number of
shares of Class A Common Stock, the Applicable Conversion Price in effect
at the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately increased, such
reduction or increase, as the case may be, to become effective immediately
prior to the opening of business on the day following the day upon which
such subdivision or combination becomes effective.
(iv) Subject to the last sentence of this subparagraph (iv),
in case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock evidences of its indebtedness, shares of any
class or series of capital stock, cash or assets (including securities,
but excluding any rights or warrants referred to in subparagraph (ii) of
this Section 13.03, any dividend or distribution paid exclusively in cash
and any dividend or distribution referred to in subparagraph (i) of this
Section 13.03), the Applicable Conversion Price shall be reduced so that
the same shall equal the price determined by multiplying the Applicable
Conversion Price in effect immediately prior to the effectiveness of the
Applicable Conversion Price reduction contemplated by this subparagraph
(iv) by a fraction of which the numerator shall be the current market
price per share (determined as provided in subparagraph (vii) of this
Section 13.03) of the Common Stock on the date fixed for the determination
of stockholders entitled to receive such distribution (the "Reference
Date") less the fair market value (as determined in good faith by the
Board of Directors, whose determination shall be conclusive and described
in a resolution of the Board of Directors), on the Reference Date, of the
portion of the evidences of indebtedness, shares of capital stock, cash
and assets so distributed applicable to one share of Common Stock and the
denominator shall be such current market price per share of the Common
Stock, such reduction to become effective immediately prior to the opening
of business on the day following the Reference Date. In the event that
such dividend or distribution is not so paid or made, the Applicable
Conversion Price shall again be adjusted to be the Applicable Conversion
Price which would then be in effect if such dividend or distribution had
not occurred. For purposes of this subparagraph (iv), any dividend or
distribution that includes shares of Common Stock or rights or warrants to
subscribe for or purchase shares of Common Stock shall be deemed instead
to be (1) a dividend or distribution of the evidences of indebtedness,
shares of capital stock, cash or assets other than such shares of Common
Stock or such rights or warrants (making any Applicable Conversion Price
reduction required
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by this subparagraph (iv)) immediately followed by (2) a dividend or
distribution of such shares of Common Stock or such rights or warrants
(making any further Applicable Conversion Price reduction required by
subparagraph (i) or (ii) of this Section 13.03), except any shares of
Common Stock included in such dividend or distribution shall not be deemed
"outstanding at the close of business on the date fixed for such
determination" within the meaning of subparagraph (i) of this Section
13.03.
(v) In case the Company shall pay or make a dividend or other
distribution on its Common Stock exclusively in cash (excluding (x) cash
dividends to the extent that they do not exceed the per share amount of
the smallest of the immediately four preceding quarterly cash dividends
(as adjusted to appropriately reflect any of the events referred to in
subparagraphs (i), (ii), (iii), (iv), (v) and (vi)), and (y) cash
dividends to the extent that the annualized per share amount thereof does
not exceed 12.5% of the current market price per share of the Common Stock
on the Trading Day next preceding the date of declaration of such
dividend, the Applicable Conversion Price shall be reduced so that the
same shall equal the price determined by multiplying the Applicable
Conversion Price in effect immediately prior to the effectiveness of the
Applicable Conversion Price reduction contemplated by this subparagraph
(v) by a fraction of which the numerator shall be the current market price
per share (determined as provided in subparagraph (vii) of this Section
13.03) of the Common Stock on the date fixed for the payment of such
distribution less the amount of cash so distributed and not excluded as
provided applicable to one share of Common Stock and the denominator shall
be such current market price per share of the Common Stock, such reduction
to become effective immediately prior to the opening of business on the
day following the date fixed for the payment of such distribution;
provided, however, that in the event the portion of the cash so
distributed applicable to one share of Common Stock is equal to or greater
than the current market price per share (as defined in subparagraph (vii)
of this Section 13.03) of the Common Stock on the record date mentioned
above, in lieu of the foregoing adjustment, adequate provision shall be
made so that each Holder of Securities shall have the right to receive
upon conversion the amount of cash such Holder would have received had
such Holder converted each Security immediately prior to the record date
for the distribution of the cash. In the event that such dividend or
distribution is not so paid or made, the Applicable Conversion Price shall
again be adjusted to be the Applicable Conversion Price which would then
be in effect if such record date had not been fixed.
(vi) In case a tender or exchange offer (other than an odd-lot
offer) made by the Company or any Subsidiary of the Company for all or any
portion of the Company's Common Stock shall expire and such tender or
exchange offer shall involve the payment by the Company or such Subsidiary
of consideration per share of Common Stock having a fair market value (as
determined in good faith by the Board of Directors, whose determination
shall be conclusive and described in a resolution of the Board of
Directors) at the last time (the "Expiration Time") tenders or exchanges
may be made pursuant to such tender or exchange offer (as it shall have
been amended) that exceeds 110% of the current market price per share
(determined as provided in subparagraph (vii) of this Section 13.03) of
the
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Common Stock on the Trading Day next succeeding the Expiration Time, the
Applicable Conversion Price shall be reduced so that the same shall equal
the price determined by multiplying the Applicable Conversion Price in
effect immediately prior to the effectiveness of the Applicable Conversion
Price reduction contemplated by this subparagraph (vi) by a fraction of
which the numerator shall be the number of shares of Common Stock
outstanding (including any tendered or exchanged shares) at the Expiration
Time multiplied by the current market price per share (determined as
provided in subparagraph (vii) of this Section 13.03) of the Common Stock
on the Trading Day next succeeding the Expiration Time and the denominator
shall be the sum of (x) the fair market value (determined as aforesaid) of
the aggregate consideration payable to stockholders based on the
acceptance (up to any maximum specified in the terms of the tender or
exchange offer) of all shares validly tendered or exchanged and not
withdrawn as of the Expiration Time (the shares deemed so accepted, up to
any such maximum, being referred to as the "Purchased Shares") and (y) the
product of the number of shares of Common Stock outstanding (less any
Purchased Shares) at the Expiration Time and the current market price per
share (determined as provided in subparagraph (vii) of this Section 13.03)
of the Common Stock on the Trading Day next succeeding the Expiration
Time, such reduction to become effective immediately prior to the opening
of business on the day following the Expiration Time.
(vii) For the purpose of any computation under subparagraphs
(ii), (iv), (v) and (vi) of this Section 13.03, the current market price
per share of Common Stock on any date in question shall be deemed to be
the average of the daily Closing Prices of the Class A Common Stock for
the ten consecutive Trading Days prior to the earlier of the day in
question and, if applicable, the day before the "ex" date with respect to
the issuance or distribution requiring such computation; provided,
however, that if another event occurs that would require an adjustment
pursuant to subparagraphs (i) through (vi) of this Section 13.03,
inclusive, the Board of Directors may make such adjustments to the Closing
Prices during such five Trading Day period as it deems appropriate to
effectuate the intent of the adjustments in this Section 13.03, in which
case any such determination by the Board of Directors shall be set forth
in a Board Resolution and shall be conclusive. For purposes of this
paragraph, the term "ex" date, (1) when used with respect to any issuance
or distribution, means the first date on which the Class A Common Stock is
quoted regular way on the New York Stock Exchange Composite Tape or on
such successor securities exchange on which the Class A Common Stock may
be quoted or listed or in the relevant market from which the Closing
Prices were obtained without the right to receive such issuance or
distribution, and (2) when used with respect to any tender or exchange
offer means the first date on which the Class A Common Stock is quoted
regular way on such securities exchange or in such market after the
Expiration Time of such offer.
(viii)The Company may make such reductions in the Applicable
Conversion Price, in addition to those required by subparagraphs (i),
(ii), (iii), (iv), (v) and (vi) of this Section 13.03, as it considers to
be advisable to avoid or diminish any income tax to holders of Common
Stock or rights to purchase Common Stock resulting from any
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dividend or distribution of stock (or rights to acquire stock) or from any
event treated as such for income tax purposes.
(ix) There shall also be no adjustment of the Applicable
Conversion Price in case of the issuance of any Common Stock (or
securities convertible into or exchangeable for Common Stock), except as
specifically described above. If any action would require adjustment of
the Applicable Conversion Price, pursuant to more than one of the
anti-dilution provisions set forth in this Article XIII, only one
adjustment shall be made and such adjustment shall be the amount of
adjustment that has the highest absolute value to Holders. Furthermore, no
adjustment in the Applicable Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in
the Applicable Conversion Price; provided, however, that any adjustments
which by reason of this sentence are not required to be made shall be
carried forward and taken into account in determining whether any
subsequent adjustment shall be required.
SECTION 13.04 RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE OF ASSETS.
In the event that the Company shall be a party to any transaction
(including without limitation (a) any recapitalization or reclassification of
the Common Stock (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination of the Common Stock), (b) any consolidation of the Company with, or
merger of the Company into, any other Person, any merger of another Person into
the Company (other than a merger which does not result in a reclassification,
conversion, exchange or cancellation of outstanding shares of Common Stock of
the Company), (c) any sale or transfer of all or substantially all of the assets
of the Company or (d) any compulsory share exchange) (each of the events in the
preceding clauses (a) through (d) being referred to as a "Company Transaction"),
in each case, as a result of which shares of Common Stock shall be converted
into the right to receive other securities, cash or other property, then lawful
provision shall be made as part of the terms of such Company Transaction whereby
the Holder of each Security then outstanding shall have the right thereafter to
convert such Security only into (i) in the case of any Company Transaction other
than a Common Stock Fundamental Change, the kind and amount of securities, cash
and other property receivable upon the consummation of the Company Transaction
by a holder of that number of shares of Common Stock into which such Security
was convertible immediately prior to such transaction, after giving effect to
any adjustment in the Applicable Conversion Price required by the provisions of
Section 13.07(a)(i), and (ii) in the case of a Company Transaction involving a
Common Stock Fundamental Change, common stock of the kind received by holders of
Common Stock as a result of such Common Stock Fundamental Change in an amount
determined pursuant to the provisions of Section 13.07(a)(ii). Holders of the
Securities shall have no voting rights with respect to any Company Transaction
described in this Section 13.04.
The Company or the Person formed by such consolidation or resulting from
such merger or which acquired such assets or which acquires the Company's
shares, as the case may be, shall make provision in its certificate or articles
of incorporation or other constituent document to establish such
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right. Such certificate or articles of incorporation or other constituent
document shall provide for adjustments which, for events subsequent to the
effective date of such certificate or articles of incorporation or other
constituent document, shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article XIII. The above provisions shall
similarly apply to successive transactions of the foregoing type.
SECTION 13.05 NOTICE OF ADJUSTMENTS OF CONVERSION PRICE.
Whenever the Applicable Conversion Price is adjusted as herein provided:
(a) the Company shall compute the adjusted Applicable Conversion
Price and shall prepare a certificate signed by the Chief Financial Officer or
the Treasurer of the Company setting forth the adjusted Applicable Conversion
Price and showing in reasonable detail the facts upon which such adjustment is
based, and such certificate shall forthwith be filed with the Trustee, the
Conversion Agent, the Property Trustee and the transfer agent for the Preferred
Securities and the Securities; and
(b) a notice stating the Applicable Conversion Price has been
adjusted and setting forth the adjusted Applicable Conversion Price shall as
soon as practicable be mailed by the Company to all record holders of Preferred
Securities and the Securities at their last addresses as they appear upon the
stock transfer books of the Company and the books and records of the Trust,
respectively.
SECTION 13.06 PRIOR NOTICE OF CERTAIN EVENTS.
In case:
(i) the Company shall (1) declare any dividend (or any other
distribution) on its Common Stock, other than (A) a dividend payable in
shares of Common Stock or (B) a dividend payable in cash that would not
require an adjustment pursuant to Section 13.03(iv) or (v) or (2)
authorize a tender or exchange offer that would require an adjustment
pursuant to Section 13.03(vi);
(ii) the Company shall authorize the granting to all holders
of Common Stock of rights or warrants to subscribe for or purchase any
shares of stock of any class or series or of any other rights or warrants;
(iii) of any reclassification of Common Stock (other than a
subdivision or combination of the outstanding Common Stock, or a change in
par value, or from par value to no par value, or from no par value to par
value), or of any consolidation or merger to which the Company is a party
and for which approval of any stockholders of the Company shall be
required, or of the sale or transfer of all or substantially all of the
assets of the
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Company or of any compulsory share exchange whereby the Common Stock is
converted into other securities, cash or other property; or
(iv) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company;
then the Company shall (a) if any Preferred Securities are outstanding, cause to
be filed with the transfer agent for the Preferred Securities, and shall cause
to be mailed to the holders of record of the Preferred Securities, at their last
addresses as they shall appear upon the books and records of the Trust, or (b)
shall cause to be mailed to all Holders at their last addresses as they shall
appear in the Security Register, at least fifteen days prior to the applicable
record or effective date hereinafter specified, a notice stating (x) the date on
which a record (if any) is to be taken for the purpose of such dividend,
distribution, rights or warrants or, if a record is not to be taken, the date as
of which the holders of Common Stock of record to be entitled to such dividend,
distribution, rights or warrants are to be determined or (y) the date on which
such reclassification, consolidation, merger, sale, transfer, share exchange,
dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, share exchange, dissolution, liquidation or winding up (but no failure
to mail such notice or any defect therein or in the mailing thereof shall affect
the validity of the corporate action required to be specified in such notice).
SECTION 13.07 ADJUSTMENTS IN CASE OF FUNDAMENTAL CHANGES.
(a) Notwithstanding any other provision in this Article XIII to the
contrary, in the case of any Company Transaction involving a Fundamental Change,
the Applicable Conversion Price will be adjusted immediately after such
Fundamental Change as follows:
(i) in the case of a Non-Stock Fundamental Change, the
Applicable Conversion Price of the Securities shall thereupon become the
lower of (A) the Applicable Conversion Price in effect immediately prior
to such Non-Stock Fundamental Change, but after giving effect to any other
prior adjustments effected pursuant to this Article XIII, and (B) the
result obtained by multiplying the greater of the Relevant Price or the
then applicable Reference Market Price by the Optional Redemption Ratio
(such product shall hereinafter be referred to as the "Adjusted Relevant
Price" or the "Adjusted Reference Market Price", as the case may be); and
(ii) in the case of a Common Stock Fundamental Change, the
Applicable Conversion Price of the Securities in effect immediately prior
to such Common Stock Fundamental Change, but after giving effect to any
other prior adjustments effected pursuant to this Article XIII, shall
thereupon be adjusted by multiplying such Applicable Conversion Price by a
fraction of which the numerator shall be the Purchaser Stock Price and the
denominator shall be the Relevant Price; provided, however, that in the
event of a Common
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Stock Fundamental Change in which (A) 100% of the value of the
consideration received by a holder of Class A Common Stock is common stock
of the successor, acquiror or other third party (and cash, if any, is paid
only with respect to any fractional interests in such common stock
resulting from such Common Stock Fundamental Change) and (B) all of the
Class A Common Stock shall have been exchanged for, converted into or
acquired for common stock (and cash with respect to fractional interests)
of the successor, acquiror or other third party, the Applicable Conversion
Price of the Securities in effect immediately prior to such Common Stock
Fundamental Change shall thereupon be adjusted by multiplying such
Applicable Conversion Price by a fraction of which the numerator shall be
one and the denominator shall be the number of shares of common stock of
the successor, acquiror, or other third party received by a stockholder
for one share of Class A Common Stock as a result of such Common Stock
Fundamental Change.
(b) DEFINITIONS. The following definitions shall apply to terms used
in this Article XIII:
(1) "Closing Price" of any security on any day shall mean on
any day the last reported sale price of such security on such day, or in
case no sale takes place on such day, the average of the closing bid and
asked prices in each case on the principal national securities exchange on
which such securities are listed or admitted to trading or, if not listed
or admitted to trading on any national securities exchange, on the NNM or,
if such securities are not listed or admitted to trading on any national
securities exchange or quoted on the NNM, the average of the closing bid
and asked prices in the over-the-counter market as furnished by any New
York Stock Exchange member firm selected by the Company for such purpose.
(2) "Common Stock Fundamental Change" shall mean any
Fundamental Change in which more than 50% of the value (as determined in
good faith by the Board of Directors) of the consideration received by
holders of Class A Common Stock consists of common stock that for each of
the ten consecutive Trading Days immediately prior to the Entitlement Date
has been admitted for listing or admitted for listing subject to notice of
issuance on a national securities exchange or quoted on the NNM; provided,
however, that a Fundamental Change shall not be a Common Stock Fundamental
Change unless either (i) the Company continues to exist after the
occurrence of such Fundamental Change and the outstanding Preferred
Securities continue to exist as outstanding Preferred Securities, or (ii)
not later than the occurrence of such Fundamental Change, the outstanding
Securities are converted into or exchanged for debentures of a corporation
succeeding to the business of the Company, which debentures have terms
substantially similar to those of the Securities.
(3) "Entitlement Date" shall mean the record date for
determination of the holders of Common Stock entitled to receive
securities, cash or other property in connection with a Non-Stock
Fundamental Change or a Common Stock Fundamental Change or, if there
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is no such record date, the date upon which holders of Class A Common
Stock shall have the right to receive such securities, cash or other
property.
(4) "Fundamental Change" shall mean the occurrence of any
transaction or event in connection with a plan pursuant to which all or
substantially all of the Class A Common Stock shall be exchanged for,
converted into, acquired for or constitute solely the right to receive
securities, cash or other property (whether by means of an exchange offer,
liquidation, tender offer, consolidation, merger, combination,
reclassification, recapitalization or otherwise); provided, however, in
the case of a plan involving more than one such transaction or event, for
purposes of adjustment of the Applicable Conversion Price, such
Fundamental Change shall be deemed to have occurred when substantially all
of the Class A Common Stock of the Company shall be exchanged for,
converted into, or acquired for or constitute solely the right to receive
securities, cash or other property, but the adjustment shall be based upon
the highest weighted average per share consideration that a holder of
Class A Common Stock could have received in such transactions or events as
a result of which more than 50% of the Class A Common Stock of the Company
shall have been exchanged for, converted into, or acquired for or
constitute solely the right to receive securities, cash or other property.
(5) "Non-Stock Fundamental Change" shall mean any Fundamental
Change other than a Common Stock Fundamental Change.
(6) "Optional Redemption Ratio" means a fraction of which the
numerator shall be $50 and the denominator will be the then current
Optional Redemption Price or, prior to June 5, 2002, an amount per
Security determined by the Company in its sole discretion, after
consultation with an investment banking firm, to be the equivalent of the
hypothetical redemption price that would have been applicable if the
Securities had been redeemable during such period.
(7) "Purchaser Stock Price" shall mean, with respect to any
Common Stock Fundamental Change, the average of the daily Closing Prices
of the common stock received in such Common Stock Fundamental Change for
the ten (10) consecutive Trading Days prior to and including the
Entitlement Date, as adjusted in good faith by the Board of Directors to
appropriately reflect any of the events referred to in subparagraphs (i),
(ii), (iii), (iv), (v) and (vi) of Section 13.03.
(8) "Reference Market Price" shall initially mean on the date
of original issuance of the Securities, $11.17 (which is an amount equal
to 66-2/3% of the last reported sale price for the Class A Common Stock on
the New York Stock Exchange Composite Tape on May 27, 1999 and, in the
event of any adjustment to the Applicable Conversion Price, other than as
a result of a Non-Stock Fundamental Change, the Reference Market Price
shall also be adjusted so that the ratio of the Reference Market Price to
the Applicable Conversion
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Price after giving effect to any such adjustment shall always be the same
as the ratio of $11.17 to the Initial Conversion Price.
(9) "Relevant Price" shall mean (i) in the event of a
Non-Stock Fundamental Change in which the holders of the Class A Common
Stock receive only cash, the amount of cash received by a stockholder for
one share of Class A Common Stock and (ii) in the event of any other
Non-Stock Fundamental Change or any Common Stock Fundamental Change, the
average of the daily Closing Prices of the Class A Common Stock for the
ten (10) consecutive Trading Days prior to and including the Entitlement
Date, in each case, as adjusted in good faith by the Company to
appropriately reflect any of the events referred to in subparagraphs (i),
(ii), (iii), (iv), (v) and (vi) of Section 13.03.
(10) "Trading Day" shall mean a day on which securities are
traded on the national securities exchange or quotation system used to
determine the Closing Price.
SECTION 13.08 DIVIDEND OR INTEREST REINVESTMENT PLANS.
(a) Notwithstanding the foregoing provisions, the issuance of any
shares of Common Stock pursuant to any present or future plan providing for the
reinvestment of dividends or interest payable on securities of the Company and
the investment of additional optional amounts in shares of Common Stock under
any such plan, and the issuance of any shares of Common Stock or options or
rights to purchase such shares pursuant to any employee benefit plan or program
of the Company or pursuant to any option issued, shall not be deemed to
constitute an issuance of Common Stock or exercisable, exchangeable or
convertible securities by the Company to which any of the adjustment provisions
described above applies.
(b) There shall also be no adjustment of the Applicable Conversion
Price in case of the issuance of any stock (or securities convertible into or
exchangeable for stock) of the Company except as specifically described in this
Article XIII.
SECTION 13.09 CERTAIN ADDITIONAL RIGHTS.
Notwithstanding any other provision of this Article XIII to the contrary,
rights, warrants, evidences of indebtedness, other securities, cash or other
assets (including, without limitation, any rights distributed pursuant to any
stockholder rights plan) shall be deemed not to have been distributed for
purposes of this Article XIII if the Company makes proper provision so that each
Holder who converts a Security (or any portion thereof) after the date fixed for
determination of stockholders entitled to receive such distribution shall be
entitled to receive upon such conversion, in addition to the shares of Common
Stock issuable upon such conversion, the amount and kind of such distributions
that such Holder would have been entitled to receive if such Holder had,
immediately prior to such determination date, converted such Security into
Common Stock.
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SECTION 13.10 RESTRICTIONS ON COMMON STOCK ISSUABLE UPON CONVERSION.
(a) Shares of Class A Common Stock to be issued upon conversion of a
Security in respect of Restricted Preferred Securities (as defined in the
Declaration) shall bear such restrictive legends as the Company may provide in
accordance with applicable law.
(b) If shares of Class A Common Stock to be issued upon conversion
of a Security in respect of Restricted Preferred Securities are to be registered
in a name other than that of the Holder of such Preferred Security, then the
Person in whose name such shares of Class A Common Stock are to be registered
must deliver to the Conversion Agent a certificate satisfactory to the Company
and signed by such Person, as to compliance with the restrictions on transfer
applicable to such Preferred Security. Neither the Trustee nor any Conversion
Agent or Registrar shall be required to register in a name other than that of
the Holder shares of Class A Common Stock or such Preferred Securities issued
upon conversion of any such Security in respect of such Preferred Securities not
so accompanied by a properly completed certificate.
SECTION 13.11 TRUSTEE NOT RESPONSIBLE FOR DETERMINING CONVERSION PRICE OR
ADJUSTMENTS.
Neither the Trustee nor any Conversion Agent shall at any time be under
any duty or responsibility to any Holder of any Security to determine whether
any facts exist which may require any adjustment of the Applicable Conversion
Price, or with respect to the nature or extent of any such adjustment when made,
or with respect to the method employed, or whether any supplemental indenture
needs to be entered into. Neither the Trustee nor any Conversion Agent shall be
accountable with respect to the validity or value (or the kind or amount) of any
shares of Common Stock or of any securities or property, which may at any time
be issued or delivered upon the conversion of any Security; and neither the
Trustee nor any Conversion Agent makes any representation with respect thereto.
Neither the Trustee nor any Conversion Agent shall be responsible for any
failure of the Company to make any cash payment or to issue, transfer or deliver
any shares of Common Stock or stock certificates or other securities or property
upon the surrender of any Security for the purpose of conversion, or, except as
expressly herein provided, to comply with any of the covenants of the Company
contained in Article X or this Article XIII.
ARTICLE XIV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS
SECTION 14.01 NO RECOURSE.
No recourse under or upon any obligation, covenant or agreement of this
Indenture, or of any Security, or for any claim based thereon or otherwise in
respect thereof, shall be had against any incorporator, stockholder, officer or
director, past, present or future as such, of the Company or of
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any predecessor or successor corporation, either directly or through the Company
or any such predecessor or successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly understood that this Indenture and the
obligations issued hereunder are solely corporate obligations, and that no such
personal liability whatever shall attach to, or is or shall be incurred by, the
incorporators, stockholders, officers or directors as such, of the Company or of
any predecessor or successor corporation, or any of them, because of the
creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Securities or implied therefrom; and that any and all such personal
liability of every name and nature, either at common law or in equity or by
constitution or statute, of, and any and all such rights and claims against,
every such incorporator, stockholder, officer or director as such, because of
the creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Securities or implied therefrom, are hereby expressly waived and released as
a condition of, and as a consideration for, the execution of this Indenture and
the issuance of such Securities.
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 as of the day and year first above written.
Dated:June 3, 1999
CARRIAGE SERVICES, INC.
By:/s/ THOMAS C. LIVENGOOD
Name: Thomas C. Livengood
Title: Executive Vice President
and Chief Financial
Officer
WILMINGTON TRUST COMPANY, as
Trustee
By:/s/ JAMES P. LAWLER
Name: James P. Lawler
Title: Vice President
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EXHIBIT A
FORM OF SECURITY
[FORM OF FACE OF SECURITY]
[Include if a Global Security: THIS SECURITY IS A GLOBAL SECURITY WITHIN
THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE
NAME OF THE DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") OR A NOMINEE OF THE
DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR A SECURITY REGISTERED IN THE NAME
OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND NO TRANSFER OF THIS SECURITY (OTHER
THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF
THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO CARRIAGE
SERVICES, INC. OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY 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 INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[Include Restricted Securities Legend if required under Section 2.02:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THIS SECURITY AND ANY COMMON STOCK ISSUABLE UPON
CONVERSION HEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
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THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE ISSUER AND THE
COMPANY THAT (A) THIS SECURITY AND ANY COMMON STOCK ISSUABLE UPON CONVERSION
HEREOF MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (i) TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (ii) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (iii)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH OF CASES (i) THROUGH (iii) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND
(B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A)
ABOVE.]
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CARRIAGE SERVICES, INC.
CONVERTIBLE JUNIOR SUBORDINATED DEBENTURE DUE 2029
No. _________ $_______
CUSIP No. 143805 AA 5
CARRIAGE SERVICES, INC., a corporation duly organized and existing under
the laws of the State of Delaware (herein called "the Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to ____________________, or
registered assigns, the principal sum [indicated on Schedule A hereof](1) [of
Dollars](2) ($) on June 1, 2029.
Interest Payment Dates: March 1, June 1, September 1 and December 1,
commencing September 1, 1999.
Regular Record Dates: the close of business on the fifteenth day
immediately preceding each Interest Payment Date, commencing September 15, 1999.
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 signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
Dated: ________, 1999
CARRIAGE SERVICES, INC.
By:_______________________________
Name:
Title:
____________
(1)Applicable to Global Securities only.
(2)Applicable to certificated Securities only.
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[Seal]
Attest:
______________________________________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
indenture.
Dated:June __, 1999
WILMINGTON TRUST COMPANY
as Trustee
By:________________________________
Authorized Signatory
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<PAGE>
[FORM OF REVERSE OF SECURITY]
CARRIAGE SERVICES, INC.
CONVERTIBLE JUNIOR SUBORDINATED DEBENTURE DUE 2029(3)
1. INTEREST. Carriage Services, Inc., a Delaware corporation (the
"Company"), is the issuer of this Convertible Junior Subordinated Debenture Due
2029 (the "Security") limited in aggregate principal amount to $96,649,600,
issued under the Indenture hereinafter referred to. The Company promises to pay
interest on the Securities in cash from June 3, 1999 or from the most recent
interest payment date to which interest has been paid or duly provided for,
quarterly (subject to deferral for up to 20 consecutive quarters as described in
Section 3 hereof) in arrears on March 1, June 1, September 1, and December 1 of
each year (each such date, an "Interest Payment Date"), commencing September 1,
1999, at the Applicable Rate, plus Additional Sums, if any, until the principal
hereof shall have become due and payable.
The amount of interest payable for any period will be computed on the
basis of twelve 30-day months and a 360-day year. To the extent lawful, the
Company shall pay interest on overdue installments of interest (without regard
to any applicable grace period) at the rate borne by the Securities, compounded
quarterly. Any interest paid on this Security shall be increased to the extent
necessary to pay Additional Sums as set forth in this Security.
2. ADDITIONAL SUMS. The Company shall pay to Carriage Services Capital
Trust (and its permitted successors or assigns under the Declaration) (the
"Trust") such additional amounts as may be necessary in order that the amount of
dividends or other distributions then due and payable by the Trust on the
Preferred Securities that at any time remain outstanding in accordance with the
terms thereof shall not be reduced as a result of any additional taxes, duties
and other governmental charges of whatever nature (other than withholding taxes)
imposed by the United States or any other taxing authority.
3. EXTENSION OF INTEREST PAYMENT PERIOD. So long as no Event of Default
has occurred and is continuing, the Company shall have the right, at any time
during the term of this Security, from time to time to defer payments of
interest by extending the interest payment period of such Security for up to 20
consecutive quarters (a "Deferral Period"); provided that no Deferral Period may
extend beyond June 1, 2029. To the extent permitted by applicable law, interest,
the payment of which has been deferred because of the extension of the interest
payment period pursuant to Section 3.13 of the Indenture, will bear interest
thereon at the Applicable Rate compounded quarterly for each quarter of the
Deferral Period ("Compounded Interest"). On the applicable Payment Resumption
Date, the Company shall pay all interest then accrued and unpaid on the
Securities, including any Compounded Interest that shall be payable to the
Holders of the Securities in whose
_________________
(3)All terms used in this Security which are defined in the
Indenture or in the Declaration referred to herein shall have the meanings
assigned to them in the Indenture or the Declaration, as the case may be.
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names the Securities are registered in the Security Register on the record date
fixed for such Payment Resumption Date. Before the termination of any Deferral
Period, the Company may further extend such period as provided in the Indenture,
provided that such period together with all such further extensions thereof
shall not exceed 20 consecutive quarters or extend beyond the Stated Maturity of
the Security. Upon the termination of any Deferral Period and upon the payment
of all Compounded Interest and Additional Sums (together, "Additional
Payments"), if any, then due, the Company may commence a new Deferral Period,
subject to the foregoing requirements. No interest shall be due and payable
during a Deferral Period except on the applicable Payment Resumption Date.
The Company shall give the Holder of the Security and the Trustee written
notice (a "Deferral Notice") of its selection of a Deferral Period at least ten
days prior to the record date for any distributions that would have been payable
on the Trust Securities except for the decision to begin or extend such Deferral
Period. The Company may elect to pay all interest then accrued and unpaid on the
Securities, including Compound Interest, on an Interest Payment Date prior to
its most recently established Payment Resumption Date, provided that the Company
gives the Holder of the Security and the Trustee a new Deferral Notice setting
forth the revised Payment Resumption Date at least three Business Days prior to
the Regular Record Date for such revised Payment Resumption Date.
The quarter in which any Deferral Notice is given pursuant to the second
paragraph of this Section 3 shall be counted as one of the 20 quarters permitted
in the maximum Deferral Period permitted under the first paragraph of this
Section 3.
4. METHOD OF PAYMENT. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the regular record date
for such interest installment, which shall be the close of business on the
fifteenth day immediately preceding each Interest Payment Date (the "Regular
Record Date"), commencing September 15, 1999. Any such interest not so
punctually paid or duly provided for shall forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders of
Securities not less than ten days prior to such Special Record Date, or be paid
at any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, all as more fully provided in said
Indenture, provided that any such payment will be made in such coin or currency
of the United States of America which at the time of payment is a legal tender
for payment of public and private debts.
