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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 10, 1999
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SLM HOLDING CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 52-2013874
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
11600 SALLIE MAE DRIVE, RESTON VIRGINIA 20193
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (703) 810-3000
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ITEM 5. OTHER EVENTS
On November 10, 1999, SLM Holding Corporation (the "Registrant")
consummated the sale of 3,000,000 shares of newly created 6.97% Cumulative
Redeemable Preferred Stock, Series A.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits.
1.1 Underwriting Agreement relating to the 6.97% Cumulative Redeemable
Preferred Stock, Series A, dated November 10, 1999, by and among SLM
Holding Corporation and the Underwriters, on behalf of each of the
underwriters named on Schedule 1 thereto.
4.1 Certificate of Designation of Powers, Preferences, Rights, Privileges,
Qualifications, Limitations, Restrictions, Terms and Conditions of
6.97% Cumulative Redeemable Preferred Stock, Series A.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Date: November 11, 1999 SLM HOLDING CORPORATION
By: /s/ Mark G. Overend
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Mark G. Overend
Senior Vice President &
Chief Financial Officer
(Principal Financial and Account
Officer and Duly Authorized Officer)
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EXHIBIT INDEX
Exhibit
Number Description of Document
1.1 Underwriting Agreement relating to the 6.97% Cumulative Redeemable
Preferred Stock, Series A, dated November 10, 1999, by and among SLM
Holding Corporation and the Underwriters, on behalf of each of the
underwriters named on Schedule 1 thereto.
4.1 Certificate of Designation of Powers, Preferences, Rights, Privileges,
Qualifications, Limitations, Restrictions, Terms and Conditions of
6.97% Cumulative Redeemable Preferred Stock, Series A.
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EXHIBIT 1.1
SLM HOLDING CORPORATION
6.97% CUMULATIVE REDEEMABLE PREFERRED STOCK, SERIES A
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UNDERWRITING AGREEMENT
November 10, 1999
Goldman, Sachs & Co.,
85 Broad Street
New York, New York 10004
CIBC World Markets
Prudential Securities Incorporated
Salomon Smith Barney Inc.
c/o Goldman, Sachs & Co.
85 Broad Street,
New York, New York 10004
Ladies and Gentlemen:
From time to time SLM Holding Corporation, a Delaware corporation (the
"Company"), proposes to enter into one or more Pricing Agreements (each a
"Pricing Agreement") in the form of Annex I hereto, with such additions and
deletions as the parties thereto may determine, and, subject to the terms and
conditions stated herein and therein, to issue and sell to the firms named in
Schedule I to the applicable Pricing Agreement (such firms constituting the
"Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain shares of its 6.97% Cumulative Redeemable Preferred
Stock, Series A (the "Shares"). The Shares specified in such Pricing Agreement
are referred to as the "Firm Shares" with respect to such Pricing Agreement and
the Shares represented by such Pricing Agreement are referred to as the shares
of "Designated Preferred Stock" with respect to such Pricing Agreement. If
specified in such Pricing Agreement, the Company may grant the Underwriters the
right to purchase at their election an additional number of Shares, specified as
provided in such Pricing Agreement as provided in Section 3 hereof (the
"Optional Shares"). The Firm Shares and the Optional Shares, if any, which the
Underwriters elect to purchase pursuant to Section 3 hereof are herein
collectively referred to as the "Designated Shares".
The terms and rights of any particular issuance of Designated Shares
shall be as specified in the Pricing Agreement relating thereto.
1. Particular sales of Designated Shares may be made from time to time
to the Underwriters of such Shares, for whom the firms designated as
representatives of the Underwriters of such Shares in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole
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representative of the Underwriters and to Underwriters who act without any firm
being designated as their representative. This Underwriting Agreement shall not
be construed as an obligation of the Company to sell any of the Shares or as an
obligation of any of the Underwriters to purchase any of the Shares. The
obligation of the Company to issue and sell any of the Shares and the obligation
of any of the Underwriters to purchase any of the Shares shall be evidenced by
the Pricing Agreement with respect to the Designated Shares specified therein.
Each Pricing Agreement shall specify the aggregate number of the Firm Shares,
the maximum number of Optional Shares, if any, the initial public offering price
of such Firm and Optional Shares or the manner of determining such price, the
terms of the Designated Shares, the purchase price to the Underwriters of such
Designated Shares, the names of the Underwriters of such Designated Shares, the
names of the Representatives of such Underwriters, the number of such Designated
Shares to be purchased by each Underwriter and the commission, if any, payable
to the Underwriters with respect thereto and shall set forth the date, time and
manner of delivery of such Firm and Optional Shares, if any, and payment
therefor. The Pricing Agreement shall also specify (to the extent not set forth
in the registration statement and prospectus with respect thereto) the terms of
such Designated Shares. A Pricing Agreement shall be in the form of an executed
writing (which may be in counterparts), and may be evidenced by an exchange of
telegraphic communications or any other rapid transmission device designed to
produce a written record of communications transmitted. The obligations of the
Underwriters under this Agreement and each Pricing Agreement shall be several
and not joint.
2. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement on Form S-3 (File No 333-83941)
(the "Initial Registration Statement") in respect of the Shares has
been filed with the Securities and Exchange Commission (the
"Commission"); the Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered
or to be delivered to the Representatives and, excluding exhibits to
the Initial Registration Statement, but including all documents
incorporated by reference in the prospectus included therein, to the
Representatives for each of the other Underwriters have been declared
effective by the Commission in such form; other than a registration
statement, if any, increasing the size of the offering (a "Rule 462(b)
Registration Statement"), filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended (the "Act"), which became effective
upon filing, no other document with respect to the Initial Registration
Statement or document incorporated by reference therein has heretofore
been filed, or transmitted for filing, with the Commission (other than
prospectuses filed pursuant to Rule 424(b) of the rules and regulations
of the Commission under the Act each in the form heretofore delivered
to the Representatives); and no stop order suspending the effectiveness
of the Initial Registration Statement, any post-effective amendment
thereto or the Rule 462(b) Registration Statement, if any, has been
issued and no proceeding for that purpose has been initiated or
threatened by the Commission (any preliminary prospectus included in
the Initial Registration Statement or filed with the Commission
pursuant to Rule 424(a) under the Act, is hereinafter called a
"Preliminary Prospectus"; the various parts of the Initial Registration
Statement and the Rule 462(b) Registration Statement, if any, including
all exhibits thereto and the documents incorporated by reference in the
prospectus contained in the Initial Registration Statement at the time
such part of the Initial Registration Statement became effective or
such part of the Rule 462(b) Registration Statement, if any, became or
hereafter becomes effective but
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excluding Form T-1, each as amended at the time such part of the
Initial Registration Statement became effective, are hereinafter
collectively called the "Registration Statement"; the prospectus
relating to the Shares, in the form in which it has most recently been
filed, or transmitted for filing, with the Commission on or prior to
the date of this Agreement, is hereinafter called the "Prospectus";
any reference herein to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to the applicable form under the Act, as of
the date of such Preliminary Prospectus or Prospectus, as the case may
be; any reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include
any documents filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and incorporated by reference
in such Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment to the Registration Statement shall be
deemed to refer to and include any annual report of the Company filed
pursuant to Section 13(a) or 15(d) of the Exchange Act after the
effective date of the Initial Registration Statement that is
incorporated by reference in the Registration Statement; and any
reference to the Prospectus as amended or supplemented shall be deemed
to refer to the Prospectus as amended or supplemented in relation to
the applicable Designated Shares in the form in which it is filed with
the Commission pursuant to Rule 424(b) under the Act in accordance
with Section 5(a) hereof, including any documents incorporated by
reference therein as of the date of such filing);
(b) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and any further documents so filed
and incorporated by reference in the Prospectus or any further
amendment or supplement thereto, when such documents become effective
or are filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder and will not 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; PROVIDED,
HOWEVER, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter of
Designated Shares through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Shares;
(c) The Registration Statement and the Prospectus conform, and
any further amendments or supplements to the Registration Statement or
the Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date
as to the Registration Statement and any amendment thereto and as of
the applicable filing date as to the Prospectus and any amendment or
supplement thereto, 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; PROVIDED,
HOWEVER, that this representation and
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warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by an Underwriter of Designated Shares through the
Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Shares;
(d) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any material
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the
capital stock or long-term debt of the Company or any of its
subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, stockholders' equity
or results of operations of the Company and its subsidiaries, otherwise
than as set forth or contemplated in the Prospectus;
(e) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Delaware,
with power and authority (corporate and other) to own its properties
and conduct its business as described in the Prospectus;
(f) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully
paid and non-assessable;
(g) The Shares have been duly and validly authorized, and, when
the Firm Shares are issued and delivered pursuant to this Agreement and
the Pricing Agreement with respect to such Designated Shares and, in
the case of any Optional Shares, pursuant to Over-allotment Options (as
defined in Section 3 hereof) with respect to such Shares, such
Designated Shares will be duly and validly issued and fully paid and
non-assessable; the Shares conform to the description thereof contained
in the Registration Statement and the Designated Shares will conform to
the description thereof contained in the Prospectus as amended or
supplemented with respect to such Designated Shares;
(h) The issue and sale of the Shares and the compliance by the
Company with all of the provisions of this Agreement, any Pricing
Agreement and each Over-allotment Option, if any, and the consummation
of the transactions contemplated herein and therein will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other material agreement or instrument
to which the Company is a party or by which the Company is bound or to
which any of the property or assets of the Company is subject, nor will
such action result in any violation of the provisions of the
Certificate of Incorporation or By-laws of the Company or any statute
(including the Student Loan Marketing Association Reorganization Act of
1996) or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of its
properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Shares or the
consummation by the Company of the transactions contemplated by this
Agreement or any Pricing Agreement or any Over-allotment Option, except
such as have been, or will have been prior to each Time of Delivery (as
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defined in Section 4 hereof), obtained under the Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriters; and such
consents, approvals, authorizations, registrations or qualifications as
may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Shares by the Underwriters;
(i) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the Company
or any of its subsidiaries is the subject, which, if determined
adversely to the Company or any of its subsidiaries, would individually
or in the aggregate have a material adverse effect on the current or
future consolidated financial position, stockholders' equity or results
of operations of the Company and its subsidiaries; and, to the best of
the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(j) Neither the Company nor any of its subsidiaries is in
violation of its Certificate of Incorporation or By-laws or in default
in the performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other material agreement or instrument
to which it is a party or by which it or any of its properties may be
bound;
(k) The statements set forth in the Prospectus under the caption
"Description of Preferred Stock", insofar as they purport to constitute
a summary of the terms of the Shares, under the caption "U.S. Federal
Income Tax Matters", and under the caption "Underwriting", insofar as
they purport to describe the provisions of the laws and documents
referred to therein, are accurate complete and fair;
(l) The Company is not and, after giving effect to the offering
and sale of the Shares, will not be an "investment company", as such
term is defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(m) Neither the Company nor any of its affiliates does business
with the government of Cuba or with any person or affiliate located in
Cuba within the meaning of Section 517.075, Florida Statutes;
(n) Arthur Andersen LLP, who have certified certain financial
statements of the Company and its subsidiaries, and Ernst & Young LLP,
who have certified certain financial statements of the Company and its
subsidiaries, are each independent public accountants as required by
the Act and the rules and regulations of the Commission thereunder; and
(o) The Company has reviewed its operations and that of its
subsidiaries and has performed certain procedures in connection with
any third parties with which the Company or any of its subsidiaries has
a material relationship to evaluate the extent to which the business or
operations of the Company or any of its subsidiaries will be affected
by the Year 2000 Problem. As a result of such review, the Company has a
reasonable basis to conclude that the Year 2000 Problem will not have a
material adverse effect on the general affairs, management, the current
or future consolidated financial position, business prospects,
stockholders' equity or results of operations of the Company and its
subsidiaries or result in any material loss or interference with the
Company's business or operations. The "Year 2000
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Problem" as used herein means any significant risk that computer
hardware or software used in the receipt, transmission, processing,
manipulation, storage, retrieval, retransmission or other utilization
of data or in the operation of mechanical or electrical systems of any
kind will not, in the case of dates or time periods occurring after
December 31, 1999, function at least as effectively as in the case of
dates or time periods occurring prior to January 1, 2000.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Shares and authorization by the Representatives of the release of the
Firm Shares, the several Underwriters propose to offer the Firm Shares for sale
upon the terms and conditions set forth in the Prospectus as amended or
supplemented.
The Company may specify in the Pricing Agreement applicable to any
Designated Shares that the Company thereby grants to the Underwriters the right
(an "Over-allotment Option") to purchase at their election up to the number of
Optional Shares set forth in such Pricing Agreement, on the terms set forth in
the paragraph above, for the sole purpose of covering over-allotments in the
sale of the Firm Shares. Any such election to purchase Optional Shares may be
exercised by written notice from the Representatives to the Company, given
within a period specified in the Pricing Agreement, setting forth the aggregate
number of Optional Shares to be purchased and the date on which such Optional
Shares are to be delivered, as determined by the Representatives but in no event
earlier than the First Time of Delivery (as defined in Section 4 hereof) or,
unless the Representatives and the Company otherwise agree in writing, earlier
than or later than the respective number of business days after the date of such
notice set forth in such Pricing Agreement.
The number of Optional Shares to be added to the number of Firm Shares
to be purchased by each Underwriter as set forth in Schedule I to the Pricing
Agreement applicable to such Designated Shares shall be, in each case, the
number of Optional Shares which the Company has been advised by the
Representatives have been attributed to such Underwriter; PROVIDED THAT, if the
Company has not been so advised, the number of Optional Shares to be so added
shall be, in each case, that proportion of Optional Shares which the number of
Firm Shares to be purchased by such Underwriter under such Pricing Agreement
bears to the aggregate number of Firm Shares (rounded as the Representatives may
determine to the nearest 100 shares). The total number of Designated Shares to
be purchased by all the Underwriters pursuant to such Pricing Agreement shall be
the aggregate number of Firm Shares set forth in Schedule I to such Pricing
Agreement plus the aggregate number of Optional Shares which the Underwriters
elect to purchase.
4. Certificates for the Firm Shares and the Optional Shares to be
purchased by each Underwriter pursuant to the Pricing Agreement relating
thereto, in the form specified in such Pricing Agreement, and in such authorized
denominations and registered in such names as the Representatives may request
upon at least forty-eight hours' prior notice to the Company, shall be delivered
by or on behalf of the Company to the Representatives for the account of such
Underwriter, against payment by such Underwriter or on its behalf of the
purchase price therefor by wire transfer of Federal (same-day) funds to the
account specified by the Company to Goldman, Sachs & Co. at least forty-eight
hours in advance as specified in such Pricing Agreement, (i) with respect to the
Firm Shares, all in the manner and at the place and time and date specified in
such Pricing Agreement or at such other place and time and date as the
Representatives and the Company may agree upon in writing, such time and date
being herein called the "First Time of Delivery" and (ii) with respect to the
Optional Shares, if any, in the manner and at the time and date specified by the
Representatives in the written notice given by the Representatives of the
Underwriters' election to purchase such
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Optional Shares, or at such other time and date as the Representatives and the
Company may agree upon in writing, such time and date, if not the First Time of
Delivery, herein called the "Second Time of Delivery". Each such time and date
for delivery is herein called a "Time of Delivery".
5. The Company agrees with each of the Underwriters of any Designated
Shares:
(a) To prepare the Prospectus as amended and supplemented in
relation to the applicable Designated Shares in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b)
under the Act not later than the Commission's close of business on the
second business day following the execution and delivery of the Pricing
Agreement relating to the applicable Designated Shares or, if
applicable, such earlier time as may be required by Rule 424(b); to
make no further amendment or any supplement to the Registration
Statement or Prospectus as amended or supplemented after the date of
the Pricing Agreement relating to such Shares and prior to any Time of
Delivery for such Shares which shall be disapproved by the
Representatives for such Shares promptly after reasonable notice
thereof; to advise the Representatives promptly of any such amendment
or supplement after any Time of Delivery for such Shares and furnish
the Representatives with copies thereof; to file promptly all reports
and any definitive proxy or information statements required to be filed
by the Company with the Commission pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act for so long as the delivery of a
prospectus is required in connection with the offering or sale of such
Shares, and during such same period to advise the Representatives,
promptly after it receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus
has been filed with the Commission, of the issuance by the Commission
of any stop order or of any order preventing or suspending the use of
any prospectus relating to the Shares, of the suspension of the
qualification of such Shares for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any such
stop order or of any such order preventing or suspending the use of any
prospectus relating to the Shares or suspending any such qualification,
promptly to use its best efforts to obtain the withdrawal of such
order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Shares for
offering and sale under the securities laws of such jurisdictions as
the Representatives may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of such Shares, provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction;
(c) Prior to 10:00 A.M., New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time
to time, to furnish the Underwriters with copies of the Prospectus in
New York City as amended or supplemented in such quantities as the
Representatives may reasonably request, and, if the delivery of a
prospectus is required at any time in connection with the offering or
sale of the Shares and if at such time any event shall have occurred as
a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact
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necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated
by reference in the Prospectus in order to comply with the Act or the
Exchange Act, to notify the Representatives and upon their request to
file such document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance;
(d) To make generally available to its security holders as soon
as practicable, but in any event not later than eighteen months after
the effective date of the Registration Statement (as defined in Rule
158(c) under the Act), an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158); and
(e) During the period beginning from the date of the Pricing
Agreement for such Designated Shares and continuing to and including
the later of (i) the termination of trading restrictions for such
Designated Shares, as notified to the Company by the Representatives
and (ii) the last Time of Delivery for such Designated Shares, not to
offer, sell, contract to sell or otherwise dispose of, except as
provided hereunder, any securities of the Company that are
substantially similar to the Designated Shares, including but not
limited to any securities that are convertible into or exchangeable
for, or that represent the right to receive, Shares or any such
substantially similar securities (other than pursuant to employee stock
option plans existing on, or upon the conversion of convertible or
exchangeable securities outstanding as of, the date of the Pricing
Agreement for such Designated Shares) without the prior written consent
of the Representatives;
(f) If the Company elects to rely upon Rule 462(b), the Company
shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on
the date of this Agreement, and the Company shall at the time of filing
either pay to the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the payment
of such fee pursuant to Rule 111(b) under the Act.