Payment of the principal of and interest on this Security will be made at
the office or agency of the Company maintained for that purpose in New York, New
York, in coin or currency of the United States of America which at the time of
payment is legal tender for payment of public and
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<PAGE>
private debts; provided, however, that at any time that the Property Trustee is
not the sole holder of the Securities, payment of interest may, at the option of
the Company, be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register or by wire
transfer.
5. PAYING AGENT AND SECURITY REGISTRAR. The Trustee will act as Paying
Agent, Security Registrar and Conversion Agent. The Company may change any
Paying Agent, Security Registrar, co-registrar or Conversion Agent without prior
notice. The Company or any of its Affiliates may act in any such capacity.
6. INDENTURE. The Company issued the Securities under an indenture, dated
as of June 3, 1999 (the "Indenture"), between the Company and Wilmington Trust
Company, as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Trustee,
the Company and the Holders of the Securities, and of the terms upon which the
Securities are, and are to be, authenticated and delivered. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) ("Trust Indenture Act") as in effect on the date of the Indenture.
The Securities are subject to, and qualified by, all such terms, certain of
which are summarized herein, and holders are referred to the Indenture and the
Trust Indenture Act for a statement of such terms. The Securities are unsecured
general obligations of the Company limited to up to $96,649,600 and subordinated
in right of payment to all existing and future Senior Debt of the Company. 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 interest on this Security at the
times, place and rate, and in the coin or currency, herein prescribed or to
convert this Security as provided in the Indenture.
7. OPTIONAL REDEMPTION. The Securities are redeemable at the Company's
option (an "Optional Redemption") in whole or in part, at any time or from time
to time, on or after June 5, 2002, at a Redemption Price equal to $51.75 per $50
principal amount of the Securities to be redeemed plus any accrued and unpaid
interest, including Additional Payments, if any, to the Redemption Date, if
redeemed on or before June 1, 2003, and at the prices per $50 principal amount
of Securities set forth in the table below, plus any accrued and unpaid
interest, including Additional Payments, if any, to the Redemption Date, if
redeemed during the 12-month period ending on June 1:
PRICE PER $50
YEAR PRINCIPAL AMOUNT
------------------ -----------------
2004.............. $ 51.17
2005.............. $ 50.58
and thereafter at $50 per $50 principal amount of the Securities plus, in each
case, any accrued and unpaid interest, including Additional Payments, if any, to
the Redemption Date.
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<PAGE>
8. OPTIONAL REDEMPTION UPON TAX EVENT. Subject to the conditions set forth
in the Indenture, the Securities are subject to redemption in whole, but not in
part, if a Tax Event shall occur and be continuing, at any time within 90 days
following the occurrence of such Tax Event, at a Redemption Price equal to $50
per $50 principal amount thereof, plus accrued but unpaid interest, including
Additional Payments, if any, to the Redemption Date.
In lieu of the foregoing, the Company also shall have the option of
causing the Securities to remain outstanding and pay Additional Sums on the
Securities.
9. NOTICE OF REDEMPTION. Notice of redemption will be mailed by
first-class mail, postage prepaid, at least 30 days (or 20 days, in the case of
a redemption upon the occurrence of a Tax Event), but not more than 60 days
before the Redemption Date to each Holder of the Securities to be redeemed at
such Holder's address appearing in the Security Register.
10. NO SINKING FUND. There are no sinking fund payments with respect to
the Securities.
11. PAYMENT TO REGISTERED HOLDERS; CESSATION OF INTEREST ACCRUAL UPON
REDEMPTION. If this Security is redeemed subsequent to a Regular Record Date
with respect to any Interest Payment Date specified above and on or prior to
such Interest Payment Date, then any accrued interest will be paid to the person
in whose name this Security is registered at the close of business on such
record date. On or after the Redemption Date, interest will cease to accrue on
the Securities, or portion thereof, called for redemption.
12. SUBORDINATION. The payment of the principal of, interest on or any
other amounts due on the Securities is subordinated in right of payment to all
existing and future Senior Debt (as defined below) of the Company, as described
in the Indenture. Each Holder, by accepting a Security, agrees to such
subordination and authorizes and directs the Trustee on its behalf to take such
action as may be necessary or appropriate to effectuate the subordination so
provided and appoints the Trustee as its attorney-in-fact for such purpose.
"Senior Debt" means (i) the principal of, and premium and interest, if
any, on all indebtedness of the Company for money borrowed, whether outstanding
on the date of execution of the Indenture or thereafter created, assumed or
incurred, (ii) all obligations to make payment pursuant to the terms of
financial instruments, such as (a) securities contracts and foreign currency
exchange contracts, (b) derivative instruments, such as swap agreements
(including interest rate and foreign exchange rate swap agreements), cap
agreements, floor agreements, collar agreements, interest rate agreements,
foreign exchange agreements, options, commodity futures contracts and commodity
options contracts, and (c) similar financial instruments; except, in the case of
both (i) and (ii) above, such indebted ness and obligations that are expressly
stated to rank junior in right of payment to, or pari passu in right of payment
with, the Securities, (iii) indebtedness or obligations of others of the kind
described in both (i) and (ii) above for the payment of which the Company is
responsible or liable as guarantor or otherwise, and (iv) deferrals, renewals or
extensions of any such Senior Debt; provided, however, that Senior Debt shall
not be deemed to include (a) any Debt of the
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Company which, when incurred and without respect to any election under Section
1111(b) of the United States Bankruptcy Code of 1978, was without recourse to
the Company, (b) trade accounts payable and accrued liabilities arising in the
ordinary course of business, (c) any Debt of the Company to any of its
subsidiaries, (d) Debt to any employee of the Company, and (e) Debt which by its
terms is subordinated to trade accounts payable or accrued liabilities arising
in the ordinary course of business to the extent that payments made to the
holders of such Debt by the Holders of the Securities as a result of the
subordination provisions of the Indenture would be greater than such payments
otherwise would have been as a result of any obligation of such holders of such
Debt to pay amounts over to the obligees on such trade accounts payable or
accrued liabilities arising in the ordinary course of business as a result of
subordination provisions to which such Debt is subject.
13. CONVERSION. The Holder of any Security has the right, exercisable at
any time prior to 5:00 p.m., New York City time, on June 1, 2029, to convert the
principal amount thereof (or any portion thereof that is an integral multiple of
$50) into shares of Common Stock at the initial conversation rate of 2.4465
shares of Class A Common Stock for each $50 in aggregate principal amount of
Securities (equivalent to a conversion price of $20.4375 per share of Class A
Common Stock of the Company). The conversion ratio and equivalent conversion
price in effect at any time are known as the "Applicable Conversion Price" and
the "Applicable Conversion Ratio," respectively, and are subject to adjustment
under certain circumstances. If a Security is called for redemption, the
conversion right will terminate at the close of business on the Business Day
immediately preceding the corresponding Redemption Date, unless the Company
defaults in making the payment due upon redemption.
To convert a Security, a Holder must (1) complete and sign a conversion
notice substantially in the form attached hereto, (2) surrender the Security to
a Conversion Agent, (3) furnish appropriate endorsements or transfer documents
if required by the Security Registrar or Conversion Agent and (4) pay any
transfer or similar tax, if required. Upon conversion, no adjustment or payment
will be made for interest or dividends, but if any Holder surrenders a Security
for conversion after the close of business on the Regular Record Date for the
payment of an installment of interest and prior to the opening of business on
the next Interest Payment Date, then, notwithstanding such conversion, the
interest payable on such Interest Payment Date will be paid to the registered
Holder of such Security on such Regular Record Date. In such event, such
Security, when surrendered for conversion, need not be accompanied by payment of
an amount equal to the interest payable on such Interest Payment Date on the
portion so converted. The number of shares issuable upon conversion of a
Security is determined by dividing the principal amount of the Security
converted by the Applicable Conversion Price in effect on the Conversion Date.
No fractional shares will be issued upon conversion but a cash adjustment will
be made for any fractional interest. The outstanding principal amount of any
Security shall be reduced by the portion of the principal amount thereof
converted into shares of Class A Common Stock.
14. REGISTRATION RIGHTS. The holders of the Preferred Securities, the
Securities, the Guarantee Agreement and the shares of Common Stock of the
Company issuable upon conversion of the Securities (collectively, the
"Registrable Securities") are entitled to the benefits of a
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<PAGE>
Registration Rights Agreement, dated as of June 3, 1999, among the Company, the
Trust and the Initial Purchaser (the "Registration Rights Agreement"). Pursuant
to the Registration Rights Agreement the Company and the Trust have agreed for
the benefit of the holders of the Registrable Securities that (i) they will, at
the Company's sole expense, prior to August 3, 1999, file a shelf registration
statement (the "Shelf Registration Statement") with the Commission with respect
to resales of the Registrable Securities, (ii) they will use their best efforts
to cause such Shelf Registration Statement to be declared effective under the
Securities Act prior to November 1, 1999, and (iii) they will use their best
efforts to maintain such Shelf Registration Statement continuously effective
under the Securities Act (subject to certain exceptions under the Registration
Rights Agreement) until the second anniversary of the effectiveness of the Shelf
Registration Statement or such other period as shall be required under Rule
144(k) thereunder or any successor rule or regulation thereto or such earlier
date as is provided in the Registration Rights Agreement. If the Company fails
to comply with either of clauses (ii) or (iii) above, subject to certain
exceptions provided in the Registration Rights Agreement, (a "Registration
Default") then, at such time, the Applicable Rate will increase by 50 basis
points (.50%). Such increase will remain in effect from and including the date
on which any such Registration Default shall occur to but excluding the date on
which all Registration Defaults have been cured, on which date the interest rate
on the Securities will revert to the interest rate originally borne by the
Securities.
15. REGISTRATION, TRANSFER, EXCHANGE AND DENOMINATIONS. 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
New York, New York, 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 authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities are issuable only in registered form without coupons in
denominations of $50 and integral multiples thereof. 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. In the event of redemption or conversion of
this Security in part only, a new Security or Securities for the unredeemed or
unconverted portion hereof will be issued in the name of the Holder hereof upon
the cancellation hereof.
16. PERSONS DEEMED OWNERS. Except as provided in Section 3 hereof, the
registered Holder of a Security may be treated as its owner for all purposes.
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<PAGE>
17. UNCLAIMED MONEY. If money for the payment of principal or interest
remains unclaimed for two years, the Trustee and the Paying Agent shall pay the
money back to the Company at its written request. After that, holders of
Securities entitled to the money must look to the Company for payment unless an
abandoned property law designates another Person and all liability of the
Trustee and such Paying Agent with respect to such money shall cease.
18. EVENTS OF DEFAULT AND REMEDIES. The Securities shall have the Events
of Default as set forth in Section 5.01 of the Indenture. Subject to certain
limitations in the Indenture, if an Event of Default occurs and is continuing,
the Trustee by notice to the Company or the holders of at least 25% in aggregate
principal amount of the Outstanding Securities by notice to the Company and the
Trustee may declare all amounts payable on the Securities (including any
Additional Payments) to be due and payable immediately; provided that, if the
Property Trustee is the sole Holder of the Security and if upon an Event of
Default, the Trustee or the holder of not less than 25% in aggregate principal
amount of the then outstanding Securities fail to declare the principal of all
the Securities to be immediately due and payable, the holders of at least 25% in
aggregate liquidation amount of Preferred Securities then outstanding shall have
such right by a notice in writing to the Company and the Trustee; and upon any
such declaration such principal and all accrued interest shall become
immediately due and payable; and provided further that the payment of principal
and interest on such Securities shall remain subordinated to the extent provided
in the Indenture.
In the case of an Event of Default, the holders of a majority in principal
amount of the Outstanding Securities by written notice to the Trustee may
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default have
been cured or waived except nonpayment of principal or interest that has become
due solely because of the acceleration.
Holders may not enforce the Indenture or the Securities except as provided
in the Indenture. Subject to certain limitations, holders of a majority in
principal amount of the then outstanding Securities issued under the Indenture
may direct the Trustee in its exercise of any trust or power. The Company must
furnish annually compliance certificates to the Trustee. The above description
of Events of Default and remedies is qualified by reference to, and subject in
its entirety by, the more complete description thereof contained in the
Indenture.
19. AMENDMENTS, SUPPLEMENTS AND WAIVERS. The Indenture permits, subject to
the rights of the holders of Preferred Securities set forth therein and in the
Declaration and with certain other 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 under the Indenture, at any time, by
the Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the Securities at the time Outstanding. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities, subject to the
rights of the holders of the Preferred Securities set forth therein and in the
Declaration, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture
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<PAGE>
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 therefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security. The above
description of amendments, supplements and waivers is qualified by reference to,
and subject in its entirety, by the more complete description thereof contained
in the Indenture.
20. TRUSTEE DEALINGS WITH THE COMPANY. The Trustee, in its individual or
any other capacity may become the owner or pledgee of the Securities and may
otherwise deal with the Company or an Affiliate with the same rights it would
have, as if it were not a Trustee, subject to certain limitations provided for
in the Indenture and in the Trust Indenture Act. Any Agent may do the same with
like rights.
21. NO RECOURSE AGAINST OTHERS. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of, or by reason of such obligations or their
creation. Each Holder of the Securities by accepting a Security waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
22. GOVERNING LAW. THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN
THE INDENTURE AND THE SECURITIES WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS
THEREOF.
23. AUTHENTICATION. The Securities shall not be valid until authenticated
by the manual signature of an authorized officer of the Trustee or an
authenticating agent.
24. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
25. The Company will furnish to any Holder of the Securities upon written
request and without charge a copy of the Indenture. Request may be made to:
Carriage Services, Inc.
1300 Post Oak Blvd., Suite 1500
Houston, Texas 77056-3012
Attention: Chief Financial Officer
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ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
________________________________________________________________________________
Date:
Your Signature:_________________________________________________________________
(Sign exactly as your name appears on the face of this Note)
SIGNATURE GUARANTEE(4)
________________________________________________________________________________
_______________
(4)(Signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar, which requirements
include membership or participation in the Security Transfer Agent
Medallion Program ("STAMP") or such other "signature guarantee program" as
may be determined by the Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.
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[Include the following if the Security bears a Restricted Securities
Legend
In connection with any transfer of any of the Securities evidenced by this
certificate, the undersigned confirms that such Securities are being:
CHECK ONE BOX BELOW
(1) |_| exchanged for the undersigned's own account
without transfer; or
(2) |_| transferred pursuant to and in compliance with
Rule 144A under the Securities Act of 1933; or
(3) |_| transferred pursuant to and in compliance with
Regulation S under the Securities Act of 1933; or
(4) |_| transferred pursuant to another available
exemption from the registration requirements of
the Securities Act of 1933.
(5) |_| transferred pursuant to an effective registration
statement under the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any person other
than the registered Holder thereof; provided, however, that if box (3) or (4) is
checked, the Trustee may require, prior to registering any such transfer of the
Securities, such legal opinions, certifications and other information as the
Company has reasonably requested to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933, such as the exemption
provided by Rule 144 under such Act.
___________________________________
Signature
91
<PAGE>
SIGNATURE GUARANTEE:(5)
___________________________________
Signature
Signature must be guaranteed Signature
_______________
(5)(Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include membership
or participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.)
92
<PAGE>
[TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.]
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
Dated:_________________________
_______________________________________
NOTICE: [To be executed by an executive
officer]
93
<PAGE>
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE A
The initial principal amount of this Global Security shall be $_______.
The following increases or decreases in the principal amount of this Global
Security have
been made:
<TABLE>
<CAPTION>
AMOUNT OF
DECREASE IN
PRINCIPAL AMOUNT SIGNATURE OF
OF THIS GLOBAL AMOUNT OF PRINCIPAL AMOUNT AUTHORIZED
SECURITY INCLUDING INCREASE IN OF THIS GLOBAL SIGNATORY OF
INCREASE UPON PRINCIPAL AMOUNT SECURITY FOLLOWING TRUSTEE OR
EXERCISE OF OVER- OF THIS GLOBAL SUCH DECREASE (OR SECURITIES
DATE MADE ALLOTMENT OPTION SECURITY INCREASE) CUSTODIAN
- --------- ------------------ ---------------- ------------------- ------------
<S> <C> <C> <C> <C>
</TABLE>
94
<PAGE>
ELECTION TO CONVERT
To: Carriage Services, Inc.
The undersigned owner of this Security hereby irrevocably exercises the
option to convert this Security, or the portion below designated, into Class A
Common Stock of CARRIAGE SERVICES, INC. in accordance with the terms of the
Indenture referred to in this Security, and directs that the shares issuable and
deliverable upon conversion, together with any check in payment for fractional
shares, be issued in the name of and delivered to the undersigned, unless a
different name has been indicated in the assignment below. If shares are to be
issued in the name of a person other than the undersigned, the undersigned will
pay all transfer taxes payable with respect thereto.
Any holder, upon the exercise of its conversion rights in accordance with
the terms of the Indenture and the Security, agrees to be bound by the terms of
the Registration Rights Agreement relating to the Class A Common Stock issuable
upon conversion of the
Securities.
Date:
in whole __
Portions of Security to be converted ($50 or integral multiples thereof):
$_______________________
____________________________________ Signature (for conversion only)
Please Print or Typewrite Name and Address, Including Zip Code, and Social
Security or Other Identifying Number ___________________________________________
________________________________________________________________________________
Signature Guarantee:(6)
_______________________________
___________________
(6)(Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include membership
or participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.)
95
EXHIBIT 4.12
------------------------------------------------------------------------------
PREFERRED SECURITIES GUARANTEE AGREEMENT
BETWEEN
CARRIAGE SERVICES, INC.
AND
WILMINGTON TRUST COMPANY
------------------------------------------------------------------------------
<PAGE>
CROSS-REFERENCE TABLE(1)
SECTION OF SECTION OF
TRUST INDENTURE ACT GUARANTEE
of 1939, as amended AGREEMENT
- ------------------------------------------------------------------------------
310(a).......................................................... 4.01(a)
310(b).......................................................... 4.01(c), 2.08
310(c).......................................................... Inapplicable
311(a).......................................................... 2.02(b)
311(b).......................................................... 2.02(b)
311(c).......................................................... Inapplicable
312(a).......................................................... 2.02(a)
312(b).......................................................... 2.02(b)
313............................................................. 2.03
314(a).......................................................... 2.04
314(b).......................................................... Inapplicable
314(c).......................................................... 2.05
314(d).......................................................... Inapplicable
314(e)..........................................................1.01, 2.05, 3.02
314(f).......................................................... 2.01, 3.02
315(a).......................................................... 3.01(d)
315(b).......................................................... 2.07
315(c).......................................................... 3.01
315(d).......................................................... 3.01(d)
316(a)..........................................................1.01, 2.06, 5.04
316(b).......................................................... 5.03
316(c).......................................................... 8.02
317(a).......................................................... Inapplicable
317(b).......................................................... Inapplicable
318(a).......................................................... 2.01(b)
318(b).......................................................... 2.01
318(c).......................................................... 2.01(a)
____________
(1)This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.01 DEFINITIONS AND INTERPRETATION.................................1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.01 TRUST INDENTURE ACT; APPLICATION...............................4
SECTION 2.02 LISTS OF HOLDERS OF SECURITIES.................................5
SECTION 2.03 REPORTS BY THE GUARANTEE TRUSTEE...............................5
SECTION 2.04 PERIODIC REPORTS TO GUARANTEE TRUSTEE..........................5
SECTION 2.05 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT...............5
SECTION 2.06 EVENTS OF DEFAULT; WAIVER......................................6
SECTION 2.07 EVENT OF DEFAULT; NOTICE.......................................6
SECTION 2.08 CONFLICTING INTERESTS..........................................6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
SECTION 3.01 POWERS AND DUTIES OF THE GUARANTEE TRUSTEE.....................6
SECTION 3.02 CERTAIN RIGHTS OF GUARANTEE TRUSTEE............................8
SECTION 3.03 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE.........10
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.01 GUARANTEE TRUSTEE; ELIGIBILITY................................10
SECTION 4.02 APPOINTMENT, REMOVAL AND RESIGNATION OF GUARANTEE TRUSTEE.....10
ARTICLE V
GUARANTEE
SECTION 5.01 GUARANTEE.....................................................11
SECTION 5.02 SUBORDINATION.................................................12
SECTION 5.03 WAIVER OF NOTICE AND DEMAND...................................12
ii
<PAGE>
SECTION 5.04 OBLIGATIONS NOT AFFECTED......................................12
SECTION 5.05 RIGHTS OF HOLDERS.............................................13
SECTION 5.06 GUARANTEE OF PAYMENT..........................................13
SECTION 5.07 SUBROGATION...................................................13
SECTION 5.08 INDEPENDENT OBLIGATIONS.......................................14
SECTION 5.09 CONVERSION....................................................14
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.01 LIMITATION OF TRANSACTIONS....................................14
SECTION 6.02 RANKING.......................................................15
ARTICLE VII
TERMINATION
SECTION 7.01 TERMINATION...................................................15
ARTICLE VIII
INDEMNIFICATION
SECTION 8.01 EXCULPATION...................................................15
SECTION 8.02 INDEMNIFICATION...............................................16
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 SUCCESSORS AND ASSIGNS........................................16
SECTION 9.02 AMENDMENTS....................................................16
SECTION 9.03 NOTICES.......................................................17
SECTION 9.04 BENEFIT.......................................................18
SECTION 9.05 GOVERNING LAW.................................................18
iii
<PAGE>
THIS PREFERRED SECURITIES GUARANTEE AGREEMENT ("Guarantee"), dated as of
June 3, 1999, is executed and delivered by CARRIAGE SERVICES, INC., a Delaware
corporation (the "Guarantor"), and WILMINGTON TRUST COMPANY, a Delaware banking
corporation, as trustee (the "Guarantee Trustee"), for the benefit of the
HOLDERS (as defined herein) from time to time of the Preferred Securities (as
defined herein) of CARRIAGE SERVICES CAPITAL TRUST, a Delaware statutory
business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of June 3, 1999, 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 1,875,000 TIDES, having an aggregate stated
liquidation amount of $93,750,000, designated the 7% Convertible Preferred
Securities Term Income Deferrable Equity Securities (TIDES) (liquidation amount
$50 per Preferred Security) (the "Preferred Securities");
WHEREAS as incentive for the Holders to purchase the TIDES, the Guarantor
desires irrevocably and unconditionally to agree, to the extent set forth in
this Guarantee, to pay on a subordinated basis to the Holders the Guarantee
Payments (as defined herein) and to make certain other payments on the terms and
conditions set forth herein; and
WHEREAS the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee") in substantially identical terms
to this Guarantee for the benefit of the holders of the Common Securities (as
defined herein) except that if a Debenture Event of Default or a Declaration
Event of Default (each as defined herein) (or an event that, with passage of
time, would become such a Debenture Event of Default) shall have occurred and be
continuing, the rights of holders of the Common Securities to receive Guarantee
Payments under the Common Securities Guarantee are subordinated to the rights of
Holders to receive Guarantee Payments under this Guarantee.
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 Guarantee for the
benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.01 DEFINITIONS AND INTERPRETATION.
In this Guarantee, unless the context otherwise requires:
(a) capitalized terms used in this Guarantee but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.01; terms defined in the Declaration
1
<PAGE>
as at the date of execution of this Guarantee have the same meaning when used in
this Guarantee unless otherwise defined in this Guarantee;
(b) a term defined anywhere in this Guarantee has the same meaning
throughout;
(c) all references to "the Guarantee" or "this Guarantee" are to
this Guarantee as modified, supplemented or amended from time to time;
(d) all references in this Guarantee to Articles and Sections are to
Articles and Sections of this Guarantee unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Guarantee unless otherwise defined in this Guarantee or unless
the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"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;
the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"COMMON SECURITIES" means the convertible common securities (liquidation
amount $50 per common security) representing common undivided beneficial
interests in the assets of the Issuer.
"COVERED PERSON" means any Holder or beneficial owner of Preferred
Securities.
"DEBENTURE EVENT OF DEFAULT" means an Event of Default as defined in
the Indenture.
"DEBENTURES" means the series of convertible junior subordinated debt
securities of the Guarantor designated the Convertible Junior Subordinated
Debentures Due 2029 held by the Property Trustee (as defined in the Indenture)
of the Issuer.
"DECLARATION EVENT OF DEFAULT" means an Event of Default as defined in
the Declaration.
"EVENT OF DEFAULT" means a default by the Guarantor on any of its payment
or other obligations under this Guarantee; provided, however, that except with
respect to a default in payment of any Guarantee Payment, the Guarantor shall
have received notice of default and shall not have cured such default within 60
days after receipt of such notice.
2
<PAGE>
"GUARANTEE PAYMENTS" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by or on behalf of the Issuer: (i) any accrued and unpaid
Distributions (as defined in the Declaration) that are required to be paid on
the Preferred Securities, to the extent that the Issuer shall have funds on hand
available therefor at such time, (ii) the applicable Redemption Price (as
defined in the Indenture) with respect to Preferred Securities called for
redemption by the Issuer, to the extent that the Issuer has funds on hand
available therefor at such time, and (iii) upon a voluntary or involuntary
dissolution, winding up or liquidation of the Issuer (other than in connection
with the distribution of Debentures to the Holders or the redemption of all the
Preferred Securities), the lesser of (a) the aggregate liquidation amount
thereof plus accrued and unpaid Distributions thereon to the date of payment
(such amount being the "Liquidation Distribution") to the extent the Issuer has
funds available therefor and (b) the amount of assets of the Issuer remaining
available for distribution to Holders upon liquidation of the Issuer after
satisfaction of liabilities to creditors of the Issuer as required by applicable
law.
"GUARANTEE TRUSTEE" means Wilmington Trust Company until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee and thereafter means each such Successor
Guarantee Trustee.
"HOLDER" means any holder, as registered on the books and records of the
Issuer of any outstanding Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage in liquidation
amount of the 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 Guarantee Trustee, any Affiliate of the
Guarantee Trustee, or any officers, directors, shareholders, members, partners,
employees, representatives or agents of the Guarantee Trustee.
"INDENTURE" means the Indenture dated as of June 3, 1999, among the
Guarantor and Wilmington Trust Company, as trustee, and any indenture
supplemental thereto, pursuant to which the Debentures are to be issued to the
Property Trustee of the Issuer.
"MAJORITY IN LIQUIDATION AMOUNT OF THE PREFERRED SECURITIES" means, except
as provided by the Trust Indenture Act, Holder(s), voting separately as a class,
representing more than 50% of the stated aggregate liquidation amount (including
the stated amount that would be paid on redemption, liquidation or otherwise) of
all Preferred Securities then outstanding.
"OFFICERS' CERTIFICATE" means, with respect to any Person, a certificate
signed by the Chairman of the Board, President or a Vice President, and by the
Treasurer, an Assistant Treasurer, the Controller, the Secretary or an Assistant
Secretary of such Person, and delivered to the Guarantee Trustee. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee shall include:
3
<PAGE>
(g) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(h) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(i) a statement that each such officer has made such examination or
investigation as, in such officer's 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
(j) 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.
"RESPONSIBLE OFFICER" means, with respect to the Guarantee Trustee, the
chairman of the board of directors, the president, any vice-president, any
assistant vice-president, the secretary, any assistant secretary, the treasurer,
any assistant treasurer, any trust officer or assistant trust officer or any
other officer of the Guarantee Trustee customarily performing functions similar
to those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of and familiarity with
the particular subject.
"SENIOR DEBT" shall have the meaning set forth in the Indenture.
"SUCCESSOR GUARANTEE TRUSTEE" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.01.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.01 TRUST INDENTURE ACT; APPLICATION.
(a) This Guarantee is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee, which are
incorporated by reference hereto, and shall, to the extent applicable, be
governed by such provisions; and
4
<PAGE>
(b) If and to the extent that any provision of this 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 2.02 LISTS OF HOLDERS OF SECURITIES.
(a) The Guarantor shall provide the Guarantee Trustee (i) within 14
days after May 15 and November 15 of each year, commencing November 15, 1999, a
list, in such form as the Guarantee Trustee may reasonably require, of the names
and addresses of the Holders ("List of Holders") as of such date; provided that
the Guarantor shall not 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 Guarantee Trustee by the Guarantor, and (ii) at any other time, within 30
days of receipt by the Guarantor of a written request for a List of Holders as
of a date no more than 14 days before such List of Holders is given to the
Guarantee Trustee. The Guarantee Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations under
Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.03 REPORTS BY THE GUARANTEE TRUSTEE.
Within 60 days after May 15 of each year, commencing May 15, 2000, the
Guarantee Trustee shall provide to the Holders of the 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 Section 313 of the Trust Indenture Act. The Guarantee
Trustee shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
SECTION 2.04 PERIODIC REPORTS TO GUARANTEE TRUSTEE.
The Guarantor shall provide to the Guarantee Trustee, the Securities and
Exchange Commission and the Holders such documents, reports and information as
required by Section 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 2.05 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this Guarantee
which 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.
5
<PAGE>
SECTION 2.06 EVENTS OF DEFAULT; WAIVER.
The Holders of a Majority in liquidation amount of the 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
Guarantee, but no such waiver shall extend to any subsequent or other default or
Event of Default or impair any right consequent therefrom.
SECTION 2.07 EVENT OF DEFAULT; NOTICE.
(a) The Guarantee Trustee shall, within 30 days after the occurrence
of an Event of Default actually known to the Guarantee Trustee, transmit by
mail, first-class postage prepaid, to the Holders, notices of all Events of
Default known to the Guarantee Trustee, unless such defaults have been cured
before the giving of such notice; provided that, except in the case of a default
in the payment of a Guarantee Payment, the Guarantee 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 and/or Responsible
Officers of the Guarantee Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of
any Event of Default except any Event of Default as to which the Guarantee
Trustee shall have received written notice or a Responsible Officer charged with
the administration of the Declaration shall have obtained written notice.
SECTION 2.08 CONFLICTING INTERESTS.
The Declaration shall be deemed to be specifically described in this
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 GUARANTEE TRUSTEE
SECTION 3.01 POWERS AND DUTIES OF THE GUARANTEE TRUSTEE.
(a) This Guarantee shall be held by the Guarantee Trustee for the
benefit of the Holders, and the Guarantee Trustee shall not transfer this
Guarantee to any Person except a Holder exercising his or her rights pursuant to
Section 5.05(d) or to a Successor Guarantee Trustee on acceptance by such
Successor Guarantee Trustee of its appointment to act as Successor Guarantee
Trustee. The right, title and interest of the Guarantee Trustee shall
automatically vest in any Successor Guarantee Trustee, and such vesting and
cessation of title shall be effective whether or
6
<PAGE>
not conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee for the benefit of the Holders.
(c) The 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 Guarantee, and no implied covenants shall be read into this Guarantee
against the Guarantee Trustee. In case an Event of Default has occurred (that
has not been cured or waived pursuant to Section 2.06), the Guarantee Trustee
shall exercise such of the rights and powers vested in it by this 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 Guarantee shall be construed to relieve the
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 Guarantee Trustee
shall be determined solely by the express provisions of this
Guarantee, and the Guarantee Trustee shall not be liable except for
the performance of such duties and obligations as are specifically
set forth in this Guarantee, and no implied covenants or obligations
shall be read into this Guarantee against the Guarantee Trustee; and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the 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 Guarantee Trustee and conforming to the requirements of this
Guarantee; but in the case of any such certificates or opinions that
by any provision hereof are specifically required to be furnished to
the Guarantee Trustee, the Guarantee Trustee shall be under a duty
to examine the same to determine whether or not they conform to the
requirements of this Guarantee;
(ii) the Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was
negligent in ascertaining the pertinent facts upon which such judgment was
made;
7
<PAGE>
(iii) the 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 Guarantee Trustee, or exercising any trust or power conferred upon the
Guarantee Trustee under this Guarantee; and
(iv) no provision of this Guarantee shall require the
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.