(g) To use its best efforts to list, subject to notice of
issuance, Shares on the New York Stock Exchange (the "Exchange").
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, any Pricing Agreement, any
Blue Sky Memorandum and legal investment survey, closing documents (including
any compilations thereof) and any other documents in connection with the
offering, purchase, sale and delivery of the Shares; (iii) all expenses in
connection with the qualification of the Shares for offering and sale under
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state securities laws as provided in Section 5(b) hereof, including the fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky survey(s); (iv) any fees
charged by securities rating services for rating the Shares; (v) any filing fees
incident to, and the fees and disbursements of counsel for the Underwriters in
connection with, any required reviews by the National Association of Securities
Dealers, Inc. of the terms of the sale of the Shares; (vi) any fees and expenses
in connection with listing the Shares; (vii) the cost of preparing certificates
for the Shares; (viii) the cost and charges of any transfer agent or registrar
or dividend disbursing agent; and (ix) all other costs and expenses incident to
the performance of its obligations hereunder and under any Over-allotment
Options which are not otherwise specifically provided for in this Section. It is
understood, however, that, except as provided in this Section, and Sections 8
and 11 hereof, the Underwriters will pay all of their own costs and expenses,
including the fees of their counsel, transfer taxes on resale of any of the
Shares by them, and any advertising expenses connected with any offers they may
make.
7. The obligations of the Underwriters of any Designated Shares under
the Pricing Agreement relating to such Designated Shares shall be subject, in
the discretion of the Representatives, to the condition that all representations
and warranties and other statements of the Company in or incorporated by
reference in the Pricing Agreement relating to such Designated Shares are, at
and as of each Time of Delivery for such Designated Shares, true and correct,
the condition that the Company shall have performed all of its obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation to
such Designated Shares shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Act and in
accordance with Section 5(a) hereof; if the Company has elected to rely
upon Rule 462(b), the Rule 462(b) Registration Statement shall have
become effective by 10:00 P.M., Washington, D.C. time, on the date of
this Agreement; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened
by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to the
Representatives' reasonable satisfaction;
(b) Gibson, Dunn & Crutcher LLP, counsel for the Underwriters,
shall have furnished to the Representatives such written opinion or
opinions (a draft of each such opinion is attached as Annex II(a)
hereto), dated each Time of Delivery for such Designated Shares, with
respect to the matters covered in paragraphs (i), (ii), (iv) and (viii)
of subsection (c) below as well as such other related matters as the
Representatives may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters;
(c) The general counsel of or other counsel employed by the
Company, or outside counsel for the Company satisfactory to the
Representatives, shall have furnished to the Representatives their
written opinions (a draft of each such opinion is attached as Annex
II(b) hereto), dated each Time of Delivery for such Designated Shares,
respectively, in form and substance satisfactory to the
Representatives, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, with
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<PAGE>
power and authority (corporate and other) to own its
properties and conduct its business as described in the
Prospectus as amended or supplemented;
(ii) The Company has an authorized capitalization as set
forth in the Prospectus as amended or supplemented, and all of
the issued shares of capital stock of the Company (including
the Designated Shares being delivered at such Time of Delivery)
have been duly and validly authorized and issued and are fully
paid and non-assessable; and the Designated Shares conform to
the description of the Shares contained in the Prospectus as
amended or supplemented;
(iii) To the best of such counsel's knowledge and other
than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of
its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries,
would individually or in the aggregate have a material adverse
effect on the current or future consolidated financial
position, stockholders' equity or results of operations of the
Company and its subsidiaries; and to the best of such counsel's
knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others;
(iv) This Agreement and the Pricing Agreement with
respect to the Designated Shares have been duly authorized,
executed and delivered by the Company;
(v) The issue and sale of the Designated Shares being
delivered at such Time of Delivery and the compliance by the
Company with all of the provisions of this Agreement and the
Pricing Agreement with respect to the Designated Shares and the
consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such
counsel to which the Company or any of its subsidiaries is a
party or by which the Company is bound or to which any of the
property or assets of the Company or any of its subsidiaries is
subject, nor will such action result in any violation of the
provisions of the Certificate of Incorporation or By-laws of
the Company or any statute (including the Student Loan
Marketing Association Reorganization Act of 1996) or any order,
rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of its properties;
(vi) No consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale
of the Designated Shares being delivered at such Time of
Delivery or the consummation by the Company of the transactions
contemplated by this Agreement or such Pricing Agreement,
except such as have been obtained under the Act and such
consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution
of the Designated Shares by the Underwriters;
(vii) Neither the Company nor any of its material
subsidiaries is in violation of its Certificate of
Incorporation or By-laws or in default in the performance or
observance of
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<PAGE>
any material obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other material agreement or instrument
to which it is a party or by which it or any of its
properties may be bound;
(viii) The statements set forth in the Prospectus under
the caption "Description of Preferred Stock", insofar as they
purport to constitute a summary of the terms of the Shares,
under the caption "U.S. Federal Income Tax Matters", insofar as
they purport to describe the provisions of the laws referred to
therein, and under the caption "Underwriting", insofar as they
purport to describe the provisions of the laws and documents
referred to therein, constitute a fair summary of such terms,
laws and documents;
(ix) The Company is not an "Investment Company", as such
term is defined in the Investment Company Act;
(x) The documents incorporated by reference in the
Prospectus as amended or supplemented (other than the financial
statements, related schedules and other financial information
therein, as to which such counsel need express no opinion),
when they became effective or were filed with the Commission,
as the case may be, complied as to form in all material
respects with the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission
thereunder; and they have no reason to believe that any of such
documents, when they became effective or were so filed, as the
case may be, contained, in the case of a registration statement
which became effective under the Act, an untrue statement of a
material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein
not misleading, or, in the case of other documents which were
filed under the Act or the Exchange Act with the Commission, an
untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made when such documents were so filed, not misleading;
and
(xi) The Registration Statement and the Prospectus as
amended or supplemented, and any further amendments and
supplements thereto made by the Company prior to such Time of
Delivery (other than the financial statements, related
schedules and other financial information therein, as to which
such counsel need express no opinion), comply as to form in all
material respects with the requirements of the Act and the
rules and regulations thereunder; although they do not assume
any responsibility for the accuracy, completeness or fairness
of the statements contained in the Registration Statement or
the Prospectus, except for those referred to in the opinion in
subsection (viii) of this Section 7(c), they have no reason to
believe that, as of its effective date, the Registration
Statement or any further amendment thereto made by the Company
prior to such Time of Delivery (other than the financial
statements and related schedules therein, as to which
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<PAGE>
such counsel need express no opinion) contained an untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading or that, as of its date,
the Prospectus as amended or supplemented or any further
amendment or supplement thereto made by the Company prior to
such Time of Delivery (other than the financial statements
and related schedules therein, as to which such counsel need
express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact necessary
to make the statements therein, in the light of the
circumstances under which they were made, not misleading or
that, as of such Time of Delivery, either the Registration
Statement or the Prospectus as amended or supplemented or
any further amendment or supplement thereto made by the
Company prior to such Time of Delivery (other than the
financial statements, related schedules and other financial
information therein, as to which such counsel need express
no opinion) contains an untrue statement of a material fact
or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading; and they do not know
of any amendment to the Registration Statement required to
be filed or any contracts or other documents of a character
required to be filed as an exhibit to the Registration
Statement or required to be incorporated by reference into
the Prospectus as amended or supplemented or required to be
described in the Registration Statement or the Prospectus as
amended or supplemented which are not filed or incorporated
by reference or described as required;
Such counsel may rely on the opinion of Gibson, Dunn & Crutcher
LLP as to matters of New York law and as to the statements in the
Prospectus under the caption "U.S. Federal Income Tax Matters."
(d) On the date of the Pricing Agreement for such Designated
Shares at a time prior to the execution of the Pricing Agreement with
respect to the Designated Shares and at each Time of Delivery for such
Designated Shares, the independent accountants of the Company who have
certified the financial statements of the Company and its subsidiaries
included or incorporated by reference in the Registration Statement
shall have furnished to the Representatives a letter, dated the
effective date of the Registration Statement or the date of the most
recent report filed with the Commission containing financial statements
and incorporated by reference in the Registration Statement, if the
date of such report is later than such effective date, and a letter
dated such Time of Delivery, respectively, to the effect set forth in
Annex II hereto, and with respect to such letter dated such Time of
Delivery, as to such other matters as the Representatives may
reasonably request and in form and substance reasonably satisfactory to
the Representatives (the executed copy of the letter delivered prior to
the execution of this Agreement is attached as Annex I(a) hereto and a
draft of the form of letter to be delivered on the effective date of
any post-effective amendment to the Registration Statement and as of
each Time of Delivery is attached as Annex I(b) hereto);
(e) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus as
amended prior to the date of the Pricing Agreement relating to the
Designated Shares any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Prospectus as amended prior to the date of the Pricing Agreement
relating to the Designated Shares, and (ii) since the respective dates
as of which information is given in the Prospectus as amended prior to
the date of the Pricing Agreement relating to the Designated Shares
there shall not have been any change in the capital stock or long-term
debt of the Company or any of its subsidiaries or any change, or any
development involving a prospective change, in or affecting
12
<PAGE>
the general affairs, management, financial position, stockholders'
equity or results of operations of the Company and its subsidiaries,
otherwise than as set forth or contemplated in the Prospectus as
amended prior to the date of the Pricing Agreement relating to the
Designated Shares, the effect of which, in any such case described in
clause (i) or (ii), is in the judgment of the Representatives so
material and adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Designated
Shares on the terms and in the manner contemplated in the Prospectus
as amended relating to the Designated Shares;
(f) On or after the date of the Pricing Agreement relating to
the Designated Shares (i) no downgrading shall have occurred in the
rating accorded the Company's debt securities or preferred stock by any
"nationally recognized statistical rating organization", as that term
is defined by the Commission for purposes of Rule 436(g)(2) under the
Act, and (ii) no such organization shall have publicly announced that
it has under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities or
preferred stock;
(g) On or after the date of the Pricing Agreement relating to
the Designated Shares there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in
securities generally on the Exchange; (ii) a suspension or material
limitation in trading in the Company's securities on the Exchange;
(iii) a general moratorium on commercial banking activities declared by
either Federal or New York State authorities, or a general moratorium
on commercial banking activities in the District of Columbia is
declared by either Federal or District of Columbia authorities; or (iv)
the outbreak or escalation of hostilities involving the United States
or the declaration by the United States of a national emergency or war,
if the effect of any such event specified in this clause (iv) in the
judgment of the Representatives makes it impracticable or inadvisable
to proceed with the public offering or the delivery of the Firm Shares
or Optional Shares or both on the terms and in the manner contemplated
in the Prospectus as first amended or supplemented relating to the
Designated Shares;
(h) The Shares at each Time of Delivery shall have been duly
listed, subject to notice of issuance, on the Exchange;
(i) The Company shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of prospectuses on
the New York Business Day next succeeding the date of this Agreement;
and
(j) The Company shall have furnished or caused to be furnished
to the Representatives at each Time of Delivery for the Designated
Shares certificates of officers of the Company satisfactory to the
Representatives as to the accuracy of the representations and
warranties of the Company herein at and as of such Time of Delivery, as
to the performance by the Company of all of its obligations hereunder
to be performed at or prior to such Time of Delivery, as to the matters
set forth in subsections (a) and (e) of this Section and as to such
other matters as the Representatives may reasonably request.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect
13
<PAGE>
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus as
amended or supplemented and any other prospectus relating to the Shares, or any
amendment 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 will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; PROVIDED, HOWEVER, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented and any other prospectus relating to
the Shares, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
of Designated Shares through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Shares.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, any preliminary prospectus supplement,
the Registration Statement, the Prospectus as amended or supplemented and any
other prospectus relating to the Shares, or any amendment 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, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Shares, or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives expressly for use therein; and will reimburse the Company for
any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party (which consent shall not be
unreasonably withheld, conditioned or delayed), be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such
14
<PAGE>
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include any statement as to, or an admission of,
fault, culpability or a failure to act, by or on behalf of any indemnified
party. The consent in this last sentence shall not be unreasonably withheld,
conditioned or delayed and the indemnifying party agrees that the indemnified
party shall in all cases be justified in withholding consent unless such
settlement, compromise or judgment (i) includes an unconditional release of the
indemnified party from all liability arising out of such action or claim and
(ii) does not include a statement as to, or an admission of, fault, culpability
or a failure to act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
of the Designated Shares on the other from the offering of the Designated Shares
to which such loss, claim, damage or liability (or action in respect thereof)
relates. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the indemnified party failed
to give the notice required under subsection (c) above, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company on the one hand and the Underwriters
of the Designated Shares on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and such Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from such offering (before deducting expenses)
received by the Company bear to the total underwriting discounts and commissions
received by such Underwriters. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or such
Underwriters on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this subsection (d) were determined by PRO RATA
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (d),
15
<PAGE>
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the applicable Designated Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
obligations of the Underwriters of Designated Shares in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations with respect to such Shares and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Firm Shares or Optional Shares which it has agreed to purchase under the
Pricing Agreement relating to such Shares, the Representatives may in their
discretion arrange for themselves or another party or other parties to purchase
such Shares on the terms contained herein. If within thirty-six hours after such
default by any Underwriter the Representatives do not arrange for the purchase
of such Firm Shares or Optional Shares, as the case may be, then the Company
shall be entitled to a further period of thirty-six hours within which to
procure another party or other parties satisfactory to the Representatives to
purchase such Shares on such terms. In the event that, within the respective
prescribed period, the Representatives notify the Company that they have so
arranged for the purchase of such Shares, or the Company notifies the
Representatives that it has so arranged for the purchase of such Shares, the
Representatives or the Company shall have the right to postpone a Time of
Delivery for such Shares for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus as amended or supplemented, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
in the opinion of the Representatives may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to the Pricing Agreement with respect to such Designated Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Firm Shares or Optional Shares, as the case may be, of a defaulting Underwriter
or Underwriters by the Representatives and the Company as provided in subsection
(a) above, the aggregate number of such Shares which remains unpurchased does
not exceed one-eleventh of the aggregate number of the Firm Shares or Optional
Shares, as the case may be, to be purchased at the respective Time of Delivery,
then the Company shall have the right to require each non-defaulting Underwriter
to purchase the number of Firm Shares or Optional Shares, as the case may be,
which such Underwriter agreed to purchase under the Pricing Agreement relating
to such Designated Shares and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the number of Firm Shares
or Optional Shares, as the case may be, which such Underwriter agreed
16
<PAGE>
to purchase under such Pricing Agreement) of the Firm Shares or Optional Shares,
as the case may be, of such defaulting Underwriter or Underwriters for which
such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Firm Shares or Optional Shares, as the case may be, of a defaulting Underwriter
or Underwriters by the Representatives and the Company as provided in subsection
(a) above, the aggregate number of Firm Shares or Optional Shares, as the case
may be, which remains unpurchased exceeds one-eleventh of the aggregate number
of the Firm Shares or Optional Shares, as the case may be, to be purchased at
the respective Time of Delivery, as referred to in subsection (b) above, or if
the Company shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Firm Shares or Optional Shares,
as the case may be, of a defaulting Underwriter or Underwriters, then the
Pricing Agreement relating to such Firm Shares or the Over-allotment Option
relating to such Optional Shares, as the case may be, shall thereupon terminate,
without liability on the part of any non-defaulting Underwriter or the Company,
except for the expenses to be borne by the Company and the Underwriters as
provided in Section 6 hereof and the indemnity and contribution agreements in
Section 8 hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Shares.
11. If any Pricing Agreement or Over-allotment Option shall be
terminated pursuant to Section 9 hereof, the Company shall not then be under any
liability to any Underwriter with respect to the Firm Shares or Optional Shares
with respect to which such Pricing Agreement shall have been terminated except
as provided in Sections 6 and 8 hereof; but, if for any other reason, Designated
Shares are not delivered by or on behalf of the Company as provided herein, the
Company will reimburse the Underwriters through the Representatives for all
out-of-pocket expenses approved in writing by the Representatives, including
fees and disbursements of counsel, reasonably incurred by the Underwriters in
making preparations for the purchase, sale and delivery of such Designated
Shares, but the Company shall then be under no further liability to any
Underwriter with respect to such Designated Shares except as provided in
Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters
of Designated Shares shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Company shall be delivered or sent by facsimile
transmission or registered mail to SLM Holding Corporation, 11600 Sallie Mae
Drive, Reston, Virginia 20193, facsimile transmission number (703) 810-7589,
Attention: General
17
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Counsel's Office; provided, however, that any notice to an Underwriter pursuant
to Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire, or telex constituting such Questionnaire, which address will be
supplied to the Company by the Representatives upon request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement and each Pricing Agreement shall be binding upon,
and inure solely to the benefit of, the Underwriters, the Company and, to the
extent provided in Sections 8 and 10 hereof, the officers and directors of the
Company and each person who controls the Company or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the Shares from
any Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
14. Time shall be of the essence of each Pricing Agreement. As used
herein, the term "Business Day" shall mean any day when the Commission's office
in Washington, D.C. is open for business.