SECTION 3.02 CERTAIN RIGHTS OF GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.01:
(i) the 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;
(ii) any direction or act of the Guarantor contemplated by
this Guarantee shall be sufficiently evidenced by an Officers'
Certificate;
(iii) whenever, in the administration of this Guarantee, the
Guarantee Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Guarantee Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and rely
upon an Officers' Certificate which, upon receipt of such request, shall
be promptly delivered by the Guarantor;
(iv) the Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or any rerecording,
refiling or reregistration thereof);
(v) the Guarantee Trustee may consult with legal counsel of
its selection, and the written advice or opinion of such legal counsel
with respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be taken
by it hereunder in good faith and in accordance with such advice or
opinion. Such legal counsel may be legal counsel to the Guarantor or any
of its Affiliates and may include any of the Guarantor's employees. The
Guarantee Trustee shall have the right at any time to seek instructions
concerning the administration of this Guarantee from any court of
competent jurisdiction;
8
<PAGE>
(vi) the Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee at the
request or direction of any Holder, unless such Holder shall have provided
to the Guarantee Trustee security and indemnity satisfactory to the
Guarantee Trustee against the costs, expenses (including attorneys' fees
and expenses) 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 Guarantee Trustee; provided that nothing contained in
this Section 3.02(a)(vi) shall be taken to relieve the Guarantee Trustee,
upon the occurrence of an Event of Default, of its obligation to exercise
the rights and powers vested in it by this Guarantee;
(vii) the 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 Guarantee Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit;
(viii) the Guarantee 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 Guarantee 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 Guarantee Trustee or its agents
hereunder shall bind the Holders, and the signature of the Guarantee
Trustee or its agents alone shall be sufficient and effective to perform
any such action; it being understood that no third party shall be required
to inquire as to the authority of the Guarantee Trustee to so act or as to
its compliance with any of the terms and provisions of this Guarantee,
both of which shall be conclusively evidenced by the Guarantee Trustee's
or its agent's taking such action; and
(x) whenever in the administration of this Guarantee the
Guarantee Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Guarantee Trustee (i) may request written instructions from
the Holders or, other than with respect to enforcing any remedy or right
or taking any action related thereto, the Guarantor, (ii) may refrain from
enforcing such remedy or right or taking such other action until such
written instructions are received, and (iii) shall be protected in acting
in accordance with such written instructions.
(b) No provision of this Guarantee shall be deemed to impose any
duty or obligation on the 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 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 Guarantee Trustee
shall be construed to be a duty.
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SECTION 3.03 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 Guarantee Trustee does not assume any responsibility
for their correctness. The Guarantee Trustee makes no representations as to the
validity or sufficiency of this
Guarantee.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.01 GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a 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 4.01(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 Guarantee Trustee shall cease to be eligible
to so act under Section 4.01(a), the Guarantee Trustee shall immediately resign
in the manner and with the effect set out in Section 4.02(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 3.10(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 3.10(b) of the Trust Indenture Act.
SECTION 4.02 APPOINTMENT, REMOVAL AND RESIGNATION OF GUARANTEE TRUSTEE.
(a) Subject to Section 4.02(b), the Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
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(b) The Guarantee Trustee shall not be removed in accordance with
Section 4.02(a) until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by written instrument executed by such Successor
Guarantee Trustee and delivered to the Guarantor.
(c) The Guarantee Trustee appointed to office shall hold office
until a Successor Guarantee Trustee shall have been appointed or until its
removal or resignation. The Guarantee Trustee may resign from office (without
need for prior or subsequent accounting) by an instrument in writing executed by
the Guarantee Trustee and delivered to the Guarantor, which resignation shall
not take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.02 within 60 days after
delivery to the Guarantor of an instrument of removal or resignation, the
Guarantee Trustee resigning or being removed may petition any court of competent
jurisdiction for appointment of a Successor Guarantee Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper, appoint
a Successor Guarantee Trustee.
(e) No Guarantee Trustee shall be liable for the acts or omissions
to act of any Successor Guarantee Trustee.
(f) Upon termination of this Guarantee or removal or resignation of
the Guarantee Trustee pursuant to this Section 4.02, the Guarantor shall pay to
the Guarantee Trustee all amounts accrued to the date of such termination,
removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.01 GUARANTEE.
The Guarantor irrevocably and unconditionally agrees to pay in full on a
subordinated basis to the Holders the Guarantee Payments (without duplication of
amounts theretofore paid by or on behalf of the Issuer), as and when due, in
coin or currency of the United States of America which at the time of payment is
legal tender for payment of public and private debt regardless of any defense,
right of setoff or counterclaim that the Issuer may have or assert other than
the defense of payment. The Guarantor's 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.
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SECTION 5.02 SUBORDINATION.
If a Debenture Event of Default or a Declaration Event of Default (or an
event that, with passage of time, would become a Debenture Event of Default)
shall have occurred and be continuing, the rights of holders of the Common
Securities to receive Guarantee Payments under the Common Securities Guarantee
are subordinated to the rights of Holders to receive Guarantee Payments under
this Guarantee.
SECTION 5.03 WAIVER OF NOTICE AND DEMAND.
The Guarantor hereby waives notice of acceptance of this 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 5.04 OBLIGATIONS NOT AFFECTED.
The obligations, covenants, agreements and duties of the Guarantor under
this Guarantee shall in no way be affected or impaired by reason of the
happening from time to time of any of the
following:
(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, the amount payable upon redemption or the
amount payable upon liquidation of the Issuer 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 that results from the extension of any interest payment period on
the Debentures 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 TIDES, 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;
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(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) 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 5.04 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 or any other Person to give
notice to, or obtain consent of, the Guarantor with respect to the happening of
any of the foregoing.
SECTION 5.05 RIGHTS OF HOLDERS.
The Guarantor expressly acknowledges that:
(a) This Guarantee will be deposited with the Guarantee Trustee to
be held for the benefit of the Holders.
(b) The Guarantee Trustee has the right to enforce this Guarantee on
behalf of the Holders.
(c) 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 Guarantee Trustee in respect of this
Guarantee or exercising any trust or power conferred upon the Guarantee Trustee
under this Guarantee.
(d) Any Holder may institute a legal proceeding directly against the
Guarantor to enforce its rights under this Guarantee, without first instituting
a legal proceeding against the Issuer, the Guarantee Trustee or any other
Person.
SECTION 5.06 GUARANTEE OF PAYMENT.
This Guarantee creates a guarantee of payment and not of collection. This
Guarantee will not be discharged except by payment of the Guarantee Payments in
full (without duplication of amounts theretofore paid by the Issuer) or upon
distribution of Debentures to Holders as provided in the Declaration.
SECTION 5.07 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 Guarantee and shall have the right to waive payment by the
Issuer pursuant to Section 5.01; provided, however, that the Guarantor shall not
(except to the extent required by mandatory provisions of law) be entitled to
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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 Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this 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 5.08 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 Guarantee notwithstanding the
occurrence of any event referred to in subsections (a) through (g), inclusive,
of Section 5.04 hereof.
SECTION 5.09 CONVERSION.
The Guarantor acknowledges its obligation to issue and deliver common
stock upon the conversion of the Preferred Securities.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.01 LIMITATION OF TRANSACTIONS.
So long as any Preferred Securities remain outstanding, if there shall
have occurred and be continuing a Debenture Event of Default, a Declaration
Event of Default or an event that, with the giving of notice or the lapse of
time or both, would constitute a Debenture Event of Default or a Declaration
Event of Default, or a selection by the Guarantor of a Deferral Period as
provided in the Indenture and such period, or any extension thereof, shall be
continuing, then (a) the Guarantor shall not declare or pay any dividend on, or
make any distribution with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock (other than stock
dividends paid by the Guarantor which stock dividends consist of the stock of
the same class as that on which the dividend is being paid), (b) the Guarantor
shall not make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities issued by the Guarantor which
rank pari passu with or junior in interest to the Debentures and (c) the
Guarantor shall not make any guarantee payments with respect to any guarantee by
the Guarantor of the debt securities of any subsidiary of the Guarantor if such
guarantee ranks pari passu with or junior in interest to the Debentures (in each
case, other than (A) dividends or distributions in Common Stock, (B) any
declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (C)
payments under this Guarantee, (D) purchases or acquisitions of shares of the
Class A Common Stock in connection with the satisfaction by the Guarantor of its
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obligations under any employee benefit plan or any other contractual obligation
of the Guarantor (other than a contractual obligation ranking pari passu with or
junior in interest to the Debentures), (E) as a result of a reclassification of
the Guarantor's capital stock or the exchange or conversion of one class or
series of the Guarantor's capital stock for another class or series of the
Guarantor's capital stock or (F) the purchase of fractional interests in shares
of the Guarantor's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged).
SECTION 6.02 RANKING.
This Guarantee will constitute an unsecured obligation of the Guarantor
and will rank subordinate to all Senior Debt of the Guarantor to the same extent
that the Debentures are subordinated pursuant to the Indenture.
ARTICLE VII
TERMINATION
SECTION 7.01 TERMINATION.
This Guarantee shall terminate upon (i) full payment of the amount payable
upon redemption of all Preferred Securities, (ii) the distribution of the
Guarantor's common stock to the Holders in respect of the conversion of the
Preferred Securities into the Guarantor's common stock, (iii) the distribution
of the Debentures to the Holders of all of the Preferred Securities or (iv) full
payment of the amounts payable in accordance with the Declaration upon
liquidation of the Issuer. Notwithstanding the foregoing, this 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 Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.01 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
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
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 Person's
negligence or willful misconduct with respect to such acts or omissions.
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(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
Person's 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 8.02 INDEMNIFICATION.
(a) The Guarantor agrees to indemnify each Indemnified Person for,
and to hold each Indemnified Person harmless against, any and all loss,
liability or expense including taxes (other than taxes based on the income of
such Indemnified Person) 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 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 8.02 shall survive the termination of this Guarantee.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees and expenses) 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 8.02(a).
(c) No Indemnified Person shall claim or exact any lien or charge on
any Guarantee Payments as a result of any amount due to it under this Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 SUCCESSORS AND ASSIGNS.
All guarantees and agreements contained in this Guarantee shall bind the
successors, assigns, receivers, trustees and representatives of the Guarantor
and shall inure to the benefit of the Holders.
SECTION 9.02 AMENDMENTS.
Except with respect to any changes that do not materially adversely affect
the rights of Holders (in which case no consent of Holders will be required),
this Guarantee may only be amended with the prior approval of the Holders of a
majority in liquidation amount of the Preferred Securities
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then outstanding. The provisions of Section 12.02 of the Declaration with
respect to meetings of holders of the Securities (as defined in the Declaration)
apply to the giving of such approval.
SECTION 9.03 NOTICES.
All notices provided for in this Guarantee shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by first-class mail, as follows:
(a) if given to the Issuer, in care of the Regular Trustees at the
Issuer's mailing address set forth below (or such other address as the Issuer
may give notice):
Mark W. Duffey
Thomas C. Livengood
Terry E. Sanford
Carriage Services Capital Trust
c/o Carriage Services, Inc.
1717 Main Street, Suite 5900
Dallas, Texas 75201
Attention: Corporate Controller
(b) If given to the Guarantee Trustee, at the Guarantee Trustee's
mailing address set forth below (or such other address as the Guarantee Trustee
may give notice of to the Holders):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attn: Corporate Trust Administration
(c) If given to the Guarantor, at the Guarantor's mailing address
set forth below (or such other address as the Guarantor may give notice of to
the Holders):
Carriage Services, Inc.
1300 Post Oak Blvd., Suite 1500
Houston, Texas 77056-3012
Attention: Corporate Controller
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(d) 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 9.04 BENEFIT.
This Guarantee is solely for the benefit of the Holders and, subject to
Section 3.01(a), is not separately transferable from the Preferred Securities.
SECTION 9.05 GOVERNING LAW.
THIS GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICT OF LAWS.
THIS GUARANTEE is executed as of the day and year first above written.
CARRIAGE SERVICES, INC.
as Guarantor
by/s/ THOMAS C. LIVENGOOD
Name: Thomas C. Livengood
Title: Executive Vice President
and Chief Financial
Officer
WILMINGTON TRUST COMPANY
as Guarantee Trustee
by /s/ JAMES P. LAWLER
Name: James P. Lawler
Title: Vice President
18
EXHIBIT 4.13
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COMMON SECURITIES GUARANTEE AGREEMENT
DELIVERED BY
CARRIAGE SERVICES, INC.
FOR THE BENEFIT OF THE HOLDERS OF COMMON SECURITIES OF
CARRIAGE SERVICES CAPITAL TRUST
------------------------------------------------------------------------------
<PAGE>
This COMMON SECURITIES GUARANTEE AGREEMENT (the "Common Securities
Guarantee"), dated as of June 3, 1999, is executed and delivered by Carriage
Services, Inc., a Delaware corporation (the "Guarantor"), for the benefit of the
Holders (as defined herein) from time to time of the Common Securities (as
defined in the Declaration (as defined herein)) of Carriage Services Capital
Trust, a Delaware business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of June 3, 1999, among the trustees of the Issuer named
therein, 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
1,875,000 7% Preferred Securities (as defined in the Declaration), having an
aggregate liquidation amount of $93,750,000; and
WHEREAS, pursuant to the Declaration, the Issuer is issuing on the date
hereof 57,992 Common Securities, having an aggregate stated liquidation amount
of $2,899,600 designated the 7% Convertible Common Securities (liquidation
amount $50 per each of the Convertible Common Securities);
WHEREAS as incentive for the Holders to purchase the Common Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Common Securities Guarantee, to pay on a subordinated basis to
the Holders of the Common Securities the Guarantee Payments (as defined herein)
and to make certain other payments on the terms and conditions set forth herein;
and
WHEREAS the Guarantor is also executing and delivering a guarantee
agreement in substantially identical terms to this Common Securities Guarantee
for the benefit of the holders of the Preferred Securities (the "Guarantee")
except that if a Debenture Event of Default or a Declaration Event of Default
(each as defined herein) (or an event that, with passage of time, would become a
Debenture Event of Default) shall have occurred and be continuing, the rights of
Holders of the Common Securities to receive Guarantee Payments under this Common
Securities Guarantee are subordinated to the rights of holders of Preferred
Securities to receive Guarantee Payments under the Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of Common
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Common Securities Guarantee
for the benefit of the
Holders.
ARTICLE I
SECTION 1.01 In this Common Securities Guarantee, unless the context
otherwise requires, the terms set forth below shall have the following meanings.
<PAGE>
(a) capitalized terms used in this Common Securities Guarantee but
not defined in the preamble above have the respective meanings assigned to them
in this Section 1.01 or the
Guarantee;
(b) terms defined in the Declaration as at the date of execution of
this Common Securities Guarantee have the same meaning when used in this Common
Securities Guarantee unless otherwise defined in this Common Securities
Guarantee or in the Guarantee;
(c) a term defined anywhere in this Common Securities Guarantee has
the same meaning throughout;
(d) all references to "the Common Securities Guarantee" or "this
Common Securities Guarantee" are to this Common Securities Guarantee as
modified, supplemented or
amended from time to time;
(e) all references in this Common Securities Guarantee to Articles
and Sections are to Articles and Sections of this Common Securities Guarantee
unless otherwise specified; and
(f) a reference to the singular includes the plural and vice versa.
"DEBENTURE EVENT OF DEFAULT" means an Event of Default under the
Indenture.
"DECLARATION EVENT OF DEFAULT" means an Event of Default under the
Declaration.
"GUARANTEE EVENT OF DEFAULT" means a default by the Guarantor on any of
its payment or other obligations under the Common Securities Guarantee.
"GUARANTEE PAYMENTS" means the following payments or distributions,
without duplication, with respect to the Common Securities, to the extent not
paid or made by or on behalf of the Issuer: (i) any accrued and unpaid
Distributions which are required to be paid on such Common Securities, to the
extent that the Issuer shall have funds on hand available therefor at such time,
(ii) the applicable Redemption Price (as defined in the Indenture) with respect
to any Common Securities called for redemption by the Issuer, to the extent that
the Issuer has funds on hand available therefor at such time, and (iii) upon a
voluntary or involuntary dissolution, winding up or liquidation of the Issuer
(other than in connection with the distribution of Debentures to the Holders or
the redemption of all the Common Securities), the lesser of (a) the aggregate
liquidation amount thereof plus accrued and unpaid Distributions thereon to the
date of payment (such amount being the "Liquidation Distribution") to the extent
the Issuer has funds available therefor and (b) the amount of assets of the
Issuer remaining available for distribution to Holders upon liquidation of the
Issuer after satisfaction of liabilities to creditors of the Issuer as required
by applicable law.
"HOLDER" means any holder, as registered on the books and records of the
Issuer, of any outstanding Common Securities.
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"SENIOR DEBT" shall have the meaning set forth in the Indenture.
ARTICLE II
SECTION 2.01 The Guarantor irrevocably and unconditionally agrees to pay
in full on a subordinated basis to the Holders the Guarantee Payments (without
duplication of amounts theretofore paid by or on behalf of the Issuer), as and
when due, in coin or currency of the United States of America which at the time
of payment is legal tender for payment of public and private debt regardless of
any defense, right of set-off or counterclaim which the Issuer may have or
assert other than the defense of payment. The Guarantor's 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 2.02 If a Debenture Event of Default or a Declaration Event of
Default (or an event that, with passage of time, would become a Debenture Event
of Default) shall have occurred and be continuing, the rights of Holders of the
Common Securities to receive Guarantee Payments under this Common Securities
Guarantee are subordinated to the rights of holders of Preferred Securities to
receive Guarantee Payments under the Guarantee.
SECTION 2.03 The Guarantor hereby waives notice of acceptance of this
Common 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 2.04 The obligations, covenants, agreements and duties of the
Guarantor under this Common Securities Guarantee shall in no way be affected or
impaired by reason of the happening
from time to time of any of the following:
(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 Common 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, the amount payable upon redemption, or the
amount payable upon liquidation of the Issuer or any other sums payable under
the terms of the Common Securities or the extension of time for the performance
of any other obligation under, arising out of, or in connection with, the Common
Securities (other than an extension of time for payment of Distributions, that
results from the extension of any interest payment period on the Debentures
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
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pursuant to the terms of the Common 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 Common
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) 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 2.04 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 or any other Person to give
notice to, or obtain consent of, the Guarantor with respect to the happening of
any of the foregoing.
SECTION 2.05 The Guarantor expressly acknowledges that any Holder may
institute a legal proceeding directly against the Guarantor to enforce its
rights under this Common Securities Guarantee, without first instituting a legal
proceeding against the Issuer or
any other Person.
SECTION 2.06 This Common Securities Guarantee creates a guarantee of
payment and not of collection. This Common Securities Guarantee will not be
discharged except by payment of the Guarantee Payments in full (without
duplication of amounts theretofore paid by the Issuer) or upon distribution of
Debentures to Holders as provided in the Declaration.
SECTION 2.07 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 Common Securities Guarantee and shall have right to
waive payment by the Issuer pursuant to Section 2.01; provided, however, that
the Guarantor shall not (except to the extent required by mandatory provisions
of law) be entitled to enforce or exercise any rights which it may acquire by
way of subrogation or any indemnity, reimbursement or other agreement, in all
cases as a result of payment under this Common Securities Guarantee, if, at the
time of any such payment, any amounts are due and unpaid under this Common
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 2.08 The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Common
Securities and that the Guarantor shall
4
<PAGE>
be liable as principal and as debtor hereunder to make Guarantee Payments
pursuant to the terms of this Common Securities Guarantee notwithstanding the
occurrence of any event referred to in subsections (a) through (g), inclusive,
of Section 2.04 hereof.
SECTION 2.09 The Guarantor acknowledges its obligation to issue and
deliver common stock upon the conversion of the Common Securities.
SECTION 2.10 The Holders of a majority in liquidation amount of Common
Securities may be vote, on behalf of the Holders of all of the Common
Securities, waive any past Guarantee Event of Default and its consequences. Upon
such waiver, any such Guarantee Event of Default shall cease to exist, and any
Guarantee Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this Common Securities Guarantee, but no such waiver shall
extend to any subsequent or other default or Guarantee Event of Default or
impair any right consequent thereon.
ARTICLE III
SECTION 3.01 So long as any Common Securities remain outstanding, if (i)
there shall have occurred and be continuing a Debenture Event of Default, a
Declaration Event of Default or an event that, with the giving of notice or the
lapse of time or both, would constitute a Debenture Event of Default or a
Declaration Event of Default or (ii) a selection by the Guarantor of a Deferral
Period as provided in the Indenture and such period, or any extension thereof,
shall be continuing, then (a) the Guarantor shall not declare or pay any
dividend on, or make any distributions with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its capital stock
(other than stock dividends paid by the Guarantor which consist of the stock of
the same class as that on which the dividend is being paid), (b) the Guarantor
shall not make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities issued by the Guarantor which
rank PARI PASSU with or junior in interest to the Debentures and (c) shall not
make any guarantee payments with respect to any guarantee by the Guarantor of
the debt securities of any subsidiary of the Guarantor if such guarantee ranks
PARI PASSU with or junior in interest to the Debentures (in each case, other
than (A) dividends or distributions in Common Stock, (B) any declaration of a
dividend in connection with the implementation of a stockholders' rights plan,
or the issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (C) payments under the
Guarantee, (D) purchases or acquisitions of shares of the Class A Common Stock
in connection with the satisfaction by the Guarantor of its obligations under
any employee benefit plan or any other contractual obligation of the Guarantor
(other than a contractual obligation ranking pari passu with or junior in
interest to the Debentures), (E) as a result of a reclassification of the
Guarantor's capital stock or the exchange or conversion of one class or series
of the Guarantor's capital stock for another class or series of the Guarantor's
capital stock or (F) the purchase of fractional interests in shares of the
Guarantor's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged).
5
<PAGE>
SECTION 3.02 This Common Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank subordinate to all Senior Debt of the
Guarantor to the same extent that the Debentures (as defined in the Indenture)
are subordinated pursuant to the Indenture.
ARTICLE IV
SECTION 4.01 This Common Securities Guarantee shall terminate upon (i)
full payment of the amount payable upon redemption of the Common Securities,
(ii) the distribution of the Guarantor's common stock to the Holders in respect
of the conversion of the Common Securities into the Guarantor's common stock,
(iii) the distribution of the Debentures to the Holders in exchange for all of
the Common Securities or (iv) full payment of the amounts payable in accordance
with the Declaration upon liquidation of the Issuer. Notwithstanding the
foregoing, this Common Securities Guarantee will continue to be effective or
will be reinstated, as the case may be, if at any time any Holder of Common
Securities must restore payment of any sums paid under the Common Securities or
under this Common Securities Guarantee.
ARTICLE V
SECTION 5.01 All guarantees and agreements contained in this Common
Securities Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders.
SECTION 5.02 Except with respect to any changes which do not adversely
affect the rights of Holders (in which case no consent of Holders will be
required), this Common Securities Guarantee may only be amended with the prior
approval of the Holders of a majority in liquidation amount of the outstanding
Common Securities. The provisions of Section 12.02 of the Declaration with
respect to meetings of Holders of the Securities apply to the giving of such
approval.
SECTION 5.03 All notices provided for in this Common 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 Issuer, in care of the Regular Trustees at the
Issuer's mailing address set forth below (or such other address as the Issuer
may give notice of to the Holders of the Common Securities):
6
<PAGE>
Mark W. Duffey
Thomas C. Livengood
Terry E. Sanford
Carriage Services Capital Trust
c/o Carriage Services, Inc.
1300 Post Oak Blvd., Suite 1500
Houston, Texas 77056-3012
Attention: Treasurer
(b) if given to the Guarantor, at the Guarantor's mailing address
set forth be low (or such other address as the Guarantor may give notice of to
the Holders of the Common
Securities):
Carriage Services, Inc.
1300 Post Oak Blvd., Suite 1500
Houston, Texas 77056-3012
Attention: Treasurer
(c) if given to any Holder of Common Securities, 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 5.04 This Common Securities Guarantee is solely for the benefit of
the Holders and is not separately transferable from the Common Securities.
SECTION 5.05 THIS COMMON SECURITIES GUARANTEE SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
7
<PAGE>
THIS COMMON SECURITIES GUARANTEE is executed as of the day and year first
above written.
CARRIAGE SERVICES, INC.,
as Guarantor
By: /s/ THOMAS C. LIVENGOOD
Name: Thomas C. Livengood
Title: Executive Vice President
and Chief Financial
Officer
8
EXHIBIT 4.14
AMENDMENT NO. 1
TO
AMENDED AND RESTATED DECLARATION OF TRUST
OF
CARRIAGE SERVICES CAPITAL TRUST
This Amendment No. 1 to the Amended and Restated Declaration of Trust of
Carriage Services Capital Trust (the "Trust"), dated as of July 29, 1999 (this
"Amendment"), is made and entered into by and among Carriage Services, Inc., a
Delaware corporation, as Sponsor (the "Sponsor"), Wilmington Trust Company, a
Delaware banking corporation, as Property Trustee (the "Property Trustee"), and
Mark W. Duffey, Thomas C. Livengood and Terry E. Sanford (each an
"Administrative Trustee," and collectively, the "Administrative Trustees").
W I T N E S S E T H
WHEREAS, the Trust is a Delaware business trust that was created under
Chapter 38 of Title 12 of the Delaware Code, 12 DEL. C. ss. 3801, eT Seq. (the
"Act") pursuant to (i) the Declaration of Trust, dated as of May 24, 1999 (the
"Original Declaration"), which Original Declaration was amended and restated in
its entirety by the Amended and Restated Declaration of Trust, dated as of June
3, 1999 (the "Declaration"), and (ii) the Certificate of Trust of the Trust,
dated as of May 24, 1999, as filed with the office of the Secretary of State of
the State of Delaware on May 24, 1999;
WHEREAS, the parties hereto are amending the Declaration to correct a
provision in the Declaration that is inconsistent with another provision in the
Declaration;
WHEREAS, this Amendment does not adversely affect in any material respect
the interests of any Holder of Securities and does not adversely affect the
powers, preferences or rights of the Securities; and
WHEREAS, in accordance with the terms of Section 12.01(a) of the
Declaration, the Sponsor, the Property Trustee and the Administrative Trustees
have the power to amend the Declaration to reflect the terms set forth below.
NOW, THEREFORE, in consideration of the mutual promises and obligations
contained herein, the parties, intending to be legally bound, hereby agree as
follows:
I. AMENDMENT.
Section 3.08(h) of the Declaration is hereby amended by deleting the first
sentence of such section and replacing it with the following:
The Property Trustee will act as Paying Agent and Registrar in
Wilmington, Delaware 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.
<PAGE>
II. MISCELLANEOUS.
A. SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon, and shall
enure to the benefit of, the parties hereto and their respective successors and
assigns.
B. FULL FORCE AND EFFECT. Except to the extent modified hereby, the
Declaration shall remain in full force and effect.
C. COUNTERPARTS. This Amendment may be executed in counterparts, all of
which together shall constitute one agreement binding on all parties hereto,
notwithstanding that all such parties are not signatories to the original or
same counterpart.
D. GOVERNING LAW. This Amendment shall be interpreted in accordance with
the laws of the State of Delaware (without regard to conflict of laws
principles), all rights and remedies being governed by such laws.
E. EFFECTIVENESS OF AMENDMENT. This Amendment shall be effective upon the
giving of notice of this Amendment to the Holders of the Securities, in
accordance with Sections 12.01 and 15.01 of the Declaration.
F. CAPITALIZED TERMS. Capitalized terms used herein and not otherwise
defined are used as defined in the Declaration.
[SIGNATURE PAGE FOLLOWS]
-2-
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the
date first set forth above.
CARRIAGE SERVICES, INC.,
as Sponsor
By: /s/ THOMAS C. LIVENGOOD
Name: Thomas C. Livengood
Title: Executive Vice President
WILMINGTON TRUST COMPANY,
as Property Trustee
By: /s/ JAMES P. LAWLER
Name: James P. Lawler
Title: Authorized Signatory
MARK W. DUFFEY,
as Administrative Trustee
/s/ MARK W. DUFFEY
THOMAS C. LIVENGOOD,
as Administrative Trustee
/s/ THOMAS C. LIVENGOOD
TERRY E. SANFORD,
as Administrative Trustee
/s/ TERRY E. SANFORD
-3-
[VINSON & ELKINS L.L.P. LETTERHEAD]
July 30, 1999
Carriage Services, Inc.
Carriage Services Capital Trust
1300 Post Oak Blvd., Suite 1500
Houston, Texas 77056
Re: Carriage Services, Inc.
Carriage Services Capital Trust
Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel to Carriage Services, Inc., a Delaware
corporation (the "Company"), and Carriage Services Capital Trust, a statutory
business trust created under the laws of the State of Delaware (the "Trust"), in
connection with the preparation of a Registration Statement on Form S-3, to be
filed by the Company and the Trust with the Securities and Exchange Commission
(the "Commission") on the date hereof (the "Registration Statement"), relating
to the registration under the Securities Act of 1933, as amended (the "Act"), of
(i) 1,875,000 7% Convertible Preferred Securities (liquidation amount $50 per
Convertible Preferred Security) (the "Convertible Preferred Securities")
representing undivided preferred beneficial ownership interests in the assets of
the Trust; (ii) Convertible Junior Subordinated Debentures due 2029 (the
"Convertible Junior Subordinated Debentures") of the Company, which may be
distributed under certain circumstances to the holders of the Convertible
Preferred Securities; (iii) the shares of Class A common stock, par value $.01
per share (the "Class A Common Stock"), of the Company, issuable upon conversion
of the Convertible Preferred Securities and the Convertible Junior Subordinated
Debentures; and (iv) the Preferred Securities Guarantee of the Company (as
defined below).
This opinion is being furnished in accordance with the requirements of
Item 601(b)(5) of Regulation S-K under the Act.
The Convertible Preferred Securities were issued pursuant to the Amended
and Restated Declaration of Trust (the "Declaration"), dated as of June 3, 1999,
among the Company, as sponsor, Wilmington Trust Company, as property trustee
(the "Property Trustee"), Wilmington Trust
<PAGE>
Page 2
July 30, 1999
Company (Delaware), as Delaware trustee (the "Delaware Trustee"), and Mark W.
Duffey, Thomas C. Livengood and Terry E. Sanford as administrative trustees
(together with the Property Trustee and the Delaware Trustee, the "Regular
Trustees"). Capitalized terms used but not otherwise defined herein have the
meanings ascribed to them in the Registration Statement.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of (i) the certificate of
trust (the "Certificate of Trust") filed by the Delaware Trustee and the Regular
Trustees with the Secretary of State of the State of Delaware on May 24, 1999;
(ii) the Declaration (including the designations of the terms of the Convertible
Preferred Securities annexed thereto); (iii) a specimen of the Convertible
Preferred Securities; (iv) the Preferred Securities Guarantee Agreement, dated
as of June 3, 1999 (the "Preferred Securities Guarantee"), between the Company
and Wilmington Trust Company, as trustee; (v) a specimen of the Convertible
Junior Subordinated Debentures, which were issued pursuant to an indenture dated
as of June 3, 1999, (the "Indenture"), between the Company and Wilmington Trust
Company, as trustee; (vi) the Indenture; (vii) certain resolutions of the Board
of Directors of the Company relating to the issuance of the Convertible Junior
Subordinated Debentures and the shares of Class A Common Stock issuable upon
conversion thereof; and (viii) the Registration Statement. We have also examined
originals or copies, certified or otherwise identified to our satisfaction, of
such other documents, certificates and records as we have deemed necessary or
appropriate as a basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies. In making our examination of
documents executed by parties other than the Trust (including the Company), we
have assumed that such parties had the power, corporate or other, to enter into
and perform all obligations thereunder and have also assumed the due
authorization by all requisite action, corporate or other, and execution and
delivery by such parties of such documents and, except as set forth in
paragraphs 1 and 2 below, that such documents constitute valid and binding
obligations of such parties. We have also assumed that the performance by the
Company of its obligations under the Indenture and the Preferred Securities
Guarantee do not and will not violate or constitute a default under (i) any
agreement or instrument to which the Company or its properties are subject, (ii)
any law, rule, or regulation to which the Company is subject, (iii) any judicial
or regulatory order or decree of any governmental authority or (iv) any consent,
approval, license, authorization or validation of, or filing, recording or
registration with any governmental authority. As to any facts material to the
opinions expressed herein which were not independently established or verified,
we have relied upon oral or written statements and representations of officers,
trustees and other representatives of the Company, the Trust and others.