15. THIS AGREEMENT AND EACH PRICING AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement and each Pricing Agreement may be executed by any
one or more of the parties hereto and thereto in any number of counterparts,
each of which shall be deemed to be an original, but all such respective
counterparts shall together constitute one and the same instrument.
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If the foregoing is in accordance with your understanding, please sign
and return to us seven counterparts hereof.
Very truly yours,
SLM Holding Corporation
By: /s/ Mark G. Overend
-----------------------------------
Name: Mark G. Overend
Title: Senior Vice President and
Chief Financial Officer
Accepted as of the date hereof:
Goldman, Sachs & Co.
CIBC World Markets
Prudential Securities Inc.
Salomon Smith Barney Inc.
By: /s/ Goldman, Sachs & Co.
---------------------------------
(Goldman, Sachs & Co.)
19
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ANNEX I
PRICING AGREEMENT
Goldman, Sachs & Co.,
CIBC World Markets
Prudential Securities Inc.
Salomon Smith Barney Inc.
As Representatives of the several
Underwriters named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
November 10, 1999
Ladies and Gentlemen:
SLM Holding Corporation, a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein and in the
Underwriting Agreement, dated November 10, 1999 (the "Underwriting Agreement"),
between the Company on the one hand and Goldman, Sachs & Co., CIBC World
Markets, Prudential Securities Inc. and Salomon Smith Barney Inc. on the other
hand, to issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters") the Shares specified in Schedule II hereto (the "Designated
Shares" consisting of Firm Shares and any Optional Shares the Underwriters may
elect to purchase). Each of the provisions of the Underwriting Agreement is
incorporated herein by reference in its entirety, and shall be deemed to be a
part of this Agreement to the same extent as if such provisions had been set
forth in full herein; and each of the representations and warranties set forth
therein shall be deemed to have been made at and as of the date of this Pricing
Agreement, except that each representation and warranty which refers to the
Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a
representation or warranty as of the date of the Underwriting Agreement in
relation to the Prospectus (as therein defined), and also a representation and
warranty as of the date of this Pricing Agreement in relation to the Prospectus
as amended or supplemented relating to the Designated Shares which are the
subject of this Pricing Agreement. Each reference to the Representatives herein
and in the provisions of the Underwriting Agreement so incorporated by reference
shall be deemed to refer to you. Unless otherwise defined herein, terms defined
in the Underwriting Agreement are used herein as therein defined. The
Representatives designated to act on behalf of the Representatives and on behalf
of each of the Underwriters of the Designated Shares pursuant to Section 12 of
the Underwriting Agreement and the address of the Representatives referred to in
such Section 12 are set forth in Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Shares, in the form
heretofore delivered to you is now proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, (a) the Company agrees
to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the
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Company, at the time and place and at the purchase price to the Underwriters set
forth in Schedule II hereto, the number of Firm Shares set forth opposite the
name of such Underwriter in Schedule I hereto and, (b) in the event and to the
extent that the Underwriters shall exercise the election to purchase Optional
Shares, as provided below, the Company agrees to issue and sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from the Company at the purchase price to the Underwriters set forth in
Schedule II hereto that portion of the number of Optional Shares as to which
such election shall have been exercised.
The Company hereby grants to each of the Underwriters the right to
purchase at their election up to the number of Optional Shares set forth
opposite the name of such Underwriter in Schedule I hereto on the terms referred
to in the paragraph above for the sole purpose of covering over-allotments in
the sale of the Firm Shares. Any such election to purchase Optional Shares may
be exercised by written notice from the Representatives to the Company given
within a period of 30 calendar days after the date of this Pricing Agreement,
setting forth the aggregate number of Optional Shares to be purchased and the
date on which such Optional Shares are to be delivered, as determined by the
Representatives, but in no event earlier than the First Time of Delivery or,
unless the Representatives and the Company otherwise agree in writing, no
earlier than two or later than ten business days after the date of such notice.
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If the foregoing is in accordance with your understanding, please sign
and return to us seven counterparts hereof, and upon acceptance hereof by you,
on behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the Underwriters
and the Company. It is understood that your acceptance of this letter on behalf
of each of the Underwriters is or will be pursuant to the authority set forth in
a form of Agreement among Underwriters, the form of which shall be submitted to
the Company for examination, upon request, but without warranty on the part of
the Representatives as to the authority of the signers thereof.
Very truly yours,
SLM Holding Corporation
By: /s/ Mark G. Overend
------------------------------------
Name: Mark G. Overend
Title: Senior Vice President and
Chief Financial Officer
Accepted as of the date hereof:
Goldman, Sachs & Co.
CIBC World Markets
Prudential Securities Inc.
Salomon Smith Barney Inc.
By: /s/ Goldman, Sachs & Co.
-------------------------------------
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
3
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SCHEDULE I
<TABLE>
<CAPTION>
Maximum Number
of Optional
Number of Shares Which
Firm Shares May be
Underwriter to be Purchased Purchased
----------- --------------- --------------
<S> <C> <C>
Goldman, Sachs & Co. ................................................... 1,800,000 270,000
Salomon Smith Barney Inc................................................ 600,000 90,000
CIBC World Markets Corp................................................. 300,000 45,000
Prudential Securities Incorporated ..................................... 300,000 45,000
Total................................................. --------------- --------------
3,000,000 450,000
</TABLE>
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SCHEDULE II
TITLE OF DESIGNATED SHARES:
6.97% Cumulative Redeemable Preferred Stock, Series A
NUMBER OF DESIGNATED SHARES:
Number of Firm Shares: 3,000,000
Maximum Number of Optional Shares: 450,000
INITIAL OFFERING PRICE TO PUBLIC:
$50.00 per Share
PURCHASE PRICE BY UNDERWRITERS:
$49.00 per Share
COMMISSION PAYABLE TO UNDERWRITERS:
$1.00 per Share in Federal same-day funds
FORM OF DESIGNATED SHARES:
Definitive form, to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery at the office of the
Representatives.
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Federal (same-day) funds
TIME OF DELIVERY:
10:00 a.m. (New York City time), November 16, 1999
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CLOSING LOCATION:
Reston, Virginia
NAMES AND ADDRESSES OF REPRESENTATIVES:
Designated Representatives:
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
OTHER TERMS:
As more fully described in the Prospectus Supplement dated November 10,
1999, if, prior to May 16, 2001, Congress enacts amendments to the Internal
Revenue Code that reduce the percentage of the dividends-received deduction
below 70%, the amount of dividends payable on the Shares will be adjusted
to offset the effect of that reduction. However, the Company will make no
adjustment to the extent that the percentage of the dividends-received
deduction is reduced below 50%.
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EXHIBIT 4.1
SLM HOLDING CORPORATION
CERTIFICATE OF DESIGNATION, POWERS,
PREFERENCES, RIGHTS, PRIVILEGES, QUALIFICATIONS,
LIMITATIONS, RESTRICTIONS, TERMS AND CONDITIONS
OF
6.97% CUMULATIVE REDEEMABLE
PREFERRED STOCK, SERIES A
I, Mary F. Eure, Secretary of SLM Holding Corporation, a Delaware
corporation (the "Corporation"), do hereby certify that, pursuant to Section
151 of the Delaware General Corporation Law and Article Fourth of the
Corporation's Amended and Restated Certificate of Incorporation, (a) on
September 23, 1999 the board of directors of the Corporation (the "Board of
Directors") appointed a Preferred Stock Issuance Committee of the Board of
Directors and delegated authority to such committee to create and designate
one or more series of preferred stock of the Corporation and, to the extent
that the powers, preferences and other special rights of such series, and the
qualifications, limitations and restrictions thereof, are not stated and
expressed in the Corporation's Amended and Restated Certificate of
Incorporation, to fix the powers, preferences and other special rights of
such series and the qualifications, limitations and restrictions and other
terms and conditions thereof, and (b) on November 10, 1999, the Preferred
Stock Issuance Committee adopted the resolutions shown immediately below,
which resolutions of the Board of Directors and the Preferred Stock Issuance
Committee are now, and at all times since their respective dates of adoption
have been, in full force and effect:
RESOLVED, that the Preferred Stock Issuance Committee does hereby create,
authorize and provide for the issuance of the 6.97% Cumulative Redeemable
Preferred Stock, Series A, par value $0.20 per share, with the following
designation, powers, preferences, rights, privileges, qualifications,
limitations, restrictions, terms and conditions:
1. DESIGNATION, PAR VALUE, NUMBER OF SHARES AND SENIORITY
The series of preferred stock of the Corporation created hereby (the
"Series A Preferred Stock") shall be designated "6.97% Cumulative Redeemable
Preferred Stock, Series A," shall have a par value of $0.20 per share and
shall consist of up to 4,000,000 shares. Subject to the requirements of
applicable law and the terms and conditions of the Corporation's Amended and
Restated Certificate of Incorporation, the Board of Directors shall be
permitted to increase the authorized number of shares of such series at any
time. The Series A Preferred Stock shall rank, both as to dividends and upon
liquidation, prior to the common stock of the Corporation (the "Common
Stock") to the extent provided in this Certificate and the Corporation's
Amended and Restated Certificate of Incorporation and shall rank, both as to
dividends and upon liquidation, on a parity with any other class or series of
preferred stock the Corporation may from time to time issue (the "Parity
Preferred Stock").
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2. DIVIDENDS
(a) The holders of outstanding shares of Series A Preferred Stock
shall be entitled to receive, ratably, when, as and if declared by the Board
of Directors, in its sole discretion, out of funds legally available
therefor, cumulative, cash dividends at the annual rate of 6.97%, or $3.485,
per share of Series A Preferred Stock. Dividends on the Series A Preferred
Stock shall accrue from but not including November 16, 1999 and are payable
when, as and if declared by the Board of Directors quarterly in arrears on
January 31, April 30, July 30 and October 31 of each year (each, a "Dividend
Payment Date") commencing on January 31, 2000. If a Dividend Payment Date is
not a "Business Day," the related dividend shall be paid on the next Business
Day with the same force and effect as though paid on the Dividend Payment
Date, without any increase to account for the period from such Dividend
Payment Date through the date of actual payment. For these purposes,
"Business Day" means a day other than (i) a Saturday or Sunday, (ii) a day on
which New York City banks are closed or (iii) a day on which the offices of
the Corporation are closed.
The "Dividend Period" relating to a Dividend Payment Date shall be
the period from but not including the preceding Dividend Payment Date (or
from but not including November 16, 1999, in the case of the first Dividend
Payment Date) through and including the related Dividend Payment Date. If
declared, the dividend payable in respect of the first Dividend Period will
be $0.7357 per share. The amount of dividends payable in respect of any
quarterly Dividend Period other than the first Dividend Period shall be
computed at a rate equal to 6.97% divided by 4; the amount of dividends
payable in respect of any shorter period shall be computed on the basis of
twelve 30-day months and a 360-day year. Each such dividend shall be paid to
the holders of record of outstanding shares of the Series A Preferred Stock
as they appear in the books and records of the Corporation on such record
date as shall be fixed in advance by the Board of Directors, not to be
earlier than 45 days nor later than 10 days preceding the applicable Dividend
Payment Date.
No dividends shall be declared or paid or set apart for payment on
the Common Stock or any other class or series of stock ranking junior to or
(except as hereinafter provided) on a parity with the Series A Preferred
Stock with respect to the payment of dividends unless all accrued and unpaid
dividends have been declared and paid or set apart for payment on the
outstanding Series A Preferred Stock in respect of all prior Dividend
Periods. In the event that the Corporation shall not pay any one or more
dividends or any part thereof on the Series A Preferred Stock, the holders of
that Series A Preferred Stock shall not have any cause of action against the
Corporation in respect of such non-payment so long as no dividend is paid on
any junior or parity stock in violation of the next preceding sentence.
No Common Stock or any other stock of the Corporation ranking junior
to or on a parity with the Series A Preferred Stock as to dividends may be
redeemed, purchased or otherwise acquired for any consideration (or any
payment be made to or available for a sinking fund for the redemption of any
shares of such stock) unless all accrued and unpaid dividends have been
declared and paid or set apart for payment on the outstanding Series A
Preferred Stock in respect of all prior Dividend Periods; provided, however,
that any moneys theretofore deposited in any
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sinking fund with respect to any such stock in compliance with the provision
of such sinking fund may thereafter be applied to the purchase or redemption
of such stock in accordance with the terms of such sinking fund, regardless
of whether at the time of such application full cumulative dividends upon the
Series A Preferred Stock outstanding to the most recent Dividend Payment Date
shall have been paid or declared and set apart for payment by the
Corporation; provided that, if and when authorized by the Board of Directors,
any such junior or parity stock or Common Stock may be converted into or
exchanged for stock of the Corporation ranking junior to the Series A
Preferred Stock as to dividends.
(b) If, prior to May 16, 2001, one or more amendments to the
Internal Revenue Code of 1986, as amended (the "Code"), are enacted that
reduce the percentage of the dividends-received deduction (70% as of November
10, 1999) as specified in section 243(a)(1) of the Code or any successor
provision (the "Dividends-Received Percentage"), certain adjustments may be
made in respect of the dividends payable by the Corporation, and Post
Declaration Date Dividends and Retroactive Dividends (as such terms are
defined below) may become payable, as described below. Notwithstanding
anything to the contrary herein, the Corporation will make no adjustment for
any amendments to the Code on or after May 16, 2001 that reduce the
Dividends-Received Percentage.
The amount of each dividend payable (if declared) per share of
Series A Preferred Stock for dividend payments made on or after the effective
date of such change in the Code will be adjusted by multiplying the amount of
the dividend payable pursuant to clause (a) of this Section 2 (before
adjustment) by a factor, which shall be the number determined in accordance
with the following formula (the "DRD Formula"), and rounding the result to
the nearest cent (with one-half cent rounded up):
1 - .35 (1 - .70)
-----------------
1 - .35 (1 - DRP)
For the purposes of the DRD Formula, "DRP" means the Dividends-Received
Percentage (expressed as a decimal) applicable to the dividend in question;
PROVIDED, HOWEVER, that if the Dividends-Received Percentage applicable to
the dividend in question is less than 50%, then the DRP will equal .50. No
amendment to the Code, other than a change in the percentage of the
dividends-received deduction set forth in section 243(a)(1) of the Code or
any successor provision, or a change in the percentage of the
dividends-received deduction for certain categories of stock, which change is
applicable to the Series A Preferred Stock, will give rise to an adjustment.
Notwithstanding the foregoing provisions, if, with respect to any
such amendment, the Corporation receives an unqualified opinion of nationally
recognized independent tax counsel selected by the Corporation or a private
letter ruling or similar form of assurance from the Internal Revenue Service
(the "IRS") to the effect that such an amendment does not apply to a dividend
payable on the Series A Preferred Stock, then such amendment shall not result
in the adjustment provided for pursuant to the DRD Formula with respect to
such dividend. The opinion referenced in the previous sentence shall be based
upon the legislation amending or
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establishing the DRP or upon a published pronouncement of the IRS addressing
such legislation. Unless the context otherwise requires, references to
dividends herein shall mean dividends as adjusted by the DRD Formula. The
Corporation's calculation of the dividends payable as so adjusted shall be
final and not subject to review absent manifest error.
Notwithstanding the foregoing, if any such amendment to the Code is
enacted after the dividend payable on a Dividend Payment Date has been
declared but before such dividend is paid, the amount of the dividend payable
on such Dividend Payment Date shall not be increased. Instead, additional
dividends (the "Post Declaration Date Dividends"), equal to the excess, if
any, of (x) the product of the dividend paid by the Corporation on such
Dividend Payment Date and the DRD Formula (where the DRP used in the DRD
Formula would be equal to the greater of the Dividends-Received Percentage
applicable to the dividend in question and .50) over (y) the dividend paid by
the Corporation on such Dividend Payment Date, shall be payable (if declared)
to holders of Series A Preferred Stock on the record date applicable to the
next succeeding Dividend Payment Date, or, if the Series A Preferred Stock is
called for redemption prior to such record date, to holders of Series A
Preferred Stock on the applicable redemption date, as the case may be, in
addition to any other amounts payable on such date. Notwithstanding the
foregoing provisions, if, with respect to any such amendment, the Corporation
receives either an unqualified opinion of nationally recognized independent
tax counsel selected by the Corporation or a private letter ruling or similar
form of assurance from the IRS to the effect that such amendment does not
apply to a divided so payable on the Preferred Stock, then such amendment
will not result in the payment of Post Declaration Date Dividends. The
opinion referenced in the previous sentence must be based upon the
legislation amending or establishing the DRP or upon a published
pronouncement of the IRS addressing such legislation.
If any such amendment to the Code is enacted and the reduction in
the Dividends-Received Percentage retroactively applies to a Dividend Payment
Date as to which the Corporation previously paid dividends on the Series A
Preferred Stock (each, an "Affected Dividend Payment Date"), the Corporation
shall pay (if declared) additional dividends (the "Retroactive Dividends") to
holders of the Series A Preferred Stock on the record date applicable to the
next succeeding Dividend Payment Date (or, if such amendment is enacted after
the dividend payable on such Dividend Payment Date has been declared, to
holders on the record date applicable to the second succeeding Dividend
Payment Date following the date of enactment) in an amount equal to the
excess of (x) the product of the dividend paid by the Corporation on each
Affected Dividend Payment Date and the DRD Formula (where the DRP used in the
DRD Formula would be equal to the greater of the Dividends-Received
Percentage and .50 applied to each Affected Dividend Payment Date) over (y)
the sum of the dividend paid by the Corporation on each Affected Dividend
Payment Date. The Corporation will make only one payment of Retroactive
Dividends for any such amendment. Notwithstanding the foregoing provisions,
if, with respect to any such amendment, the Corporation receives either an
unqualified opinion of nationally recognized independent tax counsel selected
by the Corporation or a private letter ruling or similar form of assurance
from the IRS to the effect that such amendment does not apply to a dividend
payable on an Affected Dividend Payment Date for the Series A Preferred
Stock, then such amendment will not result in the payment of Retroactive
Dividends with respect to such Affected Dividend Payment Date. The opinion
referenced in the
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previous sentence must be based upon the legislation amending or establishing
the DRP or upon a published pronouncement of the IRS addressing such
legislation.