Based on and subject to the foregoing and to the other limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that:
<PAGE>
Page 3
July 30, 1999
1. The Preferred Securities Guarantee is a valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms,
except to the extent that enforcement thereof may be limited by (i) bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium, or other similar laws now or hereafter
in effect relating to creditors' rights generally and (ii) general principles of
equity (regardless of whether enforceability is considered in a proceeding at
law or in equity).
2. The Convertible Junior Subordinate Debentures are valid and binding
obligations of the Company, entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their terms, except to the
extent that enforcement thereof may be limited by (i) bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law or in
equity) and except to the extent that the waiver of stay or extension laws
contained in Section 5.15 of the Indenture may be unenforceable.
3. The shares of Class A Common Stock issuable upon conversion of the
Convertible Preferred Securities and the Convertible Junior Subordinated
Debentures have been duly authorized and reserved for issuance upon conversion
and, when certificates representing the Class A Common Stock in the form of the
specimen certificates examined by us have been manually signed by an authorized
officer of the transfer agent and registrar for the Class A Common Stock and are
issued upon conversion of the Convertible Preferred Securities and the
Convertible Junior Subordinated Debentures, such shares of Class A Common Stock
will be validly issued, fully paid and nonassessable.
The foregoing opinions are limited in all respects to the Federal laws of
the United States, the laws of the State of Texas and the General Corporation
Law of the State of Delaware.
We hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement. We also consent to the reference to our
firm under the caption "Legal Matters" in the Registration Statement. In giving
this consent, we do not thereby admit that we are within the category of persons
whose consent is required under Section 7 of the Act or the rules and
regulations of the Commission.
Very truly yours,
/s/ VINSON & ELKINS L.L.P.
EXHIBIT 5.2
[Letterhead of Richards, Layton & Finger, P.A.]
July 30, 1999
Carriage Services Capital Trust
c/o Carriage Services, Inc.
1300 Post Oak Boulevard
Suite 1500
Houston, Texas 77056
Re: CARRIAGE SERVICES CAPITAL TRUST
Ladies and Gentlemen:
We have acted as special Delaware counsel for Carriage Services,
Inc., a Delaware corporation (the "Company"), and Carriage Services Capital
Trust, a Delaware business trust (the "Trust"), in connection with the matters
set forth herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated May 24, 1999 (the
"Certificate"), as filed in the office of the Secretary of State of the State of
Delaware (the "Secretary of State") on May 24, 1999;
(b) The Declaration of Trust of the Trust, dated as of May 24, 1999,
among the Company, the trustees of the Trust named therein and the holders, from
time to time, of undivided beneficial interests in the assets of the Trust;
(c) The Amended and Restated Declaration of Trust of the Trust
(including Annex I and Exhibits A-1 and A-2, the "Declaration of Trust"), dated
as of June 3, 1999, among the Company, as sponsor, the trustees of the Trust
named therein, and the holders, from time to time, of undivided beneficial
interests in the assets of the Trust;
(d) The Registration Statement (the "Registration Statement") on
Form S-3, as proposed to be filed by the Trust and the Company with the
Securities and
<PAGE>
Carriage Services Capital Trust
July 30, 1999
Page 2
Exchange Commission on or about July 30, 1999, including a related preliminary
prospectus (the "Prospectus"), relating to the Preferred Securities of the Trust
representing undivided beneficial interests in the assets of the Trust (each, a
"Preferred Security" and collectively, the "Preferred Securities"); and
(e) A Certificate of Good Standing for the Trust, dated July 30,
1999, obtained from the Secretary of State.
Capitalized terms used herein and not otherwise defined are used as
defined in the Declaration of Trust.
For purposes of this opinion, we have not reviewed any documents
other than the documents listed in paragraphs (a) through (e) above. In
particular, we have not reviewed any document (other than the documents listed
in paragraphs (a) through (e) above) that is referred to in or incorporated by
reference into the documents reviewed by us. We have assumed that there exists
no provision in any document that we have not reviewed that is inconsistent with
the opinions stated herein. We have conducted no independent factual
investigation of our own but rather have relied solely upon the foregoing
documents, the statements and information set forth therein and the additional
matters recited or assumed herein, all of which we have assumed to be true,
complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i)
the authenticity of all documents submitted to us as authentic originals, (ii)
the conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the
Declaration of Trust and the Certificate are in full force and effect and have
not been amended, (ii) except to the extent provided in paragraph 1 below, that
each of the parties to the documents examined by us has been duly created,
organized or formed, as the case may be, and is validly existing in good
standing under the laws of the jurisdiction governing its creation, organization
or formation, (iii) the legal capacity of natural persons who are signatories to
the documents examined by us, (iv) that each of the parties to the documents
examined by us has the power and authority to execute and deliver, and to
perform its obligations under, such documents, (v) that each of the parties to
the documents examined by us has duly authorized, executed and delivered such
documents, (vi) the receipt by each Person to whom a Preferred Security was
issued by the Trust (collectively, the "Preferred Security Holders") of a
Preferred Securities certificate (substantially in the form of Exhibit A-1 to
the Declaration of Trust) for such Preferred Security and the payment for the
Preferred Security acquired by it, in accordance with the Declaration of Trust
and as described in the
<PAGE>
Carriage Services Capital Trust
July 30, 1999
Page 3
Registration Statement, and (vii) that the Preferred Securities were issued and
sold to the Preferred Security Holders in accordance with the Declaration of
Trust and as described in the Registration Statement. We have not participated
in the preparation of the Registration Statement and assume no responsibility
for its contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder that are currently in effect.
Based upon the foregoing, and upon our examination of such questions
of law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act (12 DEL. C.
ss. 3801, et SEQ.).
2. The Preferred Securities represent valid and, subject to the
qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Preferred Security Holders, as beneficial owners of the
Trust, are 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. We note that the Preferred Security
Holders may be obligated to make payments as set forth in the Declaration of
Trust.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In addition, we
hereby consent to the use of our name under the heading "Legal Matters" in the
Prospectus. In giving the foregoing consents, we do not thereby admit that we
come within the category of Persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder. Except as
<PAGE>
Carriage Services Capital Trust
July 30, 1999
Page 4
stated above, without our prior written consent, this opinion may not be
furnished or quoted to, or relied upon by, any other Person for any purpose.
Very truly yours,
/s/ RICHARDS, LAYTON & FINGER, P.A.
BJK/TLM
EXHIBIT 10.1
CARRIAGE SERVICES CAPITAL TRUST
7% CONVERTIBLE PREFERRED SECURITIES
TERM INCOME DEFERRABLE EQUITY SECURITIES (TIDES)(SM)
(LIQUIDATION AMOUNT $50 PER
EACH OF THE TIDES)
GUARANTEED TO THE EXTENT SET FORTH
IN THE GUARANTEE AGREEMENT BY, AND
CONVERTIBLE INTO CLASS A COMMON STOCK OF,
CARRIAGE SERVICES, INC.
REGISTRATION RIGHTS AGREEMENT
June 3, 1999
Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, NY 10010-3629
Dear Sirs:
Carriage Services Capital Trust, a business trust formed under the laws of
the State of Delaware (the "Trust") by Carriage Services, Inc., a Delaware
corporation (the "Company"), proposes to issue and sell to you, as initial
purchaser (the "Purchaser"), upon the terms set forth in a purchase agreement
dated May 27, 1999 (the "Purchase Agreement"), among the Purchaser, the Company
and the Trust up to 1,875,000 7% Convertible Preferred Securities Term Income
Deferrable Equity Securities ("TIDES") (liquidation amount $50 per each of the
TIDES) (the "Initial Placement"). The proceeds of the sale by the Trust of the
TIDES and the Common Securities, liquidation amount $50 per Common Security (the
"Common Securities"), are to be invested in the Convertible Junior Subordinated
Debentures Due 2029 of the Company (the "Convertible Junior Subordinated
Debentures") having an aggregate principal amount equal to the aggregate
liquidation amount of the TIDES and the Common Securities. The TIDES are
guaranteed by the Company to the extent set forth in the Guarantee Agreement
dated as of June 3, 1999 (the "Guarantee"), between the Company and Wilmington
Trust Company, as trustee, and are convertible into Class A Common
<PAGE>
Stock, par value $.01 per share (the "Common Stock") of the Company. As an
inducement to you to enter into the Purchase Agreement and in satisfaction of a
condition to your obligations thereunder, the Trust and the Company agree with
you, (i) for your benefit and (ii) for the benefit of the registered holders
from time to time of the TIDES and the Convertible Junior Subordinated
Debentures and the record holders of the Common Stock of the Company issuable
upon conversion of the TIDES or the Convertible Junior Subordinated Debentures
(collectively, together with the Guarantee by the Company of the TIDES, the
"Securities"), including the Purchaser (each of the foregoing a "Holder" and
together the "Holders"), as follows:
1. DEFINITIONS. Capitalized terms used herein without definition shall
have their respective meanings set forth in or pursuant to the Purchase
Agreement or, if not defined therein, in the Confidential Offering Circular
dated May 27, 1999, in respect of the TIDES or, if not defined therein, in the
Amended and Restated Declaration of Trust dated as of June 3, 1999 (the
"Declaration") relating to the Trust. As used in this Agreement, the following
capitalized defined terms shall have the following meanings:
"Act" or "Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Affiliate" of any specified person means any other person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such specified person. For purposes of this definition, control of a
person means the power, direct or indirect, to direct or cause the direction of
the management and policies of such person whether by contract or otherwise; the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Business Day" means any day other than (i) a Saturday or Sunday, (ii) a
day on which banking institutions in The City of New York or Wilmington,
Delaware are authorized or required by law or executive order to remain closed
or (iii) a day on which the corporate trust office of the Debenture Trustee or
the Property Trustee is closed for business.
"Closing Date" has the meaning given such term in the Purchase Agreement.
"Commission" means the Securities and Exchange Commission.
"Common Stock" has the meaning set forth in the first paragraph to this
Agreement.
"Company" has the meaning set forth in the first paragraph to this
Agreement.
"Convertible Junior Subordinated Debentures" has the meaning set forth in
the first paragraph to this Agreement.
"Debenture Trustee", "Guarantee Trustee" and "Property Trustee" each means
Wilmington Trust Company, a Delaware banking corporation.
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"Electing Holder" has the meaning assigned thereto in Section 2(c)(ii)
hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Guarantee" means the guarantee by the Company of the TIDES pursuant to a
Guarantee Agreement dated as of June 3, 1999 between the Company and the
Guarantee
Trustee.
"Holder" and "Holders" each has the meaning set forth in the first
paragraph to this Agreement.
"Initial Placement" has the meaning set forth in the first paragraph to
this Agreement.
"Managing Underwriters" means the investment banker or investment bankers
and manager or managers that shall administer an underwritten offering, if any,
as set forth in Section 6 hereof.
"Prospectus" means the prospectus included in any Shelf Registration
Statement filed pursuant to Rule 415 under the Act, with respect to the terms of
the offering of all or any portion of the Securities covered by such Shelf
Registration Statement, as amended or supplemented by all amendments (including
post-effective amendments) and supplements to the Prospectus.
"Purchase Agreement" has the meaning set forth in the first paragraph
to this Agreement.
"Purchaser" has the meaning set forth in the first paragraph to this
Agreement.
"Registration Default" has the meaning given to such term in Section 7(a)
hereof.
"Securities" means the TIDES, the Convertible Junior Subordinated
Debentures, the Common Stock and the Guarantee, individually and collectively.
"Shelf Registration" means a registration effected pursuant to Section 2
hereof.
"Shelf Registration Period" has the meaning set forth in Section 2(b)
hereof.
"Shelf Registration Statement" means a "shelf" registration statement of
the Trust and the Company pursuant to the provisions of Section 2 hereof filed
with the Commission which covers some or all of the Securities, as applicable,
on an appropriate form under Rule 415 under the Act, or any similar rule that
may be adopted by the Commission, amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Special Distributions" has the meaning given such term in Section 7(a)
hereof.
"Special Interest" has the meaning given such term in Section 7(a) hereof.
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<PAGE>
"TIDES" has the meaning set forth in the first paragraph to this
Agreement.
"Trust" has the meaning set forth in the first paragraph to this
Agreement.
"Trustee" means the Guarantee Trustee, the Indenture Trustee or the
Property Trustee, as applicable.
"Underwriter" means any underwriter of Securities in connection with an
offering thereof under a Shelf Registration Statement.
2. SHELF REGISTRATION. (a) The Trust and the Company shall (i) file as
soon as practicable, but in no event more than 60 days after the Closing Date, a
Shelf Registration covering resales of the TIDES, the Guarantee, the Convertible
Junior Subordinated Debentures and the related Company Common Stock issuable
upon conversion thereof and (ii) use their best efforts to cause the Shelf
Registration Statement to be declared effective under the Securities Act within
150 days after the Closing Date, PROVIDED, HOWEVER, that no Holder shall be
entitled to be named as a selling securityholder in the Shelf Registration
Statement or to use the Prospectus forming a part thereof for resales of
Registrable Securities unless such holder is an Electing Holder.
(b) The Trust and the Company shall each use their best efforts (i)
to keep the Shelf Registration Statement continuously effective, subject to
Section 7(b) hereof, in order to permit the Prospectus forming part thereof to
be usable by Holders until resale of the Securities are permitted pursuant to
Rule 144(k) under the Securities Act or any successor rule or regulation thereto
after the date the Shelf Registration Statement is declared effective or such
shorter period that will terminate upon the earlier of the following: (A) when
all the TIDES covered by the Shelf Registration Statement have been sold
pursuant to the Shelf Registration Statement, (B) when all Convertible Junior
Subordinated Debentures issued to Holders in respect of TIDES that had not been
sold pursuant to the Shelf Registration Statement have been sold pursuant to the
Shelf Registration Statement or (C) when all shares of Common Stock issued upon
conversion of any such TIDES or any such Convertible Junior Subordinated
Debentures that had not been sold pursuant to the Shelf Registration Statement
have been sold pursuant to the Shelf Registration Statement (in any such case,
such period being called the "Shelf Registration Period") and (ii) after the
effectiveness of the Shelf Registration Statement, promptly upon the request of
any Holder that is not then an Electing Holder to take any action reasonably
necessary to register the sale of any Securities of such Holder and to identify
such Holder as a selling securityholder, PROVIDED, HOWEVER, that nothing in this
subparagraph shall relieve such Holder of the obligation to provide the Company
and the Trust with the information required pursuant to Section 2(c) hereof.
(c) (i) No Holder shall be entitled to be named as a selling
securityholder in the Shelf Registration Statement as of the date on which the
Commission declares the Shelf Registration Statement effective or on which the
Shelf Registration Statement otherwise becomes effective, and no Holder shall be
entitled to use the Prospectus forming a part thereof for resales of Registrable
Securities at any time, unless such holder has provided the Company and the
Trust with such
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information as they shall reasonably request in order to enable the Company and
the Trust to comply with the applicable requirements of the Securities Act in
connection with offers and sales by such Holder as a selling securityholder in
the Shelf Registration Statement within 30 calendar days from the date on which
any such request is first mailed to such Holder.
(i) After the date on which the Commission declares the Shelf
Registration Statement effective or on which the Shelf Registration
Statement otherwise becomes effective, the Company and the Trust may, upon
the request of any Holder of Registrable Securities that is not then an
Electing Holder, take such action as is necessary to name such Holder as a
selling securityholder in the Shelf Registration Statement or to enable
such Holder to use the Prospectus forming a part thereof for resales of
Registrable Securities if such Holder promptly provides the Company and
the Trust with such information as they shall reasonably request in order
to enable the Company and the Trust to comply with the applicable
requirements of the Securities Act in connection with offers and sales by
such Holder so as to permit such Holder to be so named.
(ii) The term "Electing Holder" shall mean any holder of
Registrable Securities that has complied with the requests of the Company
and the Trust in accordance with Section 2(c)(i) or 2(c)(ii) hereof.
3. REGISTRATION PROCEDURES. In connection with any Shelf Registration
Statement, the following provisions shall apply:
(a) The Trust and the Company shall furnish to the Purchaser, prior
to the filing thereof with the Commission, a copy of any Shelf Registration
Statement, and each amendment thereof and each amendment or supplement, if any,
to the Prospectus included therein and shall each use its best efforts to
reflect in each such document, when so filed with the Commission, such comments
as the Purchaser reasonably may propose.
(b) The Trust and the Company shall take such action as may be
necessary, subject to Section 7(b) hereof, so that (i) any Shelf Registration
Statement and any amendment thereto and any Prospectus forming part thereof and
any amendment or supplement thereto (and each report or other document
incorporated therein by reference in each case) complies in all material
respects with the Securities Act and the Exchange Act and the respective rules
and regulations thereunder, (ii) any Shelf Registration Statement and any
amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and
(iii) any Prospectus forming part of any Shelf Registration Statement, and any
amendment or supplement to such Prospectus, does not, during the Shelf
Registration Period, include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements, in the light of
the circumstances under which they were made, not misleading.
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<PAGE>
(c) (1) The Company shall advise the Purchaser and each Electing
Holder and, if requested by the Purchaser or any such Electing Holder,
confirm such advice in
writing:
(i) when a Shelf Registration Statement and any amendment
thereto has been filed with the Commission and when the Shelf Registration
Statement or any post-effective amendment thereto has become effective;
and
(ii) of any request by the Commission for amendments or
supplements to the Shelf Registration Statement or the Prospectus included
therein or for additional information.
(2) The Trust and the Company shall advise the Purchaser and
each Electing Holder and, if requested by the Purchaser or any such
Electing Holder, confirm such
advice in writing:
(i) of the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration Statement or the
initiation of any proceedings for that purpose;
(ii) of the receipt by the Trust or the Company of any
notification with respect to the suspension of the qualification of the
securities included therein for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose; and
(iii) of the happening, during the Shelf Registration Period,
of any event (provided that such notice need not specify the nature of
such event) that requires the making of any changes in the Shelf
Registration Statement or the Prospectus so that, as of such date, the
Registration Statement and the Prospectus do not contain an untrue
statement of a material fact and do not omit to state a material fact
required to be stated therein or necessary to make the statements therein
(in the case of the Prospectus, in light of the circumstances under which
they were made) not misleading (which advice shall be accompanied by an
instruction to suspend the use of the Prospectus until the requisite
changes have been made).
(d) The Trust and the Company shall use their best efforts to
prevent the issuance, and if issued to obtain the withdrawal, of any order
suspending the effectiveness of any Shelf Registration Statement at the earliest
possible time.
(e) The Trust and the Company shall furnish to each Electing Holder
of Securities, without charge, at least one copy of such Shelf Registration
Statement and any post- effective amendment thereto (including any reports or
other documents incorporated therein by reference), including financial
statements and schedules, and, if the Electing Holder so requests in writing,
all exhibits (including those incorporated by reference).
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<PAGE>
(f) The Trust and the Company shall, during the Shelf Registration
Period, deliver to each Electing Holder, without charge, as many copies of the
Prospectus (including each preliminary Prospectus) included in such Shelf
Registration Statement and any amendment or supplement thereto as such Electing
Holder may reasonably request and shall deliver such materials to the New York
Stock Exchange pursuant to Rule 153 under the Act; and each of the Trust and the
Company consents to the use of the Prospectus or any amendment or supplement
thereto by each of the Electing Holders in connection with the offering and sale
of the Securities covered by the Prospectus or any amendment or supplement
thereto during the Shelf Registration Period.
(g) Prior to any offering of Securities pursuant to any Shelf
Registration Statement, the Trust and the Company shall register or qualify or
cooperate with the Electing Holders and their respective counsel in connection
with the registration or qualification of such Securities for offer and sale
under the securities or blue sky laws of such jurisdictions as any such Electing
Holders reasonably request in writing and do any and all other acts or things
necessary or advisable to enable the offer and sale in such jurisdictions of the
Securities covered by such Shelf Registration Statement; PROVIDED, HOWEVER, that
neither the Trust nor the Company will be required to qualify generally to do
business in any jurisdiction where it is not then so qualified or to take any
action which would subject it to general service of process or to taxation in
any such jurisdiction where it is not then so subject.
(h) Unless the applicable Securities shall be in book-entry only
form, the Trust and the Company shall cooperate with the Electing Holders to
facilitate the timely preparation and delivery of certificates representing
Securities to be sold pursuant to any Shelf Registration Statement free of any
restrictive legends and in such permitted denominations and registered in such
names as Electing Holders may request in connection with the sale of Securities
pursuant to such Shelf Registration Statement.
(i) Upon the occurrence of any event contemplated by Section
3(c)(1)(ii) or 3(c)(2)(i) above, the Trust and the Company shall promptly
prepare, subject to Section 7(b) hereof, as soon as possible a post-effective
amendment to any Shelf Registration Statement or an amendment or supplement to
the related Prospectus or file any other required document so that, as
thereafter delivered to purchasers of the Securities included therein, the
Prospectus will not include an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading. If the Trust or
the Company notifies the Electing Holders of the occurrence of any event
contemplated by Section 3(c)(2)(i) above, the Electing Holders shall suspend the
use of the Prospectus until the requisite changes to the Prospectus have been
made.
(j) Not later than the effective date of any Shelf Registration
Statement hereunder, the Trust and the Company shall provide a CUSIP number for
the TIDES and, in the event of and at the time of any distribution thereof to
Holders, the Convertible Junior Subordinated Debentures, registered under such
Shelf Registration Statement, and provide the applicable Trustee
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<PAGE>
with certificates for such Securities, in a form eligible for deposit with
The Depository Trust Company.
(k) The Trust and the Company shall use their best efforts to comply
with all applicable rules and regulations of the Commission and shall make
generally available to their security holders or otherwise in accordance with
Section 11(a) of the Securities Act as soon as practicable after the effective
date of the applicable Shelf Registration Statement an earning statement
satisfying the provisions of Section 11(a) of the Securities Act.
(l) The Trust and the Company shall cause the Indenture, the
Declaration and the Guarantee to be qualified under the Trust Indenture Act in a
timely manner.
(m) The Trust and the Company may require each Electing Holder to
furnish to the Trust and the Company such information regarding the Electing
Holder and the distribution of such Securities as the Trust and the Company may
from time to time reasonably require for inclusion in such Shelf Registration
Statement.
(n) The Trust and the Company shall, if requested, promptly
incorporate in a Prospectus supplement or post-effective amendment to a Shelf
Registration Statement, such information as the Managing Underwriters reasonably
agree should be included therein and to which the Trust and the Company do not
reasonably object and shall make all required filings of such Prospectus
supplement or post-effective amendment as soon as practicable after they are
notified of the matters to be incorporated in such Prospectus supplement or
post-effective amendment.
(o) The Trust and the Company shall enter into such customary
agreements (including underwriting agreements in customary form) to take all
other appropriate actions in order to expedite or facilitate the registration or
the disposition of the Securities, and in connection therewith, if an
underwriting agreement is entered into, cause the same to contain
indemnification provisions and procedures substantially identical to those set
forth in Section 5 (or such other provisions and procedures acceptable to the
Managing Underwriters, if any) with respect to all parties to be indemnified
pursuant to Section 5.
(p) The Trust and the Company shall (i) make reasonably available
for inspection by the Electing Holders, any underwriter participating in any
disposition pursuant to such Shelf Registration Statement, and any attorney,
accountant or other agent retained by such Electing Holders or any such
underwriter all relevant financial and other records, pertinent corporate
documents and properties of the Trust and the Company and its subsidiaries as
shall be requested in connection with the discharge of their due diligence
obligations; (ii) cause the Company's officers, directors and employees and any
relevant Trustees to supply at the Company's expense all relevant information
reasonably requested by such Electing Holders or any such underwriter, attorney,
accountant or agent in connection with any such Shelf Registration Statement as
is customary for similar due diligence examinations; PROVIDED, HOWEVER, that any
information that is designated in writing by the Trust and the Company, in good
faith, as confidential at the time of delivery of such
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<PAGE>
information shall be kept confidential by such Electing Holders or any such
underwriter, attorney, accountant or agent, unless such disclosure is made in
connection with a court proceeding or required by law, or such information
becomes available to the public generally or through a third party without an
accompanying obligation of confidentiality, and such Electing Holders shall
agree that such information may only be used as part of their due diligence
examination and for no other purpose; and PROVIDED FURTHER that the foregoing
inspection and information gathering shall, to the greatest extent possible, be
coordinated on behalf of the Electing Holders and the other parties entitled
thereto by one counsel designated by and on behalf of such Electing Holders and
other parties; (iii) in connection with an underwritten offering conducted
pursuant to Section 6 hereof, make such representations and warranties to the
Electing Holders participating in such underwritten offering and the
underwriters in form, substance and scope as are customarily made by the issuers
to underwriters in primary underwritten offerings and covering matters as are
customarily covered in representations and warranties requested in primary
underwritten offerings including, but not limited to, those set forth in the
Purchase Agreement; (iv) in connection with an underwritten offering conducted
pursuant to Section 6 hereof, obtain opinions of counsel to the Trust and the
Company and updates thereof (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the Managing Underwriters)
addressed to each Electing Holder participating in such offering and the
underwriters, if any, covering such matters and with such exceptions as are
customarily covered or taken in opinions requested in underwritten offerings and
such other matters as may be reasonably requested by such Electing Holders and
underwriters (it being agreed that the matters to be covered by such opinion
shall include, without limitation, as of the date of the opinion and as of the
effective date of the Shelf Registration Statement or most recent post-effective
amendment thereto, as the case may be, a statement by such counsel regarding the
absence from such Shelf Registration Statement and the prospectus included
therein, as then amended or supplemented, including the documents incorporated
by reference therein, of an untrue statement of a material fact or the omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading); (v) in connection with an
underwritten offering conducted pursuant to Section 6 hereof, obtain "cold
comfort" letters and updates thereof from the independent certified public
accountants of the Company (and, if necessary, any other independent certified
public accountants of any subsidiary of the Company or of any business acquired
by the Company for which financial statements and financial data are, or are
required to be, included in the Shelf Registration Statement), addressed to each
Electing Holder participating in such underwritten offering and the
underwriters, if any, in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with primary
underwritten offerings; and (vi) in connection with an underwritten offering
conducted pursuant to Section 6 hereof, deliver such documents and certificates
as may be reasonably requested by the Managing Underwriters, if any, including
those to evidence compliance with Section 3(i) and with any customary conditions
contained in the underwriting agreement or other agreement entered into by the
Trust and the Company. The foregoing actions set forth in clauses (iii), (iv),
(v) and (vi) of this Section 3(p) shall be performed at (A) with respect to
clauses (ii) and (v) only, the execution of an underwriting agreement and (B)
each closing under any underwritten offering to the extent required under any
related underwriting or similar agreement.
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(q) The Trust and the Company will use their best efforts to cause
the Common Stock relating to such Shelf Registration Statement to be listed on
each securities exchange, over-the-counter market, or respective counterpart if
any, on which any shares of Common Stock are then listed.
(r) The Trust and the Company shall, in the event that any
broker-dealer registered under the Exchange Act shall underwrite any Securities
or participate as a member of an underwriting syndicate or selling group or
"assist in the distribution" (within the meaning of the Rules of Fair Practice
and the By-Laws of the National Association of Securities Dealers, Inc.
("NASD")) thereof, whether as a Holder of such Securities or as an underwriter,
a placement or sales agent or a broker or dealer in respect thereof, or
otherwise, assist such broker-dealer in complying with the requirements of such
Rules and By-Laws, including, without limitation, by (A) if such Rules or
By-Laws, including Schedule E thereto, shall so require, engaging a "qualified
independent underwriter" (as defined in such Schedule) to participate in the
preparation of the Shelf Registration Statement relating to such Securities, to
exercise usual standards of due diligence in respect thereto, (B) indemnifying
any such qualified independent underwriter to the extent of the indemnification
of underwriters provided in Section 5 hereof and (C) providing such information
to such broker-dealer as may be required in order for such broker-dealer to
comply with the requirements of the Rules of Fair Practice of the NASD.
(s) The Trust and the Company shall use their best efforts to take
all other steps necessary to effect the registration, offering and sale of the
Securities covered by the Shelf Registration Statement contemplated hereby.
4. REGISTRATION EXPENSES. Except as otherwise provided in Section 6, the
Company shall bear all fees and expenses incurred in connection with the
performance of the obligations of the Company and the Trust under Sections 2 and
3 hereof and shall bear or reimburse the Purchaser for the reasonable fees and
disbursements of one counsel for the Purchaser in connection with the filing of
the Shelf Registration Statement.
5. INDEMNIFICATION AND CONTRIBUTION. (a) In connection with any Shelf
Registration Statement, the Trust and the Company, jointly and severally, agree
to indemnify and hold harmless the Purchaser, each Electing Holder (including
the Purchaser) and each person who controls the Purchaser or any such Electing
Holder within the meaning of either the Securities Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Securities Act, the
Exchange Act or other Federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Shelf
Registration Statement as originally filed or in any amendment thereof, or in
any preliminary prospectus or Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to reimburse
each such indemnified party, as
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<PAGE>
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; PROVIDED, HOWEVER, that the Company and the Trust will not
be liable in any case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of the Purchaser or any such Electing Holder specifically for inclusion
therein. This indemnity agreement will be in addition to any liability which the
Company or the Trust may otherwise have.
The Trust and the Company, jointly and severally, also agree to indemnify
or contribute to Losses (as defined below) of, as provided in Section 5(d), any
underwriters of Securities registered under the Shelf Registration Statement,
their officers, directors, employees and agents and each person who controls
such underwriters on substantially the same basis as that of the indemnification
of the Purchaser and the Electing Holders provided in this Section 5(a) and
shall, if requested by any Electing Holder, enter into an underwriting agreement
reflecting such agreement, as provided in Section 3(o) and Section 6 hereof.
(a) Each Electing Holder (including the Purchaser) severally agrees
as a consequence of the inclusion of any of such Holder's Registrable Securities
in such Shelf Registration Statement, and each underwriter executing an
underwriting agreement, if any, which facilitates the disposition of Registrable
Securities shall agree, as a consequence of facilitating such disposition of
Registrable Securities, severally and not jointly, to indemnify and hold
harmless (i) the Trust and the Company, (ii) each of the directors of the
Company, (iii) each of its officers and any Administrative Trustee who signs
such Shelf Registration Statement and (iv) each person who controls the Trust or
the Company within the meaning of either the Securities Act or the Exchange Act
to the same extent as the foregoing indemnity from the Trust and the Company,
but only with reference to written information relating to such Electing Holder
or underwriter executing an underwriting agreement furnished to the Company by
or on behalf of such Electing Holder or underwriter executing an underwriting
agreement specifically for inclusion in the documents referred to in the
foregoing indemnity. This indemnity agreement will be in addition to any
liability which any such Electing Holder or underwriter executing an
underwriting agreement may otherwise have.
(b) Promptly after receipt by an indemnified party under this
Section 5 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 5, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve the
indemnifying party from any liability it may have to any indemnified party
otherwise than under paragraph (a) or (b) above. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except with the consent
of such indemnified party, be counsel to the indemnifying party), and after
notice from the indemnifying party to such indemnified party of its election so
to
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<PAGE>
assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section 5 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation.
(c) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 5 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall have a joint and several
obligation to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same) (collectively "Losses") to which such
indemnified party may be subject in such proportion as is appropriate to reflect
the relative benefits received by such indemnifying party, on the one hand, and
such indemnified party, on the other hand, from the Initial Placement and the
Shelf Registration Statement which resulted in such Losses; PROVIDED, HOWEVER,
that in no case shall the Purchaser or any subsequent Holder of any Securities
be responsible, in the aggregate, for any amount in excess of the amount by
which the net proceeds received by such Holders from the sale of the Securities
pursuant to the Registration Statement exceeds the amount of damages which such
Holders have otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. If the allocation provided by
the immediately preceding sentence is unavailable for any reason, the
indemnifying party and the indemnified party shall contribute in such proportion
as is appropriate to reflect not only such relative benefits but also the
relative fault of such indemnifying party, on the one hand, and such indemnified
party, on the other hand, in connection with the statements or omissions which
resulted in such Losses as well as any other relevant equitable considerations.
Relative fault shall be determined by reference to whether any alleged untrue
statement or omission relates to information provided by the indemnifying party,
on the one hand, or by the indemnified party, on the other hand. The parties
agree that it would not be just and equitable if contribution were determined by
pro rata allocation or any other method of allocation which does not take
account of the equitable considerations referred to above. Notwithstanding the
provisions of this paragraph (c), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (c) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of this
subsection (c). For purposes of this Section 5, each person who controls a
Holder within the meaning of either the Securities Act or the Exchange Act shall
have the same rights to contribution as such Holder, and each person who
controls the Company or the Trust within the meaning of either the Securities
Act or the Exchange Act, each officer of the Company who shall have signed the
Shelf Registration Statement and each director of the Company shall have the
same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (c).
(d) The provisions of this Section 5 will remain in full force and
effect, regardless of any investigation made by or on behalf of any Holder or
the Company or the Trust or any of the officers, directors, employees, agents or
controlling persons referred to in Section 5 hereof, and will
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<PAGE>
survive the sale by a Holder of Securities covered by the Shelf Registration
Statement. The obligations of the Trust and the Company under this Section shall
be in addition to any liability which the Trust and the Company may otherwise
have.
6. UNDERWRITTEN OFFERING. The Holders of Securities covered by the Shelf
Registration Statement who desire to do so may sell such Securities in an
underwritten offering. In any such underwritten offering, the investment banker
or bankers and manager or managers that will administer the offering will be
selected by, and the underwriting arrangements with respect thereto will be
approved by, the Holders of a majority of the Securities to be included in such
offering; PROVIDED, HOWEVER, that (i) such investment bankers and managers and
underwriting arrangements must be reasonably satisfactory to the Company and the
Trust and (ii) the Company shall not be obligated to arrange for more than one
underwritten offering during the Shelf Registration Period. No Holder may
participate in any underwritten offering contemplated hereby unless such Holder
(a) agrees to sell such Holder's Securities in accordance with any approved
underwriting arrangements, (b) completes and executes all reasonable
questionnaires, powers of attorney, indemnities, underwriting agreements,
lock-up letters and other documents required under the terms of such approved
underwriting arrangements, (c) at least 30% of the outstanding Securities are
included in such underwritten offering, and (d) if such Holder is not then an
Electing Holder, such Holder provides the Company and the Trust with such
information as they shall reasonably request in order to enable the Company and
the Trust to comply with the applicable requirements of the Securities Act in
connection with offers and sales by such Holder as a selling securityholder in
the underwritten offering within a reasonable amount of time before such
underwritten offering. The Holders participating in any underwritten offering
shall be responsible for any expenses customarily borne by selling
securityholders, including underwriting discounts and commissions and fees and
expenses of counsel to the selling securityholders. Notwithstanding the
foregoing or the provisions of Section 3(n) hereof, upon receipt of a request
from the Managing Underwriter or a representative of Holders of a majority of
the Securities outstanding to prepare and file an amendment or supplement to the
Shelf Registration Statement and Prospectus in connection with an underwritten
offering, the Company may delay the filing of any such amendment or supplement
for up to 90 days if the Company in good faith has a valid business reason for
such delay.
7. SPECIAL INTEREST AND SPECIAL DISTRIBUTIONS UNDER CERTAIN CIRCUMSTANCES.
(a) If (i) within 150 days of the Closing Date the Shelf Registration Statement
has not been declared effective by the Commission, or (ii) in the event that a
Shelf Registration Statement is declared effective by the Commission, the
Company or the Trust fails to keep such Shelf Registration Statement
continuously effective and usable (except as permitted in paragraph (b) of this
Section 7) prior to the end of the Shelf Registration Period (each such event
referred to in clauses (i) and (ii) a "Registration Default"), then additional
interest ("Special Interest") will accrue on the Convertible Junior Subordinated
Debentures (including in respect of amounts accruing during any Deferral
Period), and corresponding additional distributions (the "Special
Distributions") will accrue on the TIDES and the Common Securities, in each case
from and including the day following such Registration Default to but excluding
the day on which such Registration Default has been cured or has been deemed to
have been cured. Subject to the deferral of interest provisions of the
Convertible Junior
13
<PAGE>
Subordinated Debentures and the deferral of distributions provisions of the
TIDES, Special Interest and Special Distributions will be paid in cash quarterly
in arrears on March 1, June 1, September 1 and December 1 commencing with the
first such date following the applicable Registration Default and will accrue at
a rate such that the interest rate or distribution rate, as the case may be,
will be increased 0.50% per annum of the principal amount or liquidation amount,
as applicable. Following the cure of a Registration Default, Special Interest
and Special Distributions will cease to accrue with respect to such Registration
Default.
(b) A Registration Default referred to in Section 7(a)(ii) shall be
deemed not to have occurred and be continuing in relation to the Shelf
Registration Statement or the related Prospectus if such Registration Default
has occurred solely as a result of (x) the filing of a post-effective amendment
to such Shelf Registration Statement to incorporate annual audited financial
information with respect to the Company where such post-effective amendment is
not yet effective and needs to be declared effective to permit Holders to use
the related Prospectus or (y) the occurrence of other material events or
developments with respect to the Trust or the Company that would need to be
described in such Registration Statement or the related Prospectus and either
(i) the Company shall have determined in good faith that such disclosure is not
in the best interests of the Company and its stockholders or (ii) the Trust and
the Company are proceeding promptly and in good faith to amend or supplement
such Registration Statement and related Prospectus to describe such events;
PROVIDED, HOWEVER, that in any case, if such Registration Default occurs for a
continuous period in excess of 45 days, Special Interest and Special
Distributions shall be payable in accordance with the above paragraph from the
first day of such 45-day period until the date on which such Registration
Default is cured.
8. MISCELLANEOUS.
(a) NO INCONSISTENT AGREEMENTS. The Trust and the Company have not,
as of the date hereof, entered into, nor shall they on or after the date hereof,
enter into, any agreement with respect to their securities or otherwise that is
inconsistent with the rights granted to the Holders herein or otherwise
conflicts with the provisions hereof.
(b) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Trust and the Company have
obtained the written consent of the Purchaser.
(c) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telex, telecopier, or air courier guaranteeing overnight delivery:
(1) if to a Holder, at the most current address given by such
Holder to the Company in accordance with the provisions of this Section
7(c), which address initially is,
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<PAGE>
with respect to each Holder, the address of such Holder maintained by the
Registrar under the Indenture, with a copy in a like manner to Credit
Suisse First Boston Corporation;
(2) if to the Purchaser, initially at the address set forth in
the Purchase Agreement; and
(3) if to the Trust or the Company, initially at its address
set forth in the Purchase Agreement.
All such notices and communications shall be deemed to have been duly
given when received.
The Purchaser or the Trust and the Company by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
(d) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
and the Holders, including, without the need for an express assignment or any
consent by the Trust or the Company thereto, subsequent Holders of Securities.
The Trust and the Company hereby agree to extend the benefits of this Agreement
to any Holder of Securities and any such Holder may specifically enforce the
provisions of this Agreement as if an original party hereto.
(e) COUNTERPARTS. This agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) HEADINGS. The headings in this agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) GOVERNING LAW. This agreement shall be governed by and construed
in accordance with the internal laws of the State of New York applicable to
agreements made and to be performed in said State.
(h) SEVERABILITY. In the event that any one of more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by law.
15
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
CARRIAGE SERVICES CAPITAL TRUST
By:/s/ TERERY E. SANFORD
Name: Terry E. Sanford
Title: Administrative Trustee
CARRIAGE SERVICES, INC.
By:/s/ THOMAS C. LIVENGOOD
Name: Thomas C. Livengood
Title: Executive Vice President
and Chief Financial
Officer
The foregoing Registration Rights
Agreement is hereby confirmed and
accepted as of the date first above
written.
CREDIT SUISSE FIRST BOSTON CORPORATION
By:/s/ JOHN STEVENSON
Name: John Stevenson
Title: Director
16
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated February 1, 1999
included in Carriage Services Inc.'s Form 10-K for the year ended December 31,
1998, and to all references to our Firm included in this registration statement.
ARTHUR ANDERSEN LLP
Houston, Texas
July 30, 1999
EXHIBIT 25.1
Registration No.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) X
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
CARRIAGE SERVICES INC.
(Exact name of obligor as specified in its charter)
Delaware 76-0423828
(State of incorporation) (I.R.S. employer identification no.)
1300 Post Oak Blvd., Suite 1500
Houston, Texas 77056
(Address of principal executive offices) (Zip Code)
Convertible Junior Subordinated Debentures due 2029 of Carriage Services, Inc.
(Title of the indenture securities)
================================================================================
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the trustee
and upon information furnished by the obligor, the obligor is not an
affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which includes the
certificate of authority of Wilmington Trust Company to commence
business and the authorization of Wilmington Trust Company to
exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section 321(b) of
Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 23rd day
of July, 1999.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /S/ PATRICIA A. EVANS By: /S/ DONALD G. MACKELCAN
Assistant Secretary Name: Donald G. MacKelcan
Title: Vice President
2
<PAGE>
EXHIBIT A
AMENDED CHARTER
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON MAY 9, 1987
<PAGE>
AMENDED CHARTER
OR
ACT OF INCORPORATION
OF
WILMINGTON TRUST COMPANY
WILMINGTON TRUST COMPANY, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate the
Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and the name
of which company was changed to "WILMINGTON TRUST COMPANY" by an amendment filed
in the Office of the Secretary of State on March 18, A.D. 1903, and the Charter
or Act of Incorporation of which company has been from time to time amended and
changed by merger agreements pursuant to the corporation law for state banks and
trust companies of the State of Delaware, does hereby alter and amend its
Charter or Act of Incorporation so that the same as so altered and amended shall
in its entirety read as follows:
FIRST: - The name of this corporation is WILMINGTON TRUST COMPANY.
SECOND: - The location of its principal office in the State of Delaware
is at Rodney Square North, in the City of Wilmington, County of New
Castle; the name of its resident agent is WILMINGTON TRUST COMPANY whose
address is Rodney Square North, in said City. In addition to such
principal office, the said corporation maintains and operates branch
offices in the City of Newark, New Castle County, Delaware, the Town of
Newport, New Castle County, Delaware, at Claymont, New Castle County,
Delaware, at Greenville, New Castle County Delaware, and at Milford
Cross Roads, New Castle County, Delaware, and shall be empowered to
open, maintain and operate branch offices at Ninth and Shipley Streets,
418 Delaware Avenue, 2120 Market Street, and 3605 Market Street, all in
the City of Wilmington, New Castle County, Delaware, and such other
branch offices or places of business as may be authorized from time to
time by the agency or agencies of the government of the State of
Delaware empowered to confer such authority.
THIRD: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this Corporation
are to do any or all of the things herein mentioned as fully and to the
same extent as natural persons might or could do and in any part of the
world, viz.:
(1) To sue and be sued, complain and defend in any Court of law or
equity and to make and use a common seal, and alter the seal at
pleasure, to hold,
<PAGE>
purchase, convey, mortgage or otherwise deal in real and personal
estate and property, and to appoint such officers and agents as the
business of the Corporation shall require, to make by-laws not
inconsistent with the Constitution or laws of the United States or
of this State, to discount bills, notes or other evidences of debt,
to receive deposits of money, or securities for money, to buy gold
and silver bullion and foreign coins, to buy and sell bills of
exchange, and generally to use, exercise and enjoy all the powers,
rights, privileges and franchises incident to a corporation which
are proper or necessary for the transaction of the business of the
Corporation hereby created.
(2) To insure titles to real and personal property, or any estate
or interests therein, and to guarantee the holder of such property,
real or personal, against any claim or claims, adverse to his
interest therein, and to prepare and give certificates of title for
any lands or premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the receipt,
collection, custody, investment and management of funds, and the
purchase, sale, management and disposal of property of all
descriptions, and to prepare and execute all papers which may be
necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds, leases,
conveyances, mortgages, bonds and legal papers of every
description, and to carry on the business of conveyancing in all
its branches.
(5) To receive upon deposit for safekeeping money, jewelry, plate,
deeds, bonds and any and all other personal property of every sort
and kind, from executors, administrators, guardians, public
officers, courts, receivers, assignees, trustees, and from all
fiduciaries, and from all other persons and individuals, and from
all corporations whether state, municipal, corporate or private,
and to rent boxes, safes, vaults and other receptacles for such
property.
(6) To act as agent or otherwise for the purpose of registering,
issuing, certificating, countersigning, transferring or
underwriting the stock, bonds or other obligations of any
corporation, association, state or municipality, and may receive
and manage any sinking fund therefor on such terms as may be agreed
upon between the two parties, and in like manner may act as
Treasurer of any corporation or municipality.
(7) To act as Trustee under any deed of trust, mortgage, bond or
other
2
<PAGE>
instrument issued by any state, municipality, body politic,
corporation, association or person, either alone or in conjunction
with any other person or persons, corporation or corporations.
(8) To guarantee the validity, performance or effect of any
contract or agreement, and the fidelity of persons holding places
of responsibility or trust; to become surety for any person, or
persons, for the faithful performance of any trust, office, duty,
contract or agreement, either by itself or in conjunction with any
other person, or persons, corporation, or corporations, or in like
manner become surety upon any bond, recognizance, obligation,
judgment, suit, order, or decree to be entered in any court of
record within the State of Delaware or elsewhere, or which may now
or hereafter be required by any law, judge, officer or court in the
State of Delaware or elsewhere.
(9) To act by any and every method of appointment as trustee,
trustee in bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other trust
capacity in the receiving, holding, managing, and disposing of any
and all estates and property, real, personal or mixed, and to be
appointed as such trustee, trustee in bankruptcy, receiver,
assignee, assignee in bankruptcy, executor, administrator, guardian
or bailee by any persons, corporations, court, officer, or
authority, in the State of Delaware or elsewhere; and whenever this
Corporation is so appointed by any person, corporation, court,
officer or authority such trustee, trustee in bankruptcy, receiver,
assignee, assignee in bankruptcy, executor, administrator,
guardian, bailee, or in any other trust capacity, it shall not be
required to give bond with surety, but its capital stock shall be
taken and held as security for the performance of the duties
devolving upon it by such appointment.
(10) And for its care, management and trouble, and the exercise of
any of its powers hereby given, or for the performance of any of
the duties which it may undertake or be called upon to perform, or
for the assumption of any responsibility the said Corporation may
be entitled to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages,
debentures, shares of capital stock, and other securities,
obligations, contracts and evidences of indebtedness, of any
private, public or municipal corporation within and without the
State of Delaware, or of the Government of the United States, or of
any state, territory, colony, or possession thereof, or of any
foreign government or country; to receive, collect, receipt for,
and dispose of
3
<PAGE>
interest, dividends and income upon and from any of the bonds,
mortgages, debentures, notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and other
property held and owned by it, and to exercise in respect of all
such bonds, mortgages, debentures, notes, shares of capital stock,
securities, obligations, contracts, evidences of indebtedness and
other property, any and all the rights, powers and privileges of
individual owners thereof, including the right to vote thereon; to
invest and deal in and with any of the moneys of the Corporation
upon such securities and in such manner as it may think fit and
proper, and from time to time to vary or realize such investments;
to issue bonds and secure the same by pledges or deeds of trust or
mortgages of or upon the whole or any part of the property held or
owned by the Corporation, and to sell and pledge such bonds, as and
when the Board of Directors shall determine, and in the promotion
of its said corporate business of investment and to the extent
authorized by law, to lease, purchase, hold, sell, assign,
transfer, pledge, mortgage and convey real and personal property of
any name and nature and any estate or interest therein.
(b) In furtherance of, and not in limitation, of the powers conferred by
the laws of the State of Delaware, it is hereby expressly provided that
the said Corporation shall also have the following powers:
(1) To do any or all of the things herein set forth, to the same
extent as natural persons might or could do, and in any part of the
world.
(2) To acquire the good will, rights, property and franchises and
to undertake the whole or any part of the assets and liabilities of
any person, firm, association or corporation, and to pay for the
same in cash, stock of this Corporation, bonds or otherwise; to
hold or in any manner to dispose of the whole or any part of the
property so purchased; to conduct in any lawful manner the whole or
any part of any business so acquired, and to exercise all the
powers necessary or convenient in and about the conduct and
management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien, and to
lease, sell, exchange, transfer, or in any manner whatever dispose
of property, real, personal or mixed, wherever situated.
(4) To enter into, make, perform and carry out contracts of every
kind with any person, firm, association or corporation, and,
without limit as to amount, to draw, make, accept, endorse,
discount, execute and issue promissory notes, drafts, bills of
exchange, warrants, bonds, debentures, and other negotiable or
4
<PAGE>
transferable instruments.
(5) To have one or more offices, to carry on all or any of its
operations and businesses, without restriction to the same extent
as natural persons might or could do, to purchase or otherwise
acquire, to hold, own, to mortgage, sell, convey or otherwise
dispose of, real and personal property, of every class and
description, in any State, District, Territory or Colony of the
United States, and in any foreign country or place.
(6) It is the intention that the objects, purposes and powers
specified and clauses contained in this paragraph shall (except
where otherwise expressed in said paragraph) be nowise limited or
restricted by reference to or inference from the terms of any other
clause of this or any other paragraph in this charter, but that the
objects, purposes and powers specified in each of the clauses of
this paragraph shall be regarded as independent objects, purposes
and powers.
FOURTH: - (a) The total number of shares of all classes of stock which
the Corporation shall have authority to issue is forty-one million
(41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par value
$10.00 per share (hereinafter referred to as "Preferred Stock");
and
(2) Forty million (40,000,000) shares of Common Stock, par value
$1.00 per share (hereinafter referred to as "Common Stock").
(b) Shares of Preferred Stock may be issued from time to time in one or
more series as may from time to time be determined by the Board of
Directors each of said series to be distinctly designated. All shares of
any one series of Preferred Stock shall be alike in every particular,
except that there may be different dates from which dividends, if any,
thereon shall be cumulative, if made cumulative. The voting powers and
the preferences and relative, participating, optional and other special
rights of each such series, and the qualifications, limitations or
restrictions thereof, if any, may differ from those of any and all other
series at any time outstanding; and, subject to the provisions of
subparagraph 1 of Paragraph (c) of this Article FOURTH, the Board of
Directors of the Corporation is hereby expressly granted authority to
fix by resolution or resolutions adopted prior to the issuance of any
shares of a particular series of Preferred Stock, the voting powers and
the designations, preferences and relative, optional and other special
rights, and the qualifications, limitations and restrictions of such
series, including, but without limiting the generality of the
5
<PAGE>
foregoing, the following:
(1) The distinctive designation of, and the number of shares of
Preferred Stock which shall constitute such series, which number
may be increased (except where otherwise provided by the Board of
Directors) or decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of the Board of
Directors;
(2) The rate and times at which, and the terms and conditions on
which, dividends, if any, on Preferred Stock of such series shall
be paid, the extent of the preference or relation, if any, of such
dividends to the dividends payable on any other class or classes,
or series of the same or other class of stock and whether such
dividends shall be cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock of such
series to convert the same into or exchange the same for, shares of
any other class or classes or of any series of the same or any
other class or classes of stock of the Corporation and the terms
and conditions of such conversion or exchange;
(4) Whether or not Preferred Stock of such series shall be subject
to redemption, and the redemption price or prices and the time or
times at which, and the terms and conditions on which, Preferred
Stock of such series may be redeemed.
(5) The rights, if any, of the holders of Preferred Stock of such
series upon the voluntary or involuntary liquidation, merger,
consolidation, distribution or sale of assets, dissolution or
winding-up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase
account, if any, to be provided for the Preferred Stock of such
series; and
(7) The voting powers, if any, of the holders of such series of
Preferred Stock which may, without limiting the generality of the
foregoing include the right, voting as a series or by itself or
together with other series of Preferred Stock or all series of
Preferred Stock as a class, to elect one or more directors of the
Corporation if there shall have been a default in the payment of
dividends on any one or more series of Preferred Stock or under
such circumstances and on such conditions as the Board of Directors
may determine.
(c) (1) After the requirements with respect to preferential dividends on
the Preferred Stock (fixed in accordance with the provisions of section
(b) of this Article
6
<PAGE>
FOURTH), if any, shall have been met and after the Corporation shall
have complied with all the requirements, if any, with respect to the
setting aside of sums as sinking funds or redemption or purchase
accounts (fixed in accordance with the provisions of section (b) of this
Article FOURTH), and subject further to any conditions which may be
fixed in accordance with the provisions of section (b) of this Article
FOURTH, then and not otherwise the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to time
by the Board of Directors.
(2) After distribution in full of the preferential amount, if any,
(fixed in accordance with the provisions of section (b) of this
Article FOURTH), to be distributed to the holders of Preferred
Stock in the event of voluntary or involuntary liquidation,
distribution or sale of assets, dissolution or winding-up, of the
Corporation, the holders of the Common Stock shall be entitled to
receive all of the remaining assets of the Corporation, tangible
and intangible, of whatever kind available for distribution to
stockholders ratably in proportion to the number of shares of
Common Stock held by them respectively.
(3) Except as may otherwise be required by law or by the provisions
of such resolution or resolutions as may be adopted by the Board of
Directors pursuant to section (b) of this Article FOURTH, each
holder of Common Stock shall have one vote in respect of each share
of Common Stock held on all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or
series of stock or of other securities of the Corporation shall have any
preemptive right to purchase or subscribe for any unissued stock of any
class or series or any additional shares of any class or series to be
issued by reason of any increase of the authorized capital stock of the
Corporation of any class or series, or bonds, certificates of
indebtedness, debentures or other securities convertible into or
exchangeable for stock of the Corporation of any class or series, or
carrying any right to purchase stock of any class or series, but any
such unissued stock, additional authorized issue of shares of any class
or series of stock or securities convertible into or exchangeable for
stock, or carrying any right to purchase stock, may be issued and
disposed of pursuant to resolution of the Board of Directors to such
persons, firms, corporations or associations, whether such holders or
others, and upon such terms as may be deemed advisable by the Board of
Directors in the exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and
rights of each other series of Preferred Stock shall, in each case, be
as fixed from time to time by the Board of
7
<PAGE>
Directors in the resolution or resolutions adopted pursuant to authority
granted in section (b) of this Article FOURTH and the consent, by class
or series vote or otherwise, of the holders of such of the series of
Preferred Stock as are from time to time outstanding shall not be
required for the issuance by the Board of Directors of any other series
of Preferred Stock whether or not the powers, preferences and rights of
such other series shall be fixed by the Board of Directors as senior to,
or on a parity with, the powers, preferences and rights of such
outstanding series, or any of them; provided, however, that the Board of
Directors may provide in the resolution or resolutions as to any series
of Preferred Stock adopted pursuant to section (b) of this Article
FOURTH that the consent of the holders of a majority (or such greater
proportion as shall be therein fixed) of the outstanding shares of such
series voting thereon shall be required for the issuance of any or all
other series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series of
Preferred Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and for
such consideration as shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the Board
of Directors of the Corporation shall determine and on such terms and
for such consideration as shall be fixed by the Board of Directors.
(h) The authorized amount of shares of Common Stock and of Preferred
Stock may, without a class or series vote, be increased or decreased
from time to time by the affirmative vote of the holders of a majority
of the stock of the Corporation entitled to vote thereon.
FIFTH: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of directors
constituting the entire Board shall be not less than five nor more than
twenty-five as fixed from time to time by vote of a majority of the
whole Board, provided, however, that the number of directors shall not
be reduced so as to shorten the term of any director at the time in
office, and provided further, that the number of directors constituting
the whole Board shall be twenty-four until otherwise fixed by a majority
of the whole Board.
(b) The Board of Directors shall be divided into three classes, as
nearly equal in number as the then total number of directors
constituting the whole Board permits, with the term of office of one
class expiring each year. At the annual meeting of stockholders in 1982,
directors of the first class shall be elected to hold office for a term
expiring at the next succeeding annual meeting, directors of the second
class
8
<PAGE>
shall be elected to hold office for a term expiring at the second
succeeding annual meeting and directors of the third class shall be
elected to hold office for a term expiring at the third succeeding
annual meeting. Any vacancies in the Board of Directors for any reason,
and any newly created directorships resulting from any increase in the
directors, may be filled by the Board of Directors, acting by a majority
of the directors then in office, although less than a quorum, and any
directors so chosen shall hold office until the next annual election of
directors. At such election, the stockholders shall elect a successor to
such director to hold office until the next election of the class for
which such director shall have been chosen and until his successor shall
be elected and qualified. No decrease in the number of directors shall
shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding the
fact that some lesser percentage may be specified by law, this Charter
or Act of Incorporation or the By- Laws of the Corporation), any
director or the entire Board of Directors of the Corporation may be
removed at any time without cause, but only by the affirmative vote of
the holders of two-thirds or more of the outstanding shares of capital
stock of the Corporation entitled to vote generally in the election of
directors (considered for this purpose as one class) cast at a meeting
of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the Board
of Directors or by any stockholder entitled to vote for the election of
directors. Such nominations shall be made by notice in writing,
delivered or mailed by first class United States mail, postage prepaid,
to the Secretary of the Corporation not less than 14 days nor more than
50 days prior to any meeting of the stockholders called for the election
of directors; provided, however, that if less than 21 days' notice of
the meeting is given to stockholders, such written notice shall be
delivered or mailed, as prescribed, to the Secretary of the Corporation
not later than the close of the seventh day following the day on which
notice of the meeting was mailed to stockholders. Notice of nominations
which are proposed by the Board of Directors shall be given by the
Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name, age,
business address and, if known, residence address of each nominee
proposed in such notice, (ii) the principal occupation or employment of
such nominee and (iii) the number of shares of stock of the Corporation
which are beneficially owned by each such nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine and
declare to
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the meeting that a nomination was not made in accordance with the
foregoing procedure, and if he should so determine, he shall so declare
to the meeting and the defective nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any annual
or special meeting of stockholders of the Corporation may be taken
without a meeting, and the power of stockholders to consent in writing,
without a meeting, to the taking of any action is specifically denied.
SIXTH: - The Directors shall choose such officers, agent and servants as
may be provided in the By-Laws as they may from time to time find
necessary or proper.
SEVENTH: - The Corporation hereby created is hereby given the same
powers, rights and privileges as may be conferred upon corporations
organized under the Act entitled "An Act Providing a General Corporation
Law", approved March 10, 1899, as from time to time amended.
EIGHTH: - This Act shall be deemed and taken to be a private Act.
NINTH: - This Corporation is to have perpetual existence.
TENTH: - The Board of Directors, by resolution passed by a majority of
the whole Board, may designate any of their number to constitute an
Executive Committee, which Committee, to the extent provided in said
resolution, or in the By-Laws of the Company, shall have and may
exercise all of the powers of the Board of Directors in the management
of the business and affairs of the Corporation, and shall have power to
authorize the seal of the Corporation to be affixed to all papers which
may require it.
ELEVENTH: - The private property of the stockholders shall not be liable
for the payment of corporate debts to any extent whatever.
TWELFTH: - The Corporation may transact business in any part of the
world.
THIRTEENTH: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation by a
vote of the majority of the entire Board. The stockholders may make,
alter or repeal any By-Law whether or not adopted by them, provided
however, that any such additional By-Laws, alterations or repeal may be
adopted only by the affirmative vote of the holders of two-thirds or
more of the outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of directors (considered for
this purpose as
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one class).
FOURTEENTH: - Meetings of the Directors may be held outside of the State
of Delaware at such places as may be from time to time designated by the
Board, and the Directors may keep the books of the Company outside of
the State of Delaware at such places as may be from time to time
designated by them.
FIFTEENTH: - (a) (1) In addition to any affirmative vote required by
law, and except as otherwise expressly provided in sections (b) and (c)
of this Article FIFTEENTH:
(A) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with or into (i) any Interested
Stockholder (as hereinafter defined) or (ii) any other corporation
(whether or not itself an Interested Stockholder), which, after
such merger or consolidation, would be an Affiliate (as hereinafter
defined) of an Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of related
transactions) to or with any Interested Stockholder or any
Affiliate of any Interested Stockholder of any assets of the
Corporation or any Subsidiary having an aggregate fair market value
of $1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any Subsidiary
(in one transaction or a series of related transactions) of any
securities of the Corporation or any Subsidiary to any Interested
Stockholder or any Affiliate of any Interested Stockholder in
exchange for cash, securities or other property (or a combination
thereof) having an aggregate fair market value of $1,000,000 or
more, or
(D) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation, or
(E) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or
any similar transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect, directly
or indirectly, of increasing the proportionate share of the
outstanding shares of any class of equity or convertible securities
of the Corporation or any Subsidiary which is directly or
indirectly owned by any Interested Stockholder, or any Affiliate of
any Interested Stockholder,
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shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article FIFTEENTH as one class ("Voting Shares"). Such affirmative vote shall be
required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(2) The term "business combination" as used in this Article
FIFTEENTH shall mean any transaction which is referred to any one
or more of clauses (A) through (E) of paragraph 1 of the section
(a).
(b) The provisions of section (a) of this Article FIFTEENTH shall
not be applicable to any particular business combination and such
business combination shall require only such affirmative vote as is
required by law and any other provisions of the Charter or Act of
Incorporation of By-Laws if such business combination has been
approved by a majority of the whole Board.
(c) For the purposes of this Article FIFTEENTH:
(1) A "person" shall mean any individual firm, corporation or other
entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any Subsidiary)
who or which as of the record date for the determination of stockholders
entitled to notice of and to vote on such business combination, or
immediately prior to the consummation of any such transaction:
(A) is the beneficial owner, directly or indirectly, of more than
10% of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time within two
years prior thereto was the beneficial owner, directly or
indirectly, of not less than 10% of the then outstanding voting
Shares, or
(C) is an assignee of or has otherwise succeeded in any share of
capital stock of the Corporation which were at any time within two
years prior thereto beneficially owned by any Interested
Stockholder, and such assignment or succession shall have occurred
in the course of a transaction or series of transactions not
involving a public offering within the meaning of the Securities
Act of 1933.
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(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and Associates (as
hereafter defined) beneficially own, directly or indirectly, or
(B) which such person or any of its Affiliates or Associates has
(i) the right to acquire (whether such right is exercisable
immediately or only after the passage of time), pursuant to any
agreement, arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options, or
otherwise, or (ii) the right to vote pursuant to any agreement,
arrangement or understanding, or
(C) which are beneficially owned, directly or indirectly, by any
other person with which such first mentioned person or any of its
Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned
through application of paragraph (3) above but shall not include any
other Voting Shares which may be issuable pursuant to any agreement, or
upon exercise of conversion rights, warrants or options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings given
those terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect on December 31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority of any
class of equity security (as defined in Rule 3a11-1 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as in effect
in December 31, 1981) is owned, directly or indirectly, by the
Corporation; provided, however, that for the purposes of the definition
of Investment Stockholder set forth in paragraph (2) of this section
(c), the term "Subsidiary" shall mean only a corporation of which a
majority of each class of equity security is owned, directly or
indirectly, by the Corporation.