In the event that the amount of dividends payable per share of the
Series A Preferred Stock is adjusted pursuant to the DRD Formula and/or Post
Declaration Date Dividends or Retroactive Dividends are to be paid, the
Corporation will give notice of each such adjustment and, if applicable, any
Post Declaration Date Dividends and Retroactive Dividends to be paid as soon
as practicable to the holders of Series A Preferred Stock.
(c) Notwithstanding any other provision of this Certificate, the
Board of Directors, in its discretion, may choose to pay dividends on the
Series A Preferred Stock without the payment of any dividends on the Common
Stock or any other class or series of stock from time to time outstanding
ranking junior to the Series A Preferred Stock with respect to the payment of
dividends.
(d) No dividend shall be declared or paid or set apart for payment
on any shares of the Series A Preferred Stock if at the same time any arrears
or default exists in the payment of dividends on any outstanding class or
series of stock of the Corporation ranking prior to or (except as provided
herein) on a parity with the Series A Preferred Stock with respect to the
payment of dividends.
(e) Holders of shares of the Series A Preferred Stock shall not be
entitled to any dividends, in cash or in property, other than as herein
provided and shall not be entitled to interest, or any sum in lieu of
interest, on or in respect of any dividend payment.
3. OPTIONAL REDEMPTION
(a) The Series A Preferred Stock shall not be redeemable prior to
November 16, 2009. Subject to this limitation and to any further limitations
imposed by law, the Corporation may redeem the Series A Preferred Stock, in
whole or in part, at any time or from time to time, out of funds legally
available therefor, at the redemption price of $50.00 per share plus an
amount, determined in accordance with Section 2 above, equal to the amount of
the dividend accrued and unpaid for all prior Dividend Periods and for the
then-current Dividend Period to but not including the date of such
redemption. If less than all of the outstanding shares of the Series A
Preferred Stock are to be redeemed, the Corporation shall select shares to be
redeemed from the outstanding shares not previously called for redemption by
lot or pro rata (as nearly as possible) or by any other method which the
Corporation in its sole discretion deems equitable.
(b) In the event the Corporation shall redeem any or all of the
Series A Preferred Stock as aforesaid, notice of such redemption shall be
given by the Corporation by first class mail, postage prepaid, mailed not
less than 30 and not more than 60 days prior to the redemption date, to each
holder of record of the shares of the Series A Preferred Stock being
redeemed, at such holder's address as the same appears in the books and
records of the Corporation. Each such notice shall state the number of shares
being redeemed, the redemption price, the redemption date and the place at
which such holder's certificate(s) representing shares of the Series A
Preferred Stock must be presented for cancellation or exchanges, as the case
may be,
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upon such redemption. Any notice that is so mailed shall be conclusively
presumed to have been duly given, whether or not the stockholder received
such notice. Failure to duly give notice, or any defect in the notice or in
the mailing thereof, to any holder of the Series A Preferred Stock shall not
affect the validity of the proceedings for the redemption of any other shares
of Series A Preferred Stock being redeemed.
(c) If any redemption date is not a Business Day, then payment of
the redemption price may be made on the next Business Day with the same force
and effect as if made on the redemption date, and no interest, additional
dividends or other sums will accrue on the amount payable from the redemption
date to the next Business Day.
(d) Notice having been mailed as aforesaid, from and after the
redemption date specified therein and upon payment of the consideration set
forth in Section 3(a) above, said shares of the Series A Preferred Stock
shall no longer be deemed to be outstanding, and all rights of the holders
thereof as holders of the Series A Preferred Stock shall cease, with respect
to shares so redeemed.
(e) Subject to applicable law, any shares of the Series A Preferred
Stock which shall have been redeemed shall, after such redemption, no longer
have the status of authorized, issued or outstanding shares.
(f) The shares of Series A Preferred Stock shall not be subject to
any sinking fund or to any mandatory redemption.
4. PREFERRED STOCK BOARD COMMITTEE; LIMITED RIGHTS TO VOTE AND
ELECT BOARD OBSERVERS
At the first regularly scheduled meeting of the Board of Directors
after the issuance of the Series A Preferred Stock, the Board of Directors
shall form a committee (the "Preferred Stock Committee") of the Board of
Directors whose purpose shall be to monitor and evaluate proposed actions of
the Corporation that may impact the rights of holders of Series A Preferred
Stock, including the payment of dividends on the Series A Preferred Stock,
and to report to the Board of Directors thereon. The Board of Directors shall
designate from among its "independent directors" (as such term is defined (i)
by the Corporation's Bylaws as then in effect or (ii) by New York Stock
Exchange rules) at least three directors to serve on the Preferred Stock
Committee. In designating the independent directors to serve on the Preferred
Stock Committee, the Board of Directors may, in its sole discretion, apply
either of the foregoing definitions. The Preferred Stock Committee shall meet
at least once a year.
Except as set forth in this Section 4 and in Section 9(h) below, the
shares of the Series A Preferred Stock shall not have any voting powers,
either general or special. Whenever dividends on any shares of Series A
Preferred Stock are in arrears for four or more quarterly Dividend Periods,
whether or not consecutive:
(a) The holders of the Series A Preferred Stock, voting together as
single class with all other classes or series of capital stock of the
Corporation upon which like voting rights have
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been conferred and are exercisable and which are entitled to vote as a class
with the Series A Preferred Stock in the election of two observers to the
board of directors, will be entitled to vote for the election of a total of
two board observers at a special meeting called by an officer of the
Corporation at the request of holders of record of at least 10% of the
outstanding Series A Preferred Stock or by the holders of any such other
class or series of capital stock of the Corporation and at each subsequent
annual meeting of stockholders, until all dividends accumulated on the Series
A Preferred Stock for all prior Dividend Periods and the then current
Dividend Period have been fully paid.
(b) If and when full cumulative dividends on the Series A Preferred
Stock for all prior Dividend Periods and the then current Dividend Period
have been paid in full or declared and a sum sufficient for the payment
thereof set aside for payment in full, the right of holders of Series A
Preferred Stock to elect those two board observers will cease and, unless
there are other classes and series of capital stock of the Corporation upon
which like voting rights have been conferred and are exercisable, all rights
of each of the two board observers will immediately and automatically
terminate.
(c) The Corporation shall provide to the board observers notice, and
a detailed agenda (to the extent prepared for any member of the Board of
Directors), of all meetings of the Board of Directors and any committee of
the Board of Directors which has been delegated responsibility for matters
relating to the payment or nonpayment of dividends, including the Preferred
Stock Committee. The Corporation shall also provide to the board observers
copies of all materials that may in any way be related to the payment or
nonpayment of dividends that are provided to the Board of Directors and to
the members of any such committees. The board observers shall be subject to
the same confidentiality obligations with respect to such materials as bind
the Board of Directors. The board observers may attend any meeting of the
Board of Directors or any committee thereof which has been delegated
responsibility for matters relating to the payment or nonpayment of
dividends, including the Preferred Stock Committee; the board observers may
participate in any such meeting, include statements in the minutes of such
meetings, and present information and make recommendations to, and ask
questions of, the Board of Directors or the Preferred Stock Committee with
respect to all matters.
If a special meeting of the holders of the Series A Preferred Stock
for the election of the board observers is not called by an officer of the
Corporation within 30 days after request, then the holders of record of at
least 10% of the outstanding shares of Series A Preferred Stock may designate
a holder of Series A Preferred Stock to call that meeting at the
Corporation's expense. The Corporation will pay all costs and expenses of
calling and holding any meeting and of electing board observers as described
above.
The foregoing voting provisions will not apply if, at or prior to
the time when the act with respect to which such vote would otherwise be
required will be effected, all outstanding shares of Series A Preferred Stock
have been redeemed or called for redemption and sufficient funds have been
deposited in trust to effect such redemption.
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In any matter in which the Series A Preferred Stock is entitled to
vote, including any action by written consent, each share of the Series A
Preferred Stock shall be entitled to one vote, except that when shares of any
other class or series of capital stock of the Corporation have the right to
vote with the Series A Preferred Stock as a single class on any matter, the
Series A Preferred Stock and the shares of each such other class or series
will have one vote for each $50.00 of liquidation preference (excluding
accrued dividends).
5. NO CONVERSION OR EXCHANGE RIGHTS
The holders of shares of the Series A Preferred Stock shall not have
any right to convert such shares into or exchange such shares for any other
class or series of stock or obligations of the Corporation.
6. NO PREEMPTIVE RIGHTS
No holder of the Series A Preferred Stock shall as such holder have
any preemptive right to purchase or subscribe for any other shares, rights,
options or other securities of any class of the Corporation which at any time
may be sold or offered for sale by the Corporation.