(d) majority of the directors shall have the power and duty to
determine for the purposes of this Article FIFTEENTH on the basis
of information known to them, (1) the number of Voting Shares
beneficially owned by any person (2) whether a person is an
Affiliate or Associate of another, (3) whether a person has an
agreement, arrangement or understanding with another as to the
matters referred to in paragraph (3) of section (c), or (4) whether
the assets subject to any business combination or the consideration
received for the issuance or
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transfer of securities by the Corporation, or any Subsidiary has an
aggregate fair market value of $1,000,000 or more.
(e) Nothing contained in this Article FIFTEENTH shall be construed
to relieve any Interested Stockholder from any fiduciary obligation
imposed by law.
SIXTEENTH: Notwithstanding any other provision of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and in addition to any
other vote that may be required by law, this Charter or Act of
Incorporation by the By-Laws), the affirmative vote of the holders of at
least two-thirds of the outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) shall be required to amend,
alter or repeal any provision of Articles FIFTH, THIRTEENTH, FIFTEENTH
or SIXTEENTH of this Charter or Act of Incorporation.
SEVENTEENTH: (a) a Director of this Corporation shall not be liable to
the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a Director, except to the extent such exemption from
liability or limitation thereof is not permitted under the Delaware
General Corporation Laws as the same exists or may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph shall not
adversely affect any right or protection of a Director of the
Corporation existing hereunder with respect to any act or omission
occurring prior to the time of such repeal or modification."
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EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON JANUARY 16, 1997
<PAGE>
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
STOCKHOLDERS' MEETINGS
Section 1. The Annual Meeting of Stockholders shall be held on the third
Thursday in April each year at the principal office at the Company or at such
other date, time, or place as may be designated by resolution by the Board of
Directors.
Section 2. Special meetings of all stockholders may be called at any
time by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given by
mailing to each stockholder at least ten (10) days before said meeting, at his
last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the Company
issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each shares of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
DIRECTORS
Section 1. The number and classification of the Board of Directors shall
be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72) years
shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for three
years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed and
conducted by the Board of Directors.
<PAGE>
Section 5. The Board of Directors shall meet at the principal office of
the Company or elsewhere in its discretion at such times to be determined by a
majority of its members, or at the call of the Chairman of the Board of
Directors or the President.
Section 6. Special meetings of the Board of Directors may be called at
any time by the Chairman of the Board of Directors or by the President, and
shall be called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall be
necessary to constitute a quorum for the transaction of business at any meeting
of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of any
special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal, inability to
act, or disqualification of any director, the Board of Directors, although less
than a quorum, shall have the right to elect the successor who shall hold office
for the remainder of the full term of the class of directors in which the
vacancy occurred, and until such director's successor shall have been duly
elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect from
its own members a Chairman of the Board of Directors and a President who may be
the same person. The Board of Directors shall also elect at such meeting a
Secretary and a Treasurer, who may be the same person, may appoint at any time
such other committees and elect or appoint such other officers as it may deem
advisable. The Board of Directors may also elect at such meeting one or more
Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or division of the Company as it may deem
advisable.
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ARTICLE III
COMMITTEES
Section 1. Executive Committee
(A) The Executive Committee shall be composed of not more than
nine members who shall be selected by the Board of Directors from its own
members and who shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers of the
Board of Directors when it is not in session to transact all business for and in
behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal office
of the Company or elsewhere in its discretion at such times to be determined by
a majority of its members, or at the call of the Chairman of the Executive
Committee or at the call of the Chairman of the Board of Directors. The majority
of its members shall be necessary to constitute a quorum for the transaction of
business. Special meetings of the Executive Committee may be held at any time
when a quorum is present.
(D) Minutes of each meeting of the Executive Committee shall be
kept and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and superintend all
investments that may be made of the funds of the Company, and shall direct the
disposal of the same, in accordance with such rules and regulations as the Board
of Directors from time to time make.
(F) In the event of a state of disaster of sufficient severity
to prevent the conduct and management of the affairs and business of the Company
by its directors and officers as contemplated by these By-Laws any two available
members of the Executive Committee as constituted immediately prior to such
disaster shall constitute a quorum of that Committee for the full conduct and
management of the affairs and business of the Company in accordance with the
provisions of Article III of these By-Laws; and if less than three members of
the Trust Committee is constituted immediately prior to such disaster shall be
available for the transaction of its business, such Executive Committee shall
also be empowered to exercise all of the powers reserved to the Trust Committee
under Article III Section 2 hereof. In the event of the unavailability, at such
time, of a minimum of two members of such Executive Committee, any three
available directors shall constitute the Executive Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the foregoing provisions of this Section. This By-Law shall be subject to
implementation by Resolutions of the Board of Directors presently existing or
hereafter passed from time to time
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for that purpose, and any provisions of these By-Laws (other than this Section)
and any resolutions which are contrary to the provisions of this Section or to
the provisions of any such implementary Resolutions shall be suspended during
such a disaster period until it shall be determined by any interim Executive
Committee acting under this section that it shall be to the advantage of the
Company to resume the conduct and management of its affairs and business under
all of the other provisions of these By-Laws.
Section 2. Trust Committee
(A) The Trust Committee shall be composed of not more than
thirteen members who shall be selected by the Board of Directors, a majority of
whom shall be members of the Board of Directors and who shall hold office during
the pleasure of the Board.
(B) The Trust Committee shall have general supervision over the
Trust Department and the investment of trust funds, in all matters, however,
being subject to the approval of the Board of Directors.
(C) The Trust Committee shall meet at the principal office of
the Company or elsewhere in its discretion at such times to be determined by a
majority of its members or at the call of its chairman. A majority of its
members shall be necessary to constitute a quorum for the transaction of
business.
(D) Minutes of each meeting of the Trust Committee shall be
kept and promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power to appoint
Committees and/or designate officers or employees of the Company to whom
supervision over the investment of trust funds may be delegated when the Trust
Committee is not in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five members who
shall be selected by the Board of Directors from its own members, none of whom
shall be an officer of the Company, and shall hold office at the pleasure of the
Board.
(B) The Audit Committee shall have general supervision over the
Audit Division in all matters however subject to the approval of the Board of
Directors; it shall consider all matters brought to its attention by the officer
in charge of the Audit Division, review all reports of examination of the
Company made by any governmental agency or such independent auditor employed for
that purpose, and make such recommendations to the Board of Directors with
respect thereto or with respect to any other matters pertaining to auditing the
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Company as it shall deem desirable.
(C) The Audit Committee shall meet whenever and wherever the
majority of its members shall deem it to be proper for the transaction of its
business, and a majority of its Committee shall constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be composed of not more
than five (5) members who shall be selected by the Board of Directors from its
own members who are not officers of the Company and who shall hold office during
the pleasure of the Board.
(B) The Compensation Committee shall in general advise upon all
matters of policy concerning the Company brought to its attention by the
management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be called at any
time by the Chairman of the Compensation Committee, the Chairman of the Board of
Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director may be elected by
the Board of Directors as an associate director, to serve during the pleasure of
the Board.
(B) An associate director shall be entitled to attend all
directors meetings and participate in the discussion of all matters brought to
the Board, with the exception that he would have no right to vote. An associate
director will be eligible for appointment to Committees of the Company, with the
exception of the Executive Committee, Audit Committee and Compensation
Committee, which must be comprised solely of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any member of any
Committee created under Article III of the By-Laws of this Company, the member
or members thereof present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in the place of any such
absence or disqualified member.
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ARTICLE IV
OFFICERS
Section 1. The Chairman of the Board of Directors shall preside at all
meetings of the Board and shall have such further authority and powers and shall
perform such duties as the Board of Directors may from time to time confer and
direct. He shall also exercise such powers and perform such duties as may from
time to time be agreed upon between himself and the President of the Company.
Section 2. THE VICE CHAIRMAN OF THE BOARD. The Vice Chairman of the
Board of Directors shall preside at all meetings of the Board of Directors at
which the Chairman of the Board shall not be present and shall have such further
authority and powers and shall perform such duties as the Board of Directors or
the Chairman of the Board may from time to time confer and direct.
Section 3. The President shall have the powers and duties pertaining to
the office of the President conferred or imposed upon him by statute or assigned
to him by the Board of Directors in the absence of the Chairman of the Board the
President shall have the powers and duties of the Chairman of the Board.
Section 4. The Chairman of the Board of Directors or the President as
designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however denominated
by the Board of Directors, who may at any time perform all the duties of the
Chairman of the Board of Directors and/or the President and such other powers
and duties as may from time to time be assigned to them by the Board of
Directors, the Executive Committee, the Chairman of the Board or the President
and by the officer in charge of the department or division to which they are
assigned.
Section 6. The Secretary shall attend to the giving of notice of
meetings of the stockholders and the Board of Directors, as well as the
Committees thereof, to the keeping of accurate minutes of all such meetings and
to recording the same in the minute books of the Company. In addition to the
other notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
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Section 7. The Treasurer shall have general supervision over all assets
and liabilities of the Company. He shall be custodian of and responsible for all
monies, funds and valuables of the Company and for the keeping of proper records
of the evidence of property or indebtedness and of all the transactions of the
Company. He shall have general supervision of the expenditures of the Company
and shall report to the Board of Directors at each regular meeting of the
condition of the Company, and perform such other duties as may be assigned to
him from time to time by the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
There may be one or more subordinate accounting or controller officers
however denominated, who may perform the duties of the Controller and such
duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit Officers,
however denominated, who may perform all the duties of the Auditor and such
duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank to
all Vice Presidents with such functional titles as shall be determined from time
to time by the Board of Directors, who shall ex officio hold the office
Assistant Secretary of this Company and who may perform such duties as may be
prescribed by the officer in charge of the department or division to whom they
are assigned.
Section 11. The powers and duties of all other officers of the Company
shall be those usually pertaining to their respective offices, subject to the
direction of the Board of Directors, the Executive Committee, Chairman of the
Board of Directors or the President and the officer in charge of the department
or division to which they are assigned.
ARTICLE V
STOCK AND STOCK CERTIFICATES
Section 1. Shares of stock shall be transferrable on the
books of the Company and a
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transfer book shall be kept in which all transfers of stock shall be recorded.
Section 2. Certificate of stock shall bear the signature of the
President or any Vice President, however denominated by the Board of Directors
and countersigned by the Secretary or Treasurer or an Assistant Secretary, and
the seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate certificates of stock
shall be issued only upon giving such security as may be satisfactory to the
Board of Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to fix in
advance a record date for the determination of the stockholders entitled to
notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change, conversion or
exchange of capital stock, or in connection with obtaining the consent of
stockholders for any purpose, which record date shall not be more than 60 nor
less than 10 days proceeding the date of any meeting of stockholders or the date
for the payment of any dividend, or the date for the allotment of rights, or the
date when any change or conversion or exchange of capital stock shall go into
effect, or a date in connection with obtaining such consent.
ARTICLE VI
SEAL
Section 1. The corporate seal of the Company shall be in the following
form:
Between two concentric circles the words "Wilmington Trust
Company" within the inner circle the words "Wilmington,
Delaware."
ARTICLE VII
FISCAL YEAR
Section 1. The fiscal year of the Company shall be the calendar year.
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ARTICLE VIII
EXECUTION OF INSTRUMENTS OF THE COMPANY
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full power
and authority to enter into, make, sign, execute, acknowledge and/or deliver and
the Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as though
expressly authorized by the Board of Directors and/or the Executive Committee.
ARTICLE IX
COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES
Section 1. Directors and associate directors of the Company, other than
salaried officers of the Company, shall be paid such reasonable honoraria or
fees for attending meetings of the Board of Directors as the Board of Directors
may from time to time determine. Directors and associate directors who serve as
members of committees, other than salaried employees of the Company, shall be
paid such reasonable honoraria or fees for services as members of committees as
the Board of Directors shall from time to time determine and directors and
associate directors may be employed by the Company for such special services as
the Board of Directors may from time to time determine and shall be paid for
such special services so performed reasonable compensation as may be determined
by the Board of Directors.
ARTICLE X
INDEMNIFICATION
Section 1. (A) The Corporation shall indemnify and hold harmless, to the
fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was
9
<PAGE>
serving at the request of the Corporation as a director, officer, employee,
fiduciary or agent of another corporation or of a partnership, joint venture,
trust, enterprise or non-profit entity, including service with respect to
employee benefit plans, against all liability and loss suffered and expenses
reasonably incurred by such person. The Corporation shall indemnify a person in
connection with a proceeding initiated by such person only if the proceeding was
authorized by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in
defending any proceeding in advance of its final disposition, PROVIDED, HOWEVER,
that the payment of expenses incurred by a Director officer in his capacity as a
Director or officer in advance of the final disposition of the proceeding shall
be made only upon receipt of an undertaking by the Director or officer to repay
all amounts advanced if it should be ultimately determined that the Director or
officer is not entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment of expenses,
under this Article X is not paid in full within ninety days after a written
claim therefor has been received by the Corporation the claimant may file suit
to recover the unpaid amount of such claim and, if successful in whole or in
part, shall be entitled to be paid the expense of prosecuting such claim. In any
such action the Corporation shall have the burden of proving that the claimant
was not entitled to the requested indemnification of payment of expenses under
applicable law.
(D) The rights conferred on any person by this Article X shall
not be exclusive of any other rights which such person may have or hereafter
acquire under any statute, provision of the Charter or Act of Incorporation,
these By-Laws, agreement, vote of stockholders or disinterested Directors or
otherwise.
(E) Any repeal or modification of the foregoing provisions of
this Article X shall not adversely affect any right or protection hereunder of
any person in respect of any act or omission occurring prior to the time of such
repeal or modification.
ARTICLE XI
AMENDMENTS TO THE BY-LAWS
Section 1. These By-Laws may be altered, amended or repealed, in whole
or in part, and any new By-Law or By-Laws adopted at any regular or special
meeting of the Board of Directors by a vote of the majority of all the members
of the Board of Directors then in office.
10
<PAGE>
EXHIBIT C
SECTION 321(B) CONSENT
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as
amended, Wilmington Trust Company hereby consents that reports of examinations
by Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: July 23, 1999 By: /S/ DONALD G. MACKELCAN
Name: Donald G. MacKelcan
Title: Vice President
11
<PAGE>
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and
savings banks with state publication requirements. It has not
been approved by any state banking authorities. Refer to your
appropriate state banking authorities for your state publication
requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
Name of Bank City
in the State of DELAWARE , at the close of business on March 31, 1999.
<TABLE>
<CAPTION>
ASSETS
Thousands of dollars
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins...............................................................196,035
Interest-bearing balances............................................................................................. 0
Held-to-maturity securities.................................................................................................. 44,909
Available-for-sale securities..............................................................................................1,396,028
Federal funds sold and securities purchased under agreements to resell.......................................................127,340
Loans and lease financing receivables:
Loans and leases, net of unearned income............. 4,176,290
LESS: Allowance for loan and lease losses........... 68,543
LESS: Allocated transfer risk reserve............... 0
Loans and leases, net of unearned income, allowance, and reserve................................................4,107,747
Assets held in trading accounts....................................................................................................0
Premises and fixed assets (including capitalized leases).....................................................................139,843
Other real estate owned....................................................................................................... 1,055
Investments in unconsolidated subsidiaries and associated companies............................................................1,225
Customers' liability to this bank on acceptances outstanding.......................................................................0
Intangible assets............................................................................................................. 5,265
Other assets................................................................................................................. 99,075
Total assets...............................................................................................................6,118,520
</TABLE>
CONTINUED ON NEXT PAGE
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits:
In domestic offices........................................................................................................4,332,124
Noninterest-bearing................ 959,777
Interest-bearing................... 3,372,347
Federal funds purchased and Securities sold under agreements to repurchase.................................................. 432,395
Demand notes issued to the U.S. Treasury......................................................................................28,906
Trading liabilities (from Schedule RC-D)...........................................................................................0
Other borrowed money:........................................................................................................///////
With original maturity of one year or less........................................................................715,000
With original maturity of more than one year.......................................................................43,000
Bank's liability on acceptances executed and outstanding...........................................................................0
Subordinated notes and debentures..................................................................................................0
Other liabilities (from Schedule RC-G)..................................................................................... 93,311
Total liabilities..........................................................................................................5,644,736
EQUITY CAPITAL
Perpetual preferred stock and related surplus......................................................................................0
Common Stock.....................................................................................................................500
Surplus (exclude all surplus related to preferred stock)......................................................................62,118
Undivided profits and capital reserves.......................................................................................408,053
Net unrealized holding gains (losses) on available-for-sale securities........................................................ 3,113
Total equity capital.........................................................................................................473,784
Total liabilities, limited-life preferred stock, and equity capital........................................................6,118,520
</TABLE>
2
EXHIBIT 25.2
Registration No.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) X
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
CARRIAGE SERVICES INC.
CARRIAGE SERVICES CAPITAL TRUST
(Exact name of obligor as specified in its charter)
Delaware 76-0423828
(State of incorporation) (I.R.S. employer identification no.)
1300 Post Oak Blvd., Suite 1500
Houston, Texas 77056
(Address of principal executive offices) (Zip Code)
7% Convertible Preferred Securities
(Title of the indenture securities)
================================================================================
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the trustee
and upon information furnished by the obligor, the obligor is not an
affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which includes the
certificate of authority of Wilmington Trust Company to commence
business and the authorization of Wilmington Trust Company to
exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section 321(b)
of Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 23rd day
of July, 1999.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /S/ PATRICIA A. EVANS By: /S/ DONALD G. MACKELCAN
Assistant Secretary Name: Donald G. MacKelcan
Title: Vice President
2
<PAGE>
EXHIBIT A
AMENDED CHARTER
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON MAY 9, 1987
<PAGE>
AMENDED CHARTER
OR
ACT OF INCORPORATION
OF
WILMINGTON TRUST COMPANY
WILMINGTON TRUST COMPANY, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate the
Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and the name
of which company was changed to "WILMINGTON TRUST COMPANY" by an amendment filed
in the Office of the Secretary of State on March 18, A.D. 1903, and the Charter
or Act of Incorporation of which company has been from time to time amended and
changed by merger agreements pursuant to the corporation law for state banks and
trust companies of the State of Delaware, does hereby alter and amend its
Charter or Act of Incorporation so that the same as so altered and amended shall
in its entirety read as follows:
FIRST: - The name of this corporation is WILMINGTON TRUST COMPANY.
SECOND: - The location of its principal office in the State of Delaware
is at Rodney Square North, in the City of Wilmington, County of New
Castle; the name of its resident agent is WILMINGTON TRUST COMPANY whose
address is Rodney Square North, in said City. In addition to such
principal office, the said corporation maintains and operates branch
offices in the City of Newark, New Castle County, Delaware, the Town of
Newport, New Castle County, Delaware, at Claymont, New Castle County,
Delaware, at Greenville, New Castle County Delaware, and at Milford
Cross Roads, New Castle County, Delaware, and shall be empowered to
open, maintain and operate branch offices at Ninth and Shipley Streets,
418 Delaware Avenue, 2120 Market Street, and 3605 Market Street, all in
the City of Wilmington, New Castle County, Delaware, and such other
branch offices or places of business as may be authorized from time to
time by the agency or agencies of the government of the State of
Delaware empowered to confer such authority.
THIRD: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this Corporation
are to do any or all of the things herein mentioned as fully and to the
same extent as natural persons might or could do and in any part of the
world, viz.:
(1) To sue and be sued, complain and defend in any Court of law or
equity and to make and use a common seal, and alter the seal at
pleasure, to hold,
<PAGE>
purchase, convey, mortgage or otherwise deal in real and personal
estate and property, and to appoint such officers and agents as the
business of the Corporation shall require, to make by-laws not
inconsistent with the Constitution or laws of the United States or
of this State, to discount bills, notes or other evidences of debt,
to receive deposits of money, or securities for money, to buy gold
and silver bullion and foreign coins, to buy and sell bills of
exchange, and generally to use, exercise and enjoy all the powers,
rights, privileges and franchises incident to a corporation which
are proper or necessary for the transaction of the business of the
Corporation hereby created.
(2) To insure titles to real and personal property, or any estate
or interests therein, and to guarantee the holder of such property,
real or personal, against any claim or claims, adverse to his
interest therein, and to prepare and give certificates of title for
any lands or premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the receipt,
collection, custody, investment and management of funds, and the
purchase, sale, management and disposal of property of all
descriptions, and to prepare and execute all papers which may be
necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds, leases,
conveyances, mortgages, bonds and legal papers of every
description, and to carry on the business of conveyancing in all
its branches.
(5) To receive upon deposit for safekeeping money, jewelry, plate,
deeds, bonds and any and all other personal property of every sort
and kind, from executors, administrators, guardians, public
officers, courts, receivers, assignees, trustees, and from all
fiduciaries, and from all other persons and individuals, and from
all corporations whether state, municipal, corporate or private,
and to rent boxes, safes, vaults and other receptacles for such
property.
(6) To act as agent or otherwise for the purpose of registering,
issuing, certificating, countersigning, transferring or
underwriting the stock, bonds or other obligations of any
corporation, association, state or municipality, and may receive
and manage any sinking fund therefor on such terms as may be agreed
upon between the two parties, and in like manner may act as
Treasurer of any corporation or municipality.
(7) To act as Trustee under any deed of trust, mortgage, bond or
other
2
<PAGE>
instrument issued by any state, municipality, body politic,
corporation, association or person, either alone or in conjunction
with any other person or persons, corporation or corporations.
(8) To guarantee the validity, performance or effect of any
contract or agreement, and the fidelity of persons holding places
of responsibility or trust; to become surety for any person, or
persons, for the faithful performance of any trust, office, duty,
contract or agreement, either by itself or in conjunction with any
other person, or persons, corporation, or corporations, or in like
manner become surety upon any bond, recognizance, obligation,
judgment, suit, order, or decree to be entered in any court of
record within the State of Delaware or elsewhere, or which may now
or hereafter be required by any law, judge, officer or court in the
State of Delaware or elsewhere.
(9) To act by any and every method of appointment as trustee,
trustee in bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other trust
capacity in the receiving, holding, managing, and disposing of any
and all estates and property, real, personal or mixed, and to be
appointed as such trustee, trustee in bankruptcy, receiver,
assignee, assignee in bankruptcy, executor, administrator, guardian
or bailee by any persons, corporations, court, officer, or
authority, in the State of Delaware or elsewhere; and whenever this
Corporation is so appointed by any person, corporation, court,
officer or authority such trustee, trustee in bankruptcy, receiver,
assignee, assignee in bankruptcy, executor, administrator,
guardian, bailee, or in any other trust capacity, it shall not be
required to give bond with surety, but its capital stock shall be
taken and held as security for the performance of the duties
devolving upon it by such appointment.
(10) And for its care, management and trouble, and the exercise of
any of its powers hereby given, or for the performance of any of
the duties which it may undertake or be called upon to perform, or
for the assumption of any responsibility the said Corporation may
be entitled to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages,
debentures, shares of capital stock, and other securities,
obligations, contracts and evidences of indebtedness, of any
private, public or municipal corporation within and without the
State of Delaware, or of the Government of the United States, or of
any state, territory, colony, or possession thereof, or of any
foreign government or country; to receive, collect, receipt for,
and dispose of
3
<PAGE>
interest, dividends and income upon and from any of the bonds,
mortgages, debentures, notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and other
property held and owned by it, and to exercise in respect of all
such bonds, mortgages, debentures, notes, shares of capital stock,
securities, obligations, contracts, evidences of indebtedness and
other property, any and all the rights, powers and privileges of
individual owners thereof, including the right to vote thereon; to
invest and deal in and with any of the moneys of the Corporation
upon such securities and in such manner as it may think fit and
proper, and from time to time to vary or realize such investments;
to issue bonds and secure the same by pledges or deeds of trust or
mortgages of or upon the whole or any part of the property held or
owned by the Corporation, and to sell and pledge such bonds, as and
when the Board of Directors shall determine, and in the promotion
of its said corporate business of investment and to the extent
authorized by law, to lease, purchase, hold, sell, assign,
transfer, pledge, mortgage and convey real and personal property of
any name and nature and any estate or interest therein.
(b) In furtherance of, and not in limitation, of the powers conferred by
the laws of the State of Delaware, it is hereby expressly provided that
the said Corporation shall
also have the following powers:
(1) To do any or all of the things herein set forth, to the same
extent as natural persons might or could do, and in any part of the
world.
(2) To acquire the good will, rights, property and franchises and
to undertake the whole or any part of the assets and liabilities of
any person, firm, association or corporation, and to pay for the
same in cash, stock of this Corporation, bonds or otherwise; to
hold or in any manner to dispose of the whole or any part of the
property so purchased; to conduct in any lawful manner the whole or
any part of any business so acquired, and to exercise all the
powers necessary or convenient in and about the conduct and
management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien, and to
lease, sell, exchange, transfer, or in any manner whatever dispose
of property, real, personal or mixed, wherever situated.
(4) To enter into, make, perform and carry out contracts of every
kind with any person, firm, association or corporation, and,
without limit as to amount, to draw, make, accept, endorse,
discount, execute and issue promissory notes, drafts, bills of
exchange, warrants, bonds, debentures, and other negotiable or
4
<PAGE>
transferable instruments.
(5) To have one or more offices, to carry on all or any of its
operations and businesses, without restriction to the same extent
as natural persons might or could do, to purchase or otherwise
acquire, to hold, own, to mortgage, sell, convey or otherwise
dispose of, real and personal property, of every class and
description, in any State, District, Territory or Colony of the
United States, and in any foreign country or place.
(6) It is the intention that the objects, purposes and powers
specified and clauses contained in this paragraph shall (except
where otherwise expressed in said paragraph) be nowise limited or
restricted by reference to or inference from the terms of any other
clause of this or any other paragraph in this charter, but that the
objects, purposes and powers specified in each of the clauses of
this paragraph shall be regarded as independent objects, purposes
and powers.
FOURTH: - (a) The total number of shares of all classes of stock which
the Corporation shall have authority to issue is forty-one million
(41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par value
$10.00 per share (hereinafter referred to as "Preferred Stock");
and
(2) Forty million (40,000,000) shares of Common Stock, par value
$1.00 per share (hereinafter referred to as "Common Stock").
(b) Shares of Preferred Stock may be issued from time to time in one or
more series as may from time to time be determined by the Board of
Directors each of said series to be distinctly designated. All shares of
any one series of Preferred Stock shall be alike in every particular,
except that there may be different dates from which dividends, if any,
thereon shall be cumulative, if made cumulative. The voting powers and
the preferences and relative, participating, optional and other special
rights of each such series, and the qualifications, limitations or
restrictions thereof, if any, may differ from those of any and all other
series at any time outstanding; and, subject to the provisions of
subparagraph 1 of Paragraph (c) of this Article FOURTH, the Board of
Directors of the Corporation is hereby expressly granted authority to
fix by resolution or resolutions adopted prior to the issuance of any
shares of a particular series of Preferred Stock, the voting powers and
the designations, preferences and relative, optional and other special
rights, and the qualifications, limitations and restrictions of such
series, including, but without limiting the generality of the
5
<PAGE>
foregoing, the following:
(1) The distinctive designation of, and the number of shares of
Preferred Stock which shall constitute such series, which number
may be increased (except where otherwise provided by the Board of
Directors) or decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of the Board of
Directors;
(2) The rate and times at which, and the terms and conditions on
which, dividends, if any, on Preferred Stock of such series shall
be paid, the extent of the preference or relation, if any, of such
dividends to the dividends payable on any other class or classes,
or series of the same or other class of stock and whether such
dividends shall be cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock of such
series to convert the same into or exchange the same for, shares of
any other class or classes or of any series of the same or any
other class or classes of stock of the Corporation and the terms
and conditions of such conversion or exchange;
(4) Whether or not Preferred Stock of such series shall be subject
to redemption, and the redemption price or prices and the time or
times at which, and the terms and conditions on which, Preferred
Stock of such series may be redeemed.
(5) The rights, if any, of the holders of Preferred Stock of such
series upon the voluntary or involuntary liquidation, merger,
consolidation, distribution or sale of assets, dissolution or
winding-up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase
account, if any, to be provided for the Preferred Stock of such
series; and
(7) The voting powers, if any, of the holders of such series of
Preferred Stock which may, without limiting the generality of the
foregoing include the right, voting as a series or by itself or
together with other series of Preferred Stock or all series of
Preferred Stock as a class, to elect one or more directors of the
Corporation if there shall have been a default in the payment of
dividends on any one or more series of Preferred Stock or under
such circumstances and on such conditions as the Board of Directors
may determine.
(c) (1) After the requirements with respect to preferential dividends on
the Preferred Stock (fixed in accordance with the provisions of section
(b) of this Article
6
<PAGE>
FOURTH), if any, shall have been met and after the Corporation shall
have complied with all the requirements, if any, with respect to the
setting aside of sums as sinking funds or redemption or purchase
accounts (fixed in accordance with the provisions of section (b) of this
Article FOURTH), and subject further to any conditions which may be
fixed in accordance with the provisions of section (b) of this Article
FOURTH, then and not otherwise the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to time
by the Board of Directors.
(2) After distribution in full of the preferential amount, if any,
(fixed in accordance with the provisions of section (b) of this
Article FOURTH), to be distributed to the holders of Preferred
Stock in the event of voluntary or involuntary liquidation,
distribution or sale of assets, dissolution or winding-up, of the
Corporation, the holders of the Common Stock shall be entitled to
receive all of the remaining assets of the Corporation, tangible
and intangible, of whatever kind available for distribution to
stockholders ratably in proportion to the number of shares of
Common Stock held by them respectively.
(3) Except as may otherwise be required by law or by the provisions
of such resolution or resolutions as may be adopted by the Board of
Directors pursuant to section (b) of this Article FOURTH, each
holder of Common Stock shall have one vote in respect of each share
of Common Stock held on all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or
series of stock or of other securities of the Corporation shall have any
preemptive right to purchase or subscribe for any unissued stock of any
class or series or any additional shares of any class or series to be
issued by reason of any increase of the authorized capital stock of the
Corporation of any class or series, or bonds, certificates of
indebtedness, debentures or other securities convertible into or
exchangeable for stock of the Corporation of any class or series, or
carrying any right to purchase stock of any class or series, but any
such unissued stock, additional authorized issue of shares of any class
or series of stock or securities convertible into or exchangeable for
stock, or carrying any right to purchase stock, may be issued and
disposed of pursuant to resolution of the Board of Directors to such
persons, firms, corporations or associations, whether such holders or
others, and upon such terms as may be deemed advisable by the Board of
Directors in the exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and
rights of each other series of Preferred Stock shall, in each case, be
as fixed from time to time by the Board of
7
<PAGE>
Directors in the resolution or resolutions adopted pursuant to authority
granted in section (b) of this Article FOURTH and the consent, by class
or series vote or otherwise, of the holders of such of the series of
Preferred Stock as are from time to time outstanding shall not be
required for the issuance by the Board of Directors of any other series
of Preferred Stock whether or not the powers, preferences and rights of
such other series shall be fixed by the Board of Directors as senior to,
or on a parity with, the powers, preferences and rights of such
outstanding series, or any of them; provided, however, that the Board of
Directors may provide in the resolution or resolutions as to any series
of Preferred Stock adopted pursuant to section (b) of this Article
FOURTH that the consent of the holders of a majority (or such greater
proportion as shall be therein fixed) of the outstanding shares of such
series voting thereon shall be required for the issuance of any or all
other series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series of
Preferred Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and for
such consideration as shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the Board
of Directors of the Corporation shall determine and on such terms and
for such consideration as shall be fixed by the Board of Directors.
(h) The authorized amount of shares of Common Stock and of Preferred
Stock may, without a class or series vote, be increased or decreased
from time to time by the affirmative vote of the holders of a majority
of the stock of the Corporation entitled to vote thereon.
FIFTH: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of directors
constituting the entire Board shall be not less than five nor more than
twenty-five as fixed from time to time by vote of a majority of the
whole Board, provided, however, that the number of directors shall not
be reduced so as to shorten the term of any director at the time in
office, and provided further, that the number of directors constituting
the whole Board shall be twenty-four until otherwise fixed by a majority
of the whole Board.
(b) The Board of Directors shall be divided into three classes, as
nearly equal in number as the then total number of directors
constituting the whole Board permits, with the term of office of one
class expiring each year. At the annual meeting of stockholders in 1982,
directors of the first class shall be elected to hold office for a term
expiring at the next succeeding annual meeting, directors of the second
class
8
<PAGE>
shall be elected to hold office for a term expiring at the second
succeeding annual meeting and directors of the third class shall be
elected to hold office for a term expiring at the third succeeding
annual meeting. Any vacancies in the Board of Directors for any reason,
and any newly created directorships resulting from any increase in the
directors, may be filled by the Board of Directors, acting by a majority
of the directors then in office, although less than a quorum, and any
directors so chosen shall hold office until the next annual election of
directors. At such election, the stockholders shall elect a successor to
such director to hold office until the next election of the class for
which such director shall have been chosen and until his successor shall
be elected and qualified. No decrease in the number of directors shall
shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding the
fact that some lesser percentage may be specified by law, this Charter
or Act of Incorporation or the By- Laws of the Corporation), any
director or the entire Board of Directors of the Corporation may be
removed at any time without cause, but only by the affirmative vote of
the holders of two-thirds or more of the outstanding shares of capital
stock of the Corporation entitled to vote generally in the election of
directors (considered for this purpose as one class) cast at a meeting
of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the Board
of Directors or by any stockholder entitled to vote for the election of
directors. Such nominations shall be made by notice in writing,
delivered or mailed by first class United States mail, postage prepaid,
to the Secretary of the Corporation not less than 14 days nor more than
50 days prior to any meeting of the stockholders called for the election
of directors; provided, however, that if less than 21 days' notice of
the meeting is given to stockholders, such written notice shall be
delivered or mailed, as prescribed, to the Secretary of the Corporation
not later than the close of the seventh day following the day on which
notice of the meeting was mailed to stockholders. Notice of nominations
which are proposed by the Board of Directors shall be given by the
Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name, age,
business address and, if known, residence address of each nominee
proposed in such notice, (ii) the principal occupation or employment of
such nominee and (iii) the number of shares of stock of the Corporation
which are beneficially owned by each such nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine and
declare to
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the meeting that a nomination was not made in accordance with the
foregoing procedure, and if he should so determine, he shall so declare
to the meeting and the defective nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any annual
or special meeting of stockholders of the Corporation may be taken
without a meeting, and the power of stockholders to consent in writing,
without a meeting, to the taking of any action is specifically denied.
SIXTH: - The Directors shall choose such officers, agent and servants as
may be provided in the By-Laws as they may from time to time find
necessary or proper.
SEVENTH: - The Corporation hereby created is hereby given the same
powers, rights and privileges as may be conferred upon corporations
organized under the Act entitled "An Act Providing a General Corporation
Law", approved March 10, 1899, as from time to time amended.
EIGHTH: - This Act shall be deemed and taken to be a private Act.
NINTH: - This Corporation is to have perpetual existence.
TENTH: - The Board of Directors, by resolution passed by a majority of
the whole Board, may designate any of their number to constitute an
Executive Committee, which Committee, to the extent provided in said
resolution, or in the By-Laws of the Company, shall have and may
exercise all of the powers of the Board of Directors in the management
of the business and affairs of the Corporation, and shall have power to
authorize the seal of the Corporation to be affixed to all papers which
may require it.
ELEVENTH: - The private property of the stockholders shall not be liable
for the payment of corporate debts to any extent whatever.
TWELFTH: - The Corporation may transact business in any part of the
world.
THIRTEENTH: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation by a
vote of the majority of the entire Board. The stockholders may make,
alter or repeal any By-Law whether or not adopted by them, provided
however, that any such additional By-Laws, alterations or repeal may be
adopted only by the affirmative vote of the holders of two-thirds or
more of the outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of directors (considered for
this purpose as
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one class).
FOURTEENTH: - Meetings of the Directors may be held outside of the State
of Delaware at such places as may be from time to time designated by the
Board, and the Directors may keep the books of the Company outside of
the State of Delaware at such places as may be from time to time
designated by them.
FIFTEENTH: - (a) (1) In addition to any affirmative vote required by
law, and except as otherwise expressly provided in sections (b) and (c)
of this Article FIFTEENTH:
(A) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with or into (i) any Interested
Stockholder (as hereinafter defined) or (ii) any other corporation
(whether or not itself an Interested Stockholder), which, after
such merger or consolidation, would be an Affiliate (as hereinafter
defined) of an Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of related
transactions) to or with any Interested Stockholder or any
Affiliate of any Interested Stockholder of any assets of the
Corporation or any Subsidiary having an aggregate fair market value
of $1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any Subsidiary
(in one transaction or a series of related transactions) of any
securities of the Corporation or any Subsidiary to any Interested
Stockholder or any Affiliate of any Interested Stockholder in
exchange for cash, securities or other property (or a combination
thereof) having an aggregate fair market value of $1,000,000 or
more, or
(D) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation, or
(E) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or
any similar transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect, directly
or indirectly, of increasing the proportionate share of the
outstanding shares of any class of equity or convertible securities
of the Corporation or any Subsidiary which is directly or
indirectly owned by any Interested Stockholder, or any Affiliate of
any Interested Stockholder,
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shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article FIFTEENTH as one class ("Voting Shares"). Such affirmative vote shall be
required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(2) The term "business combination" as used in this Article
FIFTEENTH shall mean any transaction which is referred to any one
or more of clauses (A) through (E) of paragraph 1 of the section
(a).
(b) The provisions of section (a) of this Article FIFTEENTH shall
not be applicable to any particular business combination and such
business combination shall require only such affirmative vote as is
required by law and any other provisions of the Charter or Act of
Incorporation of By-Laws if such business combination has been
approved by a majority of the whole Board.
(c) For the purposes of this Article FIFTEENTH:
(1) A "person" shall mean any individual firm, corporation or other
entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any Subsidiary)
who or which as of the record date for the determination of stockholders
entitled to notice of and to vote on such business combination, or
immediately prior to the consummation of any such transaction:
(A) is the beneficial owner, directly or indirectly, of more than
10% of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time within two
years prior thereto was the beneficial owner, directly or
indirectly, of not less than 10% of the then outstanding voting
Shares, or
(C) is an assignee of or has otherwise succeeded in any share of
capital stock of the Corporation which were at any time within two
years prior thereto beneficially owned by any Interested
Stockholder, and such assignment or succession shall have occurred
in the course of a transaction or series of transactions not
involving a public offering within the meaning of the Securities
Act of 1933.
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(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and Associates (as
hereafter defined) beneficially own, directly or indirectly, or
(B) which such person or any of its Affiliates or Associates has
(i) the right to acquire (whether such right is exercisable
immediately or only after the passage of time), pursuant to any
agreement, arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options, or
otherwise, or (ii) the right to vote pursuant to any agreement,
arrangement or understanding, or
(C) which are beneficially owned, directly or indirectly, by any
other person with which such first mentioned person or any of its
Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned
through application of paragraph (3) above but shall not include any
other Voting Shares which may be issuable pursuant to any agreement, or
upon exercise of conversion rights, warrants or options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings given
those terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect on December 31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority of any
class of equity security (as defined in Rule 3a11-1 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as in effect
in December 31, 1981) is owned, directly or indirectly, by the
Corporation; provided, however, that for the purposes of the definition
of Investment Stockholder set forth in paragraph (2) of this section
(c), the term "Subsidiary" shall mean only a corporation of which a
majority of each class of equity security is owned, directly or
indirectly, by the Corporation.
(d) majority of the directors shall have the power and duty to
determine for the purposes of this Article FIFTEENTH on the basis
of information known to them, (1) the number of Voting Shares
beneficially owned by any person (2) whether a person is an
Affiliate or Associate of another, (3) whether a person has an
agreement, arrangement or understanding with another as to the
matters referred to in paragraph (3) of section (c), or (4) whether
the assets subject to any business combination or the consideration
received for the issuance or
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transfer of securities by the Corporation, or any Subsidiary has an
aggregate fair market value of $1,000,000 or more.
(e) Nothing contained in this Article FIFTEENTH shall be construed
to relieve any Interested Stockholder from any fiduciary obligation
imposed by law.
SIXTEENTH: Notwithstanding any other provision of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and in addition to any
other vote that may be required by law, this Charter or Act of
Incorporation by the By-Laws), the affirmative vote of the holders of at
least two-thirds of the outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) shall be required to amend,
alter or repeal any provision of Articles FIFTH, THIRTEENTH, FIFTEENTH
or SIXTEENTH of this Charter or Act of Incorporation.
SEVENTEENTH: (a) a Director of this Corporation shall not be liable to
the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a Director, except to the extent such exemption from
liability or limitation thereof is not permitted under the Delaware
General Corporation Laws as the same exists or may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph shall not
adversely affect any right or protection of a Director of the
Corporation existing hereunder with respect to any act or omission
occurring prior to the time of such repeal or modification."
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EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON JANUARY 16, 1997
<PAGE>
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
STOCKHOLDERS' MEETINGS
Section 1. The Annual Meeting of Stockholders shall be held on the third
Thursday in April each year at the principal office at the Company or at such
other date, time, or place as may be designated by resolution by the Board of
Directors.
Section 2. Special meetings of all stockholders may be called at any
time by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given by
mailing to each stockholder at least ten (10) days before said meeting, at his
last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the Company
issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each shares of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
DIRECTORS
Section 1. The number and classification of the Board of Directors shall
be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72) years
shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for three
years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed and
conducted by the Board of Directors.
<PAGE>
Section 5. The Board of Directors shall meet at the principal office of
the Company or elsewhere in its discretion at such times to be determined by a
majority of its members, or at the call of the Chairman of the Board of
Directors or the President.
Section 6. Special meetings of the Board of Directors may be called at
any time by the Chairman of the Board of Directors or by the President, and
shall be called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall be
necessary to constitute a quorum for the transaction of business at any meeting
of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of any
special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal, inability to
act, or disqualification of any director, the Board of Directors, although less
than a quorum, shall have the right to elect the successor who shall hold office
for the remainder of the full term of the class of directors in which the
vacancy occurred, and until such director's successor shall have been duly
elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect from
its own members a Chairman of the Board of Directors and a President who may be
the same person. The Board of Directors shall also elect at such meeting a
Secretary and a Treasurer, who may be the same person, may appoint at any time
such other committees and elect or appoint such other officers as it may deem
advisable. The Board of Directors may also elect at such meeting one or more
Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or division of the Company as it may deem
advisable.
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ARTICLE III
COMMITTEES
Section 1. Executive Committee
(A) The Executive Committee shall be composed of not more than
nine members who shall be selected by the Board of Directors from its own
members and who shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers of the
Board of Directors when it is not in session to transact all business for and in
behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal office
of the Company or elsewhere in its discretion at such times to be determined by
a majority of its members, or at the call of the Chairman of the Executive
Committee or at the call of the Chairman of the Board of Directors. The majority
of its members shall be necessary to constitute a quorum for the transaction of
business. Special meetings of the Executive Committee may be held at any time
when a quorum is present.
(D) Minutes of each meeting of the Executive Committee shall be
kept and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and superintend all
investments that may be made of the funds of the Company, and shall direct the
disposal of the same, in accordance with such rules and regulations as the Board
of Directors from time to time make.
(F) In the event of a state of disaster of sufficient severity
to prevent the conduct and management of the affairs and business of the Company
by its directors and officers as contemplated by these By-Laws any two available
members of the Executive Committee as constituted immediately prior to such
disaster shall constitute a quorum of that Committee for the full conduct and
management of the affairs and business of the Company in accordance with the
provisions of Article III of these By-Laws; and if less than three members of
the Trust Committee is constituted immediately prior to such disaster shall be
available for the transaction of its business, such Executive Committee shall
also be empowered to exercise all of the powers reserved to the Trust Committee
under Article III Section 2 hereof. In the event of the unavailability, at such
time, of a minimum of two members of such Executive Committee, any three
available directors shall constitute the Executive Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the foregoing provisions of this Section. This By-Law shall be subject to
implementation by Resolutions of the Board of Directors presently existing or
hereafter passed from time to time
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for that purpose, and any provisions of these By-Laws (other than this Section)
and any resolutions which are contrary to the provisions of this Section or to
the provisions of any such implementary Resolutions shall be suspended during
such a disaster period until it shall be determined by any interim Executive
Committee acting under this section that it shall be to the advantage of the
Company to resume the conduct and management of its affairs and business under
all of the other provisions of these By-Laws.
Section 2. Trust Committee
(A) The Trust Committee shall be composed of not more than
thirteen members who shall be selected by the Board of Directors, a majority of
whom shall be members of the Board of Directors and who shall hold office during
the pleasure of the Board.
(B) The Trust Committee shall have general supervision over the
Trust Department and the investment of trust funds, in all matters, however,
being subject to the approval of the Board of Directors.
(C) The Trust Committee shall meet at the principal office of
the Company or elsewhere in its discretion at such times to be determined by a
majority of its members or at the call of its chairman. A majority of its
members shall be necessary to constitute a quorum for the transaction of
business.
(D) Minutes of each meeting of the Trust Committee shall be
kept and promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power to appoint
Committees and/or designate officers or employees of the Company to whom
supervision over the investment of trust funds may be delegated when the Trust
Committee is not in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five members who
shall be selected by the Board of Directors from its own members, none of whom
shall be an officer of the Company, and shall hold office at the pleasure of the
Board.
(B) The Audit Committee shall have general supervision over the
Audit Division in all matters however subject to the approval of the Board of
Directors; it shall consider all matters brought to its attention by the officer
in charge of the Audit Division, review all reports of examination of the
Company made by any governmental agency or such independent auditor employed for
that purpose, and make such recommendations to the Board of Directors with
respect thereto or with respect to any other matters pertaining to auditing the
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Company as it shall deem desirable.
(C) The Audit Committee shall meet whenever and wherever the
majority of its members shall deem it to be proper for the transaction of its
business, and a majority of its Committee shall constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be composed of not more
than five (5) members who shall be selected by the Board of Directors from its
own members who are not officers of the Company and who shall hold office during
the pleasure of the Board.
(B) The Compensation Committee shall in general advise upon all
matters of policy concerning the Company brought to its attention by the
management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be called at any
time by the Chairman of the Compensation Committee, the Chairman of the Board of
Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director may be elected by
the Board of Directors as an associate director, to serve during the pleasure of
the Board.
(B) An associate director shall be entitled to attend all
directors meetings and participate in the discussion of all matters brought to
the Board, with the exception that he would have no right to vote. An associate
director will be eligible for appointment to Committees of the Company, with the
exception of the Executive Committee, Audit Committee and Compensation
Committee, which must be comprised solely of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any member of any
Committee created under Article III of the By-Laws of this Company, the member
or members thereof present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in the place of any such
absence or disqualified member.
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ARTICLE IV
OFFICERS
Section 1. The Chairman of the Board of Directors shall preside at all
meetings of the Board and shall have such further authority and powers and shall
perform such duties as the Board of Directors may from time to time confer and
direct. He shall also exercise such powers and perform such duties as may from
time to time be agreed upon between himself and the President of the Company.
Section 2. THE VICE CHAIRMAN OF THE BOARD. The Vice Chairman of the
Board of Directors shall preside at all meetings of the Board of Directors at
which the Chairman of the Board shall not be present and shall have such further
authority and powers and shall perform such duties as the Board of Directors or
the Chairman of the Board may from time to time confer and direct.
Section 3. The President shall have the powers and duties pertaining to
the office of the President conferred or imposed upon him by statute or assigned
to him by the Board of Directors in the absence of the Chairman of the Board the
President shall have the powers and duties of the Chairman of the Board.
Section 4. The Chairman of the Board of Directors or the President as
designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however denominated
by the Board of Directors, who may at any time perform all the duties of the
Chairman of the Board of Directors and/or the President and such other powers
and duties as may from time to time be assigned to them by the Board of
Directors, the Executive Committee, the Chairman of the Board or the President
and by the officer in charge of the department or division to which they are
assigned.
Section 6. The Secretary shall attend to the giving of notice of
meetings of the stockholders and the Board of Directors, as well as the
Committees thereof, to the keeping of accurate minutes of all such meetings and
to recording the same in the minute books of the Company. In addition to the
other notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
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Section 7. The Treasurer shall have general supervision over all assets
and liabilities of the Company. He shall be custodian of and responsible for all
monies, funds and valuables of the Company and for the keeping of proper records
of the evidence of property or indebtedness and of all the transactions of the
Company. He shall have general supervision of the expenditures of the Company
and shall report to the Board of Directors at each regular meeting of the
condition of the Company, and perform such other duties as may be assigned to
him from time to time by the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
There may be one or more subordinate accounting or controller officers
however denominated, who may perform the duties of the Controller and such
duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit Officers,
however denominated, who may perform all the duties of the Auditor and such
duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank to
all Vice Presidents with such functional titles as shall be determined from time
to time by the Board of Directors, who shall ex officio hold the office
Assistant Secretary of this Company and who may perform such duties as may be
prescribed by the officer in charge of the department or division to whom they
are assigned.
Section 11. The powers and duties of all other officers of the Company
shall be those usually pertaining to their respective offices, subject to the
direction of the Board of Directors, the Executive Committee, Chairman of the
Board of Directors or the President and the officer in charge of the department
or division to which they are assigned.
ARTICLE V
STOCK AND STOCK CERTIFICATES
Section 1. Shares of stock shall be transferrable on the books of
the Company and a
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transfer book shall be kept in which all transfers of stock shall be recorded.
Section 2. Certificate of stock shall bear the signature of the
President or any Vice President, however denominated by the Board of Directors
and countersigned by the Secretary or Treasurer or an Assistant Secretary, and
the seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate certificates of stock
shall be issued only upon giving such security as may be satisfactory to the
Board of Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to fix in
advance a record date for the determination of the stockholders entitled to
notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change, conversion or
exchange of capital stock, or in connection with obtaining the consent of
stockholders for any purpose, which record date shall not be more than 60 nor
less than 10 days proceeding the date of any meeting of stockholders or the date
for the payment of any dividend, or the date for the allotment of rights, or the
date when any change or conversion or exchange of capital stock shall go into
effect, or a date in connection with obtaining such consent.
ARTICLE VI
SEAL
Section 1. The corporate seal of the Company shall be in the following
form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
ARTICLE VII
FISCAL YEAR
Section 1. The fiscal year of the Company shall be the calendar year.
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ARTICLE VIII
EXECUTION OF INSTRUMENTS OF THE COMPANY
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full power
and authority to enter into, make, sign, execute, acknowledge and/or deliver and
the Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as though
expressly authorized by the Board of Directors and/or the Executive Committee.
ARTICLE IX
COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES
Section 1. Directors and associate directors of the Company, other than
salaried officers of the Company, shall be paid such reasonable honoraria or
fees for attending meetings of the Board of Directors as the Board of Directors
may from time to time determine. Directors and associate directors who serve as
members of committees, other than salaried employees of the Company, shall be
paid such reasonable honoraria or fees for services as members of committees as
the Board of Directors shall from time to time determine and directors and
associate directors may be employed by the Company for such special services as
the Board of Directors may from time to time determine and shall be paid for
such special services so performed reasonable compensation as may be determined
by the Board of Directors.
ARTICLE X
INDEMNIFICATION
Section 1. (A) The Corporation shall indemnify and hold harmless, to the
fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was
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serving at the request of the Corporation as a director, officer, employee,
fiduciary or agent of another corporation or of a partnership, joint venture,
trust, enterprise or non-profit entity, including service with respect to
employee benefit plans, against all liability and loss suffered and expenses
reasonably incurred by such person. The Corporation shall indemnify a person in
connection with a proceeding initiated by such person only if the proceeding was
authorized by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in
defending any proceeding in advance of its final disposition, PROVIDED, HOWEVER,
that the payment of expenses incurred by a Director officer in his capacity as a
Director or officer in advance of the final disposition of the proceeding shall
be made only upon receipt of an undertaking by the Director or officer to repay
all amounts advanced if it should be ultimately determined that the Director or
officer is not entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment of expenses,
under this Article X is not paid in full within ninety days after a written
claim therefor has been received by the Corporation the claimant may file suit
to recover the unpaid amount of such claim and, if successful in whole or in
part, shall be entitled to be paid the expense of prosecuting such claim. In any
such action the Corporation shall have the burden of proving that the claimant
was not entitled to the requested indemnification of payment of expenses under
applicable law.
(D) The rights conferred on any person by this Article X shall
not be exclusive of any other rights which such person may have or hereafter
acquire under any statute, provision of the Charter or Act of Incorporation,
these By-Laws, agreement, vote of stockholders or disinterested Directors or
otherwise.
(E) Any repeal or modification of the foregoing provisions of
this Article X shall not adversely affect any right or protection hereunder of
any person in respect of any act or omission occurring prior to the time of such
repeal or modification.
ARTICLE XI
AMENDMENTS TO THE BY-LAWS
Section 1. These By-Laws may be altered, amended or repealed, in whole
or in part, and any new By-Law or By-Laws adopted at any regular or special
meeting of the Board of Directors by a vote of the majority of all the members
of the Board of Directors then in office.
10
<PAGE>
EXHIBIT C
SECTION 321(B) CONSENT
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as
amended, Wilmington Trust Company hereby consents that reports of examinations
by Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: July 23, 1999 By: /S/ DONALD G. MACKELCAN
Name: Donald G. MacKelcan
Title: Vice President
<PAGE>
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and savings banks with
state publication requirements. It has not been approved by any state banking
authorities. Refer to your appropriate state banking authorities for your state
publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
Name of Bank City
in the State of DELAWARE , at the close of business on March 31, 1999.
<TABLE>
<CAPTION>
ASSETS
Thousands of dollars
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins...............................................................196,035
Interest-bearing balances............................................................................................. 0
Held-to-maturity securities.................................................................................................. 44,909
Available-for-sale securities..............................................................................................1,396,028
Federal funds sold and securities purchased under agreements to resell.......................................................127,340
Loans and lease financing receivables:
Loans and leases, net of unearned income............. 4,176,290
LESS: Allowance for loan and lease losses........... 68,543
LESS: Allocated transfer risk reserve............... 0
Loans and leases, net of unearned income, allowance, and reserve................................................4,107,747
Assets held in trading accounts....................................................................................................0
Premises and fixed assets (including capitalized leases).....................................................................139,843
Other real estate owned....................................................................................................... 1,055
Investments in unconsolidated subsidiaries and associated companies............................................................1,225
Customers' liability to this bank on acceptances outstanding.......................................................................0
Intangible assets............................................................................................................. 5,265
Other assets................................................................................................................. 99,075
Total assets...............................................................................................................6,118,520
</TABLE>
CONTINUED ON NEXT PAGE
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits:
In domestic offices........................................................................................................4,332,124
Noninterest-bearing................ 959,777
Interest-bearing................... 3,372,347
Federal funds purchased and Securities sold under agreements to repurchase.................................................. 432,395
Demand notes issued to the U.S. Treasury......................................................................................28,906
Trading liabilities (from Schedule RC-D)...........................................................................................0
Other borrowed money:........................................................................................................///////
With original maturity of one year or less........................................................................715,000
With original maturity of more than one year.......................................................................43,000
Bank's liability on acceptances executed and outstanding...........................................................................0
Subordinated notes and debentures..................................................................................................0
Other liabilities (from Schedule RC-G)..................................................................................... 93,311
Total liabilities..........................................................................................................5,644,736
EQUITY CAPITAL
Perpetual preferred stock and related surplus......................................................................................0
Common Stock.....................................................................................................................500
Surplus (exclude all surplus related to preferred stock)......................................................................62,118
Undivided profits and capital reserves.......................................................................................408,053
Net unrealized holding gains (losses) on available-for-sale securities........................................................ 3,113
Total equity capital.........................................................................................................473,784
Total liabilities, limited-life preferred stock, and equity capital........................................................6,118,520
</TABLE>
2
EXHIBIT 25.3
Registration No.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) X
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
CARRIAGE SERVICES INC.
(Exact name of obligor as specified in its charter)
Delaware 76-0423828
(State of incorporation) (I.R.S. employer identification no.)
1300 Post Oak Blvd., Suite 1500
Houston, Texas 77056
(Address of principal executive offices) (Zip Code)
Guarantee of Preferred Securities by Carriage Services, Inc.
(Title of the indenture securities)
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the trustee
and upon information furnished by the obligor, the obligor is not an
affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which includes the
certificate of authority of Wilmington Trust Company to commence
business and the authorization of Wilmington Trust Company to
exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section 321(b)
of Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 23rd day
of July, 1999.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /S/ PATRICIA A. EVANS By: /S/ DONALD G. MACKELCAN
Assistant Secretary Name: Donald G. MacKelcan
Title: Vice President
2
<PAGE>
EXHIBIT A
AMENDED CHARTER
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON MAY 9, 1987
<PAGE>
AMENDED CHARTER
OR
ACT OF INCORPORATION
OF
WILMINGTON TRUST COMPANY
WILMINGTON TRUST COMPANY, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate the
Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and the name
of which company was changed to "WILMINGTON TRUST COMPANY" by an amendment filed
in the Office of the Secretary of State on March 18, A.D. 1903, and the Charter
or Act of Incorporation of which company has been from time to time amended and
changed by merger agreements pursuant to the corporation law for state banks and
trust companies of the State of Delaware, does hereby alter and amend its
Charter or Act of Incorporation so that the same as so altered and amended shall
in its entirety read as follows:
FIRST: - The name of this corporation is WILMINGTON TRUST COMPANY.
SECOND: - The location of its principal office in the State of Delaware
is at Rodney Square North, in the City of Wilmington, County of New
Castle; the name of its resident agent is WILMINGTON TRUST COMPANY whose
address is Rodney Square North, in said City. In addition to such
principal office, the said corporation maintains and operates branch
offices in the City of Newark, New Castle County, Delaware, the Town of
Newport, New Castle County, Delaware, at Claymont, New Castle County,
Delaware, at Greenville, New Castle County Delaware, and at Milford
Cross Roads, New Castle County, Delaware, and shall be empowered to
open, maintain and operate branch offices at Ninth and Shipley Streets,
418 Delaware Avenue, 2120 Market Street, and 3605 Market Street, all in
the City of Wilmington, New Castle County, Delaware, and such other
branch offices or places of business as may be authorized from time to
time by the agency or agencies of the government of the State of
Delaware empowered to confer such authority.
THIRD: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this Corporation
are to do any or all of the things herein mentioned as fully and to the
same extent as natural persons might or could do and in any part of the
world, viz.:
(1) To sue and be sued, complain and defend in any Court of law or
equity and to make and use a common seal, and alter the seal at
pleasure, to hold,
<PAGE>
purchase, convey, mortgage or otherwise deal in real and personal
estate and property, and to appoint such officers and agents as the
business of the Corporation shall require, to make by-laws not
inconsistent with the Constitution or laws of the United States or
of this State, to discount bills, notes or other evidences of debt,
to receive deposits of money, or securities for money, to buy gold
and silver bullion and foreign coins, to buy and sell bills of
exchange, and generally to use, exercise and enjoy all the powers,
rights, privileges and franchises incident to a corporation which
are proper or necessary for the transaction of the business of the
Corporation hereby created.
(2) To insure titles to real and personal property, or any estate
or interests therein, and to guarantee the holder of such property,
real or personal, against any claim or claims, adverse to his
interest therein, and to prepare and give certificates of title for
any lands or premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the receipt,
collection, custody, investment and management of funds, and the
purchase, sale, management and disposal of property of all
descriptions, and to prepare and execute all papers which may be
necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds, leases,
conveyances, mortgages, bonds and legal papers of every
description, and to carry on the business of conveyancing in all
its branches.
(5) To receive upon deposit for safekeeping money, jewelry, plate,
deeds, bonds and any and all other personal property of every sort
and kind, from executors, administrators, guardians, public
officers, courts, receivers, assignees, trustees, and from all
fiduciaries, and from all other persons and individuals, and from
all corporations whether state, municipal, corporate or private,
and to rent boxes, safes, vaults and other receptacles for such
property.
(6) To act as agent or otherwise for the purpose of registering,
issuing, certificating, countersigning, transferring or
underwriting the stock, bonds or other obligations of any
corporation, association, state or municipality, and may receive
and manage any sinking fund therefor on such terms as may be agreed
upon between the two parties, and in like manner may act as
Treasurer of any corporation or municipality.
(7) To act as Trustee under any deed of trust, mortgage, bond or
other
2
<PAGE>
instrument issued by any state, municipality, body politic,
corporation, association or person, either alone or in conjunction
with any other person or persons, corporation or corporations.
(8) To guarantee the validity, performance or effect of any
contract or agreement, and the fidelity of persons holding places
of responsibility or trust; to become surety for any person, or
persons, for the faithful performance of any trust, office, duty,
contract or agreement, either by itself or in conjunction with any
other person, or persons, corporation, or corporations, or in like
manner become surety upon any bond, recognizance, obligation,
judgment, suit, order, or decree to be entered in any court of
record within the State of Delaware or elsewhere, or which may now
or hereafter be required by any law, judge, officer or court in the
State of Delaware or elsewhere.
(9) To act by any and every method of appointment as trustee,
trustee in bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other trust
capacity in the receiving, holding, managing, and disposing of any
and all estates and property, real, personal or mixed, and to be
appointed as such trustee, trustee in bankruptcy, receiver,
assignee, assignee in bankruptcy, executor, administrator, guardian
or bailee by any persons, corporations, court, officer, or
authority, in the State of Delaware or elsewhere; and whenever this
Corporation is so appointed by any person, corporation, court,
officer or authority such trustee, trustee in bankruptcy, receiver,
assignee, assignee in bankruptcy, executor, administrator,
guardian, bailee, or in any other trust capacity, it shall not be
required to give bond with surety, but its capital stock shall be
taken and held as security for the performance of the duties
devolving upon it by such appointment.
(10) And for its care, management and trouble, and the exercise of
any of its powers hereby given, or for the performance of any of
the duties which it may undertake or be called upon to perform, or
for the assumption of any responsibility the said Corporation may
be entitled to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages,
debentures, shares of capital stock, and other securities,
obligations, contracts and evidences of indebtedness, of any
private, public or municipal corporation within and without the
State of Delaware, or of the Government of the United States, or of
any state, territory, colony, or possession thereof, or of any
foreign government or country; to receive, collect, receipt for,
and dispose of
3
<PAGE>
interest, dividends and income upon and from any of the bonds,
mortgages, debentures, notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and other
property held and owned by it, and to exercise in respect of all
such bonds, mortgages, debentures, notes, shares of capital stock,
securities, obligations, contracts, evidences of indebtedness and
other property, any and all the rights, powers and privileges of
individual owners thereof, including the right to vote thereon; to
invest and deal in and with any of the moneys of the Corporation
upon such securities and in such manner as it may think fit and
proper, and from time to time to vary or realize such investments;
to issue bonds and secure the same by pledges or deeds of trust or
mortgages of or upon the whole or any part of the property held or
owned by the Corporation, and to sell and pledge such bonds, as and
when the Board of Directors shall determine, and in the promotion
of its said corporate business of investment and to the extent
authorized by law, to lease, purchase, hold, sell, assign,
transfer, pledge, mortgage and convey real and personal property of
any name and nature and any estate or interest therein.
(b) In furtherance of, and not in limitation, of the powers conferred by
the laws of the State of Delaware, it is hereby expressly provided that
the said Corporation shall also have the following powers:
(1) To do any or all of the things herein set forth, to the same
extent as natural persons might or could do, and in any part of the
world.