7. LIQUIDATION RIGHTS AND PREFERENCE
(a) Except as otherwise set forth herein, upon the voluntary or
involuntary dissolution, liquidation or winding up of the Corporation, after
payment of or provision for the liabilities of the Corporation and the
expenses of such dissolution, liquidation or winding up, the holders of the
outstanding shares of the Series A Preferred Stock shall be entitled to
receive out of the assets of the Corporation available for distribution to
stockholders, before any payment or distribution shall be made on the Common
Stock or any other class or series of stock of the Corporation ranking junior
to the Series A Preferred Stock upon liquidation, the amount of $50.00 per
share plus an amount, determined in accordance with Section 2 above, equal to
all accrued and unpaid dividends for all prior Dividend Periods and for the
then-current Dividend Period through and including the date of payment in
respect of such dissolution, liquidation or winding up, and the holders of
the outstanding shares of any class or series of stock of the Corporation
ranking on a parity with the Series A Preferred Stock upon liquidation shall
be entitled to receive out of the assets of the Corporation available for
distribution to stockholders, before any such payment or distribution shall
be made on the Common Stock or any other class or series of stock of the
Corporation ranking junior to the Series A Preferred Stock and to such parity
stock upon liquidation, any corresponding preferential amount to which the
holders of such parity stock may, by the terms thereof, be entitled;
provided, however, that if the assets of the Corporation available for
distribution to stockholders shall be insufficient for the payment of the
full amounts to which the holders of the outstanding shares of the Series A
Preferred Stock and the holders of the outstanding shares of such parity
stock shall be entitled to receive upon such dissolution, liquidation or
winding up of the Corporation as aforesaid, then all of the assets of the
Corporation available for distribution to stockholders shall be distributed
to the holders of outstanding shares of the Series A Preferred Stock and to
the holders of outstanding shares of such parity stock pro rata, so that the
amounts so distributed to holders of the Series A Preferred Stock and to
holders of such classes or series of such parity stock, respectively, shall
bear to each
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other the same ratio that the respective distributive amounts to which they
are so entitled (including any adjustment due to changes in the
Dividends-Received Percentage) bear to each other. After the payment of the
aforesaid amounts to which they are entitled, the holders of outstanding
shares of the Series A Preferred Stock and the holders of outstanding shares
of any such parity stock shall not be entitled to any further participation
in any distribution of assets of the Corporation.
(b) Neither the sale of all or substantially all of the property or
business of the Corporation, nor the merger, consolidation or combination of
the Corporation into or with any other corporation or entity, shall be deemed
to be a dissolution, liquidation or winding up for the purpose of this
Section 7.
8. ADDITIONAL CLASSES OR SERIES OF STOCK
The Board of Directors shall have the right at any time in the
future to authorize, create and issue, by resolution or resolutions, one or
more additional classes or series of stock of the Corporation, and to
determine and fix the distinguishing characteristics and the relative rights,
preferences, privileges and other terms of the shares thereof. Any such class
or series of stock may rank on a parity with or junior to the Series A
Preferred Stock as to dividends or upon liquidation or otherwise. No such
class or series of stock of the Corporation may rank prior to the Series A
Preferred Stock as to dividends or upon liquidation or otherwise.
9. MISCELLANEOUS
(a) Any stock of any class or series of the Corporation shall
be deemed to rank:
(i) on a parity with shares of the Series A Preferred Stock,
either as to dividends or upon liquidation, whether or not the dividend
rates or amounts, dividend payment dates or redemption of liquidation
prices per share, if any, be different from those of the Series A
Preferred Stock, if the holders of such class or series shall be
entitled to the receipt of dividends or of amounts distributable upon
dissolution, liquidation or winding up of the Corporation, as the case
may be, in proportion to their respective dividend rates or amounts or
liquidation prices, without preference or priority, one over the other,
as between the holders of such class or series and the holders of
shares of the Series A Preferred Stock; and
(ii) junior to shares of the Series A Preferred Stock, either
as to dividends or upon liquidation, if such class or series shall be
Common Stock, or if the holders of shares of the Series A Preferred
Stock shall be entitled to receipt of dividends or of amounts
distributable upon dissolution, liquidation or winding up of the
Corporation, as the case may be, in preference or priority to the
holders of shares of such class or series.
(b) The Corporation and any agent of the Corporation may deem and treat
the holder of a share or shares of Series A Preferred Stock, as shown in the
Corporation's books and records, as the absolute owner of such share or shares
of Series A Preferred Stock for the purpose of receiving payment of dividends in
respect of such share or shares of Series A Preferred Stock
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and for all other purposes whatsoever, and neither the Corporation nor any
agent or the Corporation shall be affected by any notice to the contrary. All
payments made to or upon the order of any such persons shall be valid and, to
the extent of the sum or sums so paid, effectual to satisfy and discharge
liabilities for moneys payable by the Corporation on or with respect to any
such share or shares of Series A Preferred Stock.
(c) The shares of the Series A Preferred Stock, when duly issued,
shall be fully paid and non-assessable.
(d) For purposes of this Certificate, the term "the Corporation"
means SLM Holding Corporation and any successor thereto by operation of law
or by reason of a merger, consolidation or combination.
(e) Any notice, demand or other communication which by any provision
of this Certificate is required or permitted to be given or served to or upon
the Corporation shall be given or served in writing addressed (unless and
until another address shall be published by the Corporation) to SLM Holding
Corporation, 11600 Sallie Mae Drive, Reston, Virginia 20193, Attn: General
Counsel's Office. Such notice, demand or other communication to or upon the
Corporation shall be deemed to have been sufficiently given or made only upon
actual receipt of a writing by the Corporation. Any notice, demand or other
communication which by any provision of this Certificate is required or
permitted to be given or served by the Corporation hereunder may be given or
served by being deposited first class, postage prepaid, in the United States
mail addressed (i) to the holder as such holder's name and address may appear
at such time in the books and records of the Corporation or (ii) to a person
or entity other than a holder of record of the Series A Preferred Stock, to
such person or entity at such address as appears to the Corporation to be
appropriate at such time. Such notice, demand or other communication shall be
deemed to have been sufficiently given or made, for all purposes, upon
mailing.
(h) The Corporation, by or under the authority of the Board of
Directors, may amend, alter, supplement or repeal any provision of this
Certificate pursuant to applicable law and the following terms and conditions:
(i) The consent of the holders of at least 66 2/3% of all of
the shares of the Series A Preferred Stock at the time outstanding,
given in person or by proxy, either in writing or by a vote at a
meeting called for the purpose at which the holders of shares of the
Series A Preferred Stock shall vote together as a class, shall be
necessary for authorizing, effecting or validating the amendment,
alteration, supplementation or repeal of the provisions of this
Certificate if such amendment, alteration, supplementation or repeal
would materially and adversely affect the powers, preferences, rights,
privileges, qualifications, limitations, restrictions, terms or
conditions of the Series A Preferred Stock. The creation and issuance
of any other class or series of stock, or the issuance of additional
shares of any existing class or series of stock of the Corporation
(including the Series A Preferred Stock), whether ranking on parity
with or junior to the Series A Preferred Stock, shall not be deemed to
constitute such an amendment, alteration, supplementation or repeal.
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(ii) Holders of the Series A Preferred Stock shall be entitled
to one vote per share on matters on which their consent is required
pursuant to subparagraph (i) of this paragraph (h). In connection with
any meeting of such holders, the Board of Directors shall fix a record
date, neither earlier than 60 days nor later than 10 days prior to the
date of such meeting, and holders of record of shares of the Series A
Preferred Stock on such record date shall be entitled to notice of and
to vote at any such meeting and any adjournment. The Board of
Directors, or such person or persons as it may designate, may establish
reasonable rules and procedures as to the solicitation of the consent
of holders of the Series A Preferred Stock at any such meeting or
otherwise, which rules and procedures shall conform to the requirements
of any national securities exchange on which the Series A Preferred
Stock maybe listed at such time.
(i) RECEIPT AND ACCEPTANCE OF A SHARE OR SHARES OF THE SERIES A
Preferred Stock BY OR ON BEHALF OF A HOLDER SHALL CONSTITUTE THE
UNCONDITIONAL ACCEPTANCE BY THE HOLDER (AND ALL OTHERS HAVING BENEFICIAL
OWNERSHIP OF SUCH SHARE OR SHARES) OF ALL OF THE TERMS AND PROVISIONS OF THIS
CERTIFICATE. NO SIGNATURE OR OTHER FURTHER MANIFESTATION OF ASSENT TO THE
TERMS AND PROVISIONS OF THIS CERTIFICATE SHALL BE NECESSARY FOR ITS OPERATION
OR EFFECT AS BETWEEN THE CORPORATION AND THE HOLDER (AND ALL SUCH OTHERS).
In witness whereof, I have hereunto set my hand and the seal of the
Corporation this 10th day of November, 1999.
[seal]
/s/ Mary F. Eure
---------------------------------------
Mary F. Eure, Secretary
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