(2) To acquire the good will, rights, property and franchises and
to undertake the whole or any part of the assets and liabilities of
any person, firm, association or corporation, and to pay for the
same in cash, stock of this Corporation, bonds or otherwise; to
hold or in any manner to dispose of the whole or any part of the
property so purchased; to conduct in any lawful manner the whole or
any part of any business so acquired, and to exercise all the
powers necessary or convenient in and about the conduct and
management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien, and to
lease, sell, exchange, transfer, or in any manner whatever dispose
of property, real, personal or mixed, wherever situated.
(4) To enter into, make, perform and carry out contracts of every
kind with any person, firm, association or corporation, and,
without limit as to amount, to draw, make, accept, endorse,
discount, execute and issue promissory notes, drafts, bills of
exchange, warrants, bonds, debentures, and other negotiable or
4
<PAGE>
transferable instruments.
(5) To have one or more offices, to carry on all or any of its
operations and businesses, without restriction to the same extent
as natural persons might or could do, to purchase or otherwise
acquire, to hold, own, to mortgage, sell, convey or otherwise
dispose of, real and personal property, of every class and
description, in any State, District, Territory or Colony of the
United States, and in any foreign country or place.
(6) It is the intention that the objects, purposes and powers
specified and clauses contained in this paragraph shall (except
where otherwise expressed in said paragraph) be nowise limited or
restricted by reference to or inference from the terms of any other
clause of this or any other paragraph in this charter, but that the
objects, purposes and powers specified in each of the clauses of
this paragraph shall be regarded as independent objects, purposes
and powers.
FOURTH: - (a) The total number of shares of all classes of stock which
the Corporation shall have authority to issue is forty-one million
(41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par value
$10.00 per share (hereinafter referred to as "Preferred Stock");
and
(2) Forty million (40,000,000) shares of Common Stock, par value
$1.00 per share (hereinafter referred to as "Common Stock").
(b) Shares of Preferred Stock may be issued from time to time in one or
more series as may from time to time be determined by the Board of
Directors each of said series to be distinctly designated. All shares of
any one series of Preferred Stock shall be alike in every particular,
except that there may be different dates from which dividends, if any,
thereon shall be cumulative, if made cumulative. The voting powers and
the preferences and relative, participating, optional and other special
rights of each such series, and the qualifications, limitations or
restrictions thereof, if any, may differ from those of any and all other
series at any time outstanding; and, subject to the provisions of
subparagraph 1 of Paragraph (c) of this Article FOURTH, the Board of
Directors of the Corporation is hereby expressly granted authority to
fix by resolution or resolutions adopted prior to the issuance of any
shares of a particular series of Preferred Stock, the voting powers and
the designations, preferences and relative, optional and other special
rights, and the qualifications, limitations and restrictions of such
series, including, but without limiting the generality of the
5
<PAGE>
foregoing, the following:
(1) The distinctive designation of, and the number of shares of
Preferred Stock which shall constitute such series, which number
may be increased (except where otherwise provided by the Board of
Directors) or decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of the Board of
Directors;
(2) The rate and times at which, and the terms and conditions on
which, dividends, if any, on Preferred Stock of such series shall
be paid, the extent of the preference or relation, if any, of such
dividends to the dividends payable on any other class or classes,
or series of the same or other class of stock and whether such
dividends shall be cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock of such
series to convert the same into or exchange the same for, shares of
any other class or classes or of any series of the same or any
other class or classes of stock of the Corporation and the terms
and conditions of such conversion or exchange;
(4) Whether or not Preferred Stock of such series shall be subject
to redemption, and the redemption price or prices and the time or
times at which, and the terms and conditions on which, Preferred
Stock of such series may be redeemed.
(5) The rights, if any, of the holders of Preferred Stock of such
series upon the voluntary or involuntary liquidation, merger,
consolidation, distribution or sale of assets, dissolution or
winding-up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase
account, if any, to be provided for the Preferred Stock of such
series; and
(7) The voting powers, if any, of the holders of such series of
Preferred Stock which may, without limiting the generality of the
foregoing include the right, voting as a series or by itself or
together with other series of Preferred Stock or all series of
Preferred Stock as a class, to elect one or more directors of the
Corporation if there shall have been a default in the payment of
dividends on any one or more series of Preferred Stock or under
such circumstances and on such conditions as the Board of Directors
may determine.
(c) (1) After the requirements with respect to preferential dividends on
the Preferred Stock (fixed in accordance with the provisions of section
(b) of this Article
6
<PAGE>
FOURTH), if any, shall have been met and after the Corporation shall
have complied with all the requirements, if any, with respect to the
setting aside of sums as sinking funds or redemption or purchase
accounts (fixed in accordance with the provisions of section (b) of this
Article FOURTH), and subject further to any conditions which may be
fixed in accordance with the provisions of section (b) of this Article
FOURTH, then and not otherwise the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to time
by the Board of Directors.
(2) After distribution in full of the preferential amount, if any,
(fixed in accordance with the provisions of section (b) of this
Article FOURTH), to be distributed to the holders of Preferred
Stock in the event of voluntary or involuntary liquidation,
distribution or sale of assets, dissolution or winding-up, of the
Corporation, the holders of the Common Stock shall be entitled to
receive all of the remaining assets of the Corporation, tangible
and intangible, of whatever kind available for distribution to
stockholders ratably in proportion to the number of shares of
Common Stock held by them respectively.
(3) Except as may otherwise be required by law or by the provisions
of such resolution or resolutions as may be adopted by the Board of
Directors pursuant to section (b) of this Article FOURTH, each
holder of Common Stock shall have one vote in respect of each share
of Common Stock held on all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or
series of stock or of other securities of the Corporation shall have any
preemptive right to purchase or subscribe for any unissued stock of any
class or series or any additional shares of any class or series to be
issued by reason of any increase of the authorized capital stock of the
Corporation of any class or series, or bonds, certificates of
indebtedness, debentures or other securities convertible into or
exchangeable for stock of the Corporation of any class or series, or
carrying any right to purchase stock of any class or series, but any
such unissued stock, additional authorized issue of shares of any class
or series of stock or securities convertible into or exchangeable for
stock, or carrying any right to purchase stock, may be issued and
disposed of pursuant to resolution of the Board of Directors to such
persons, firms, corporations or associations, whether such holders or
others, and upon such terms as may be deemed advisable by the Board of
Directors in the exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and
rights of each other series of Preferred Stock shall, in each case, be
as fixed from time to time by the Board of
7
<PAGE>
Directors in the resolution or resolutions adopted pursuant to authority
granted in section (b) of this Article FOURTH and the consent, by class
or series vote or otherwise, of the holders of such of the series of
Preferred Stock as are from time to time outstanding shall not be
required for the issuance by the Board of Directors of any other series
of Preferred Stock whether or not the powers, preferences and rights of
such other series shall be fixed by the Board of Directors as senior to,
or on a parity with, the powers, preferences and rights of such
outstanding series, or any of them; provided, however, that the Board of
Directors may provide in the resolution or resolutions as to any series
of Preferred Stock adopted pursuant to section (b) of this Article
FOURTH that the consent of the holders of a majority (or such greater
proportion as shall be therein fixed) of the outstanding shares of such
series voting thereon shall be required for the issuance of any or all
other series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series of
Preferred Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and for
such consideration as shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the Board
of Directors of the Corporation shall determine and on such terms and
for such consideration as shall be fixed by the Board of Directors.
(h) The authorized amount of shares of Common Stock and of Preferred
Stock may, without a class or series vote, be increased or decreased
from time to time by the affirmative vote of the holders of a majority
of the stock of the Corporation entitled to vote thereon.
FIFTH: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of directors
constituting the entire Board shall be not less than five nor more than
twenty-five as fixed from time to time by vote of a majority of the
whole Board, provided, however, that the number of directors shall not
be reduced so as to shorten the term of any director at the time in
office, and provided further, that the number of directors constituting
the whole Board shall be twenty-four until otherwise fixed by a majority
of the whole Board.
(b) The Board of Directors shall be divided into three classes, as
nearly equal in number as the then total number of directors
constituting the whole Board permits, with the term of office of one
class expiring each year. At the annual meeting of stockholders in 1982,
directors of the first class shall be elected to hold office for a term
expiring at the next succeeding annual meeting, directors of the second
class
8
<PAGE>
shall be elected to hold office for a term expiring at the second
succeeding annual meeting and directors of the third class shall be
elected to hold office for a term expiring at the third succeeding
annual meeting. Any vacancies in the Board of Directors for any reason,
and any newly created directorships resulting from any increase in the
directors, may be filled by the Board of Directors, acting by a majority
of the directors then in office, although less than a quorum, and any
directors so chosen shall hold office until the next annual election of
directors. At such election, the stockholders shall elect a successor to
such director to hold office until the next election of the class for
which such director shall have been chosen and until his successor shall
be elected and qualified. No decrease in the number of directors shall
shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding the
fact that some lesser percentage may be specified by law, this Charter
or Act of Incorporation or the By- Laws of the Corporation), any
director or the entire Board of Directors of the Corporation may be
removed at any time without cause, but only by the affirmative vote of
the holders of two-thirds or more of the outstanding shares of capital
stock of the Corporation entitled to vote generally in the election of
directors (considered for this purpose as one class) cast at a meeting
of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the Board
of Directors or by any stockholder entitled to vote for the election of
directors. Such nominations shall be made by notice in writing,
delivered or mailed by first class United States mail, postage prepaid,
to the Secretary of the Corporation not less than 14 days nor more than
50 days prior to any meeting of the stockholders called for the election
of directors; provided, however, that if less than 21 days' notice of
the meeting is given to stockholders, such written notice shall be
delivered or mailed, as prescribed, to the Secretary of the Corporation
not later than the close of the seventh day following the day on which
notice of the meeting was mailed to stockholders. Notice of nominations
which are proposed by the Board of Directors shall be given by the
Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name, age,
business address and, if known, residence address of each nominee
proposed in such notice, (ii) the principal occupation or employment of
such nominee and (iii) the number of shares of stock of the Corporation
which are beneficially owned by each such nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine and
declare to
9
<PAGE>
the meeting that a nomination was not made in accordance with the
foregoing procedure, and if he should so determine, he shall so declare
to the meeting and the defective nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any annual
or special meeting of stockholders of the Corporation may be taken
without a meeting, and the power of stockholders to consent in writing,
without a meeting, to the taking of any action is specifically denied.
SIXTH: - The Directors shall choose such officers, agent and servants as
may be provided in the By-Laws as they may from time to time find
necessary or proper.
SEVENTH: - The Corporation hereby created is hereby given the same
powers, rights and privileges as may be conferred upon corporations
organized under the Act entitled "An Act Providing a General Corporation
Law", approved March 10, 1899, as from time to time amended.
EIGHTH: - This Act shall be deemed and taken to be a private Act.
NINTH: - This Corporation is to have perpetual existence.
TENTH: - The Board of Directors, by resolution passed by a majority of
the whole Board, may designate any of their number to constitute an
Executive Committee, which Committee, to the extent provided in said
resolution, or in the By-Laws of the Company, shall have and may
exercise all of the powers of the Board of Directors in the management
of the business and affairs of the Corporation, and shall have power to
authorize the seal of the Corporation to be affixed to all papers which
may require it.
ELEVENTH: - The private property of the stockholders shall not be liable
for the payment of corporate debts to any extent whatever.
TWELFTH: - The Corporation may transact business in any part of the
world.
THIRTEENTH: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation by a
vote of the majority of the entire Board. The stockholders may make,
alter or repeal any By-Law whether or not adopted by them, provided
however, that any such additional By-Laws, alterations or repeal may be
adopted only by the affirmative vote of the holders of two-thirds or
more of the outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of directors (considered for
this purpose as
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one class).
FOURTEENTH: - Meetings of the Directors may be held outside of the State
of Delaware at such places as may be from time to time designated by the
Board, and the Directors may keep the books of the Company outside of
the State of Delaware at such places as may be from time to time
designated by them.
FIFTEENTH: - (a) (1) In addition to any affirmative vote required by
law, and except as otherwise expressly provided in sections (b) and (c)
of this Article FIFTEENTH:
(A) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with or into (i) any Interested
Stockholder (as hereinafter defined) or (ii) any other corporation
(whether or not itself an Interested Stockholder), which, after
such merger or consolidation, would be an Affiliate (as hereinafter
defined) of an Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of related
transactions) to or with any Interested Stockholder or any
Affiliate of any Interested Stockholder of any assets of the
Corporation or any Subsidiary having an aggregate fair market value
of $1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any Subsidiary
(in one transaction or a series of related transactions) of any
securities of the Corporation or any Subsidiary to any Interested
Stockholder or any Affiliate of any Interested Stockholder in
exchange for cash, securities or other property (or a combination
thereof) having an aggregate fair market value of $1,000,000 or
more, or
(D) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation, or
(E) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or
any similar transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect, directly
or indirectly, of increasing the proportionate share of the
outstanding shares of any class of equity or convertible securities
of the Corporation or any Subsidiary which is directly or
indirectly owned by any Interested Stockholder, or any Affiliate of
any Interested Stockholder,
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shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article FIFTEENTH as one class ("Voting Shares"). Such affirmative vote shall be
required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(2) The term "business combination" as used in this Article
FIFTEENTH shall mean any transaction which is referred to any one
or more of clauses (A) through (E) of paragraph 1 of the section
(a).
(b) The provisions of section (a) of this Article FIFTEENTH shall
not be applicable to any particular business combination and such
business combination shall require only such affirmative vote as is
required by law and any other provisions of the Charter or Act of
Incorporation of By-Laws if such business combination has been
approved by a majority of the whole Board.
(c) For the purposes of this Article FIFTEENTH:
(1) A "person" shall mean any individual firm, corporation or other
entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any Subsidiary)
who or which as of the record date for the determination of stockholders
entitled to notice of and to vote on such business combination, or
immediately prior to the consummation of any such transaction:
(A) is the beneficial owner, directly or indirectly, of more than
10% of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time within two
years prior thereto was the beneficial owner, directly or
indirectly, of not less than 10% of the then outstanding voting
Shares, or
(C) is an assignee of or has otherwise succeeded in any share of
capital stock of the Corporation which were at any time within two
years prior thereto beneficially owned by any Interested
Stockholder, and such assignment or succession shall have occurred
in the course of a transaction or series of transactions not
involving a public offering within the meaning of the Securities
Act of 1933.
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(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and Associates (as
hereafter defined) beneficially own, directly or indirectly, or
(B) which such person or any of its Affiliates or Associates has
(i) the right to acquire (whether such right is exercisable
immediately or only after the passage of time), pursuant to any
agreement, arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options, or
otherwise, or (ii) the right to vote pursuant to any agreement,
arrangement or understanding, or
(C) which are beneficially owned, directly or indirectly, by any
other person with which such first mentioned person or any of its
Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned
through application of paragraph (3) above but shall not include any
other Voting Shares which may be issuable pursuant to any agreement, or
upon exercise of conversion rights, warrants or options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings given
those terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect on December 31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority of any
class of equity security (as defined in Rule 3a11-1 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as in effect
in December 31, 1981) is owned, directly or indirectly, by the
Corporation; provided, however, that for the purposes of the definition
of Investment Stockholder set forth in paragraph (2) of this section
(c), the term "Subsidiary" shall mean only a corporation of which a
majority of each class of equity security is owned, directly or
indirectly, by the Corporation.
(d) majority of the directors shall have the power and duty to
determine for the purposes of this Article FIFTEENTH on the basis
of information known to them, (1) the number of Voting Shares
beneficially owned by any person (2) whether a person is an
Affiliate or Associate of another, (3) whether a person has an
agreement, arrangement or understanding with another as to the
matters referred to in paragraph (3) of section (c), or (4) whether
the assets subject to any business combination or the consideration
received for the issuance or
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transfer of securities by the Corporation, or any Subsidiary has
an aggregate fair market value of $1,000,000 or more.
(e) Nothing contained in this Article FIFTEENTH shall be construed
to relieve any Interested Stockholder from any fiduciary obligation
imposed by law.
SIXTEENTH: Notwithstanding any other provision of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and in addition to any
other vote that may be required by law, this Charter or Act of
Incorporation by the By-Laws), the affirmative vote of the holders of at
least two-thirds of the outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) shall be required to amend,
alter or repeal any provision of Articles FIFTH, THIRTEENTH, FIFTEENTH
or SIXTEENTH of this Charter or Act of Incorporation.
SEVENTEENTH: (a) a Director of this Corporation shall not be liable to
the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a Director, except to the extent such exemption from
liability or limitation thereof is not permitted under the Delaware
General Corporation Laws as the same exists or may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph shall not
adversely affect any right or protection of a Director of the
Corporation existing hereunder with respect to any act or omission
occurring prior to the time of such repeal or modification."
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EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON JANUARY 16, 1997
<PAGE>
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
STOCKHOLDERS' MEETINGS
Section 1. The Annual Meeting of Stockholders shall be held on the third
Thursday in April each year at the principal office at the Company or at such
other date, time, or place as may be designated by resolution by the Board of
Directors.
Section 2. Special meetings of all stockholders may be called at any
time by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given by
mailing to each stockholder at least ten (10) days before said meeting, at his
last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the Company
issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each shares of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
DIRECTORS
Section 1. The number and classification of the Board of Directors shall
be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72) years
shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for three
years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed and
conducted by the Board of Directors.
<PAGE>
Section 5. The Board of Directors shall meet at the principal office of
the Company or elsewhere in its discretion at such times to be determined by a
majority of its members, or at the call of the Chairman of the Board of
Directors or the President.
Section 6. Special meetings of the Board of Directors may be called at
any time by the Chairman of the Board of Directors or by the President, and
shall be called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall be
necessary to constitute a quorum for the transaction of business at any meeting
of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of any
special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal, inability to
act, or disqualification of any director, the Board of Directors, although less
than a quorum, shall have the right to elect the successor who shall hold office
for the remainder of the full term of the class of directors in which the
vacancy occurred, and until such director's successor shall have been duly
elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect from
its own members a Chairman of the Board of Directors and a President who may be
the same person. The Board of Directors shall also elect at such meeting a
Secretary and a Treasurer, who may be the same person, may appoint at any time
such other committees and elect or appoint such other officers as it may deem
advisable. The Board of Directors may also elect at such meeting one or more
Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or division of the Company as it may deem
advisable.
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ARTICLE III
COMMITTEES
Section 1. Executive Committee
(A) The Executive Committee shall be composed of not more than
nine members who shall be selected by the Board of Directors from its own
members and who shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers of the
Board of Directors when it is not in session to transact all business for and in
behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal office
of the Company or elsewhere in its discretion at such times to be determined by
a majority of its members, or at the call of the Chairman of the Executive
Committee or at the call of the Chairman of the Board of Directors. The majority
of its members shall be necessary to constitute a quorum for the transaction of
business. Special meetings of the Executive Committee may be held at any time
when a quorum is present.
(D) Minutes of each meeting of the Executive Committee shall be
kept and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and superintend all
investments that may be made of the funds of the Company, and shall direct the
disposal of the same, in accordance with such rules and regulations as the Board
of Directors from time to time make.
(F) In the event of a state of disaster of sufficient severity
to prevent the conduct and management of the affairs and business of the Company
by its directors and officers as contemplated by these By-Laws any two available
members of the Executive Committee as constituted immediately prior to such
disaster shall constitute a quorum of that Committee for the full conduct and
management of the affairs and business of the Company in accordance with the
provisions of Article III of these By-Laws; and if less than three members of
the Trust Committee is constituted immediately prior to such disaster shall be
available for the transaction of its business, such Executive Committee shall
also be empowered to exercise all of the powers reserved to the Trust Committee
under Article III Section 2 hereof. In the event of the unavailability, at such
time, of a minimum of two members of such Executive Committee, any three
available directors shall constitute the Executive Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the foregoing provisions of this Section. This By-Law shall be subject to
implementation by Resolutions of the Board of Directors presently existing or
hereafter passed from time to time
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for that purpose, and any provisions of these By-Laws (other than this Section)
and any resolutions which are contrary to the provisions of this Section or to
the provisions of any such implementary Resolutions shall be suspended during
such a disaster period until it shall be determined by any interim Executive
Committee acting under this section that it shall be to the advantage of the
Company to resume the conduct and management of its affairs and business under
all of the other provisions of these By-Laws.
Section 2. Trust Committee
(A) The Trust Committee shall be composed of not more than
thirteen members who shall be selected by the Board of Directors, a majority of
whom shall be members of the Board of Directors and who shall hold office during
the pleasure of the Board.
(B) The Trust Committee shall have general supervision over the
Trust Department and the investment of trust funds, in all matters, however,
being subject to the approval of the Board of Directors.
(C) The Trust Committee shall meet at the principal office of
the Company or elsewhere in its discretion at such times to be determined by a
majority of its members or at the call of its chairman. A majority of its
members shall be necessary to constitute a quorum for the transaction of
business.
(D) Minutes of each meeting of the Trust Committee shall be
kept and promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power to appoint
Committees and/or designate officers or employees of the Company to whom
supervision over the investment of trust funds may be delegated when the Trust
Committee is not in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five members who
shall be selected by the Board of Directors from its own members, none of whom
shall be an officer of the Company, and shall hold office at the pleasure of the
Board.
(B) The Audit Committee shall have general supervision over the
Audit Division in all matters however subject to the approval of the Board of
Directors; it shall consider all matters brought to its attention by the officer
in charge of the Audit Division, review all reports of examination of the
Company made by any governmental agency or such independent auditor employed for
that purpose, and make such recommendations to the Board of Directors with
respect thereto or with respect to any other matters pertaining to auditing the
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Company as it shall deem desirable.
(C) The Audit Committee shall meet whenever and wherever the
majority of its members shall deem it to be proper for the transaction of its
business, and a majority of its Committee shall constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be composed of not more
than five (5) members who shall be selected by the Board of Directors from its
own members who are not officers of the Company and who shall hold office during
the pleasure of the Board.
(B) The Compensation Committee shall in general advise upon all
matters of policy concerning the Company brought to its attention by the
management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be called at any
time by the Chairman of the Compensation Committee, the Chairman of the Board of
Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director may be elected by
the Board of Directors as an associate director, to serve during the pleasure of
the Board.
(B) An associate director shall be entitled to attend all
directors meetings and participate in the discussion of all matters brought to
the Board, with the exception that he would have no right to vote. An associate
director will be eligible for appointment to Committees of the Company, with the
exception of the Executive Committee, Audit Committee and Compensation
Committee, which must be comprised solely of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any member of any
Committee created under Article III of the By-Laws of this Company, the member
or members thereof present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in the place of any such
absence or disqualified member.
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ARTICLE IV
OFFICERS
Section 1. The Chairman of the Board of Directors shall preside at all
meetings of the Board and shall have such further authority and powers and shall
perform such duties as the Board of Directors may from time to time confer and
direct. He shall also exercise such powers and perform such duties as may from
time to time be agreed upon between himself and the President of the Company.
Section 2. THE VICE CHAIRMAN OF THE BOARD. The Vice Chairman of the
Board of Directors shall preside at all meetings of the Board of Directors at
which the Chairman of the Board shall not be present and shall have such further
authority and powers and shall perform such duties as the Board of Directors or
the Chairman of the Board may from time to time confer and direct.
Section 3. The President shall have the powers and duties pertaining to
the office of the President conferred or imposed upon him by statute or assigned
to him by the Board of Directors in the absence of the Chairman of the Board the
President shall have the powers and duties of the Chairman of the Board.
Section 4. The Chairman of the Board of Directors or the President as
designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however denominated
by the Board of Directors, who may at any time perform all the duties of the
Chairman of the Board of Directors and/or the President and such other powers
and duties as may from time to time be assigned to them by the Board of
Directors, the Executive Committee, the Chairman of the Board or the President
and by the officer in charge of the department or division to which they are
assigned.
Section 6. The Secretary shall attend to the giving of notice of
meetings of the stockholders and the Board of Directors, as well as the
Committees thereof, to the keeping of accurate minutes of all such meetings and
to recording the same in the minute books of the Company. In addition to the
other notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
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Section 7. The Treasurer shall have general supervision over all assets
and liabilities of the Company. He shall be custodian of and responsible for all
monies, funds and valuables of the Company and for the keeping of proper records
of the evidence of property or indebtedness and of all the transactions of the
Company. He shall have general supervision of the expenditures of the Company
and shall report to the Board of Directors at each regular meeting of the
condition of the Company, and perform such other duties as may be assigned to
him from time to time by the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
There may be one or more subordinate accounting or controller officers
however denominated, who may perform the duties of the Controller and such
duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit Officers,
however denominated, who may perform all the duties of the Auditor and such
duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank to
all Vice Presidents with such functional titles as shall be determined from time
to time by the Board of Directors, who shall ex officio hold the office
Assistant Secretary of this Company and who may perform such duties as may be
prescribed by the officer in charge of the department or division to whom they
are assigned.
Section 11. The powers and duties of all other officers of the Company
shall be those usually pertaining to their respective offices, subject to the
direction of the Board of Directors, the Executive Committee, Chairman of the
Board of Directors or the President and the officer in charge of the department
or division to which they are assigned.
ARTICLE V
STOCK AND STOCK CERTIFICATES
Section 1. Shares of stock shall be transferrable on the books of
the Company and a
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transfer book shall be kept in which all transfers of stock shall be recorded.
Section 2. Certificate of stock shall bear the signature of the
President or any Vice President, however denominated by the Board of Directors
and countersigned by the Secretary or Treasurer or an Assistant Secretary, and
the seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate certificates of stock
shall be issued only upon giving such security as may be satisfactory to the
Board of Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to fix in
advance a record date for the determination of the stockholders entitled to
notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change, conversion or
exchange of capital stock, or in connection with obtaining the consent of
stockholders for any purpose, which record date shall not be more than 60 nor
less than 10 days proceeding the date of any meeting of stockholders or the date
for the payment of any dividend, or the date for the allotment of rights, or the
date when any change or conversion or exchange of capital stock shall go into
effect, or a date in connection with obtaining such consent.
ARTICLE VI
SEAL
Section 1. The corporate seal of the Company shall be in the following
form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
ARTICLE VII
FISCAL YEAR
Section 1. The fiscal year of the Company shall be the calendar year.
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ARTICLE VIII
EXECUTION OF INSTRUMENTS OF THE COMPANY
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full power
and authority to enter into, make, sign, execute, acknowledge and/or deliver and
the Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as though
expressly authorized by the Board of Directors and/or the Executive Committee.
ARTICLE IX
COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES
Section 1. Directors and associate directors of the Company, other than
salaried officers of the Company, shall be paid such reasonable honoraria or
fees for attending meetings of the Board of Directors as the Board of Directors
may from time to time determine. Directors and associate directors who serve as
members of committees, other than salaried employees of the Company, shall be
paid such reasonable honoraria or fees for services as members of committees as
the Board of Directors shall from time to time determine and directors and
associate directors may be employed by the Company for such special services as
the Board of Directors may from time to time determine and shall be paid for
such special services so performed reasonable compensation as may be determined
by the Board of Directors.
ARTICLE X
INDEMNIFICATION
Section 1. (A) The Corporation shall indemnify and hold harmless, to the
fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was
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serving at the request of the Corporation as a director, officer, employee,
fiduciary or agent of another corporation or of a partnership, joint venture,
trust, enterprise or non-profit entity, including service with respect to
employee benefit plans, against all liability and loss suffered and expenses
reasonably incurred by such person. The Corporation shall indemnify a person in
connection with a proceeding initiated by such person only if the proceeding was
authorized by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in
defending any proceeding in advance of its final disposition, PROVIDED, HOWEVER,
that the payment of expenses incurred by a Director officer in his capacity as a
Director or officer in advance of the final disposition of the proceeding shall
be made only upon receipt of an undertaking by the Director or officer to repay
all amounts advanced if it should be ultimately determined that the Director or
officer is not entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment of expenses,
under this Article X is not paid in full within ninety days after a written
claim therefor has been received by the Corporation the claimant may file suit
to recover the unpaid amount of such claim and, if successful in whole or in
part, shall be entitled to be paid the expense of prosecuting such claim. In any
such action the Corporation shall have the burden of proving that the claimant
was not entitled to the requested indemnification of payment of expenses under
applicable law.
(D) The rights conferred on any person by this Article X shall
not be exclusive of any other rights which such person may have or hereafter
acquire under any statute, provision of the Charter or Act of Incorporation,
these By-Laws, agreement, vote of stockholders or disinterested Directors or
otherwise.
(E) Any repeal or modification of the foregoing provisions of
this Article X shall not adversely affect any right or protection hereunder of
any person in respect of any act or omission occurring prior to the time of such
repeal or modification.
ARTICLE XI
AMENDMENTS TO THE BY-LAWS
Section 1. These By-Laws may be altered, amended or repealed, in whole
or in part, and any new By-Law or By-Laws adopted at any regular or special
meeting of the Board of Directors by a vote of the majority of all the members
of the Board of Directors then in office.
10
<PAGE>
EXHIBIT C
SECTION 321(B) CONSENT
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as
amended, Wilmington Trust Company hereby consents that reports of examinations
by Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: July 23, 1999 By: /S/ DONALD G. MACKELCAN
Name: Donald G. MacKelcan
Title: Vice President
<PAGE>
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and savings banks with
state publication requirements. It has not been approved by any state banking
authorities. Refer to your appropriate state banking authorities for your state
publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
Name of Bank City
in the State of DELAWARE , at the close of business on March 31, 1999.
<TABLE>
<CAPTION>
ASSETS
Thousands of dollars
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins...............................................................196,035
Interest-bearing balances............................................................................................. 0
Held-to-maturity securities.................................................................................................. 44,909
Available-for-sale securities..............................................................................................1,396,028
Federal funds sold and securities purchased under agreements to resell.......................................................127,340
Loans and lease financing receivables:
Loans and leases, net of unearned income............. 4,176,290
LESS: Allowance for loan and lease losses........... 68,543
LESS: Allocated transfer risk reserve............... 0
Loans and leases, net of unearned income, allowance, and reserve................................................4,107,747
Assets held in trading accounts....................................................................................................0
Premises and fixed assets (including capitalized leases).....................................................................139,843
Other real estate owned....................................................................................................... 1,055
Investments in unconsolidated subsidiaries and associated companies............................................................1,225
Customers' liability to this bank on acceptances outstanding.......................................................................0
Intangible assets............................................................................................................. 5,265
Other assets................................................................................................................. 99,075
Total assets...............................................................................................................6,118,520
</TABLE>
CONTINUED ON NEXT PAGE
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits:
In domestic offices........................................................................................................4,332,124
Noninterest-bearing................ 959,777
Interest-bearing................... 3,372,347
Federal funds purchased and Securities sold under agreements to repurchase.................................................. 432,395
Demand notes issued to the U.S. Treasury......................................................................................28,906
Trading liabilities (from Schedule RC-D)...........................................................................................0
Other borrowed money:........................................................................................................///////
With original maturity of one year or less........................................................................715,000
With original maturity of more than one year.......................................................................43,000
Bank's liability on acceptances executed and outstanding...........................................................................0
Subordinated notes and debentures..................................................................................................0
Other liabilities (from Schedule RC-G)..................................................................................... 93,311
Total liabilities..........................................................................................................5,644,736
EQUITY CAPITAL
Perpetual preferred stock and related surplus......................................................................................0
Common Stock.....................................................................................................................500
Surplus (exclude all surplus related to preferred stock)......................................................................62,118
Undivided profits and capital reserves.......................................................................................408,053
Net unrealized holding gains (losses) on available-for-sale securities........................................................ 3,113
Total equity capital.........................................................................................................473,784
Total liabilities, limited-life preferred stock, and equity capital........................................................6,118,520
</TABLE>
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